A categorical ban is way better than past efforts to subject Congress to insider trading laws. That gives way to much power to the executive branch to go after members of the legislative branch for political reasons. We should also raise congressional salaries to $1 million a year. Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
Pay peanuts, get monkeys. And if US politicians are expected to be free of corruption and draw an average salary nobody would even be willing to do it. Statistically the US president is one of the most dangerous jobs around [0] and all the politicians are subject to tides of abuse whether they seem to be doing a principled job or not.
The US would be far better off figuring out how to make its politicians do a good job before worrying about how outrageously they are compensated. Even the current fog of corruption they manage isn't as big a deal as the policies they push through as part of their routine above-the-counter activities. It's a sausage factory, the process of making the sausage isn't going to be pretty.
Why do you assume they would stop gathering money from side channels? You would need to tie the increase to a prohibition against side/back channel money.
I think there are a couple flaws in your logic. One, $50k is $50k and spends the same whether you make $174k or $1M. It’s money you didn’t have and now you do and if it’s completely legal to receive it, why wouldn’t you take it? I would at either level of salary if it was legal and was an interest I wasn’t morally opposed to. Generally donations to garnish support will be for things that are not going to go directly against the politician’s morals—assuming they have morals.. If they are willing to take the donations and entertain special interest money, they are willing to take it despite their income high or low.
Another is assuming that the price to buy support is fixed and the coffers are limited. The price might be $50k because perhaps that is the sweet spot on your target, but support and donations will go higher if needed and the special interest is motivated to garner support.
Then the bribe will increase to 300,000 and we're back to square one but with more inflation. Just to use the same argument they would have against raising minimum wage...
> This isn’t going to stop it, but perfect shouldn’t be the enemy of better.
There are less "causes" that have the ability to fund a $300k bribe so even with that argument, we're still better off. (And it costs those causes more, bigger paper trails etc.)
The pettiness of bribes has always surprised me. 3K, 5K, that kind of money. A few thousand dollars is all it takes to buy a senator, and they are largely already multi-millionaires. Raising their salary won't help, because, just like Trump cheating suppliers, there's no way the issue is money.
This idea seems straightforward me, but I'm a huge nerd, and every time I try to explain it to normal people they're so offended by the idea that they talk to me like I'm crazy.
Name 1 company that makes over $1 Billion in annual revenue where somebody 2 links below the top makes less than a congressional salary. Congress critters are paid peanuts and also rent in an above-median cost of living area as well as their own district.
~150k sounds like a big salary but when you're very much in charge of trillions of annual revenue it's not.
Salary is not where congresspeople make their money and if you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
We're so obviously talking about total compensation. CEOs making $1 while getting billions in stock appreciation or literally hundreds of millions in stock grants are not making $1/year by any reasonable definition.
> f you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
So, you want to keep the status quo where the people who are correctly compensated for their role are the ones willing to front-run their own citizens? (And also spending their time front-running instead of their elected job?)
> So, you want to keep the status quo where the people who are correctly compensated for their role are the ones willing to front-run their own citizens? (And also spending their time front-running instead of their elected job?
No, those are actually entirely different words than what I have said.
Yeah $150k in DC is comfortable but far from luxurious (if you have a family, which it seems like most congresspeople do). It would not be enough to incentivize me to do the job of a congressperson.
I submit that most people with college degrees, including those in politics, do not meet the bare minimum standard of what it means to be truly educated.
I may not agree with her politics, but from what I can tell, AOC is intelligent, articulate, more than willing to inform herself about an issue before voting on or having a hearing about it, and most importantly, she appears to genuinely wish to represent her constituents to the best of her ability.
I would happily clear and re-populate both parties with candidates sharing those traits.
MTG, on the other hand, is and always has been an internet troll, and not even a high-quality troll - merely a ball of ignorance and bigotry that comes a dime a dozen in any competitive online game lobby or forum.
A few examples of AOC’s reasons for proper comparison to MGT. Personally, to these I would add acts of drama like the emotional breakdown at the border, modeling the expensive ‘Tax the rich’ dress, etc.
Google can bring many more examples. AOC is not more intelligent than MGT. They are two sides of the same coin.
Probably not so imaginative as that, but there’s a whole YouTube channel devoted to AOC’s stupidity.
Favorites might include the one where she fails in trying to identify the three branches of government, or the one where she says congressional reps are inaugurated and sign bills. Those don’t have the amusing color of MGTs idiotic statement, but they are every bit as stupid and maybe even more shocking, given her job.
This comment represents a lack of understanding of human nature.
You can't effectively represent the interests of others when your own needs are barely covered. I want my elected representatives paid quite well so that they have fewer excuses to succumb to the various temptations of holding such a position.
You can wish all you want that people with incredible power and responsibility should live like spiritual monks and possess only the purest and noblest of intentions, but that's not how people work, and it sure as hell isn't how politics works.
Pay peas, get monks? Anyway the idea of preventing corruption by bribing them officially is weird. It means they aren't any more morally upstanding, and would still do corrupt activities in their minds, we just hope that when they're well paid they won't make the effort. On the basis that they're immoral and lazy, so it balances out.
Anyway the idea of preventing corruption by bribing them officially is weird.
Labeling the act of someone getting paid to do a job as "bribery" is even more weird. While I certainly wouldn't do by current job if I was paid minimum wage, I don't know if I would say I'm being "bribed" by my employer to stick around. Even if it does appear to align with your new definition.
A millionaire approaches an attractive young woman in a bar and asks if she would be willing to spend the weekend with him at the country’s most expensive and luxurious hotel, waited on hand and foot and receiving a million pounds to sleep with him. The girl considers that it’s worth it for a million pounds, and agrees. The millionaire then suggests that they immediately sneak into the men’s toilet for quick sex for £5. She is shocked and insulted, and says “That’s disgusting! What kind of girl do you think I am?” He replies “We’ve already decided that. Now we’re just haggling over the price.”
We don't need to moralize everything when we can simply recognize patterns that work vs. patterns that don't work. And underpaying people definitely is not the way to get the results you want.
You may not like the reasons for WHY they work or not, but that is not relevant to WHETHER they work.
When I made minimum wage working at Subway, I would sneak extra sandwiches for myself here and there. I didn't strictly NEED them to physically survive, but hey -- I'm busting my ass for $7.25, I'm gonna pay myself a little bonus here and there. No one's watching, so I'm going to decide what's fair for a change.
