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Senators to Propose Ban on U.S. Lawmakers, Executive Branch Members Owning Stock
- jqpabc123 3y agoAll show and no go. Like most such "reforms", it is intended for naive public consumption while also being easily circumvented. Setup a trust or corporation run by a family member and continue with business a usual.
- rsstack 3y agoAs if it would even reach a vote. (Some) Senators (plan) to _propose_ ban ...
- mhb 3y agoI dunno. There's a reasonable chance that the SEC might have encountered that sort of activity some other times in its history.
- anonym29 3y agoThis isn't a reason to not support the current effort. Democracy is an iterative process, not a magic wand that you wave to instantly teleport to a flawless system. This bill is step one. When (not if) it gets circumvented, that's when the next law addressing that problem can be passed.
- bell-cot 3y ago> ...iterative process... ...When (not if it gets circumvented), that's when... If the politicians manage the process correctly, they can forever be passing "reform bills" which sound good...but have enough loopholes so that nothing resembling actual reform ever happens. Rule of Thumb: If somebody claims they want to build a transportation system, then starts with a square wheel and talks about improving it as the next step - then either [1] they're teaching, and it's only a pedagogical exercise, or [2] they are lying about wanting to build a transportation system.
- anonym29 3y agoInefficient action being taken is still better than absolutely zero action being taken in addressing a problem. Think, for instance, about how many more people might become aware of / interested in the problem, who were previously unaware or uninterested in insider stock trading by members of congress, should a historic bill be passed to initialize the process of stopping the problem.
- givemeethekeys 3y agoPeople will be more frustrated with no action. That is why politicians (like so many others) do the bare minimum to kick the can down the road some more.
- respondo2134 3y agoThis sounds good in principal but is not always true. You have limited resources, including time, public goodwill and attention. If you waste it all on inefficient action you've got nothing left for working on actual solutions. >> should a historic bill be passed Passed? They've never brought even a flawed bill like this to a vote, let alone passed one.
- dotnet00 3y agoInefficient action is not necessarily better than absolutely no action. Inefficient action is a way for politicians to kick the can down the road so they can still use the issue to buy votes. That's how you get 40+ years of abortion being legal on a technicality, rather than being properly codified into law. It's how you get "student loan forgiveness" instead of any attempt at fixing the student loan racket. It's how you get a NASA where the overall budget is constantly decreasing with the exception of the super expensive rocket no one wants. Sure, in the moment, these were nice decisions and helped while they lasted, but overall they're simply suppressing actual solutions to focus on feelgood promises.
- bell-cot 3y ago> Inefficient action... For actions which are not free (and getting any bill through Congress sure as h*ell isn't), one can write a very simple "break even" formula - relating the cost of action A, the efficiency of action A, and the value of the benefits that a 100%-efficient action would provide. For actions falling short of break-even, it's generally considered wiser to spend the resources on something else. You can spend money re-roofing your house with cotton candy - because shingles were too expensive, or unavailable, or whatever. Yeah, that does scratch the itchy need to "do something!". But longer-term...
- jqpabc123 3y agoThis bill is step one. No, it's not. It's just the latest in a long line of campaign finance reform --- most of which is ineffective because it was purposely designed from the get-go to be easily circumvented. The open secret here is that you're counting on an organization (Congress) to police itself. This makes no more sense than an counting on Congress to avoid raising it's own pay. How has that worked out?
- strictnein 3y ago> This makes no more sense than an counting on Congress to avoid raising it's own pay Congress hasn't had a raise since 2009. Their current effective pay is the lowest its been in 75 years. https://en.wikipedia.org/wiki/Salaries_of_members_of_the_United_States_Congress https://en.wikipedia.org/wiki/Salaries_of_members_of_the_Uni...
