...we should sit down with state and local treasurers and ask them what prevents them from taking advantage of the lower bond underwriting commissions that could be charged by investment banks in Mumbai or Hong Kong. This could save taxpayers nationwide billions of dollars each year in bond underwriting fees...A fascinating idea, but Wall Street is largely a reputation- and experience-driven business. There isn't really anything that keeps developing country firms from setting up shop in the U.S. and trying to compete; the players in that market are entrenched for reasons that have nothing to do with trade policy.
Free trade policies that removed barriers to financial firms in the developing world would both hasten growth by increasing efficiency and also lead to a more equal distribution of income. Of course, all the editorial writers and columnists who hold free trade to be most sacred would have to support this agenda, otherwise they would be a bunch of knuckle-scraping Neanderthals. Put simply, we need a new free trade agenda that will do for Wall Street exactly what the current free trade agenda has done for Detroit.
If we really wanted to introduce more competition for Wall Street bankers, we would allow the banks to hire more foreign workers on immigrant visas in the U.S. But that is not a popular idea among the middle-income workers Baker wants to help.