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"We are a free-market economy" is simply not a defense of congress members being able to trade individual stocks with no restrictions. Free-market economies sti

"We are a free-market economy" is simply not a defense of congress members being able to trade individual stocks with no restrictions. Free-market economies still take measures against insider trading, still place limits on how and when high-ranking executives can trade company stock. Placing restrictions on how congress members can trade, when they have access to material non-public information, is totally compatible with a free-market economy. This is not a defense, it's a dismissal.

dsizzle 5y ago
They do have to report their positions. Not sure if that's a "restriction" per se, but that is something that insiders have to do as well, and it's something retail traders do not have to do. If they are using insider information so effectively, anyone is free to copy their moves, no? EDIT: That they only report 45 days after the fact is indeed a significant difference from company insiders and severely limits how well someone could profit by following along.
- rootusrootus 5y ago
  How quickly do they have to report their investment activity? If it's not immediate, then no, anyone is not free to copy their moves.
- pfortuny 5y ago
  Their moves are known ex post facto.
- voisin 5y ago
  Not sure about congress but for corporate insiders and major investors the reporting is quarterly so likely not as useful if trading on inside info (which tends to disseminate faster).
- hef19898 5y ago
  Having worked for a couple of publicly US-listed companies, when you have access to material data you had to adhere to strictly defined trade windows, among a load of other things. Being in Supply Chain, with obvious access to forecasts and inventories, I always fall under insider trading rules. Why law makers would be exempt is beyond me.
  - nradov 5y ago
    Law makers are exempt because they made themselves exempt, simple as that.
    - hef19898 5y ago
      Of course they are. I guess that's one of the few cases on which all law makers can agree. Doesn't mean they should be exempt.
    - dsizzle 5y ago
      Not simply "exempt", unless you're referring specifically to the trade window part. There is in fact a law making it illegal to trade on insider information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act Arguably it did not go far enough. I just don't think Congress has much in the way of insider information most of the time. Antitrust litigation would be one example where they do, but what else? Company insiders by contrast almost by definition have insider information.
      - hef19898 5y ago
        One could make the case that the ability to influence the market itself is even more powerful than just knowing some inside data. And we are not even talking about things like defense contracts.
        mcv 5y ago
        They should recuse themselves from any vote involving an industry that they have a more than trivial amount of stock in. Do you expect someone to restrict Big Tech when they have Facebook and Google stock?
        hef19898 5y ago
        Absolutely not, we are talking about politicians here. I like the idea of divesting into index funds during time in parliament / service.
- ceejayoz 5y ago
  They should have to report their positions well in advance. If I want to buy/sell Boeing stock and I'm a Senator, I should have to publicly file that intention three months in advance, and not be able to undo it. Those filings should immediately be public in a data feed. I'd expect to see a "Congressional stock purchases index fund" arise, and it'd be fascinating to see how it performed. Stuff like https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock-gilead-sciences/index.html https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock... - "oops, forgot to disclose my stock moves for over a year!" - should be punishable by loss of trading ability and confiscation of the assets (not just profits) involved.
  - dsizzle 5y ago
    True, in advance would be better. The "Congressional stock purchases index fund" would underperform though https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso... > Academic research revealed that senators' stock purchases underperformed the benchmark during six-month intervals by 17 basis points between 2012 and March 2020