- kjkjadksj 3y agoNo wonder the congress to consultancy revolving door is so well greased
- jqpabc123 3y agoNo one is really counting but graft is probably the highest it's been in 75 years. The reform laws (like this one) are written to make it's incredibly easy for politicians to personally profit from "campaign contributions" --- among other things. Example: Trump personally buys copyrighted MAGA hats in bulk from China for $3 each and sells them to his campaign for $35 each. Instant personal profit --- from your "contributions". His campaign sells some, gives some away and trashes any remainder. They don't care, it's your money, not theirs.
- ericmcer 3y agoWhat if making hollow grand gestures is the process, with reelection and career progression as the end goal.
- giantg2 3y agoIf the restrictions are similar to restrictions by the SEC or financial institutions, having more than 10% ownership over a company or control over a trust would also violate those restrictions.
- deleted 3y ago[deleted]
- BurningFrog 3y agoIf so, that's probably true for all insider trading regulations?
- rsynnott 3y ago> Setup a trust or corporation run by a family member Unless you can control their contact with that family member, that sounds like it would accomplish approximately nothing.
- teeray 3y agoOne major flaw of our system is that it's nigh impossible to get lawmakers to pass laws favoring the public good that act against their own interests.
- astockwell 3y agoI feel like there is very likely some precedents for this (or at least some close examples) that other countries have implemented similar to this, I wonder if any of these folks have looked into it. Wish US elected officials would look at how ideas fared in other places more often. "Pull their heads out of their asses" would be the less cordial phrasing there.
- _ea1k 3y agoIn practice, how would this work? A requirement that they only use index funds? But then wouldn't that bias them to support the companies that are the major movers in that index? Indexes are often heavily weighted to a small subset after all. TBH, it seems like an idea that sounds good on the surface but has practical issues in implementation that would make it irrelevant
- mikrl 3y agoMore reasonable would be a ban on trading, if not ownership. But then again, lawmakers would just advocate positions in favour of their static portfolio. It does seem better than the status quo of ‘extremely lucky’ returns though.
- lotsofpulp 3y agoLegislators are already under the imperative to backstop public equity markets (and hence all the biggest companies) because the most active voters also have a significant amount of their wealth in the public equity markets. And also all the state and local governments are heavily depending on equities to deliver major gains to fulfill their deferred compensation for government employees (otherwise they have to increase taxes to make up for lack of any performance), so the more state and local tax you pay or are able to pay, the more invested you are in backstopping the markets also.
- capital_guy 3y agoThis is a ridiculous take. Imperfect is better than bad. Right now you have the Speaker of the House's husband buying $5million worth of Alphabet call options. That's not a good system.
- koolba 3y ago> Right now you have the Speaker of the House's husband buying $5million worth of Alphabet call options. That’s patently false. Nancy Pelosi is no longer Speaker of the House. The former Speaker of the House’s husband was the one doing all that.
- KingLancelot 3y agoThere is 0% reason Nancy Pelosi should be allowed to be one of the best traders in history, it’s nothing but corruption. Either lawmakers should not be allowed to own stock, or insider trading shouldn’t be a crime, though the latter option is a lot more abusable.
- mikeyouse 3y agoHave you considered that the meme about Pelosi being "the best trader in history" might be just a complete lie? I don't even disagree with the proposals to restrict trading in congress but it's kind of wild how credulously everyone is repeating these things..
- KingLancelot 3y ago[dead]
- gautamdivgi 3y agoI don’t think she is the best trader. I think it’s her husband that’s the best trader.
- thedangler 3y agoHave you seen how much wealth a lot of congress have gained over their careers. There is no way someone can look at those numbers and come to the conclusion that they did become multi millionaires without inside information. It should be banned out right or every position they take is public knowledge within 1 trading day or less. "Representative Nancy Pelosi has made up to $12.5M off of Microsoft stock so far this year. This is almost 100 times her salary as a member of Congress. " I love this graph https://twitter.com/QuiverQuant/status/1680973761560846338 https://twitter.com/QuiverQuant/status/1680973761560846338
- psychlops 3y agoInside trading is legal for them so isn't really a bad word. I see no reason why they can't trade stocks as long as they are required to publicly disclose their trades a week before the purchase is made, not after.
