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Public officials should not own stocks full stop.

• HPsquared 1y ago
  Pretty much everyone owns stocks.
  • VincentEvans 1y ago
    IMO broad categories of government employees should be restricted to owning broad index funds. But at least as far as upper echelons of political power - house, senate, supreme court, president and his cabinet - there should scarcely be any debate at all. Personally I would prefer restricting them to SNP500. US does well - they’ll do well.
• Jtsummers 1y ago
  It might be reasonable to say they shouldn't own individual stocks (of their own selection), but not owning stocks is unreasonable. They get paid well, but not that well. https://radiotv.house.gov/house-data/salaries https://radiotv.house.gov/house-data/salaries That's several times over median but many of us on this site make that much or more. More reasonable restrictions would be things like requiring them to use a blind trust, to restrict investments to index funds or managed portfolios, or something.
  • ivanmontillam 1y ago
    But isn't that a significant conflict of interest if they are public service employees? If they are truly people-oriented as they oath when they join public service, why allow them to own stock at all?
    • kasey_junk 1y ago
      Should all government employees be banned from owning stock?
      • AngryData 1y ago
        If it may be involved with or adjacent to the work they are doing, I would say yes.
        • mvc 1y ago
          You gonna give them all a defined benefit pension scheme too because otherwise, how will they save for retirement?
          • AngryData 1y ago
            I have no problem with them getting a pension. There are also plenty of other ways to invest your money that aren't putting it right into the stock market. Multiple kinds of bonds, CDs, annuities, etc.
      • bigbacaloa 1y ago
        [dead]
      • fragmede 1y ago
        So we were meeting with a group of customers in the morning and we wanted to bring doughnuts to the meeting. Unfortunately, one of the customers was NASA, so we couldn't bring doughnuts to the meeting because that would have been too much of a gift/bribe. The rules for rank and file employees already exist, it's the ones at the top that can flout the rules that are an issue.
        • Jtsummers 1y ago
          https://www.justice.gov/jmd/gifts-and-entertainment#outside https://www.justice.gov/jmd/gifts-and-entertainment#outside You can bring coffee and donuts, those are even specifically called out: > Modest items of food and non-alcoholic refreshments, such as soft drinks, coffee and donuts, offered other than as part of a meal;
          • 1y ago
    • Jtsummers 1y ago
      > If they are truly people-oriented as they oath when they join public service, why allow them to own stock at all? I take this to mean you think that civil servants and members of the military should also be barred from holding stocks? > But isn't that a significant conflict of interest if they are public service employees? There is no inherent conflict of interest in owning stocks. The risk is when they own (especially if they are heavily invested in) individual stocks. Use a blind trust like I mentioned or disallow holding individual stocks if they want to manage their own portfolio, then they still have a vested interest in the economy (how well businesses are doing as proxied by the stock market) but their conflicts are limited or removed.
    • deleted 1y ago
      [deleted]
  • autobodie 1y ago
    Then we can pay them more, or not and they can take another job instead. Either way, I can't take you seriously.
    • Jtsummers 1y ago
      > Either way, I can't take you seriously. Why not? I've suggested solutions that let them invest without even being aware of what they're invested in or only minimally (index funds, specific portfolios). This resolves the conflict of interest problem while allowing them to still gain the financial benefits of investing some of their money.
      • autobodie 1y ago
        No need for complexity here. Anyone who needs those benefits to accept the position is a poor choice anyhow. Forget them.
        • mvc 1y ago
          Again, how do people here think public servants will live beyond their service to the government? Or is the idea that if they choose to work for the government, they need to work until they die.
          • autobodie 1y ago
            They can just get paid more. Why do I need to repeat myself?
  • tombert 1y ago
    I agree; I don't think it's realistic to tell them not to invest at all. The only real way to preserve your money is to invest it somewhere. I think if the only thing that they could invest in was total-market index funds (or something similar), that would not have too much of a conflict of interest. They'd have the incentive to make the entire market happy, not just individual stocks, which benefits nearly everyone. If the only stock that politicians owned was VTI or something similar, I think most people would mostly be fine with that. That would still have problem in terms of the uneven weighting, but it would certainly better than what we have right now.
    • AbstractH24 1y ago
      > The only real way to preserve your money is to invest it somewhere Don’t tell that to folks planning to retire soon.
      • rezz 1y ago
        Unless they had a 6 month career they likely have still done very well
        • AbstractH24 1y ago
          Doing very well and having your expectations abruptly reset are two different things.
• sksxihve 1y ago
  Owning stocks isn't the problem, it's trading stocks on non-public information that is the issue
  • outer_web 1y ago
    Well the holdings also create a conflict of interest in how they choose to vote.