Now I make much more than that. I no longer steal sandwiches from my employer.
I think this is the pattern for the great majority of people.
Everything you do to make them poorer will just make it cheaper for moneyed interests to buy them.
The root problem is abusing their office for financial gain.
Reducing their above the table pay doesn't actually change the abuse aspect much and the degree to which it does change things is not in a good direction.
But then you’ll just get median americans for the job. And even median americans don’t want to be governed by other median americans. They want to be governed by exceptional people who share their values and whose judgment they trust. That’s what makes representative government difficult.
(You see this in juries for example. They select the smart or authoritative person among them to be the foreperson and look to that person for direction. This is how humans naturally form hierarchies.)
> You see this in juries for example. They select the smart or authoritative person among them to be the foreperson and look to that person for direction. This is how humans naturally form hierarchies.
This is a mischaracterization of juries. It's not a hierarchy. Every juror has an equal vote. And each juror gets paid the same, including the foreperson (not much, but they usually get paid something for their service).
The foreperson has two special roles: (1) to announce the verdict in court and (2) to guide the deliberations. Neither of those roles has any personal benefit to the foreperson. The second role exists merely to keep deliberations orderly, prevent them from devolving into cacophony and chaos. And in fact the foreperson is charged with making sure that every juror is allowed their input, otherwise one or a small number of jurors might dominate the discussion. Some kind of order is needed in group discussions. This is why Robert's Rules of Order exists, for example.
Democracy itself always requires some form of order: people entrusted with scheduling, administering, and counting the votes. But that doesn't make these people our leaders.
Salary caps do nothing to prevent an elected official from accepting deals on the side, and it can be impossible to incriminate the bad actors.
Will the salary cap prevent a congressman’s daughter from accepting a lucrative job offer? Will his wife’s law firm have to turn away new clients? Will his non-profit have to turn away donations?
Any system that could prevent personal enrichment of elected officials would require every freedom be taken away from them. You’d have to imprison them (and anyone who could proxy wealth for them) as soon as they take office and for decades after if you want to be sure that they were not motivated by self interest.
That's a good way to ensure that only the very wealthy run for office. A professional might make $200k/yr, which is a nice household income - but "only" 85th percentile - and their family probably can't afford(with their lifestyle) to make only $50k/yr.
Yep. Perversely it probably increases the chance of them being out of touch with the average citizen, because the average person doesn't have the connections or drive or paper credentials to run for Congress anyway, and if the people that do are sacrificing the chance to earn much higher salaries it's probably because they're rich enough to be completely indifferent to their paycheck.
The way election campaigning works already ensures that only the very wealthy or incredibly dedicated can run for office. Who else can afford to take time out of their schedule to travel, give speeches and attend campaign events and fundraisers, do interviews, schmooze donors, etc? A representative democracy already selects for the wealthy from the get-go, so the $174k current Congressional salary is more or less inconsequential to those folks that do run.
It should be some multiplier of the mean salary of the population you represent. In California this would be about $96,000. In Mississippi it would be about $54,000. There's a congressional district in New York where it's $31,000.
You want your pay to be higher? Work to raise the median salary in your state.
If you pay the median salary, you’ll end up with Congress consisting of only independently wealthy people whose priorities don’t align with the median citizen.
Singapore has high politicians salaries and low corruption as measured by international standards. They also have extremely strict anti-lobbying or to use the sane word anti-corruption laws. Their reasoning as I understand it is to attract and keep good people in government, competing with the public sector, instead of attracting what amounts to an endless stream of grifters that work for lobbyists and not the government.
https://www.transparency.org/en/cpi/2024 Singapore is number 3 for the most recent report. USA by comparison is number 28. It’s an apples and oranges comparison given the vast differences in the two countries of course, and raising politician’s salaries isn’t a black and white fix for the problems in the USA.
How about p75 or higher instead? Nothing special about the median, and as others have pointed out, it's probably not enough to live in on given DC prices.
That seems like a recipe for corruption. Representatives would need to supplement their salary somehow just to afford housing. The easiest means would be to leverage their position. Even if you make it illegal, the demand will make it happen anyway.
We could make it something like 10x the median salary and still have the alignment you want, but would be more resistant to that effect.
> Congressional salaries should be exactly the median US salary.
Congressional salaries should be $1m+. It would only half a billion dollars a year. A pittance of the $6.75 trillion federal budget.
Combine that high salary with mandatory life sentences for accepting any form of graft and you have a recipe for honest people to enter government. Pretty much the Singapore model for compensation of https://en.wikipedia.org/wiki/Cabinet_of_Singapore
The problem with low or median salaries for politicians is the ratio of power to compensation. It directly encourages the griftiest of grifters to accept the low salary and abuse their positions of power.
With a high enough salary, you will attract honest people who will do the job functions knowing that any deviation from working on behalf of the people will not only make you broke, it will land you in prison for life.
How do you convince Congress to pass a law subjecting themselves to the death penalty? What do you do about the legal bribery? Do you really think that you can raise congressional salaries high enough that "speaking fees" or "campaign contributions" won't make them a drop in the bucket? Why is salary imagined to be an important factor when the majority of elected officials are not in any way wanting for money? The basic structure of representative democracies ensure that representatives are largely drawn from the class of the idle rich and upper-class who can afford to stop working at a relatively young age.
A constitutional amendment, brought about through a constitutional convention of the states, is probably the only way. Even then, the state legislators might be concerned that they too will be held to similar standards.
> The basic structure of representative democracies ensure that representatives are largely drawn from the class of the idle rich and upper-class who can afford to stop working at a relatively young age.
That's what this purports to solve. By having the direct compensation for being an elected member of Congress be high enough that it would provide a well compensated life for someone who is not rich before becoming a politician.
How can a non-rich person afford to campaign and do all the necessary politicking to get elected? Getting money after being elected has never been the problem - even those congresspeople who somehow get elected from humbler origins seem to become multimillionaires pretty quickly after gaining office. The reason the vast majority are drawn from the upper crust is the time and money costs involved in the initial campaigning.