- exabrial 3y ago> It should be banned out right or every position they take is public knowledge within 1 trading day or less. Other way around, every position they _plan_ to take is public knowledge 24 hours in advance. EDIT: ==== Other comment says a week, I'm good with that
- psychlops 3y agoReally if they simply became subject to the same rules as everyone else that has sensitive insider information, the problem would be solved. Those who work in the investment industry are subject to strict rules.
- andsoitis 3y ago> every position they _plan_ to take is public knowledge 24 hours in advance. If you know in advance what position someone is going to take, then, logically they have already taken the position (otherwise, how would you know with certainty what position they're going to take?. This isn't mere wordplay; the practical consequence is that even if you knew in advance how they would vote on a particular decision (maybe you're definition of "position they plan to take"), you should assume they have also already made other steps to take advantage of that public knowledge. If my reasoning is correct, then I don't know that your proposal would make too much of a dent in the (safe to assume) "insider trading" that's happening. So I think a better policy would be to be ban trading altogether for these folks, because that would also disincentivize people from pursuing these careers for extreme profit.
- _lb0d 3y agoMy wife works in the audit department of a bank. I'm heavily regulated by the SEC on what stocks, ETFs, mutual funds I can buy/sell. An internal group monitors my buying/selling and makes approval/denial before I can do so. I have to hold an ETF for 1 month before I can sell it--not that I should be swing trading ETFs, but still. It's very frustrating at times, especially when I'm relegated to using just her bank's trading platform, too.
- jchanimal 3y agoI think is standard practice at larger firms in the banking industry, it should be for government as well.
- _lb0d 3y agoAgreed.
- ghaff 3y agoThere are significant restrictions in a number of sectors--including ones that don't necessarily compensate terribly well--that I expect many people reading this would bridle at if they applied to themselves but which are in place (usually for understandable reasons) nonetheless.
- ksec 3y agoNot just in banking industry but many other Finance or Legal industry as well. Pretty much standard practice.
- vinceguidry 3y agoWhy would this solve the problem? They're still incentivized to make decisions on behalf of the nation in their own financial interests. The conflict of interest in the financial industry is with the companies they work with and for. For lawmakers it's with the whole country. They should absolutely not be allowed to benefit personally from legislating.
- 0xbadcafebee 3y agoAt least they can still take bribes - sorry, "campaign contributions" - from conglomerates exploiting/hurting the public.
- plim8481 3y agoNever thought I'd see the day Kirsten Gillibrand and Josh Hawley would co-author a bill
- harry8 3y agoThis kind of thing, outsiders from both sides of government joining to try to get something done is the only way you will ever get any reform. Also why the insiders from both sides will be so scathing about outsiders on the other side and claim they are literally $evil_person_from_history
- munchler 3y agoI'm scathing about Josh Hawley because he encouraged a coup against the US government, not because he's some sort of "outsider".
- harry8 3y agoI'm sure you believe that. I dislike him and I don't. Go figure.
- j33zusjuice 3y agoHawley’s on the same level as Greene. They’re insane, incredibly stupid, or incredibly bad.
- engineer_22 3y agoJosh Hawley has a JD from Yale - this isn't proof that he's smart or sane, but an indication that Yale thinks so. Maybe he is incredibly bad, there might be some data points for that. Interesting, as JH would probably not agree with most of the personal politics of Yale's campus community, but the Law School may have a different culture. I don't know.
- DontchaKnowit 3y agoimo, even more egregious than this is Josh Hawley's incessant needling, pestering, leading, talking over, and ultimately ignoring every single person he has ever questioned as part of a congressional hearing. He asks people leading questions, then when they start to give a legit answer he just talks over them in an attempt to make them look like they couldn't answer the question. Conservatives eat that dumb shit up. drives me insane.