    - ceejayoz 5y ago
      All sorts of trading strategies you could try out on a full, in-advance data feed, though. Only follow the trades of those in leadership, give special attention to transactions involving defense contractors by members of the Committee on Armed Services, etc. I don't doubt that Congress has its share of confident morons to skew the numbers downwards, but you might be able to identify people who somehow manage to make better moves.
  - PaulDavisThe1st 5y ago
    Nice idea, but for this to work, you'd also have require that previously announced intended trades MUST be followed through within a given window. Without out, this is way to game stocks without spending anything at all.
    - 5y ago
- mschuster91 5y ago
  > They do have to report their positions Yeah... 45 days after the trade (per https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso...). Not to mention that both dominant parties don't take their responsibilities seriously (https://www.businessinsider.com/congress-staff-violated-stock-act-conflicts-of-interest-possible-2021-12 https://www.businessinsider.com/congress-staff-violated-stoc...), and that information can be filed on paper so sleuths have a much harder time digging through the data to spot suspicious trades (https://www.opensecrets.org/news/2013/04/action-alert-stock-act-reversal-signed/ https://www.opensecrets.org/news/2013/04/action-alert-stock-...). An effective law would require all elected representatives to identify themselves and their close relatives (i.e. parents, siblings and children) as such to their banks and brokers, with the banks and brokers having to maintain an instant feed exposing all trades executed on the accounts of these people.
- Mountain_Skies 5y ago
  As a software developer at a law firm, I had to have all of my stock trades pre-approved by the firm just in case there was a conflict, regardless of if I had any actual access to or knowledge of material relevant to the company stock's being traded. Since I invest mostly in indexes, it wasn't much of an issue for me but I had a coworker who had several of his trades blocked without explanation other than there was a conflict. Funny how software developers with no actual access to insider information, just the potential for access, are more restricted than members of Congress who have actual access to such information.
  - andybp85 5y ago
    similar situation here, I'm a dev for a major business news company. her comments are brazen at best.
  - mistrial9 5y ago
    this rings true for me -- restrictions are placed on those that cannot defend themselves.. all of financial reporting is heading in the wrong direction, due in no small part to the operators of the system, not Mr and Miss Main Street
    - NoGravitas 5y ago
      > Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
mtalantikite 5y ago
I mean she's worth over $100 million and her husband is a professional investor, it's not surprising they'd want to keep restrictions off of themselves. It's shameful, but it's not surprising. A while back there was some noise around potential favorable treatment she gave Visa around the time of their IPO. [1] Congresspeople really should be forced to stop all trading activity while serving in office, aside from maybe putting things in index funds. And have term limits. [1] https://www.cbsnews.com/news/new-details-on-visas-attempt-to-influence-pelosi/ https://www.cbsnews.com/news/new-details-on-visas-attempt-to...
- ModernMech 5y ago
  It it really shameful though? As you said, it’s not surprising. And it’s not surprising because this kind of thing is so common in positions of power. It’s so common that I have started to admit to myself, after wrestling with the shame, that this is one of the key organizing principles of our society; that the primary purpose of attaining power is to leverage it to benefit yourself personally. If seemingly everyone agrees on this principle, left and right, then where does the shame come in? Why shouldn’t I seek power to enrich myself and my friends? Everyone else is doing it. No one gets punished for doing it. That’s the way we have decided that our society works. Society is worse off for it, probably, sure. But if our society doesn’t care about our society, why should I? Is that shameful? I used to think so but I’m not really that convinced anymore.