Now don't get me wrong, given how often legislation in the USA and the UK seems to get rubber-stamped by members of the legislative body who did not (and in some cases could not have) actually read it, I think there's something structurally wrong with at least these two governments, where the senators and MPs are more like overpaid customer support agents and less like the legal/constitutional equivalent of software engineers doing code review or maintaining system architecture, but conditional on if we actually want the elected representatives to be the people's preferred choices amongst the best legal minds available, we have to pay enough to encourage… actually, even before that, even just to get the attention of the top m=contested_seats candidates whose views allow them to comfortably be members of each of the n=num_parties.
Now, I don't know what that pay rate is, and ChatGPT's guess would be better than mine, so the best I can do is link to a page that I only found because ChatGPT gave me a searchable phrase, "magic circle law firm": https://www.allaboutlaw.co.uk/school-leaver-law-careers/beco...
That suggests >>£1M/year in the UK. I assume the USA is more.
Consider: would you take a 90% pay-cut to do your current day job but for the public good?
> that simply does not select for those attributes.
I agree that it does not select for those attributes. Whether that's a simple matter is debatable, though perhaps it is simple: in the political system I live under, elections are pay-to-play and self-funded, inherently favoring candidates who can raise vast sums of money and thereby encouraging political corruption.
> We all would like altruistic bankers and energetic, ambitious DMV workers, too.
Of course it's deadly serious. Politicians could end the entire world with nuclear weapons. (They might still!).
It is also a game, with players and objectives, and zero-sum outcomes for the players. You either get elected, or you don't, and it's up to each player to decide what they are willing to do in order to win.
I'll await your answer to my question about your criteria before I answer this unfortunately phrased follow-up.
Actually, I won't wait: Democracy depends on voters getting what they voted for. It's essential that there's consistency between a candidate's election campaign and the elected representative's behavior in office, otherwise you might as well vote for Mickey Mouse for all it matters. So yes, I'd take a consistent "religious nut" any day over someone who sells their soul to the highest bidder.
I have respect for people who do what they say and say what they mean, even if they don't agree with me. I have no respect for liars and con artists, regardless of their "intelligence" or "skill". The latter will always screw over the people they were elected to represent.
>Democracy depends on voters getting what they voted for.
That only works if each vote has the same worth in the election and governing. Otherwise the whole population might be getting something that only a small number voted.
Do you think that is the case today in the United States? Or are you unaware of all of the gerrymandering currently going on throughout the country?
I don’t know how “gerrymandering” became such a meme. Currently, Democrats have 6 more seats than their two-party share of the House popular vote. That’s only 1.3% off. The differences have been pretty small since the 1990s: https://en.m.wikipedia.org/wiki/File:Popular_vote_vs_actual_...
You can't look at gerrymandering at that scale. It exists on the scale of individual states. I'm in Tennessee, and Republicans gerrymandered the districts so that Nashville is divided across three, leading to the state only having one blue district instead of the two or three it should have (by votes, it should have two with a third competitive district). They were forced to keep Memphis' district around only as the minority-majority one (a federal court even ruled that it was a clear political gerrymander, but not a racial one, so it was upheld).
> You can't look at gerrymandering at that scale. It exists on the scale of individual states.
But Congress is a national body. Maryland is almost the exact flip of Tennessee (2:1 democrat) and democrats have gerrymandered the state so there's only 1 GOP district. Republicans have 35% of the vote, but only 12% of the representatives. At the end of the day, Congressional votes aren't taken state-by-state, and the delta between each party's share of the two-party popular vote and their share of seats typically is small.
There's no fair way to do districting. "Independent" redistricting commissions don't work. In California, which has an independent redistricting commission, republicans have just 17% of the seats despite getting 39% of the vote. It's not that much better than Illinois's extreme gerrymander, where the GOP got only 17% of seats with 46% of the popular vote.
If we mandated districts be drawn by independent commissions in every state, they'd get taken over by democrats, just like every other non-elected institution (everything from NPR to the ABA). At least the adversarial political process we have now results in relatively small, non-permanent advantages to either side. The only solution would be to ban districts all together and have a statewide vote for a party slate of candidates.
I very strongly doubt that salary is a driving force behind any kind of political corruption. Even those wealthy enough to support three generations without work won't pass up opportunities to make easy money.
It’s more to increase the social status of legislators in comparison to the people around them.
For the most part, the problem is not back alley “corruption.” It’s people trying to not rock the boat too much so they can exit to something reasonable when the kids need to go to college.
Nobody is running for Congress to pay for college tuition. That would be the stupidest, most improbable investment plan in the world.
The reason that legislators don't rock the boat is that they're paid by their wealthy campaign contributors to not rock the boat. But the reality is usually not honest candidates getting corrupted; rather, the wealthy campaign donors specifically select candidates who are naturally amenable to their interests, and give them boatloads of money (and needless to say, would stop giving them boatloads if they failed to do what the contributors wanted). It's a trade of money for political power, between willing parties. The political system, as it is, attracts and benefits those who are already corrupt or corruptible.
Increasingly, members of Congress are already wealthy even before taking office, so they never had any fear of paying for college. Stock trading itself is largely a luxury of the wealthy. Even those people of lesser means who do own stock typically don't trade it directly but have it managed for them by a pension or retirement fund.
They will become lawyers anyway if money is the key motivation.
The rule should be: One has to give up dream to become rich if they want to become congressmen. They should be able to live like a middle class, but not rich.
“High quality candidates will become lawyers and lobbyists instead.”
That’s the way it should be. If they’re in it for a big pile of cash, they should go the proper routes. We’d be better off if our expectations were that politics does not pay well, and a politician that retires wealthy has not been a good public servant.
>Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
I'm sorry, but what? Are you proposing that being a member of Congress should come with legal insider trading as part of their compensation package?
That's downright abhorrent. Where on Earth are you getting the impression there should be a class of people uncovered by the constraints we put on literally everyone else?
I think that we need to pay them a lot more. Running and serving in congress is a hell of dumb idea for anyone that we'd want in the position. Your life gets pulled apart by the press, you spend absurd amounts of money just to get there, and you essentially have to quit your career and buy a house/condo in DC for an indeterminate timeline, you get yelled at. Smart people would not do this job; it really is a service for the people they represent. [0]
This really only allow the corrupt and the already wealthy to do the job. Issues there are obvious.
