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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

#201

Post by CrazyPyroLinux »

neom wrote: post #108
ramblenode wrote: post #88

Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began in the US, 4 US Senators were picking up medical stocks after closed-door briefings. Investigations were opened by the DOJ, but they were all dropped. [0] https://www.theatlantic.com/ideas/archive/2020/03/congress-i... [1] https://onlinelibrary.wiley.com/doi/1…

Is there a Congress ETF?

Effectively, yes - it's a combination of "regulatory capture" and "campaign contributions"

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

#202

Post by DavidPeiffer »

mgkimsal wrote: post #91
DavidPeiffer wrote: post #76

Earlier quoted context omitted.

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.

I mostly take your point(s), and really... $3m is not a large amount for someone who's worked and been moderately diligent about finances. You don't need to have insider knowledge or bend the rules to have saved $3m over 60 years. BUT... $310/month back in 1950 was a lot of 'savable' income for most working people. Most manufacturing workers in mid 1950s were earning under $2.50/hr - even assuming some overtime, mont…

Totally understand, and I was doing a bit of hand waving in the original comment. 7% is around the inflation adjusted, long term S&P 500 return, meaning $310/month would need to be adjusted for inflation over that timeframe.

Converting 2020 dollars (because times are weird right now) to 1960, it comes to about $35.50/month. On $500/month income, that's a 7% savings rate.

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

#203

Post by InitialLastName »

yunohn wrote: post #198
InitialLastName wrote: post #129

Earlier quoted context omitted.

I don't know that Singapore (effectively a single-party state whose PM has dictatorship levels of power) is the best example of how this works in a republic (or sub-republic) with separated powers.

Every major democracy is effectively a two party system. Further, both parties are usually quite corrupt, despite claiming to be the opposite of the other.

Even granted that, in a (n>1)-party system there is the capacity for electoral repercussions for individuals who demonstrate extraordinary corruption (as in the situation we are discussing here). In a single-party unitary system, there isn't even that possibility.

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

#204

Post by max46 »

ramblenode wrote: post #88

Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began in the US, 4 US Senators were picking up medical stocks after closed-door briefings. Investigations were opened by the DOJ, but they were all dropped. [0] https://www.theatlantic.com/ideas/archive/2020/03/congress-i... [1] https://onlinelibrary.wiley.com/doi/1…

I don't think the stocks liquidations at the beginning of the pandemic is a good example of this. shit was hitting the fan and cities were closing down before most of the "insider trading" happened. If the information they used to make their trades was on the front page of every newspaper, it's not insider trading.

I think the conflict of interest alone should be enough to ban them and their close relatives from trading individual stocks

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

#205

Post by someonewhocar3s »

neom wrote: post #108
ramblenode wrote: post #88

Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began in the US, 4 US Senators were picking up medical stocks after closed-door briefings. Investigations were opened by the DOJ, but they were all dropped. [0] https://www.theatlantic.com/ideas/archive/2020/03/congress-i... [1] https://onlinelibrary.wiley.com/doi/1…

Is there a Congress ETF?

Not even a bad idea!

toppost: money is speech in the US. And it makes little sense to just force them to earn less. Preventing corporate ties otherwise seems more appeasing.

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

#206

Post by Lammy »

ramblenode wrote: post #88

Before the STOCK Act passed, Congress outperformed the market by 20%, with some senior Republican leaders doing as well as 35% [0,1]. Before the pandemic began in the US, 4 US Senators were picking up medical stocks after closed-door briefings. Investigations were opened by the DOJ, but they were all dropped. [0] https://www.theatlantic.com/ideas/archive/2020/03/congress-i... [1] https://onlinelibrary.wiley.com/doi/1…

Not just congresspeople: https://www.wsj.com/articles/bezos-other-corporate-executive...

“Top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of [the second week of March 2020]”

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

#207

Post by pclmulqdq »

pirate787 wrote: post #134
pclmulqdq wrote: post #111

Earlier quoted context omitted.

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…

> "This is one of the biggest signals that the US is an oligarchy and not a democracy." The constitutional doctrine of separation of powers generally limits regulatory law enforcement by the executive against the legislative branch. This is actually a signal of constitutionally limited government-- this is a design feature.

Judges also have strict rules about what they can and can't trade. So do congressional aides, and the capitol police (both part of the legislative branch). It's only members of congress who don't.

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

#208

Post by pclmulqdq »

giantg2 wrote: post #123
pclmulqdq wrote: post #111

Earlier quoted context omitted.

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…

I'd go a step further and restrict them to index funds. Even just holding a stock could affect their judgement. So they might not trade it to their benefit, but they might make the wrong policy decision for the country.

You can do a lot more with index funds than you think. For example, you can buy sector index funds to get exposure to more limited stocks, and going further, you can actually construct linear combinations of index funds to gain exposure to single stocks. Maybe if you restrict them to only S&P 500 index funds then you could stop them from trading like this. I would rather they just be barred from trading on insider information regardless of the trading vehicle.

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

#209

Post by giantg2 »

refurb wrote: post #188
giantg2 wrote: post #178

Earlier quoted context omitted.

Except the legislature gave the executive branch the power to create and enforce those regulations. Not to mention the type of abuse the restriction is aimed at preventing would still be allowed to take place against regular citizens (classic examples are ATF definitions changing randomly and even conflicting with statute or other regulations).

Yes, it gave the executive branch those powers but exempted itself. And with good reason - can you imagine if a sitting president created a new regulation that conveniently put his congressional opponents in prison?

Do you have a link to that?

Can you imagine a world where the president can do the same to ordinary people? On the whole, regulatory agencies lack the checks and balances that our system is supposedly built on.

https://www.heritage.org/courts/report/who-will-regulate-the...

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