Legal Commentary

A combination of recent headlines and Richard Schragger's recent piece "Mobile Capital, Local Economic Regulation and the Democratic City" (which suggests, among other things, that "[t]he new 'regulatory localism' challenges the proposition that industrial policy, redistribution, and other responses to global economic restructuring must be addressed at the national level") prompt me to wonder about the role of cities in economic regulation. 

I'm sure the answer depends on a rigorous definition of "economic regulation," which I don't claim to offer here.  So let me just raise a specific question I'm intrigued by: the role of the city in regulating executive compensation.  Should it or can it have any role at all?  At the very least, we can say that the interests of the different levels of government as to executive compensation may be different.  The AIG bonus example plays out on the national stage (e.g., 90% taxation of the bonuses) and at the state level (the New York Daily Newssuggestively quotes Attorney General Andrew Cuomo as saying that "If a person returns the money, I don't believe there's a public interest in releasing their name.").  At the city level, though, Mayor Bloomberg apparently warned that "[e]ven if you think that it's fair to take [the bonuses] away, just recognize that we're going to have to make up that tax gap, that reduction, by taxing the rest of us."