Look, the labor theory of value is wrong. Something is not worth what went into it (capital, labor, R&D, etc). Something is worth what you pay for it. This is why you don't see a lot of marxists about these days, because prices are determined by the market, not the production.
Same thing goes for CEOs and politicians. They are not worth what they produce (mostly headaches). They are worth what it takes to get them there. If you want a good one to run and try for election, then you have to make it worth their time relative to their other options. You want a good one? You have to pay exponentially.
Pro sports understands this. Sure, you can get a lot of people playing NFL any Sunday for like $10; they'll do it just for the crowds and the dream. Nearly all of them will suck. But if you incentivize correctly ($$$), then you get a much better game and viewing experience than a Sunday afternoon beer league. Better politicians means better incentive structures.
[0] campaign finance reform is also desperately needed, but that's another related subject.
Federal employees have more strict stock regulations and yet we still see problems with private influence on the government.
The issue is our bribery laws are ridiculously weak. It's not illegal for your pals at Nestle to pay you 10x for your house or send your kids to college.
Stock is fairly public knowledge and you owning shares in Nestle doesn't do nearly as much to influence the laws you write regulating Nestle. You can always dump the stock before sending the laws out of committee.
The one positive of banning congressional stock trading is that at least it might make congressional people more sensitive to the broad market.
Make your own crypto coin, maybe do a few press conferences about it and how great it is. If you find yourself in a situation where you might be legally immune to any prosecution, maybe just outright state that buying said asset will get you favoritism.
But yes, I'd support outright banning crypto, especially for Congress. WAAAAY to easy to spin up a new coin that effectively works as money laundering.
That's a much worse scenario than stock currently is. It's a lot harder to create new stock.
Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
Strict Scrutiny is a SFW alternative to 5-4. They both cover more or less the same events and issues. Strict Scrutiny's hosts are profs and former clerks, whereas 5-4 are "blue color" lawyers.
Though they have different POVs, I think they're both hysterical.
Former prosecutor Preet Bharara (Cafe Insider) has yet another POV. More nuts & bolts. Super informative.
Until this ACTUALLY passes and is rattified I these talks dont even get me excited. Its been tried so many times. Today is just Hawley's turn to grand stand. Just before it gets strangled in the crib, and then in 2 years it will be someone elses turn.
I personally think killing earmarks was just as bad. It removed a key avenue for congressmen to do the "right thing" in defiance of the party line while still remaining safe on the reelection cycle. These days there's a ton more party-managed back room vote trading and whatnot and the legislators are substantially less free to be reasonable.
We’re already on the verge of eliminating birthright citizenship, with the Supreme Court’s blessing. This is a major and pretty unequivocal clause of the 14th amendment. If they can do that, then none of the other amendments are going to matter either.
This will make lobbying more powerful. If you can’t make money from insider trading, you have one less alternative to accepting bribes. I’d rather require insider trading than ban it.
The title makes it appear like a bipartisan move when every republicans but one voted against the proposal. We all know where the GOP's true interests are, no need to whitewash them. A better title would have been "GOP representatives massively vote against insider trading regulations".
I support the idea, but I don't think it will make much of a difference because there are bound to be too many loopholes to be effective. I think stock market reform would be more effective - ban calls and puts and other forms of speculation. Speculation invites manipulation and incentivizes unethical actions, especially when paired with power and information. The best, but least realistically possible, thing would be to fix the problems with regulatory capture in the SEC and other oversight and enforcement agencies that are supposed to be punishing politicians.
I take as dim a view as anyone of hyper-financialization: the incentive for a sophosticated market participant to market high complexity instruments to cless sophisticated counter parties is clear and pernicious. If we had allowed the CFTC to regulate OTC derivatives products in the 90s we'd be living in a different timeline.
But standard American and European options contracts are neither complex nor uniquely suited to speculation. These instruments are so fundamental that in many treatments you use them as the atoms from which to build more familiar instruments (theres a great MIT OpenCourseware about the martingale construction of an equity from binaries and calls, British guy, forget his name). You can explain such instruments to a precocious child and they've been in use by merchants and farmers and all kinds of people into the mists of antiquity.
It gives responsible financial regulation a bad name to be like "its the puts and those damn calls!"
The purpose of stocks is to raise money for a company. The purpose of the stock market is to give those stocks liquidity.
The further away from this basic framework we go the more dangerous it gets. Derivatives are not inherently antithetical to the basic framework, but they present new options and opportunities for market distortion that can't be ignored. We've seen how badly things can go, numerous times. And that doesn't even address the problems you get with wealth concentration, especially when your currency is untethered to some sort of commodity and can inflate more freely.
I'd like to see some real changes, but the problem is that the people who would make changes are so tied up with the market itself that any changes are superficial and often merely present new avenues of chicanery. It's not likely anything will be done, and when the next collapse happens, no lessons will be learned.
Options are literally just insurance plans for stocks.
Just like car insurance or home insurance. They are called options, because when you get in a car crash you have the option of calling your insurer, because you purchased insurance. When your stock crashes, you have the option to call the counter-party to cover the loss.
If options were called "insurance contracts", they would still be the same thing, and probably more understandable to the public.
Options and futures are very good price discovery mechanisms. Forcing people to only take long positions is not a good solution. Speculation is not a problem, nor is utilizing asymmetric information in markets, since this all comes out as the price. The problem is that congress has a government enforced monopoly on a large quantity of various types of important information.
Why is it one or the other? Why not both? Maybe this ban can have a small dent, and some other laws have other dents too, when added together makes at least some difference.
Kind of similar to how Spain is fighting vacation rentals. Yes, each individual new law and change won't immediately fix the problem, but each enacted change makes a small difference and currently we seem to be moving in a really great direction to eventually have at least that particular problem solved.
I never suggested it was one or the other, I just don't think this approach will be effective because it's filled with obvious loopholes and the existing laws aren't enforced anyway, but I am generally of the opinion that a smaller legal code is better, because people have to be able to know it to follow or enforce it.
Options can be used for speculation but they are also frequently used to reduce risk/exposure. Covered calls and married puts are just a couple of such strategies frequently used by retail investors. We shouldn’t ban those tools just to prevent political corruption. We should be enforcing the law when it comes to insider trading and market manipulation much more effectively.
