Fed to ban policymakers from owning individual stocks • Hacker News Board

Re: Fed to ban policymakers from owning individual stocks

#31

Post by dhosek » Thu, Oct 21, 2021, 8:56 PM UTC

unbalancedevh wrote: post #17

Does this just mean that stock will now all be held in their spouse's name? I didn't see any provision for that in the article.

One would hope so. When I worked for Bank of America, as a lowly computer programmer I was required to make all of my investment information available to the compliance office as well as all of my wife's. In practical terms it meant moving my IRAs from Schwab to Fidelity, but it was still inconvenient (and cost me about $100 in fees for which I wasn't reimbursed). I would expect much stricter controls on people with this level of influence.

Re: Fed to ban policymakers from owning individual stocks

#32

Post by dhosek » Thu, Oct 21, 2021, 8:57 PM UTC

jonas21 wrote: post #28

jrockway wrote: post #24

Earlier quoted context omitted.

Not sure that's necessarily fair. If you're 75, you probably don't want your retirement nest egg in 100% stocks. There isn't a policy congress could institute that guarantees stocks will retain their value in a 4 year window.

There are bond index funds too.

Exactly. My retirement funds have exactly two securities in them: A stock index fund and a bond index fund.

Re: Fed to ban policymakers from owning individual stocks

#33

Post by gnopgnip » Thu, Oct 21, 2021, 8:58 PM UTC

slowmovintarget wrote: post #9

flyingfences wrote: post #3

Earlier quoted context omitted.

I don't think they will, but I do think they should.

I don't think they can. Current law in that respect does not apply to members of Congress, IIRC. Instead, Congress has decided that its members should: 1. Self-report on themselves, their spouses, their dependent children (why dependent children would be trading securities is beyond me, but OK.) 2. Be subject to a $200 fine for conflicts of interest or failure to report "in a timely manner" 3. Have the fine waived at…

The SEC can still pursue criminal charges

Re: Fed to ban policymakers from owning individual stocks

#34

Post by officeplant » Thu, Oct 21, 2021, 8:59 PM UTC

Factorium wrote: post #15

awb wrote: post #7

The relatively low salaries compared to the huge amounts of power is almost begging for insider trading, influence peddling, etc. > The salary of a Congress member varies based on the job title of the congressman or senator. Most senators, representatives, delegates and the resident commissioner from Puerto Rico make a salary of $174,000 per year. https://www.indeed.com/career-advice/pay-salary/congressman-... Then a…

This is the case all over the Western world. Federal Government politician salaries need to be 10x higher.

Sometimes I feel like congress and representatives should make the minimum wage of the area they represent. Might encourage them to actually improve things for the people.

Re: Fed to ban policymakers from owning individual stocks

#35

Post by officeplant » Thu, Oct 21, 2021, 9:01 PM UTC

jrockway wrote: post #24

N0tAThr0wAway wrote: post #21

Someone once told me that a stipulation for public service should involve converting all your holdings into index funds only. Thought that was an interesting proposal.

Not sure that's necessarily fair. If you're 75, you probably don't want your retirement nest egg in 100% stocks. There isn't a policy congress could institute that guarantees stocks will retain their value in a 4 year window.

If they're 75 they should focus on retirement.

Re: Fed to ban policymakers from owning individual stocks

#36

Post by dogman144 » Thu, Oct 21, 2021, 9:03 PM UTC

Have to ask how this wasn't instituted in the first place, excluding the "well it's corruption, obviously" answers.

Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.

Re: Fed to ban policymakers from owning individual stocks

#37

Post by zrail » Thu, Oct 21, 2021, 9:04 PM UTC

gnopgnip wrote: post #33

slowmovintarget wrote: post #9

Earlier quoted context omitted.

I don't think they can. Current law in that respect does not apply to members of Congress, IIRC. Instead, Congress has decided that its members should: 1. Self-report on themselves, their spouses, their dependent children (why dependent children would be trading securities is beyond me, but OK.) 2. Be subject to a $200 fine for conflicts of interest or failure to report "in a timely manner" 3. Have the fine waived at…

The SEC can still pursue criminal charges

The SEC is not a law enforcement agency. They can and do partner with the FBI but there's a separation of powers problem with that.

Re: Fed to ban policymakers from owning individual stocks

#38

Post by davesque » Thu, Oct 21, 2021, 9:05 PM UTC

awb wrote: post #7

The relatively low salaries compared to the huge amounts of power is almost begging for insider trading, influence peddling, etc. > The salary of a Congress member varies based on the job title of the congressman or senator. Most senators, representatives, delegates and the resident commissioner from Puerto Rico make a salary of $174,000 per year. https://www.indeed.com/career-advice/pay-salary/congressman-... Then a…

Yeah, the other day this really hit home for me. I don't know why I hadn't previously thought about it in such clear terms. Being a congressperson has to be one of the most morally hazardous occupations in the world. I mean, you have more direct control over how our entire society works than almost anyone else. So you become the perfect target for bribery and gain access to countless levers that you could pull in your own favor or the favor of your friends. I suppose this all goes without saying but for some reason it only recently dawned on me just how much this is true. And the position must select for people who are the most willing to exploit all those opportunities. Not sure how to really solve for it. Maybe getting paid more would help but I don't know.

Re: Fed to ban policymakers from owning individual stocks

#39

Post by newaccount2021 » Thu, Oct 21, 2021, 9:08 PM UTC

Factorium wrote: post #15

awb wrote: post #7

The relatively low salaries compared to the huge amounts of power is almost begging for insider trading, influence peddling, etc. > The salary of a Congress member varies based on the job title of the congressman or senator. Most senators, representatives, delegates and the resident commissioner from Puerto Rico make a salary of $174,000 per year. https://www.indeed.com/career-advice/pay-salary/congressman-... Then a…

This is the case all over the Western world. Federal Government politician salaries need to be 10x higher.

You already have to be wealthy to win an election...no one in Congress is there to build their retirement fund

Re: Fed to ban policymakers from owning individual stocks

#40

Post by adolph » Thu, Oct 21, 2021, 9:08 PM UTC

Fed says trading activity by top officials under independent review

Fed leaders have said the trading activities of its top leaders complied with existing, albeit insufficient guidelines. But the Fed’s latest statement reflected a more concerted focus on the trades themselves.

https://www.washingtonpost.com/us-policy/2021/10/04/fed-ethi...