Foreign investment is a large and growing business in America, and it is integral to the health of New York City. Much, if not most, foreign investment passes through the city’s banks, law firms, and accounting firms.

While the dollar figures are immense, most of these foreign funds are channeled into passive investments and remarkably little is put into controlling interests in American corporations. This skewing of investment reflects the desire by foreigners to avoid government oversight, and under Senator Obama, such oversight is likely to become more extreme.

Mr. Obama does not advocate free trade, but instead prefers the phrase “fair trade,” code for more government meddling in transactions. That may mean more jobs in Washington, but it will result in fewer outside the Beltway, and certainly fewer in New York. This is no comfort to potential investors in America, and no comfort to New Yorkers eager to support international investments.

Foreign-owned assets in America exceeded $20 trillion at the end of 2007, whether measured on a cost or current value basis and excluding derivatives. That comes out to roughly $65,000 for every American. These numbers, it should be pointed out, are substantially understated, reflecting assets such as stocks, bonds, and bank accounts, where ownership by nationality is visible, but ignoring indirect investments and unregistered private holdings.

Lest anyone conclude that America is now foreign owned, in most sectors of the economy foreign ownership remains the exception rather than the rule. And overseas assets owned by Americans, while slightly smaller than foreign-owned assets here, have increased tenfold in less than 20 years.

In addition, foreign ownership is concentrated in certain areas, such as government-issued Treasury bonds, and the relatively little direct investment in American corporations means that while American companies have received large minority investments in the past year, the acquisition of foreign controlling interests remains unusual.

Will this pattern continue? Although majority stakes in some American companies will be sold abroad, the pace is unlikely to be rapid. Much more foreign investment will likely be structured as minority stakes, because large visible foreign investments receive close government scrutiny, and even the potential for such review frightens away many investors and sellers. Such investments may receive regulatory restrictions beyond those that would be imposed by a domestic transaction, including limitations imposed by the Committee on Foreign Investment in the United States, as well as through other governmental regulatory bodies.

It takes much longer and with greater regulatory uncertainty for a foreign acquisition than for the domestic acquisition of an American corporation. The impetus is at least partially domestic politics rather than exclusively changes in international threats.

Another consideration is increasingly complex international antitrust review. Antitrust authorities must review mergers and acquisitions and not find an increased likelihood of anti-competitive market behavior. Product and service markets are often international in scope, leading some antitrust authorities to look intensively at international holdings. Microsoft and other corporations can attest to the challenges of running afoul of antitrust authorities.

The most troubling reason for a lack of sales of American corporations to eager foreign buyers is the changing political climate of America. Throughout our history, America has been a magnet for foreign investment, which has been a source of growth. For decades, administrations of both political parties supported free trade and open investment policies, which have supported American economic growth.

But those days may be past. When Mr. Obama speaks tomorrow at the Democratic National Convention, New Yorkers should pay close attention.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He can be reached at hfr@furchtgott-roth.com.