That's silly. Futures are an essential part of commodity trading and market liquidity. We don't need to kill market functions to prevent blatant political corruption. Just limit congresscritters to blind trusts. Done.
Like buying the stock? You're not talking about reform - you can't remove speculation from the stock market without banning stock markets entirely.
I agree that market manipulation (especially by those in power) is an enormous problem. Can we hope to truly fix that? Or are we just going for damage control by banning derivatives or the entire stock market?
The legislation is trying to stop insider trading by legislators. Stock market reform could mitigate much of it (although I don't know that it's something that causes any kind of real-world harm, it provides incentives for legislators to do even more unethical things, like manipulating the markets). Removing money from politics is much, much broader and way more complicated.
Historically, speculative instruments such as options as well as short selling have been outright banned in many countries. The British options trading ban in the 1800’s lasted for over a century.
I just want to point something out that has irked me since it happened, and continues to fuel a mythos to this day.
Nancy Pelosi and the infamous insider trading of Nvidia.
A few weeks before the CHIPS act passed congress in July 2022, Nancy Pelosi made a large purchase of Nvidia shares. This made headlines everywhere as obviously she was going to pass the CHIPS act, obviously Nvidia stands to benefit, so of course she loaded up knowing these things.
But the media, who will readily obscure any nuance that can kill a story, only mentioned that she executed call options to purchase nvidia shares. Which to 99% of the public is technical babble that is ignored.
But what actually happened? Well Pelosi, looking at her trading history, likes to buy deep ITM LEAP calls and hold them to expiry. This means in the simplest terms, that she signs a contract 1yr+ before a date, where she gives herself the option (hence the name) to purchase a set number of shares at a set price. So when Nancy purchased Nvidia shares in June 2022, she had set the contract in motion to do that at least a year prior.
But even worse for the inflammatory story, because she purchased that option over a year prior, and Nvidia was down ~15% in the last year (remember 2022 was a bad year for stocks), she actually would have lost money on the trade.
So here we have the foundational story that set this whole thing is motion, which is based on public ignorance of how stocks and options work, where Pelosi was vilified for a trade she lost money on, because the execution date of a contract she signed at least a year prior happened to be within a few weeks of the CHIPS act.
If she likes to hold them to expiry like you pointed out, then isn’t it odd to not have let the nvidia options expire? I’d need to see her full trading history to make sense of whether or not she is using insider information to influence her trading patterns. Given her net worth of over 100 million dollars I am a little suspicious, but lacking details it’s hard for me to make a judgement and I assume you are correct.
Or we can ban members of the government from trading stocks and investing while they hold office and then not have to have this discussion. I hate all politicians republicans democrats and Bernie’s (not picking on Mr. Sanders but I don’t know if there’s another registered independent in high level government) if they even have a sniff of engaging in fuckery, the job should be too important to show any possible signs of impartiality. That boat seems to have sailed away though minus their being an actual grassroots populist movement to overhaul government. And those keep seeming to dissipate or get co-opted when they do start to foment, like the occupy Wall Street type things that in my life seem to keep popping up, gaining traction, and then becoming something no one hardly talks about anymore.
> The measure, originally called the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, would prohibit members of Congress and their spouses from trading or holding individual stocks
I genuinely laughed out loud at the bill's original name.
That one is fun, but it's part of a general trend of childish naming of US laws that is not a good sign for the health of the country making them. It's a Brown M&M for the country that you're focused on sound bite names for laws, not their content.
Years ago I ran into the fun hack introduced in Britain's laws during my lifetime. Modern laws provide short names for themselves, so an Act might say you can refer to this as the "1996 Goat Prevention Act" and even though it has an unwieldy long full name that shorter name works everywhere you need to name it, but some older laws don't do this, so that's annoying, and also if you've repealed the law you can't use a short name which no longer exists because the law itself was repealed and that's where the short name comes from.
So, they passed a law which said when you repeal a law which gives any law a short name, those short names still work anyway. Then they passed a law which just provides convenient short names for laws people often want to refer to but don't come with short names, then they repealed that second law. Done.
Naming laws after people who did bad stuff you're trying to legislate away or their victims is at least a hundred years old. Only a rabid partisan would complain about a law about insider trading being named after one of the politicans most notorious for it.
Personally I think they names should be more humorous and creative but I think this one is way, way better than stupid contradictory names like the PATRIOT act.
There are nine members of congress who trade more profitably than her, but for some reason certain people use her as the poster child for this problem.
She became the poster child for it because she's the daughter of a politician who did the same sort of thing.
She's a poster child for "evil congress lizard" the same way that the Kochs and Soros and Murdoch are poster children for "evil billionares" even though there's richer ones.
Don’t feed people that kind of nonsense trying to pretend it’s the same situation. It’s fine to just call a spade a spade or in this case to call corruption corruption.
Previous / current behavior is nearly always exempted from legislation.
Same reason why salary increases for senators and etc affect the _next_ session instead of the current one.
Chances are the current administration is already running awfoul of existing laws (especially the part where TrumpCoin conferred actually benefits to its holders). But given the lack of appetite from the current majority parties at enforcing the law I don't expect any changes. Can't wait for anything besides FTTP to become more widespread.
That's not what's happening here. It's not a one-time Trump exception, it just doesn't apply to presidents.
To me, it's completely obvious that this legislation should apply to the president. All the legislators know that too.
Perhaps they're afraid. Perhaps they're ambitious. Either way, I'm not a fan.
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump.
If I am reading this correctly, it does apply to future presidents, right?
"He made a reference to billionaires, okay?" Scott said of Hawley. "I don't know when in this country it became a negative to make money. But somehow, if you've made money, you're supposedly — I think Senator Hawley suggests — you shouldn't be serving, because you might trade stocks."
"Anybody want to be poor? I don't." Scott continued. "Right? So this idea that we're going to attack people because they make money is wrong. Is absolutely wrong. We should cherish all of our different backgrounds. ... So, I think it's disgusting what is going on here."
This is Republican Sen. Rick Scott by the way.
Seems like he's using some form ad hominem to distract from the actual purpose. The purpose is not to prevent congress from getting rich. The purpose is to remove conflict of interest. Congress can have insider info on individual stocks. For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info.
I think only allowing congress members to buy and sell index funds is fine. Not individual stocks. Or if they want to trade individual stocks, make them declare 1 month earlier and make it public.
