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

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

#161
post #4

Earlier quoted context omitted.

*purposeful loopholes

I don’t think it’s “purposeful” as much as the fact that the fundamental fungibility of money makes it very hard to write legislation that covers a reasonable amount of loopholes. Or rather, while purposeful loopholes could exist, it’s very hard to prevent legislators trading stocks even if there were no deliberate loopholes.

Almost every other facet of the law rests somewhat on 'common sense' and what 'reasonable people would do'

I don't see why the laws couldn't be like that, but I take your point.

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

#162
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 think the cleanest law here is to change the law to clarify that non-public information gained by public servants and representatives that can have an affect on a stock's price should be treated as "material non-public information." Then the SEC can do their jobs like they do with other insider traders. Remember that ONLY elected congresspeople are exempt from rules like that. Other public servants are not. This is…

Insider information is notoriously difficult to identify and prosecute, so while this is an important aspect, I dont think it is a complete solution. We would have to understand what the SEC baseline is for catching insider trades.

The easiest and most robust solution is a blind trust.

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

#163
post #108

Earlier quoted context omitted.

Is there a Congress ETF?

No, the problem is the disclosures come out way too late. There isn't a way to track and move with the market in real-time.

You're right. I'm an idiot, should have considered that.

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

#164
post #113

Earlier quoted context omitted.

Incentivizing that large public companies do well, not quite the same.

Then make it a total market index fund with small, mid-size, and large companies.

The family owned restaurant down the block is definitely listed on the stock exchange.

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

#165
post #108

Earlier quoted context omitted.

Is there a Congress ETF?

Whoa whoa slow down there, what are we, a free market? That's only for HNWI and hedge funds.

Free markets do not necessarily mean that everyone has equal access to information. We've got market regulations so that less sophisticated retail investors have a chance against the more sophisticated / secretive groups with more money / knowledge / power than us.

A laissez-faire market would encourage secrets as a means to protect ones own capital. To force some people to give up secrets (ie: regulations against insider trading) is itself, a regulation, that already moves us away from truly free markets.

Which is a good thing. I think a laissez-faire market is naive. There's benefits to free markets, but also downsides. We as a society should try to build systems where we get the benefits of free markets, but place regulations on the behaviors that cause societal harm.

These rules and regulations we as a society follow (and ideally enforce) have problems. But the way to fix things is to improve the rules so that they're fairer and more comprehensive. Maybe some rules are too hard to be enforced and should be tossed away (even if in a hypothetical perfect world, they'd be net-beneficial... if its too hard to implement or enforce, then there's no point in practice).

"Insider Trading among Congressmen" is more of the latter IMO. We all would like it if Congressmen played by the same rules we did. But in practice: how would we even write a law that hampers this behavior from Congressmen? Who will keep track of which stocks Congressmen are trading, and which committees they are a part of?

If we can't enforce the rule, then the rule doesn't exist (even if we write down the law into our code or even the Constitution, without enforcement, the law is meaningless)

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

#166

Earlier quoted context omitted.

U.S. Reps and Senators have an annual salary of around $180,000*, which is in the order of twice the national median income. Why do you think they need to be paid more? --- *They also have a baked-in-statute annual cost of living adjustment, which is more than we can say for the vast majority of people in the country. Though they have voted not to take it for the last decade. (If they had, I believe the current salar…

> U.S. Reps and Senators have an annual salary of $180,000 $174,000, except for the Speaker of the House ($223,500) and the President Pro Tem of the Senate and the Majority and Minority leaders in both houses (all $193,400). > which is in the order of twice the national median income. Its almost 5 times the median personal income ($36K), and almost 3 times the median household income ($62K).

Thanks, I guess I was misremembering the household income as being in the 70s.

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

#168

I'm completely fine with politicians being paid significantly more if them, their partners and their relatives faced serious prison time is they did the sort of insider trading that is considered completely normal and weirdly they're allowed to do but it's illegal if the lowly plebs do it. End of the day these people are paid very little on paper for the amount of pressure and responsibility yet if you follow their f…

U.S. Reps and Senators have an annual salary of around $180,000*, which is in the order of twice the national median income. Why do you think they need to be paid more? --- *They also have a baked-in-statute annual cost of living adjustment, which is more than we can say for the vast majority of people in the country. Though they have voted not to take it for the last decade. (If they had, I believe the current salar…

>U.S. Reps and Senators have an annual salary of around $180,000*, which is in the order of twice the national median income. Why do you think they need to be paid more?

This is less than a fresh college grad working at FAANG or Big Law.

Google starts around 190 [1], and big law starts at 205k [2]

I think this comes down to what incentives we want in place. Do we only want smart people who are willing to sacrifice income for public service. Maybe that is the case and this is irrelevant.

https://www.levels.fyi/?compare=Google,Facebook,Microsoft&tr...

https://abovethelaw.com/2021/06/paul-weiss-raise-2021/

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

#169

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...

Of all the senators to look at you pick sanders? Senators are paid $174k a year and Sanders wears hand knit mittens. This story goes into his wealth.

https://www.politico.com/magazine/story/2019/05/24/bernie-sa...

>Bernie Sanders one day left City Hall and found a ticket on the windshield of his rusty Volkswagen Dasher. The offense: This was the mayor’s spot, and, surely, a cop had thought, this was not the mayor’s car. But it was. It matched perfectly with both Sanders’ image as a scrappy advocate of the little guy and his own shaky financial reality. It was the beginning of the 1980s, and he was approaching 40, a single father of a not-quite-teenage son, renting a sparse second-floor apartment and having a hard time keeping up with his bills. “Not only,” he wrote on his yellow, coffee-splotched legal pads kept in archives at the University of Vermont, “do I not pay bills every month—‘What, every month?’—I am unable to …” His scribbles in barely legible cursive in the margins read like reminders and afterthoughts: “gas,” “light,” “water.”

He was, said Bruce Seifer, a friend of Sanders, an economic aide in his administration and one of many people who know him who told me this, “frugal.” Seifer paused and considered the right way to put it. “That’s a nice way of saying he’s a cheap son of a bitch.”

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

#170

Earlier quoted context omitted.

Whoa whoa slow down there, what are we, a free market? That's only for HNWI and hedge funds.

Free markets do not necessarily mean that everyone has equal access to information. We've got market regulations so that less sophisticated retail investors have a chance against the more sophisticated / secretive groups with more money / knowledge / power than us. A laissez-faire market would encourage secrets as a means to protect ones own capital. To force some people to give up secrets (ie: regulations against in…

It doesn't have to be laissez-faire.

Laws only have to be applied fairly. In this case, congress cannot hide their purchases for months before disclosure. They are a representative of the people or their state. The people must know immediately about their backdoor dealings.

Immediate release will cause some gamification of the market. But it will also attract strong monitors on bad faith congresspeople.

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