- deleted 3y ago[deleted]
- ckardat123 3y agoI started building out tools to track congressional stock trading in 2020. Since then, I believe there have been 9 other proposals similar to this one. None of them have been even called to a vote. It seem like Congress is pretty unwilling to regulate its own trading. Until they are, feel free to track the trading here: https://www.quiverquant.com/congresstrading/ https://www.quiverquant.com/congresstrading/
- jakearmitage 3y agoI wish there was a tool that allowed me to follow Congress as if it was an index. Automatically buying and selling what they buy and sell. Right from my Fidelity or something.
- nickpeterson 3y agoIf it got popular enough, congressmen would heavily buy a stock their spouse has short term options on, why not?
- minkzilla 3y agoNANC and KRUZ ETFs track democrats and republican holdings respectively. A word of caution: there are articles online that have looked at individual senators and most of them unperformed compared to the SP500
- shagmin 3y agoSomeone with some spare cash for seed funding could file with the SEC to create an ETF that does exactly this.
- rwmj 3y agoDoes a "Congress tracker fund" make money? What with all the rumoured insider trading ...
- jjoonathan 3y agoNANC and KRUZ are the ticker symbols (I wish I was joking)
- givemeethekeys 3y agoWhy not immediate reporting for all transactions instead? I want to know as soon as Nancy Pelosi and family makes a trade.. not 30 days later.
- smcin 3y agoURL: https://archive.li/KB69t https://archive.li/KB69t Proposed by Sens. Kirsten Gillibrand (D-NY) and Josh Hawley (R-MO)
- neilv 3y agoI would love for all lawmakers to be limited to market index investing. Say, asset allocation (other than their home and a Washington pied a terre) of 50% US stocks index, 20% non-US stocks index, 30% US bonds index. No stock-picking. No sector-picking. No real estate other than through the indexes. No private company ownership. No trusts. No circumvention. Alignment with ordinary people's retirement funds seems great.
- jefftk 3y agoEven broad market trends are something they could have inside information on, if they have advance notice of major legislative efforts success.
- awestroke 3y agoThen restrict them so that they can only buy/sell once per year, and need to declare their investment choice 1 month before the yearly buy/sell date
- neilv 3y agoFixed asset allocation aligned with ordinary American, and no moving back and forth from cash. (Just cash for modest bill-paying, emergency fund, home, big child-raising expenses like college tuition.) They're generally incentived to keep all 3 indexes up.
- pc86 3y agoGoing from "no individual stock picking" to "we feel you have too much cash, you have to buy index funds!" is quite the leap.
- neilv 3y agoMoving huge sums between index funds and cash can constitute trading on insider information, and/or on conditions that a lawmaker is able to manipulate.
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- picibucor 3y agoThis will be accepted only before a major crash.
- picibucor 3y agothis happens only before a major crash
- jollyllama 3y agoI don't know who said it first, and there are plenty of cartoons of it, but they should have to deck themselves out with the logos of campaign contributors and entities in which they hold shares, like NASCAR cars/drivers.
- sgc 3y agoAs soon as it is implemented, there goes any shred of sanity in our real estate laws. Something has to be done, but no matter what, it is going to be a bumpy ride.
- fallingknife 3y agoI say let them trade. But they should have to report all their trades 5 business days in advance. So they can trade however they want, but any member of the public can front run them.
- delecti 3y agoI couldn't get around this paywall, but the coverage on Fox describes what was in the WSJ report: > Sens. Josh Hawley, R-Mo., and Kirsten Gillibrand, D-N.Y., are set to introduce the legislation in the Senate. It would prohibit those affected from owning stocks in individual companies, even through a blind trust, the Wall. Street Journal reported Wednesday. "No individual stocks, period" seems like a fairly reasonable restriction. https://www.foxnews.com/politics/sens-hawley-gillibrand-push-ban-lawmakers-executive-branch-officials-owning-stock https://www.foxnews.com/politics/sens-hawley-gillibrand-push...