Rick Scott made his money by being the CEO of a company that paid a $1.7 billion fine for Medicare fraud.[0] He’s one of the most corrupt people in Congress.
Have you ever watched CSPAN? He's doing the same stupid routine they all do. Trying to spew keywords and generate soundbytes he thinks will be useful to him and bad for the opposition. I'm pretty sure they all get taught this or something. It's so f-ing tiresome. I wish they'd just discuss things more normally.
What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades.
Sensor Scott opposes the blanket ban because insider trading is already illegal, and thus the ban makes punishable otherwise entirely legal behavior. And he's right- it isn't, and shouldn't be, illegal or considered wrong to be successful, if done the right way.
There's a middle ground somewhere in there I'm sure, but given how suspiciously well some members of Congress have done, and how there's been seemingly not enough accountability of it, I'm not terribly empathetic.
>What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades.
It speaks volumes about the relationship between the government and the people that they nailed Martha for (a bullshit follow on charge stemming from an investigation into) a small time variant of basically the same thing.
Like how if the police shoot your dog it's just property but you shoot one of theirs and well you might as well shoot the officer too because it's another count of the same crime.
Goddamn double standards everywhere. What ever happened to equality under the law?
Some jobs place restriction on your ability to trade individual stocks - I discovered this when I went to work at an investment management firm. This was a policy applied to all people that worked there.
I see no reason not to do the same thing for Congress. The legal space is well-traveled and the fundamental concern - namely, the perverse incentives resulting from asymmetric access to valuable information - is present in Congress the esame way as in a sizable investment firm.
Index funds and mutual funds are often exempt or subject to less scrutiny, and that could be here too.
I run the numbers every couple of years and I’ve never had a year that shows individual Congress people are particularly better at trading than an index over the course of their terms.
The fact is, the vast majority of Congress people _own index funds_ or similar portfolio construction.
When there are outliers they regress after a few years. The last time I ran the numbers the the majority of the outliers just got into Nvidia a little early. They mostly had tech heavy portfolio construction.
The big outliers were people like Pelosi who were married to wealthy spouses who were doing exotic trading, but several of them did poorly as well.
The fact is, Congress people have more scrutiny on their trades than the average person and more downsides.
We should restrict trading by Congress people because of the image of impropriety not because it’s actually common to make a bunch of money doing it.
That’s not a middle ground; index funds are profitable based on the country’s success, not the trader’s. And you don’t get that same dopamine hit as gambling.
They’re the smarter place for people to put their money but I wouldn’t consider them a comparable product.
Yes, it is a middle ground. The extreme positions here are "no equity ownership, directly or indirectly" and "no trading restrictions at all." Allowing index fund purchases is squarely in the middle of that continuum.
Additionally, your description of how people purchase and make money on indexes funds is incomplete at best. Really, it's just factually incorrect in that it presumes a certain purchase strategy. People do short-term, dopamine-inducing trades of index funds all the time.
But, I don't think elected representatives should be able to do that, either. At the very least, successful short term trading - directly or through an advisor, of an individual security or a fund - creates the appearance of impropriety.
Perhaps Congress have a way of influencing the country's success in a way that Uvix can't?
If congress has to bet on the overall economy instead of e.g. spotting that riot gear providers goes up when country goes down, that would be a good thing?
> For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info.
If a congress person gets that info from oracle or TikTok or someone with fiduciary duty to their shareholders that’s insider info (in the US) and that congress person is subject to existing insider trading laws.
If they get it as part of their duties in Congress it’s not insider info, the same way any other person without the fiduciary duty.
It may be an abuse of power and we may want to ban it, but it’s not insider trading.
It’s an important distinction because insider trading laws (in the US) are not predicated on open access to information, rather on not stealing from people you have a duty to. It’s not a fairness doctrine it’s property rights one.
Also surprised it didn’t mention that Rick Scott got rich by defrauding Medicare. To the tune of 14 felony counts against his company and a 1.7B dollar fine.
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump
The current GOP deserves no benefit of the doubt, but there's also a history of excluding the people currently in office. If anything I'm surprised it gives current congresspeople 180 days to sell, rather than being something like "nobody not currently in office" like the 22nd amendment.
Banning stocks will not do anything. Most congressman lose money when they sell. There is an incorrect notion passed by there loud people on twitter that congress people got rich while in congress. Oh contrare, they were already rich. They had be to run for office.
Do you see the danger in introducing this dichotomy? A stock ban is not bad even if you believe that it won't help. Many do believe it is a good idea, and therefore is worth a vote.
But stopping it by saying we should tilt at another windmill? I don't see the benefit of that, I only see it being used as a tactic to stop good legislation in favor of the impossible great.
A categorical ban is way better than past efforts to subject Congress to insider trading laws. That gives way to much power to the executive branch to go after members of the legislative branch for political reasons. We should also raise congressional salaries to $1 million a year. Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
Congressional salaries should be exactly the median US salary. That way their incentives are aligned with the median citizen and not just the 1%.
Pay peanuts, get monkeys. And if US politicians are expected to be free of corruption and draw an average salary nobody would even be willing to do it. Statistically the US president is one of the most dangerous jobs around [0] and all the politicians are subject to tides of abuse whether they seem to be doing a principled job or not.
The US would be far better off figuring out how to make its politicians do a good job before worrying about how outrageously they are compensated. Even the current fog of corruption they manage isn't as big a deal as the policies they push through as part of their routine above-the-counter activities. It's a sausage factory, the process of making the sausage isn't going to be pretty.
[0] https://en.wikipedia.org/wiki/List_of_United_States_presiden... alone and you just need to look at Obama before and after to see what the stress does.
> Pay peanuts, get monkeys
As opposed to now with all the highly qualified congresspersons.
The current pay for members of the House of Representatives and Senate is $174,000 per year [1]
Rayiner is claiming we would get better members if we raise it to $1 million per year, to which your reply is unresponsive.
[1] https://en.wikipedia.org/wiki/Salaries_of_members_of_the_Uni...
$174k is not an accurate representation of the wealth accumulated from being a member of congress.
That’s the point. They’re making money from side channels.
The idea is that if you pay them $1M, they won’t do their side channel earnings (and therefore reduce their potential conflicts of interest)
Why do you assume they would stop gathering money from side channels? You would need to tie the increase to a prohibition against side/back channel money.
Both seems highly unlikely to me.
If you pay them 170k salary, then a 50k donation/bribe/dinner is very lucrative.
If you pay them $1M salary, then a 50k donation/bribe/dinner is less convincing.
This isn’t going to stop it, but perfect shouldn’t be the enemy of better.
I think there are a couple flaws in your logic. One, $50k is $50k and spends the same whether you make $174k or $1M. It’s money you didn’t have and now you do and if it’s completely legal to receive it, why wouldn’t you take it? I would at either level of salary if it was legal and was an interest I wasn’t morally opposed to. Generally donations to garnish support will be for things that are not going to go directly against the politician’s morals—assuming they have morals.. If they are willing to take the donations and entertain special interest money, they are willing to take it despite their income high or low.
Another is assuming that the price to buy support is fixed and the coffers are limited. The price might be $50k because perhaps that is the sweet spot on your target, but support and donations will go higher if needed and the special interest is motivated to garner support.
Then the bribe will increase to 300,000 and we're back to square one but with more inflation. Just to use the same argument they would have against raising minimum wage...
> This isn’t going to stop it, but perfect shouldn’t be the enemy of better.
There are less "causes" that have the ability to fund a $300k bribe so even with that argument, we're still better off. (And it costs those causes more, bigger paper trails etc.)
The pettiness of bribes has always surprised me. 3K, 5K, that kind of money. A few thousand dollars is all it takes to buy a senator, and they are largely already multi-millionaires. Raising their salary won't help, because, just like Trump cheating suppliers, there's no way the issue is money.
This idea seems straightforward me, but I'm a huge nerd, and every time I try to explain it to normal people they're so offended by the idea that they talk to me like I'm crazy.
Do you notice a trend of rich people becoming disinterested in amassing further riches?
They just hire someone to do their trading for them and buy an island to go along with their yacht.
Trump has far more than that, but he still seems willing to abuse the office to make himself even richer.
Name 1 company that makes over $1 Billion in annual revenue where somebody 2 links below the top makes less than a congressional salary. Congress critters are paid peanuts and also rent in an above-median cost of living area as well as their own district.
~150k sounds like a big salary but when you're very much in charge of trillions of annual revenue it's not.
This is like the CEOs who "only get paid $1"
Salary is not where congresspeople make their money and if you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
The point is reducing that reliance on side channels, including the topical ban on trading.
> This is like the CEOs who "only get paid $1"
We're so obviously talking about total compensation. CEOs making $1 while getting billions in stock appreciation or literally hundreds of millions in stock grants are not making $1/year by any reasonable definition.
> f you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
So, you want to keep the status quo where the people who are correctly compensated for their role are the ones willing to front-run their own citizens? (And also spending their time front-running instead of their elected job?)
> So, you want to keep the status quo where the people who are correctly compensated for their role are the ones willing to front-run their own citizens? (And also spending their time front-running instead of their elected job?
No, those are actually entirely different words than what I have said.
Yeah $150k in DC is comfortable but far from luxurious (if you have a family, which it seems like most congresspeople do). It would not be enough to incentivize me to do the job of a congressperson.
Mark Zuckerberg's salary is only $1 a year! He must be homeless given bay area housing prices!
Also consider the need to maintain a home back in their home districts.
Most are well-educated and "qualified"; integrity and ethics are the bigger problems.
I submit that most people with college degrees, including those in politics, do not meet the bare minimum standard of what it means to be truly educated.
Just look at how great all the CEOs getting tens of millions of dollars are doing.
This is nothing but wishful thinking at best, and appeal to wealth at worst.
AOC and MGT would suggest high pay is not a sufficient gate.
I may not agree with her politics, but from what I can tell, AOC is intelligent, articulate, more than willing to inform herself about an issue before voting on or having a hearing about it, and most importantly, she appears to genuinely wish to represent her constituents to the best of her ability.
I would happily clear and re-populate both parties with candidates sharing those traits.
MTG, on the other hand, is and always has been an internet troll, and not even a high-quality troll - merely a ball of ignorance and bigotry that comes a dime a dozen in any competitive online game lobby or forum.
A few examples of AOC’s reasons for proper comparison to MGT. Personally, to these I would add acts of drama like the emotional breakdown at the border, modeling the expensive ‘Tax the rich’ dress, etc.
Google can bring many more examples. AOC is not more intelligent than MGT. They are two sides of the same coin.
https://www.washingtonexaminer.com/opinion/1857375/three-gaf...
https://www.cnn.com/2019/01/07/politics/alexandria-ocasio-co...
https://www.telegraph.co.uk/us/politics/2024/10/30/alexandri...
What is the AOC equivalent of MGT believing that California wildfires were started by Jewish space lasers to clear land for high speed rail?
Probably not so imaginative as that, but there’s a whole YouTube channel devoted to AOC’s stupidity.
Favorites might include the one where she fails in trying to identify the three branches of government, or the one where she says congressional reps are inaugurated and sign bills. Those don’t have the amusing color of MGTs idiotic statement, but they are every bit as stupid and maybe even more shocking, given her job.
They’re both ignorant and represent similarly low information districts.
This comment represents a lack of understanding of human nature.
You can't effectively represent the interests of others when your own needs are barely covered. I want my elected representatives paid quite well so that they have fewer excuses to succumb to the various temptations of holding such a position.
You can wish all you want that people with incredible power and responsibility should live like spiritual monks and possess only the purest and noblest of intentions, but that's not how people work, and it sure as hell isn't how politics works.
You also can't empathize with poor people if your needs are met too well.
If congress were represented proportionally by wealth bracket instead of geography, most of these problems would be solved.
Pay peas, get monks? Anyway the idea of preventing corruption by bribing them officially is weird. It means they aren't any more morally upstanding, and would still do corrupt activities in their minds, we just hope that when they're well paid they won't make the effort. On the basis that they're immoral and lazy, so it balances out.
Pay peas, get independently wealthy part time politicians and filter out anyone lower or middle class.
Anyway the idea of preventing corruption by bribing them officially is weird.
Labeling the act of someone getting paid to do a job as "bribery" is even more weird. While I certainly wouldn't do by current job if I was paid minimum wage, I don't know if I would say I'm being "bribed" by my employer to stick around. Even if it does appear to align with your new definition.
