4 ms·

I joked in the past that politicians should only be allowed to buy index funds. In their local currency and from their country of course. Basically, do a good

I joked in the past that politicians should only be allowed to buy index funds. In their local currency and from their country of course. Basically, do a good job for the economy overall and then your net worth will increase.

bee_rider 5y ago
It would be kinda interesting if each town/county/state/country had an associated index fund (maybe one for Earth as a whole, too) and elected officials were only allowed to invest in one "up" from their elected seat. I mean this would involve a ton of bookkeeping but it would be interesting to see * how behavior changes when elected officials are required to have their interest in line with their constituents. * what mixes people choose.
Moodles 5y ago
Why's that a joke? Sounds like a good idea on the face of it.
xyzzy123 5y ago
I like this. A few thoughts: First (as usual) it incentivises short term-ism. Some penalty to initiatives where we take a hit now but benefit in 40 years, e.g. climate action. It incentivises our entire political class to keep broad asset bubbles going and "not stop the party" while they're in control. It increases incentives to misrepresent or obfuscate the state of the entire economy (money supply, inflation and other macro things that influence the market as a whole). To be fair all these incentives exist right now, so it might not make things worse.
- 908B64B197 5y ago
  That's very true. CEO compensation might be another thing to look at when designing these policies: Often it's paid out only if the company reaches certain goals or paid as options that can only be exercised in the future at a certain price, ie, they are completely worthless otherwise. "You only get your pension if the carbon emissions are down by X% in 10 years", or something like that.
leppr 5y ago
> Basically, do a good job for the economy overall and then your net worth will increase. The economy's health is not necessarily accurately reflected in asset valuations (which is what index funds track). When it becomes clear the pie will stop growing for a little while, wealthy politicians have the perverse incentive to enact policies increasing asset prices at the expense of overall productivity (in 2021-2022 this manifested in money supply increase combined with lockdowns to delay inflation until after the transfer of wealth).

bee_rider 5y ago

It would be kinda interesting if each town/county/state/country had an associated index fund (maybe one for Earth as a whole, too) and elected officials were only allowed to invest in one "up" from their elected seat. I mean this would involve a ton of bookkeeping but it would be interesting to see * how behavior changes when elected officials are required to have their interest in line with their constituents. * what mixes people choose.

Moodles 5y ago

Why's that a joke? Sounds like a good idea on the face of it.

xyzzy123 5y ago

I like this. A few thoughts: First (as usual) it incentivises short term-ism. Some penalty to initiatives where we take a hit now but benefit in 40 years, e.g. climate action. It incentivises our entire political class to keep broad asset bubbles going and "not stop the party" while they're in control. It increases incentives to misrepresent or obfuscate the state of the entire economy (money supply, inflation and other macro things that influence the market as a whole). To be fair all these incentives exist right now, so it might not make things worse.

908B64B197 5y ago
That's very true. CEO compensation might be another thing to look at when designing these policies: Often it's paid out only if the company reaches certain goals or paid as options that can only be exercised in the future at a certain price, ie, they are completely worthless otherwise. "You only get your pension if the carbon emissions are down by X% in 10 years", or something like that.

leppr 5y ago

> Basically, do a good job for the economy overall and then your net worth will increase. The economy's health is not necessarily accurately reflected in asset valuations (which is what index funds track). When it becomes clear the pie will stop growing for a little while, wealthy politicians have the perverse incentive to enact policies increasing asset prices at the expense of overall productivity (in 2021-2022 this manifested in money supply increase combined with lockdowns to delay inflation until after the transfer of wealth).