House Democrats to propose ban on lawmaker stock trading

Re: House Democrats to propose ban on lawmaker stock trading – report

#81

Post by ericmay » Thu, Jul 28, 2022, 5:07 PM UTC

tootallgavin wrote: post #52

ch4s3 wrote: post #39

Earlier quoted context omitted.

Senators make $174,000/yr and most are already wealthy before running for election.No one is asking them to give up all income streams outside of their jobs, just to stop trading individual stocks. Senators have a LOT of knowledge about things that will effect stock prices that is outside of the public realm. Trading on that knowledge is a clear violation of public trust.

> just to stop trading individual stocks Why? Is buying a particular car not an investment? what about a house? Buying and selling assets should not be criminalized. Having privileged knowledge is part of the game. Someone who cannot read and write is going to have a tough time in life. Insider trading is already illegal. Also, investing in a publicly traded company is a weird way of violating public trust. Its as if…

> Why?

So keeping in mind this doesn't preclude lawmakers from investing or buying index funds or ETFs, but the reason is because they literally create legislation that benefits certain companies. CHIPS Act is a recent example.

So they can do something like buy stock in a company, and then advocate for a law to pass that benefits that company, and then make money by doing that. What we want to do is separate "what's good for me" from "what's good for the country" and remove conflicts of interest like that. There's no real reason for a lawmaker or their immediate family to be buying individual stocks. Instead it makes more sense for them to invest in something like a market index so that if there are incentives to be aligned they should be focused on benefiting the entire market instead of any specific companies.

Re: House Democrats to propose ban on lawmaker stock trading – report

#82

Post by [deleted] » Thu, Jul 28, 2022, 5:08 PM UTC

tootallgavin wrote: post #52

ch4s3 wrote: post #39

Earlier quoted context omitted.

Senators make $174,000/yr and most are already wealthy before running for election.No one is asking them to give up all income streams outside of their jobs, just to stop trading individual stocks. Senators have a LOT of knowledge about things that will effect stock prices that is outside of the public realm. Trading on that knowledge is a clear violation of public trust.

> just to stop trading individual stocks Why? Is buying a particular car not an investment? what about a house? Buying and selling assets should not be criminalized. Having privileged knowledge is part of the game. Someone who cannot read and write is going to have a tough time in life. Insider trading is already illegal. Also, investing in a publicly traded company is a weird way of violating public trust. Its as if…

[deleted]

Re: House Democrats to propose ban on lawmaker stock trading – report

#83

Post by [deleted] » Thu, Jul 28, 2022, 5:09 PM UTC

encryptluks2 wrote: post #56

ckardat123 wrote: post #47

Earlier quoted context omitted.

The comment above is plainly false though. Pelosi's sale of Nvidia was timed incredibly poorly, if the goal was to avoid short-term price movement around the CHIPS Act news. $NVDA is up about 8% in the two days since the sale.

Up 8% now, down 15-20+% in the near future. Hm... would you rather sale now if you have a heads up that the CHIPS act is going to stall and affect the price, which is correlated to others in the industry, or wait until is down more?

[deleted]

Re: House Democrats to propose ban on lawmaker stock trading – report

#84

Post by _8j50 » Thu, Jul 28, 2022, 5:09 PM UTC

Sevii wrote: post #57

nostromo wrote: post #51

Hear me out... few people want to run for federal office already. The pay isn't great and it's hard work. If the US was a company, there'd be no question that we'd need to pay our leadership much better to attract top talent. We pay senators $170k a year to manage our country with a $20 trillion economy. So what we end up with is activists who crave power and elites from rich families for whom $170k a year is a round…

Let's do a trade. Congress people get paid 1mil/year adjusted for inflation plus pension, but in return they don't get to own stocks or real estate while they are in office.

Better Idea: $300k base and a performance bonus up to 100% more based on sponsored laws and an additional 100% for passed laws with an extra 100k for no votes missed or abstained. So a perfectly performing congressperson gets a mil.

Re: House Democrats to propose ban on lawmaker stock trading – report

#85

Post by tootallgavin » Thu, Jul 28, 2022, 5:10 PM UTC

paulcole wrote: post #67

tootallgavin wrote: post #53

Earlier quoted context omitted.

And so how do these members of congress pay for staffing, research, etc? with just 150K per year?

It’s called the Members’ Representational Allowance and is north of $1,000,000 per year. https://sgp.fas.org/crs/misc/RL30064.pdf

I am sure we could find some Members who think this number inadequate. that number could fund about 8 people's salary per year, is that enough staff to do the job? I don't know

Re: House Democrats to propose ban on lawmaker stock trading – report

#86

Post by hedora » Thu, Jul 28, 2022, 5:10 PM UTC

Sevii wrote: post #57

nostromo wrote: post #51

Hear me out... few people want to run for federal office already. The pay isn't great and it's hard work. If the US was a company, there'd be no question that we'd need to pay our leadership much better to attract top talent. We pay senators $170k a year to manage our country with a $20 trillion economy. So what we end up with is activists who crave power and elites from rich families for whom $170k a year is a round…

Let's do a trade. Congress people get paid 1mil/year adjusted for inflation plus pension, but in return they don't get to own stocks or real estate while they are in office.

I'd take it further: $1M/year for life, have to divest all investments they own coming in to office (i.e., turn them to cash). Accepting any third party payment during or after being elected (and during campaigns) is treason.

If their kids accept their inheritance, the rules apply to them too. The rules always apply to spouses.

Let them invest in whole-market funds / ETFs, but only allow withdrawls 5 years after leaving office.

Re: House Democrats to propose ban on lawmaker stock trading – report

#87

Post by throwaway0a5e » Thu, Jul 28, 2022, 5:10 PM UTC

throwaway_4ever wrote: post #73

nostromo wrote: post #51

Hear me out... few people want to run for federal office already. The pay isn't great and it's hard work. If the US was a company, there'd be no question that we'd need to pay our leadership much better to attract top talent. We pay senators $170k a year to manage our country with a $20 trillion economy. So what we end up with is activists who crave power and elites from rich families for whom $170k a year is a round…

How does paying a politician MORE than 3x median US pay make them less out of touch with the average American? We don't need politicians 15x out of touch with the median American's lifestyle. In NYC governor's last election, there was a question about how much the median house costs in Brooklyn, and two high level candidates gave absolutely bonkers answers like $90k and $120k, when it's actually $900k. You only want…

>How does paying a politician MORE than 3x median US pay make them less out of touch with the average American?

Being dependent on their salary for their lifestyle would make them more in touch than the current "use the power of the office to make money via alternative means" situation.

Re: House Democrats to propose ban on lawmaker stock trading – report

#88

Post by zeruch » Thu, Jul 28, 2022, 5:11 PM UTC

Sevii wrote: post #57

nostromo wrote: post #51

Hear me out... few people want to run for federal office already. The pay isn't great and it's hard work. If the US was a company, there'd be no question that we'd need to pay our leadership much better to attract top talent. We pay senators $170k a year to manage our country with a $20 trillion economy. So what we end up with is activists who crave power and elites from rich families for whom $170k a year is a round…

Let's do a trade. Congress people get paid 1mil/year adjusted for inflation plus pension, but in return they don't get to own stocks or real estate while they are in office.

...or afterwards for 5 years.

Re: House Democrats to propose ban on lawmaker stock trading – report

#89

Post by dhritzkiv » Thu, Jul 28, 2022, 5:13 PM UTC

mfer wrote: post #74

Sevii wrote: post #57

Earlier quoted context omitted.

Let's do a trade. Congress people get paid 1mil/year adjusted for inflation plus pension, but in return they don't get to own stocks or real estate while they are in office.

> they don't get to own stocks or real estate So, they can't own a home in a location they represent? I don't see that going over well. Your primary home is real estate. So is that little family cottage. Also, congressional reps need to have a home is Washington. So, they have to rent there?

Many reps do rent in DC, sometimes in frat-house-like conditions with other reps.[1]

[1] https://www.cnn.com/2013/12/04/politics/real-alpha-house/ind...

Re: House Democrats to propose ban on lawmaker stock trading – report

#90

Post by danaris » Thu, Jul 28, 2022, 5:13 PM UTC

willcipriano wrote: post #48

danaris wrote: post #33

Earlier quoted context omitted.

....They get a salary? It's not huge, by rich-people standards (which is a legitimate concern, as it does lead to very rich people being more able to take politician jobs than regular people), but, what, you thought they relied on graft to buy their dinners??

It is huge by the people they are supposed to govern standards though. It would be a raise to virtually everyone except the top 1% of people in terms of household income. They also receive top of line medical care and retirement benefits in addition to the salary. The salary isn't preventing poor people from becoming elected officials.

It would be much more effective to guarantee that the salary of Congresspeople was a fixed multiple of the minimum wage than to attempt to force Congresspeople to live on minimum wage (or anything similar).

Even as it stands, just relying on their Congressional salary, it can be difficult for Congresspeople to maintain a residence in their district and one in DC—which is a fairly expensive real estate market—which is effectively a requirement of their position. Within some fairly clear limits, increasing the salary paid to those in Congress would have a tendency to decrease their reliance on lobbying money, rather than increase their appetite for it.