  - animal_spirits 5y ago
    > Why shouldn’t I seek power to enrich myself and my friends? > Society is worse off for it, probably, sure. You answered your own question. You are directly and knowingly contributing to the worsening of society and you should feel ashamed for it. If anything you should feel shame for your lack of self awareness here
    - kolbe 5y ago
      > and you should feel ashamed for it But why? Telling someone they should be "ashamed of [their] own lack of self-awareness" sounds like you don't know how to answer the question, so you just hurl insults instead. History has shown over and over and over that relying on people to be benevolent when they have outsized power is foolish. That they almost never have this "shame" you think everyone should have. I find this to be far more foolish: consolidating power into someone's hands with the assumption that they will rely on shame or pride to guide them towards using the power for good. We should all acknowledge humans are tribalist and self-interested, and limit the amount of power they can have to exploit. The way I see it, if you give them the power and they "misuse" it, that's as much your fault as theirs.
golemotron 5y ago
We should give her a break. She is busy solving problems in her district.
- AlexTWithBeard 5y ago
  I can see fat dripping from this post.
- 3glkjlkjgr 5y ago
  Yep. * We've had 3X murders more than "covid deaths" last year. * We have people dying on the street - you have to literally walk over them. * We have human shit everywhere. * The mayor's ex-boyfriend was arrested by the FBI for stealing money from the "clean streets program". * They banned natural gas and it is ~40 F right now. * She repeatedly gets away without wearing a mask (in the hair salon, at the Getty wedding, etc.) while us plebes get violently assaulted for not having our mask on 'properly' in the fucking grocery store. * The school board refers to Asian Americans as "house niggers" and won't leave until people bribe her with a package of tens of millions of dollars. * They tried to rename the schools from names like Washington and Lincoln. Why? I don't know Lincoln, a republican, wrote this document called the emancipation proclamation - apparently freeing a bunch of slaves or something. * You can't enter a restaurant or most any business inside the city without showing your papers - even if you are tripled/quadruple vaxd and you are wearing a mask. * Oh yeh, I forgot, you can legally rape a 14 year old boy but not a 14 year old girl. Man, this fucking list is endless. I hope San Francisco is the first city the Chinese bomb with their nuclear tipped hyper-sonics.
- publicexecution 5y ago
  Did you know you can legally rape a 14 year old boy in San Fran Shithole? Did you know that the school board calls asian americans "house niggers" ? Did you know that Pelosi repeatedly gets away without wearing a mask inside even though all of us will get yelled at if we don't have the mask above the nose in the grocery store, present our vax pass and be tripled or quad vaxd?
- publicexecution 5y ago
  Did you know that London Breed's (also who repeatedly violates the city and now state mask mandate) boyfriend was arrested by the FBI for stealing money from the SF Clean Streets Program?
javert 5y ago
In a pure free market, trading by insiders is legal. It used to be that way in the US. Also, keep in mind that regulation creates insiders of its own. Regulation always degenerates into a weapon of the corrupt.
- analognoise 5y ago
  Woah, I don't know about that. I like clean air regulations, clean water, and regulations against children working. Without regulation we would have a real hellscape. It turns out you can't trust "the market" to do the right thing - ever.
  - javert 5y ago
    Do you disagree with something I said in my comment? I cannot see that you do. Also, frankly, I don't appreciate the sass. It isn't necessary.
    - analognoise 5y ago
      I was responding to "Regulation always degenerates into a weapon of the corrupt." That's an easy target to sass, because it's such an easy target. Did I reply to wrong comment or something? Maybe it's because I'm on mobile. Apologies if I replied to the wrong person.
- gruez 5y ago
  > In a pure free market, trading by insiders is legal. Not really. Why can't companies make "no insider trading" as a condition to employment?
  - javert 5y ago
