With the Dow Jones Industrial average down by more than 500 points on Monday, a New York Assembly Republican candidate, Saul Farber, is worried. Mr. Farber, 22, a reformer in the mode of Sarah Palin, is running for the 75th district seat, and many of his future potential constituents are affected.

“We’ve lost 90,000 financial district jobs this year, and these people are responsible for a large percent of the taxes flowing to New York City and Albany,” he said in a telephone conversation. “These people live in our city, they have to pay their bills.

“My economic policy will enable people to pick themselves up and get back on their feet. My opponent has not done this in 38 years.”

Mr. Farber’s district runs from 75th Street and Central Park West across to Columbus Avenue, and then south to 16th Street, where it hooks east and north to embrace Murray Hill.

He is challenging Richard Gottfried, who won the seat in 1970, when he was 23 years old, and who has never had major opposition.

All 12 assembly districts in New York City are Democratic. But, since New York has the largest group of young Republicans in America, Mr. Farber thinks that this might be the year for change.

His platform is ambitious. He wants to rejuvenate the Empire State by cutting New York’s state sales tax, reducing Medicaid fraud, increasing fiscal transparency, reducing the number of panhandlers, and increasing the number of charter schools.

Three months ago, when I first met Mr. Farber and heard him speak to the New York Young Republicans’ Club, his candidacy seemed quixotic. How was he ever going to defeat an entrenched incumbent who has held the seat for almost 40 years?

Yet, since June, Mr. Farber’s candidacy has gained momentum, defying all expectations.

He is the only candidate in Manhattan for Assembly to be endorsed by the Independence Party. He has reported raising $50,000, a respectable sum. Mr. Gottfried, on the other hand, has reported $18,000 of campaign contributions for 2008 — but may have a war chest of carryover funds.

Mr. Farber wants to follow the example of Alaska, Delaware, Montana, New Hampshire, and Oregon — all states without a general sales tax — and eliminate New York’s 4% sales tax, which brought in $11.3 billion in 2006, the latest year available. Doing that would leave New York City with a local sales tax of 4%, half the present level.

Mr. Farber would pay for the abolition of the state sales tax by doing away with $18 billion in Medicaid fraud in New York State, or 15% of the state’s budget. He wants to prosecute people who file false claims, and get an independent auditor.

Mr. Farber has ambitious ideas for changing the fiscal relationship between New York City and New York State — if he can find the votes in Albany for such legislation. That might be harder than he thinks considering he would reduce the tax dollars that New York City sends to Albany.

Currently, the city pays $11 billion more to Albany than it receives in services. Mr. Farber would bring this down to zero eventually, and get enough back to cover the city deficit and the removal of state sales tax.

“I’d like some of our money back,” he said. “Let New York be self-sufficient and not beholden to Albany and Washington.”

Mr. Farber seeks spending transparency at both the state and city level. Like Mrs. Palin, who requires that all state expenditures greater than $1,000 are available online, he advocates posting all state and New York City expenditures on the Internet so that residents can see where their tax dollars are going. Texas, Missouri, Kansas, Oklahoma, and Hawaii do the same.

During Mayor Giuliani’s tenure, crime decreased, but now it’s rising. Mr. Farber would hire more police officers to raise the quality of life in New York City by curbing panhandling, especially near the N train line at 57th Street and Seventh Avenue, at West 23rd Street, and at 59th Street and Lexington. The busy West Side stops lie within the 75th Assembly district.

“It’s essential that all New Yorkers and visitors are comfortable walking the streets, riding the trains, and hailing cabs, ultimately supporting the New York economy,” Mr. Farber says.

Stock markets will eventually recover from Monday’s rout, but New York’s economy, especially jobs in its financial sector, is a more immediate problem. In light of the financial turmoil, Mr. Farber’s proposals are even more worthy of consideration than when he began his campaign.

Mrs. Palin’s phenomenal rise from an unknown governor to a vice presidential candidate might help Mr. Farber. He is another young reformer, not indebted to special interests, and willing to take on the bureaucracy. Perhaps New Yorkers will think that after 38 years of Mr. Gottfried, it’s time for a change in both ideas and representation.

Ms. Furchtgott-Roth, dfr@hudson.org, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute.