Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Many believe it's time to do away with lawmakers making stock trades

npr.org

Post reply on HN
Print view View original

71–80 of 229 posts

Re: Many believe it's time to do away with lawmakers making stock trades

#71

Post by TomGullen »

giantg2 wrote: post #35

It's the most blatant example of insider trading. Company insiders might have inside access to a single company. Lawmakers have access to inside information that can affect the entire industry or market. It's a perfect example of how we do have class stratification in society and that rule of law and equality are laughably distant ideas in a sea of hypocrisy.

I'd be more concerned that if a law maker had a million of Tesla stock and Tesla lobbied them, it would take someone with concrete morals to not factor in their potential gains. Humans are not great at making decisions without considering their own incentives - you can trick yourself and your subconscious can sway you.

Re: Many believe it's time to do away with lawmakers making stock trades

#73

Post by ctennis1 »

Pxtl wrote: post #45
ravedave5 wrote: post #2

There are so many loop holes. I mean then they just make a company that does stock trades for them and tell that company what to trade. Or their spouse does the trades instead of them.

Yeah, the spousal loophole is a hard one. Having an elected position restricting a spouse isn't right, but the fact that money can flow freely within a marriage basically annihilates any restrictions. Other non-marital transactions can be controlled - that's the basis of half the tax system in every country. The moment money leaves a household or arrives in a household, there are laws about the transaction. But withi…

Not really - I work for a company in the financial space and my spouse is restricted on any trading they can do just like I am.

Re: Many believe it's time to do away with lawmakers making stock trades

#74

Post by andrewla »

_wldu wrote: post #23

We should also do away with the steak dinners, golf trips and other 'perks' that lobbyists/vendors give them in exchange for votes.

You are under the impression, I think, that this is something that happens. It does not -- this is already illegal (all the things you mentioned) and against ethics rules in both houses.

Lobbyists, for the most part, wield power not because of the money they give to politicians, but because of the votes that they implicitly command from the constituents on behalf of whom they are operating. They also command considerable power because they have research organizations that are better funded than congressional staff allocations for doing things like authoring bills.

Way more fishy is the revolving door when politicians leave office; that is done openly and without shame. Somewhat fishy are implicit bribes (like buying 1000s of copies of a politician's book), and sometimes preferential terms on loans, or employing family members (or buying their art for ridiculous prices).

But lobbyists and vendors are already very tightly locked down -- the things you are talking about simply do not exist; politicians and special interest groups have found better ways of buying votes.

Re: Many believe it's time to do away with lawmakers making stock trades

#75

Post by intrepidhero »

koheripbal wrote: post #52
_wldu wrote: post #23

We should also do away with the steak dinners, golf trips and other 'perks' that lobbyists/vendors give them in exchange for votes.

So meetings can not take place over a meal? ...or are you specifically saying they can only order certain dishes? Maybe we should force all meetings with politicians to take place on the floor of a mcdonalds. No chairs - that would be too fancy.

Rank and file civil servants have very strict rules around what they can and cannot accept from a vendor. Same for investing actually, the rules around who can in invest in what depend on their decision making responsibilities. I'm baffled why we don't hold elected officials to the same standards.

Re: Many believe it's time to do away with lawmakers making stock trades

#76

Post by DavidPeiffer »

leesalminen wrote: post #48
bastardoperator wrote: post #27

Earlier quoted context omitted.

It's widespread, republicans seem to be doing it more though https://www.nytimes.com/2020/12/02/us/politics/david-perdue-... https://www.cnbc.com/2021/01/19/doj-will-not-charge-sen-rich... https://www.washingtonpost.com/politics/2021/08/11/rand-paul... https://tulsaworld.com/news/u-s-sen-jim-inhofe-responds-afte...

Bernie Sanders is worth $3 million and has never worked outside of politics in his entire life. Maybe that seems like not a lot to the SV types, but it’s far, far more than what most people I know have to show for a lifetime of actually hard work. https://finance.yahoo.com/news/rich-bernie-sanders-210000864...

He's also 80 and still working. $310/month invested over 60 years is about $3 million at 7% annual growth.

Or assume he had nothing until being elected to the senate in 2007, then started putting 60k/year into an S&P 500 index fund.

That also gets you to about $3 million.

Re: Many believe it's time to do away with lawmakers making stock trades

#77

Post by andrewla »

Regulation is a poor substitute for criminal prosecution. Law enforcement at the Federal level needs to investigate and prosecute cases where members of Congress have even apparently abused their position for personal profit.

Banning stock trading will just push things into more indirect methods; giving law enforcement the power to enforce the law means that the very fact that they attempted to use indirect methods are an indicator of consciousness of guilt.

Re: Many believe it's time to do away with lawmakers making stock trades

#78

Post by jbverschoor »

TomGullen wrote: post #71
giantg2 wrote: post #35

It's the most blatant example of insider trading. Company insiders might have inside access to a single company. Lawmakers have access to inside information that can affect the entire industry or market. It's a perfect example of how we do have class stratification in society and that rule of law and equality are laughably distant ideas in a sea of hypocrisy.

I'd be more concerned that if a law maker had a million of Tesla stock and Tesla lobbied them, it would take someone with concrete morals to not factor in their potential gains. Humans are not great at making decisions without considering their own incentives - you can trick yourself and your subconscious can sway you.

Morals, or a different risk/reward ratio

Re: Many believe it's time to do away with lawmakers making stock trades

#79

Post by arc-in-space »

camjohnson26 wrote: post #49
gruez wrote: post #22

Earlier quoted context omitted.

> Outright banning trades will only obscure congressional trading (shell corps, friends/family, etc.) >I would prefer a public registry listing all congressional trades Wouldn't your proposal obscure congressional trading as well, because they want to preserve their alpha by not publishing their trades?

The argument can be made that insider trading isn’t actually a bad thing as long as it’s legal, precisely because allowing that information to trickle into the markets destroys alpha. Anyone who thinks hedge funds aren’t constantly trading on insider information has their head in the sand. Of course then you have problems where people with private information are incentivized to leak that information, which is bad fo…

Indeed. The prevailing mood in this thread is a sort of mutual understanding that insider trading is obviously bad, and the only point worth debating is how to regulate it in this particular instance. Instead, I feel like we should back up a couple steps and seriously investigate the assumption that insider trading is at all detrimental.

I fear we're still deep in the "somebody, somewhere, might be making a profit" bog.

Re: Many believe it's time to do away with lawmakers making stock trades

#80

Post by ScottMann »

If you want to avoid accusations of impropriety you need to avoid the appearance that malfeasance has taken place.

In other words, don't create an environment where illegal activity is inevitable. If it looks like you did something questionable or wrong there will be people willing to challenge the behavior.

Post reply on HN