    They can. Do you not understand the difference between a rule for employees, and the law?
- ClumsyPilot 5y ago
  In a pure free market, trading slaves and snake oil is legal. It used to be that way in the US.
hermitdev 5y ago
> This is not a defense, it's a dismissal. You really hit the nail on the head here. Members of Congress (and their staff) should either simply be held to the already existing rules on insider trading. They should not be able to act upon material non public information. They should be subject to trading windows and restrictions. They should not be able to vote on any legislation affecting held securities. Don't want to be subject to the rules? Set up a blind trust like the rest of us would have to. If Congress is going to be held to a different standard than the rest of us, it should be a higher standard, not a more lax one.
- JumpCrisscross 5y ago
  > Members of Congress (and their staff) should either simply be held to the already existing rules on insider trading. They should not be able to act upon material non public information. This is the law, and has been since 2012 [1]. [1] https://en.m.wikipedia.org/wiki/STOCK_Act https://en.m.wikipedia.org/wiki/STOCK_Act
  - umvi 5y ago
    Is the law actually enforced though? It seems like every other month we see evidence of congress members selling off a ton of stock mere days before some critical piece of information goes public that makes the stock value drop.
    - dntrkv 5y ago
      With 538 members of our government bodies making trades at "random", with typical trading intervals, it doesn't seem so outrageous that a few times a year there will be a trade that looks to be made on insider information. I'm not saying it never happens, but I think it's difficult to separate "insider trading" from "getting lucky" when you're talking about 538 generally well-off, active traders. It's like when a CEO offloads stock before it drops and everyone loses their minds. But if you dig in to the story, the CEO is just selling stock on a regular schedule.
      - 5y ago
Cupertino95014 5y ago
In capitalism, if you have money you can get power. In socialism, if you have power you can get money. I guess in a mixed economy, it flows both ways.
notacoward 5y ago
A market that allows insiders to profit from still-hidden information, inevitably at the expense of non-insiders, is not truly free. And legislators privy to non-public information from hearings are definitely insiders in any rational sense. The fact that they're not so in a legal sense is only a reflection of the fact that they write the laws and sometimes do so for their own benefit. As the saying goes... There are two groups of people who laugh at the law: those who break it, and those who make it.
- astrobe_ 5y ago
  How do you prevent this anyway? If you want to make money from insider info you can trade it (on a truly free black market), if you want to minimize the risk of being caught.
biztos 5y ago
Is trading an index fund that much better, when you are effectively The Government and can make decisions, let alone know about them in advance, that will affect entire markets?
- dmt0 5y ago
  There's a good example right in front of our eyes right now. In order for inflation to get back to normal, the index has to drop around 20%. A drop would be pretty much inevitable as the liquidity would have to be pulled out. Powell has all his reported holdings in the index. People who influence his decisions are likely also very much invested in the index. Is anybody gonna do the right thing?
mathattack 5y ago
In our free market economy execs can’t trade on inside information or they would go to jail. It’s legal for congress to trade in inside information. She’s a sleazebag for blowing this off.
godelski 5y ago
I think what a lot of people miss is that a well regulated market is a free market. A market that is unregulated ends up with monopolies and huge power dynamics as the old guard is able to pool capital through momentum and compounding forces. Good regulation reduces the power imbalance so David has the possibility to defeat Goliath and they can fight on even ground.
Accujack 5y ago
This is Nancy Pelosi saying "Members of congress make lots of money that way, and we like money, so we're not going to stop making money." Like most of government, they won't take their hand out of the cash drawer until someone threatens to put cuffs on it.

dsizzle 5y ago

They do have to report their positions. Not sure if that's a "restriction" per se, but that is something that insiders have to do as well, and it's something retail traders do not have to do. If they are using insider information so effectively, anyone is free to copy their moves, no? EDIT: That they only report 45 days after the fact is indeed a significant difference from company insiders and severely limits how well someone could profit by following along.

rootusrootus 5y ago
How quickly do they have to report their investment activity? If it's not immediate, then no, anyone is not free to copy their moves.
pfortuny 5y ago
Their moves are known ex post facto.
voisin 5y ago
Not sure about congress but for corporate insiders and major investors the reporting is quarterly so likely not as useful if trading on inside info (which tends to disseminate faster).
hef19898 5y ago
Having worked for a couple of publicly US-listed companies, when you have access to material data you had to adhere to strictly defined trade windows, among a load of other things. Being in Supply Chain, with obvious access to forecasts and inventories, I always fall under insider trading rules. Why law makers would be exempt is beyond me.
- nradov 5y ago
  Law makers are exempt because they made themselves exempt, simple as that.
  - hef19898 5y ago
    Of course they are. I guess that's one of the few cases on which all law makers can agree. Doesn't mean they should be exempt.
  - dsizzle 5y ago
    Not simply "exempt", unless you're referring specifically to the trade window part. There is in fact a law making it illegal to trade on insider information. https://en.wikipedia.org/wiki/STOCK_Act https://en.wikipedia.org/wiki/STOCK_Act Arguably it did not go far enough. I just don't think Congress has much in the way of insider information most of the time. Antitrust litigation would be one example where they do, but what else? Company insiders by contrast almost by definition have insider information.
    - hef19898 5y ago
      One could make the case that the ability to influence the market itself is even more powerful than just knowing some inside data. And we are not even talking about things like defense contracts.
      - mcv 5y ago
        They should recuse themselves from any vote involving an industry that they have a more than trivial amount of stock in. Do you expect someone to restrict Big Tech when they have Facebook and Google stock?
        hef19898 5y ago
        Absolutely not, we are talking about politicians here. I like the idea of divesting into index funds during time in parliament / service.
ceejayoz 5y ago
They should have to report their positions well in advance. If I want to buy/sell Boeing stock and I'm a Senator, I should have to publicly file that intention three months in advance, and not be able to undo it. Those filings should immediately be public in a data feed. I'd expect to see a "Congressional stock purchases index fund" arise, and it'd be fascinating to see how it performed. Stuff like https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock-gilead-sciences/index.html https://www.cnn.com/2021/08/11/politics/rand-paul-wife-stock... - "oops, forgot to disclose my stock moves for over a year!" - should be punishable by loss of trading ability and confiscation of the assets (not just profits) involved.
- dsizzle 5y ago
  True, in advance would be better. The "Congressional stock purchases index fund" would underperform though https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso... > Academic research revealed that senators' stock purchases underperformed the benchmark during six-month intervals by 17 basis points between 2012 and March 2020
  - ceejayoz 5y ago
    All sorts of trading strategies you could try out on a full, in-advance data feed, though. Only follow the trades of those in leadership, give special attention to transactions involving defense contractors by members of the Committee on Armed Services, etc. I don't doubt that Congress has its share of confident morons to skew the numbers downwards, but you might be able to identify people who somehow manage to make better moves.
- PaulDavisThe1st 5y ago
  Nice idea, but for this to work, you'd also have require that previously announced intended trades MUST be followed through within a given window. Without out, this is way to game stocks without spending anything at all.
  - 5y ago
mschuster91 5y ago
> They do have to report their positions Yeah... 45 days after the trade (per https://www.investopedia.com/tiktokers-track-lawmakers-personal-stock-trades-5206454 https://www.investopedia.com/tiktokers-track-lawmakers-perso...). Not to mention that both dominant parties don't take their responsibilities seriously (https://www.businessinsider.com/congress-staff-violated-stock-act-conflicts-of-interest-possible-2021-12 https://www.businessinsider.com/congress-staff-violated-stoc...), and that information can be filed on paper so sleuths have a much harder time digging through the data to spot suspicious trades (https://www.opensecrets.org/news/2013/04/action-alert-stock-act-reversal-signed/ https://www.opensecrets.org/news/2013/04/action-alert-stock-...). An effective law would require all elected representatives to identify themselves and their close relatives (i.e. parents, siblings and children) as such to their banks and brokers, with the banks and brokers having to maintain an instant feed exposing all trades executed on the accounts of these people.
Mountain_Skies 5y ago
As a software developer at a law firm, I had to have all of my stock trades pre-approved by the firm just in case there was a conflict, regardless of if I had any actual access to or knowledge of material relevant to the company stock's being traded. Since I invest mostly in indexes, it wasn't much of an issue for me but I had a coworker who had several of his trades blocked without explanation other than there was a conflict. Funny how software developers with no actual access to insider information, just the potential for access, are more restricted than members of Congress who have actual access to such information.
- andybp85 5y ago
  similar situation here, I'm a dev for a major business news company. her comments are brazen at best.
- mistrial9 5y ago
  this rings true for me -- restrictions are placed on those that cannot defend themselves.. all of financial reporting is heading in the wrong direction, due in no small part to the operators of the system, not Mr and Miss Main Street
  - NoGravitas 5y ago
    > Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.

mtalantikite 5y ago

I mean she's worth over $100 million and her husband is a professional investor, it's not surprising they'd want to keep restrictions off of themselves. It's shameful, but it's not surprising. A while back there was some noise around potential favorable treatment she gave Visa around the time of their IPO. [1] Congresspeople really should be forced to stop all trading activity while serving in office, aside from maybe putting things in index funds. And have term limits. [1] https://www.cbsnews.com/news/new-details-on-visas-attempt-to-influence-pelosi/ https://www.cbsnews.com/news/new-details-on-visas-attempt-to...

ModernMech 5y ago
It it really shameful though? As you said, it’s not surprising. And it’s not surprising because this kind of thing is so common in positions of power. It’s so common that I have started to admit to myself, after wrestling with the shame, that this is one of the key organizing principles of our society; that the primary purpose of attaining power is to leverage it to benefit yourself personally. If seemingly everyone agrees on this principle, left and right, then where does the shame come in? Why shouldn’t I seek power to enrich myself and my friends? Everyone else is doing it. No one gets punished for doing it. That’s the way we have decided that our society works. Society is worse off for it, probably, sure. But if our society doesn’t care about our society, why should I? Is that shameful? I used to think so but I’m not really that convinced anymore.
- animal_spirits 5y ago
  > Why shouldn’t I seek power to enrich myself and my friends? > Society is worse off for it, probably, sure. You answered your own question. You are directly and knowingly contributing to the worsening of society and you should feel ashamed for it. If anything you should feel shame for your lack of self awareness here
  - kolbe 5y ago
    > and you should feel ashamed for it But why? Telling someone they should be "ashamed of [their] own lack of self-awareness" sounds like you don't know how to answer the question, so you just hurl insults instead. History has shown over and over and over that relying on people to be benevolent when they have outsized power is foolish. That they almost never have this "shame" you think everyone should have. I find this to be far more foolish: consolidating power into someone's hands with the assumption that they will rely on shame or pride to guide them towards using the power for good. We should all acknowledge humans are tribalist and self-interested, and limit the amount of power they can have to exploit. The way I see it, if you give them the power and they "misuse" it, that's as much your fault as theirs.

golemotron 5y ago

We should give her a break. She is busy solving problems in her district.

AlexTWithBeard 5y ago
I can see fat dripping from this post.
3glkjlkjgr 5y ago
Yep. * We've had 3X murders more than "covid deaths" last year. * We have people dying on the street - you have to literally walk over them. * We have human shit everywhere. * The mayor's ex-boyfriend was arrested by the FBI for stealing money from the "clean streets program". * They banned natural gas and it is ~40 F right now. * She repeatedly gets away without wearing a mask (in the hair salon, at the Getty wedding, etc.) while us plebes get violently assaulted for not having our mask on 'properly' in the fucking grocery store. * The school board refers to Asian Americans as "house niggers" and won't leave until people bribe her with a package of tens of millions of dollars. * They tried to rename the schools from names like Washington and Lincoln. Why? I don't know Lincoln, a republican, wrote this document called the emancipation proclamation - apparently freeing a bunch of slaves or something. * You can't enter a restaurant or most any business inside the city without showing your papers - even if you are tripled/quadruple vaxd and you are wearing a mask. * Oh yeh, I forgot, you can legally rape a 14 year old boy but not a 14 year old girl. Man, this fucking list is endless. I hope San Francisco is the first city the Chinese bomb with their nuclear tipped hyper-sonics.
publicexecution 5y ago
Did you know you can legally rape a 14 year old boy in San Fran Shithole? Did you know that the school board calls asian americans "house niggers" ? Did you know that Pelosi repeatedly gets away without wearing a mask inside even though all of us will get yelled at if we don't have the mask above the nose in the grocery store, present our vax pass and be tripled or quad vaxd?
publicexecution 5y ago
Did you know that London Breed's (also who repeatedly violates the city and now state mask mandate) boyfriend was arrested by the FBI for stealing money from the SF Clean Streets Program?

javert 5y ago

In a pure free market, trading by insiders is legal. It used to be that way in the US. Also, keep in mind that regulation creates insiders of its own. Regulation always degenerates into a weapon of the corrupt.