    • sksxihve 1y ago
      Fair, but you can own stocks in a blind trust
    • tombert 1y ago
      If they had broad ETFs that had a whole bunch of companies (like VTI), then conceivably that wouldn't bias their vote as much. They'd have a personal reason to make sure that the entire stock market is doing well.
      • mrguyorama 1y ago
        Even that still encourages them to prioritize corporations over individuals. There's no actual reason a congressperson needs to own stocks. In fact, we should be doing what we can to enforce a certain "Average American"-ness to their lives so they work to improve the lives of the average american.
        • tombert 1y ago
          Maybe. I think it's not realistic to tell people that they cannot preserve their money into some sort of 401k (or equivalent). It's basically the only way to realistically retire in the US.
• hamstergene 1y ago
  Publicly announcing trades many months ahead should be enough, without having to get too radical about it. It pretty much prevents benefiting from "subtle insider" trading via being lobbied by corporate officials or getting any friendly hints from them. The problem with "follow Nancy's trades" idea is that by the time the trade is known, the price has already corrected. The first one to complete the trade is often the only one to collect a significant benefit, the followers get scraps. And it indirectly disincentivizes owning individual stock because prearranged trade of one stock carries a risk of being screwed by market manipulators, while prearranged trade of a broad index fund is not a problem.
  • darth_avocado 1y ago
    Holding public officials to the same standards as insiders should also suffice. Trading windows, pre set trading schedules, immediate disclosures etc. are all easily enforceable solutions. That would allow them to trade as much as they like, but with reasonable restrictions.
  • Terr_ 1y ago
    > Publicly announcing trades many months ahead should be enough, without having to get too radical about it. A complete disclosure of all holdings will also be required, so that you can see if they're picking policy to assist their existing portfolio.
    • deleted 1y ago
      [deleted]
• roenxi 1y ago
  Why not? You need a reason. We might as well say they shouldn't be beholden to voters (which is a legit political theory, by the way, there are reasons the US is a Republic). If we work backwards from the observation that Donald Trump just got elected from his second term and start probing into the whys and wherefores; direct lobbying seems to be the major problem. Politicians stock trading is certainly unseemly but it isn't at all clear whether it is pushing the quality of the decision making in Washington up or down.
• thaumasiotes 1y ago
  There was a school of commentary when Trump was elected in 2016 that said he was unfit to be president because he owned active businesses instead of having the good taste to own stocks like everyone else. The idea was that this opens the door to corruption by allowing people to patronize his business(es) even if they otherwise wouldn't. I'm intrigued at the extension to the idea that public officials shouldn't own anything at all. What do you want them to do?
  • tombert 1y ago
    In 2016, Trump agreed with that reasoning. He did a whole song and dance about leaving his businesses to his kids. In 2025 he didn't even pretend to hide it. No one is saying that public officials should own nothing, but the concern is that if they own stock in an individual company, they will have an incentive to vote to benefit that company to drive up the stock price. For example, if I owned a ton of stock in Lockheed Martin, I might be incentivized to vote to declare a war that isn't necessary in order to get a bump in my income. This doesn't mean that they actually would do this, it's possible that the politicians would have integrity and vote their actual positions, but I think for things like this the appearance of impropriety is almost as bad as actual impropriety. We need to have some level of trust in our political leaders, and having things that look unseemly is almost as bad as actual corruption. Even if you could prove that Trump now maintaining his businesses has no effect on his political decisions, it would still be bad, because it still gives an appearance of corruption, and that erodes trust in our institutions. I don't think most people would have a huge problem with politicians having stocks in broad mutual funds, especially if they don't directly know what's being invested in. This would encourage them to make the entire market grow, instead of just individual stocks.
• trgn 1y ago
  Can cut both ways. If you're on the Fed board, you sell all your stocks before taking office and then crash the market by hiking rates. What about owning any asset class? real estate? is that allowed? Metals?
• infecto 1y ago
  I respect the sentiment but I think it should not be as drastic as that. However they should have to follow the same rules and regulations that many insiders follow at public and private firms. Specifically those firms that do investments or trading. The fear of god is put into you about the importance of compliance with MNPI due to enforcement actions from the government yet the government itself pays no mind to it.
• jsemrau 1y ago
  At least the disclosure shouldn't be lagging.
• theptip 1y ago
  Index funds seem fine, having some skin in the game is a good idea.
• Ekaros 1y ago
  Real arms length fully open pension fund would be reasonable. All investments would have to be made in that fund or sub-fund. These would also be fully open to public. And also ban any communication between those making investment decisions and those in office.