They simply shouldn't be able to trade individual stocks. Requiring them to tell the world the exact second they're buying a stock doesn't change that that purchase was made to make money. If you're the elected authority who, by your rule, creates corporate winners and losers, we should not merely have to hope that your rule benefits us more than it does you. The job description is clear - you're a civil servant. If doing your job as a senator is unappealing to you because you can no longer invest in individual companies, then don't let the door hit you on the way out. Goodbye
Full reform: Select representatives randomly like jurors to prevent maligned motives. If selected there is temporarily a freeze on their assets and they move to dormatories on a political campus built around the White house with a panopticon of cameras 24/7 live streaming the political process with ads to generate revenue to pay down the debt. All communication during this period is public record and searchable, ads will be included in the results. Run it like the reality TV show it has become and pay them current per capita gdp, they can get a raise by increasing it.
This is why neither party will truly save us. Candidates from both parties seem to mostly focus on social issues (Democrats are 110% preferable here imo). There are very few politicians who speak to the level of corruption and economic inequality we all see.
The way America was designed may have been pretty novel / innovative at the time but we've learned so much since then about how to build better democracies. Switzerland has a council of seven members as their executive branch, not a single person. It's brilliant stuff. I worry that the only way to do better is through an incredibly painful collapse of things. Unless politicians start deciding to write laws that force them to give up power. Which seems almost humorous to suggest.
Deeply corrupt country we've created here, and it seems impossible to back out of it. How are you gonna get congress to cut their effective pay? I would bet money that there are people who go to congress _solely because_ of the advantages it will give them back in the private sector. If you even got it on a ballot or something where the general populace could vote on it, you can bet your ass that, thanks to citizens united, the pro-owning-stocks lobby would outspend the anti-corruption folks 10 to 1.
I guess the way to start is by shaming these obviously corrupt officials and practices. Much like racism, people don't mind being corrupt but they seem to mind being _called_ corrupt.
Proposal : A congressman can trade to their hearts content but must publicize their intentions to purchase or sell a stock with a minimum of at least 24 hours. This gives the public the open view of their intentions however they come to that decision, but the open market can then decide how to react to the congressman’s decision before they actually finalize a trade.
Every single one of these scoundrels will stand up at a college graduation and exhort the virtues of public service and sacrifice for country. But somehow they all manage to get rich in the midst of their own service and sacrifice.
They shouldn't be allowed to trade stocks. When you do so, corruption is inevitable. It should be an expected price of public service that you remove yourself from most other ambitions.
I'd hope that if they were required to live off of their (rapidly depreciating) savings and income, like most Americans, they might consider some of their legislative choices differently.
It must be just down to the fact that they're so intelligent and tuned into the world that they know where to invest. Nothing to see here folks, move along now.
I would say jokes aside but the political system promotes this corruption.
I think the solution is to pay them more, create very strict laws around insider trading, and enforce those laws vigorously.
I don't know if that's realistic or not as the electorate has already shown they don't care enough to vote their representatives out for doing it and it's unlikely that current members would restrict their earnings. I guess it's good that we know about it, at least.
I’m also in the camp of paying government officials more. In my town, the mayor and council make about $30k each while the median income in the city is well over $100k and houses cost over $1M. That self-selects out the majority of qualified candidates who must work for a living.
We have several high tech companies as well as a pro sports team that perpetually influence politics to the city’s detriment, and the stooges that get put on our ballot each election are simply under-equipped to combat them.
I don't understand how paying them more will curtail this. This is a mixture of a crime of convenience and greed. It's not a Les Mis situation where they need these stock picks to survive (or even thrive). The current US Administration is full of rich people who are still not above corruption.
Obama signed the STOCK act into law, but of course, who watches the watchmen? The Restore Trust In Congress Act is sitting there, waiting for Mike Johnson to bring it to a vote.
> as the electorate has already shown they don't care enough to vote their representatives out for doing it
The problem arises from how we run elections. It's very hard to dislodge an incumbent when the small group of people voting in a primary are very biased, and then the people voting in the general election really don't want the candidate from the other party.
I suggest reading "Breaking the Two-Party Doom Loop: The Case for Multiparty Democracy in America" by Lee Drutman.
From my perspective it would make a lot more sense to only allow index fund purchases as an elected official. If the economy does well you still do well, but there would clearly be no insider trading going on.
Or at least there would be less - you could only trade on the knowledge of full-market swings rather than per-company swings.
You've just been presented evidence that your law makers are doing something immoral, something that should be illegal, and your idea is to pay them more. Do you also advocate putting a little pot of cash at the front of every walmart so the shop lifters can just take the cash and pay for the stuff they were going to steal?
The logic of paying lawmakers well is that if they have enough money they won't be at tempted to do bad things to get more money. All of human history has shown that "enough money" is not a meaningful term for people attracted to such positions.
Lawmakers should be paid enough that they are not destitute, so that low income people are not excluded from participating in government, but the price of power should be that one can not become wealthy during or shortly after their stint. Tax their household 100% on all income and capital gains over the congressional salary (which should be comparable and pegged to the average DC area household income) for their term and over a reasonably small multiple of that salary for 10 years after they leave office. They can insider trade all they want, they can take a cushy job with a company that lobbied them, but all the money they would make by these efforts will go to the people. In practice I think most would not bother. Some people may choose not to go into government because they have better earning opportunities elsewhere, I consider that a feature not a bug. Some may leave office earlier than they otherwise would because they don't like the low income, again that's a good thing. Non-monetary quid pro quo is still an issue, but it's no worse than the current situation and frankly power will always come with perks.
Exempt sitting congresspeople from the change they implement and any of their past potentially ill gotten gains will be exempt from prosecution. Passing a major anti-corruption bill while legalizing your own grift? It may very well pass unanimously.
There are a lot of strong claims that the paper could, but does not make. It never says that Congressional leaders outperform index funds. It just says very specifically that leaders outperform other members of congress. The paper also does not include any clear charts on the actual returns the congressional leaders were getting.
Having done some reading on this myself I don't think it's the case that Congress as a whole outperforms SPY [1]
Can I find one of these people in congressional leadership positions, who is willing to accept a sizeable campaign contribution in exchange for joining their mailing list which contains their list of stock purchases in real time?
Or is that one of those, "Of course that exists, but if you have to ask how much it costs, you can't afford it" kind of things?
Despite Congress' general dysfunction, this seems like a problem that could feasibly be solved. It would make most Congressmen of both parties look good to pass a bill that e.g. restricted sitting members to index funds/mutual funds/etc.
The assumption is that the stock picks come from insider knowledge gleaned from congressional duties like sitting on committees. Another possibility is that they are a form of off-the-books campaign donation or bribe, and the knowledge comes straight from an insider who wants to influence congressional decision making.
Its almost as if private encrypted chat networks are a thing. Oh, look at that, Mets owner, Steve Cohen paid record fine for insider trading using just that.
Its funny -- out of all the corruption you see from Washington this one seems the most benign. For whatever reason this one gets almost the most constant press. Maybe because its the easiest to fix but isn't.
> out of all the corruption you see from Washington this one seems the most benign
Lawmakers deciding what laws to argue against/for based on how much money it'll get them personally is a benign issue? It's a very hard problem to solve, when the people making the laws have to outlaw behavior that makes them rich, but it's a very worthwhile one if you manage to get it down, because then you'll again get politicians working for the people rather than against.
Peoples understanding of what "corruption" is differs by a surprising amount.
The boundaries between corruption, lobbyism, incompetence and nepotism can get very blurry (sometimes even actually representing your constituents interests can look this way!).
But policy makers enriching themselves by insider trading are seen as corrupt by pretty much everyone.
What is the less benign corruption seen in Washington that you feel is most pressing?
Insider trading is a form of theft. Every trade has a counterparty who missed out on those capital gains because they did not have their thumb on regulatory levers.
Look, I have my political views, but this is why the whole divide and conquer thing is 100% true. As long as we, whether left or right, allow our entire mind and emotions to be warped and subverted by those in power, we will never effect change and unite against this kind of corruption, which none of us stand for.
It doesn't require us to change our views on areas where we don't agree. It simply requires uniting on the numerous areas where there is common ground.
I don't know about you, but I'm tired of this.
Your average Joe does this and gets ripped away from his family for 10-years. Politicians do it and it gives them job security.
The two-party system amounts to two wings on the same bird. While we're fighting about left vs. right, we're soon going to find ourselves in a new system of lords vs. peasants.
We need to change the voting system in order to dissolve the two party system, per Duverger's law. Ranked choice voting will not work. Approval voting or STAR voting would work.
The one thing that stirs the hearts and minds of the American people is a 67 page deep dive statistical analysis of an issue.
If only Congress and Americans had access to more figures and math, then we would do the right thing. This paper is going to change things. We finally did it.
This is a primary source. Journalists can now read (low-quality ones will use AI summaries) this information and dramatize, cut up and cherry-pick as necessary to get their readers to care.
Maybe a better solution is to crowdfund someone to run for federal office under the guise of purposeful naked corruption. Their whole platform will be "I'm doing this so I can get access to information before the market does, and I will immediately disclose that information to my constituents, and provide realtime trading updates".
I'd vote for that person in a heartbeat even if the rest of their platform was non-existent.
They would need quite the bankroll. The most powerful congressional committees are pay to play and lobbyists usually foot the bill to get their guy on a committee.
It's pretty incredible to see how public data puts this corruption out in the open with specific names at hand and these officials couldn't care any less. The level of corruption here is astronomically brazen. They know no one will do anything and people will just bend over.
Just to be fair, they compare every congressperson who becomes a leader with a “regular” (non-leader) congressperson who entered Congress in the same year and is from the same political party. Alternative view: people who becomes leaders are just more capable and better at selecting stocks?
"Our baseline finding is that both congressional leaders in their pre-leadership years and their matched 'regular' members underperform the benchmark by similar magnitudes"
"Earlier studies of lawmakers’ trading by Ziobrowski et al. (2004 and 2011), found their portfolios to outperform the market. However, this conclusion is reversed in later studies. In particular, Eggers and Hainmueller (2013) and Belmont et al. (2022) document the opposite—members of Congress underperform the market during 2004-2008 and 2012-2020, respectively."
I guess the title of "Congress members suck at trading stocks, but suck less once in leadership positions" was already taken
[+] [-] agosta|3 months ago|reply
[+] [-] thatcat|3 months ago|reply
[+] [-] rayiner|3 months ago|reply
[+] [-] unknown|3 months ago|reply
[deleted]
[+] [-] jdasdf|3 months ago|reply
That is the actual problem, and you're not fixing it by stopping them from buying stocks.
[+] [-] SilverElfin|3 months ago|reply
[+] [-] TacticalCoder|3 months ago|reply
[deleted]
[+] [-] cmckn|3 months ago|reply
I think that one died in committee: https://www.congress.gov/bill/119th-congress/house-bill/5106
There’s another from earlier this year (https://www.congress.gov/bill/119th-congress/house-bill/1908...) that is currently being pushed by a Republican member from Florida. It was blocked by the Speaker. There’s currently a discharge petition: https://www.congress.gov/bill/119th-congress/house-resolutio...
Over the summer, Josh Hawley of all people introduced a similar bill in the Senate.
[+] [-] y-curious|3 months ago|reply
[+] [-] morgan814|3 months ago|reply
The way America was designed may have been pretty novel / innovative at the time but we've learned so much since then about how to build better democracies. Switzerland has a council of seven members as their executive branch, not a single person. It's brilliant stuff. I worry that the only way to do better is through an incredibly painful collapse of things. Unless politicians start deciding to write laws that force them to give up power. Which seems almost humorous to suggest.
[+] [-] Kapura|3 months ago|reply
I guess the way to start is by shaming these obviously corrupt officials and practices. Much like racism, people don't mind being corrupt but they seem to mind being _called_ corrupt.
[+] [-] Aboutplants|3 months ago|reply
[+] [-] trentnix|3 months ago|reply
They shouldn't be allowed to trade stocks. When you do so, corruption is inevitable. It should be an expected price of public service that you remove yourself from most other ambitions.
I'd hope that if they were required to live off of their (rapidly depreciating) savings and income, like most Americans, they might consider some of their legislative choices differently.
[+] [-] bilekas|3 months ago|reply
I would say jokes aside but the political system promotes this corruption.
[+] [-] hypeatei|3 months ago|reply
I don't know if that's realistic or not as the electorate has already shown they don't care enough to vote their representatives out for doing it and it's unlikely that current members would restrict their earnings. I guess it's good that we know about it, at least.
[+] [-] georgeburdell|3 months ago|reply
We have several high tech companies as well as a pro sports team that perpetually influence politics to the city’s detriment, and the stooges that get put on our ballot each election are simply under-equipped to combat them.
[+] [-] dfxm12|3 months ago|reply
Obama signed the STOCK act into law, but of course, who watches the watchmen? The Restore Trust In Congress Act is sitting there, waiting for Mike Johnson to bring it to a vote.
[+] [-] gwbas1c|3 months ago|reply
The problem arises from how we run elections. It's very hard to dislodge an incumbent when the small group of people voting in a primary are very biased, and then the people voting in the general election really don't want the candidate from the other party.
I suggest reading "Breaking the Two-Party Doom Loop: The Case for Multiparty Democracy in America" by Lee Drutman.
https://www.amazon.com/Breaking-Two-Party-Doom-Loop-Multipar...
[+] [-] lfuller|3 months ago|reply
Or at least there would be less - you could only trade on the knowledge of full-market swings rather than per-company swings.
[+] [-] someguyiguess|3 months ago|reply
[+] [-] andsoitis|3 months ago|reply
Many people agree with Bay Area's idea that people making less than $105k are poor - https://news.ycombinator.com/item?id=46036803
[+] [-] hugeBirb|3 months ago|reply
[+] [-] SilverBirch|3 months ago|reply
[+] [-] rs186|3 months ago|reply
Who's going to draft those laws?
Definitely not the lawmakers who could benefit from this.
See the problem?
[+] [-] jjk166|3 months ago|reply
Lawmakers should be paid enough that they are not destitute, so that low income people are not excluded from participating in government, but the price of power should be that one can not become wealthy during or shortly after their stint. Tax their household 100% on all income and capital gains over the congressional salary (which should be comparable and pegged to the average DC area household income) for their term and over a reasonably small multiple of that salary for 10 years after they leave office. They can insider trade all they want, they can take a cushy job with a company that lobbied them, but all the money they would make by these efforts will go to the people. In practice I think most would not bother. Some people may choose not to go into government because they have better earning opportunities elsewhere, I consider that a feature not a bug. Some may leave office earlier than they otherwise would because they don't like the low income, again that's a good thing. Non-monetary quid pro quo is still an issue, but it's no worse than the current situation and frankly power will always come with perks.
Exempt sitting congresspeople from the change they implement and any of their past potentially ill gotten gains will be exempt from prosecution. Passing a major anti-corruption bill while legalizing your own grift? It may very well pass unanimously.
[+] [-] misiti3780|3 months ago|reply
CA doesnt care about this -- you continue to re-elected Pelosi, she is one of the worst violators of this
[+] [-] chis|3 months ago|reply
Having done some reading on this myself I don't think it's the case that Congress as a whole outperforms SPY [1]
[1] https://www.sciencedirect.com/science/article/abs/pii/S00472...
[+] [-] VikingCoder|3 months ago|reply
Or is that one of those, "Of course that exists, but if you have to ask how much it costs, you can't afford it" kind of things?
[+] [-] slibhb|3 months ago|reply
[+] [-] Workaccount2|3 months ago|reply
"After ascension, however, leaders outperform their matched peers by up to 47 percentage points per year"
They looked at the 20 congressional leaders from 1995 to 2021 that traded stocks. They found _up to_ a 47% outperformacnce per year.
It's not clear (without trudging through the data) what the average outperformance was (or if there was any).
[+] [-] intalentive|3 months ago|reply
[+] [-] rglover|3 months ago|reply
[+] [-] tronicjester|3 months ago|reply
[+] [-] boringg|3 months ago|reply
[+] [-] embedding-shape|3 months ago|reply
Lawmakers deciding what laws to argue against/for based on how much money it'll get them personally is a benign issue? It's a very hard problem to solve, when the people making the laws have to outlaw behavior that makes them rich, but it's a very worthwhile one if you manage to get it down, because then you'll again get politicians working for the people rather than against.
[+] [-] myrmidon|3 months ago|reply
The boundaries between corruption, lobbyism, incompetence and nepotism can get very blurry (sometimes even actually representing your constituents interests can look this way!).
But policy makers enriching themselves by insider trading are seen as corrupt by pretty much everyone.
What is the less benign corruption seen in Washington that you feel is most pressing?
[+] [-] mdavidn|3 months ago|reply
[+] [-] exasperaited|3 months ago|reply
[+] [-] complianceowl|3 months ago|reply
It doesn't require us to change our views on areas where we don't agree. It simply requires uniting on the numerous areas where there is common ground.
I don't know about you, but I'm tired of this.
Your average Joe does this and gets ripped away from his family for 10-years. Politicians do it and it gives them job security.
The two-party system amounts to two wings on the same bird. While we're fighting about left vs. right, we're soon going to find ourselves in a new system of lords vs. peasants.
[+] [-] amavect|3 months ago|reply
https://www.equal.vote/
[+] [-] hermannj314|3 months ago|reply
If only Congress and Americans had access to more figures and math, then we would do the right thing. This paper is going to change things. We finally did it.
[+] [-] tencentshill|3 months ago|reply
[+] [-] whatever1|3 months ago|reply
[+] [-] charlieyu1|3 months ago|reply
[+] [-] NickC25|3 months ago|reply
I'd vote for that person in a heartbeat even if the rest of their platform was non-existent.
[+] [-] gaudystead|3 months ago|reply
[+] [-] tastyfreeze|3 months ago|reply
[+] [-] sakopov|3 months ago|reply
[+] [-] regnull|3 months ago|reply
[+] [-] gereshes|3 months ago|reply
"Earlier studies of lawmakers’ trading by Ziobrowski et al. (2004 and 2011), found their portfolios to outperform the market. However, this conclusion is reversed in later studies. In particular, Eggers and Hainmueller (2013) and Belmont et al. (2022) document the opposite—members of Congress underperform the market during 2004-2008 and 2012-2020, respectively."
I guess the title of "Congress members suck at trading stocks, but suck less once in leadership positions" was already taken