analognoise 5y ago
Woah, I don't know about that. I like clean air regulations, clean water, and regulations against children working. Without regulation we would have a real hellscape. It turns out you can't trust "the market" to do the right thing - ever.
- javert 5y ago
  Do you disagree with something I said in my comment? I cannot see that you do. Also, frankly, I don't appreciate the sass. It isn't necessary.
  - analognoise 5y ago
    I was responding to "Regulation always degenerates into a weapon of the corrupt." That's an easy target to sass, because it's such an easy target. Did I reply to wrong comment or something? Maybe it's because I'm on mobile. Apologies if I replied to the wrong person.
gruez 5y ago
> In a pure free market, trading by insiders is legal. Not really. Why can't companies make "no insider trading" as a condition to employment?
- javert 5y ago
  They can. Do you not understand the difference between a rule for employees, and the law?
ClumsyPilot 5y ago
In a pure free market, trading slaves and snake oil is legal. It used to be that way in the US.

hermitdev 5y ago

> This is not a defense, it's a dismissal. You really hit the nail on the head here. Members of Congress (and their staff) should either simply be held to the already existing rules on insider trading. They should not be able to act upon material non public information. They should be subject to trading windows and restrictions. They should not be able to vote on any legislation affecting held securities. Don't want to be subject to the rules? Set up a blind trust like the rest of us would have to. If Congress is going to be held to a different standard than the rest of us, it should be a higher standard, not a more lax one.

JumpCrisscross 5y ago
> Members of Congress (and their staff) should either simply be held to the already existing rules on insider trading. They should not be able to act upon material non public information. This is the law, and has been since 2012 [1]. [1] https://en.m.wikipedia.org/wiki/STOCK_Act https://en.m.wikipedia.org/wiki/STOCK_Act
- umvi 5y ago
  Is the law actually enforced though? It seems like every other month we see evidence of congress members selling off a ton of stock mere days before some critical piece of information goes public that makes the stock value drop.
  - dntrkv 5y ago
    With 538 members of our government bodies making trades at "random", with typical trading intervals, it doesn't seem so outrageous that a few times a year there will be a trade that looks to be made on insider information. I'm not saying it never happens, but I think it's difficult to separate "insider trading" from "getting lucky" when you're talking about 538 generally well-off, active traders. It's like when a CEO offloads stock before it drops and everyone loses their minds. But if you dig in to the story, the CEO is just selling stock on a regular schedule.
    - 5y ago

Cupertino95014 5y ago

In capitalism, if you have money you can get power. In socialism, if you have power you can get money. I guess in a mixed economy, it flows both ways.

notacoward 5y ago

A market that allows insiders to profit from still-hidden information, inevitably at the expense of non-insiders, is not truly free. And legislators privy to non-public information from hearings are definitely insiders in any rational sense. The fact that they're not so in a legal sense is only a reflection of the fact that they write the laws and sometimes do so for their own benefit. As the saying goes... There are two groups of people who laugh at the law: those who break it, and those who make it.

astrobe_ 5y ago
How do you prevent this anyway? If you want to make money from insider info you can trade it (on a truly free black market), if you want to minimize the risk of being caught.

biztos 5y ago

Is trading an index fund that much better, when you are effectively The Government and can make decisions, let alone know about them in advance, that will affect entire markets?

dmt0 5y ago
There's a good example right in front of our eyes right now. In order for inflation to get back to normal, the index has to drop around 20%. A drop would be pretty much inevitable as the liquidity would have to be pulled out. Powell has all his reported holdings in the index. People who influence his decisions are likely also very much invested in the index. Is anybody gonna do the right thing?

mathattack 5y ago

In our free market economy execs can’t trade on inside information or they would go to jail. It’s legal for congress to trade in inside information. She’s a sleazebag for blowing this off.

godelski 5y ago

I think what a lot of people miss is that a well regulated market is a free market. A market that is unregulated ends up with monopolies and huge power dynamics as the old guard is able to pool capital through momentum and compounding forces. Good regulation reduces the power imbalance so David has the possibility to defeat Goliath and they can fight on even ground.

Accujack 5y ago

This is Nancy Pelosi saying "Members of congress make lots of money that way, and we like money, so we're not going to stop making money." Like most of government, they won't take their hand out of the cash drawer until someone threatens to put cuffs on it.