- gautamdivgi 3y agoThe problem with this is that now you will have their spouses or children own the stock and not have similar reporting requirements. I don’t believe this ban will accomplish much.
- caseysoftware 3y agoThis looks good in principle but the implementation will be key.. because people like Pelosi would just say “I don’t own stock, my husband does!”
- rsynnott 3y agoThis seems completely reasonable; it's arguably surprising it hasn't been done before. The devil will be in the details; in particular it would likely have to extend to spouses.
- guerrilla 3y agoHow is that surprising? It's super obvious why it hasn't been done before...
- dataflow 3y agoThis doesn't seem reasonable at all? Ban on trading while during office is one thing, ban on keeping preexisting ownership is quite something else.
- rsynnott 3y agoThere are plenty of jobs with rules about this; some of them are quite extensive and can cover spouses. There are rules about it for certain US government employees, for instance. Don't want to be subject to it? Don't take the job; no-one's forcing these people to run for election.
- m3kw9 3y agoToo much edge to give up, gonna be hard to pass
- tombert 3y agoI think it would make sense to only allow congresspersons to own "total market" index funds like VTSAX; wouldn't that more or less align their interest with the general American public?
- deleted 3y ago[deleted]
- kjkjadksj 3y agoThe thing is, even with insider trading, lawmakers underperform the market. The few that trade well either have a background in finance or a spouse who is in finance, like most other people who outperform the market. The value of this insider trading must be very overstated. DOD stocks like LMT make poor investments compared to just buying the index anyhow.
- TravelTechGuy 3y agoIMHO this ban will never pass. The only law all these people are always sure to vote for is the one increasing their salary and benefits. But beyond that, even if it passes, I expect so many violations that it'd be as if it didn't pass. If we've learned anything in the last 6-7 years is that if there's no shame, law becomes less relevant. It's enough to look at some of of the current crop (and I'm doing my absolute best to prevent myself George from dropping Santos actual names here) to understand that the believe they're above any law.
- apsec112 3y agoThis seems super overbroad? "Executive branch employees" is basically everyone who works for the federal government, which is 2.1 million civilians and another 1.3 million active-duty military. Most of these people are, like, border patrol agents or Social Security clerks or nurses at Veterans Affairs hospitals or prison guards, and are just middle-class workers who won't have access to insider information anyway.
- legitster 3y agoI think a complete ban on owning individual stocks would be a bit overkill. Perhaps, controversially, I believe members of the government should own some stock - I want them personally invested in the economic wellbeing of the country. I also don't want to limit the candidate pool artificially to just professional politicians. But the fix here seems pretty easy. If you are an executive at a publicly traded corporation, you have to disclose any changes in your position of that stock months in advance. Just make politicians follow the same process for the entire stock market.
- jzoch 3y agoLet them own index funds only. Individual stock holding is not an investment in the economic well-being of the country
- kelseyfrog 3y agoThe other option is complete real-time transparency. Eliminate the alpha on congressional trades. A de-anonymized book view of all congressional orders and trades.
- deleted 3y ago[deleted]
- kats 3y agoNo way. If they remove normal ways for people in Congress to make money, then normal people won't run for Congress. More MTGs will get in, but smart people who could make >10x more will say no.
- engineer_22 3y agohttps://archive.is/KB69t https://archive.is/KB69t Alternative Universe: New Proposal Bans Plumbers from Houses of Congress. Read: Under new proposal Mario Bros must trade in plungers for portfolios. Minority Leader Bowser had this to say: "It's important for the koopas of our nation to know their leaders are working for them, and not taking all the mushrooms and star powers for themselves."
- WillAdams 3y agoI just don't understand how in my lifetime it went from Jimmy Carter having to sell his family's farm, to it being okay for Donald Trump to charge the Secret Service for room and board.
- nullc 3y agoWhat will they own instead, and will the resulting motivation distortions be better or worse?
- tracker1 3y agoI can only guess there are big enough loopholes in this to drive a bus through. Similar to what congress has enacted on itself.