A millionaire approaches an attractive young woman in a bar and asks if she would be willing to spend the weekend with him at the country’s most expensive and luxurious hotel, waited on hand and foot and receiving a million pounds to sleep with him. The girl considers that it’s worth it for a million pounds, and agrees. The millionaire then suggests that they immediately sneak into the men’s toilet for quick sex for £5. She is shocked and insulted, and says “That’s disgusting! What kind of girl do you think I am?” He replies “We’ve already decided that. Now we’re just haggling over the price.”
We don't need to moralize everything when we can simply recognize patterns that work vs. patterns that don't work. And underpaying people definitely is not the way to get the results you want.
You may not like the reasons for WHY they work or not, but that is not relevant to WHETHER they work.
When I made minimum wage working at Subway, I would sneak extra sandwiches for myself here and there. I didn't strictly NEED them to physically survive, but hey -- I'm busting my ass for $7.25, I'm gonna pay myself a little bonus here and there. No one's watching, so I'm going to decide what's fair for a change.
Now I make much more than that. I no longer steal sandwiches from my employer.
I think this is the pattern for the great majority of people.
If a median salary barely covers your needs, then that's a problem with what the median salary is, not that you've set it to that.
The median US pay is a good bit below median pay in DC.
Everything you do to make them poorer will just make it cheaper for moneyed interests to buy them.
The root problem is abusing their office for financial gain.
Reducing their above the table pay doesn't actually change the abuse aspect much and the degree to which it does change things is not in a good direction.
Like most things in DC, a pegged salary would be about optics. Maybe, just maybe it would allow for self reflection.
But then you’ll just get median americans for the job. And even median americans don’t want to be governed by other median americans. They want to be governed by exceptional people who share their values and whose judgment they trust. That’s what makes representative government difficult.
(You see this in juries for example. They select the smart or authoritative person among them to be the foreperson and look to that person for direction. This is how humans naturally form hierarchies.)
> You see this in juries for example. They select the smart or authoritative person among them to be the foreperson and look to that person for direction. This is how humans naturally form hierarchies.
This is a mischaracterization of juries. It's not a hierarchy. Every juror has an equal vote. And each juror gets paid the same, including the foreperson (not much, but they usually get paid something for their service).
The foreperson has two special roles: (1) to announce the verdict in court and (2) to guide the deliberations. Neither of those roles has any personal benefit to the foreperson. The second role exists merely to keep deliberations orderly, prevent them from devolving into cacophony and chaos. And in fact the foreperson is charged with making sure that every juror is allowed their input, otherwise one or a small number of jurors might dominate the discussion. Some kind of order is needed in group discussions. This is why Robert's Rules of Order exists, for example.
Democracy itself always requires some form of order: people entrusted with scheduling, administering, and counting the votes. But that doesn't make these people our leaders.
Salary caps do nothing to prevent an elected official from accepting deals on the side, and it can be impossible to incriminate the bad actors.
Will the salary cap prevent a congressman’s daughter from accepting a lucrative job offer? Will his wife’s law firm have to turn away new clients? Will his non-profit have to turn away donations?
Any system that could prevent personal enrichment of elected officials would require every freedom be taken away from them. You’d have to imprison them (and anyone who could proxy wealth for them) as soon as they take office and for decades after if you want to be sure that they were not motivated by self interest.
That's a good way to ensure that only the very wealthy run for office. A professional might make $200k/yr, which is a nice household income - but "only" 85th percentile - and their family probably can't afford(with their lifestyle) to make only $50k/yr.
Yep. Perversely it probably increases the chance of them being out of touch with the average citizen, because the average person doesn't have the connections or drive or paper credentials to run for Congress anyway, and if the people that do are sacrificing the chance to earn much higher salaries it's probably because they're rich enough to be completely indifferent to their paycheck.
The way election campaigning works already ensures that only the very wealthy or incredibly dedicated can run for office. Who else can afford to take time out of their schedule to travel, give speeches and attend campaign events and fundraisers, do interviews, schmooze donors, etc? A representative democracy already selects for the wealthy from the get-go, so the $174k current Congressional salary is more or less inconsequential to those folks that do run.
Or the very dedicated.
Even the very dedicated would have trouble maintaining two residences (DC & home district) on the median income.
Dedicated to obtaining power?
I'd much rather have a person there who doesn't need the money vs. one who does.
It should be some multiplier of the mean salary of the population you represent. In California this would be about $96,000. In Mississippi it would be about $54,000. There's a congressional district in New York where it's $31,000.
You want your pay to be higher? Work to raise the median salary in your state.
If you pay the median salary, you’ll end up with Congress consisting of only independently wealthy people whose priorities don’t align with the median citizen.
Unsubstantiated
They do not have the same employment security as the median citizen.
You think the median citizen has 2 years of guaranteed job security and a cushy consulting job lined up if it doesn't pan out after that?
They have better one.
Singapore has high politicians salaries and low corruption as measured by international standards. They also have extremely strict anti-lobbying or to use the sane word anti-corruption laws. Their reasoning as I understand it is to attract and keep good people in government, competing with the public sector, instead of attracting what amounts to an endless stream of grifters that work for lobbyists and not the government.
https://www.transparency.org/en/cpi/2024 Singapore is number 3 for the most recent report. USA by comparison is number 28. It’s an apples and oranges comparison given the vast differences in the two countries of course, and raising politician’s salaries isn’t a black and white fix for the problems in the USA.
How about p75 or higher instead? Nothing special about the median, and as others have pointed out, it's probably not enough to live in on given DC prices.
That seems like a recipe for corruption. Representatives would need to supplement their salary somehow just to afford housing. The easiest means would be to leverage their position. Even if you make it illegal, the demand will make it happen anyway.
We could make it something like 10x the median salary and still have the alignment you want, but would be more resistant to that effect.
> Congressional salaries should be exactly the median US salary.
Congressional salaries should be $1m+. It would only half a billion dollars a year. A pittance of the $6.75 trillion federal budget.
Combine that high salary with mandatory life sentences for accepting any form of graft and you have a recipe for honest people to enter government. Pretty much the Singapore model for compensation of https://en.wikipedia.org/wiki/Cabinet_of_Singapore
The problem with low or median salaries for politicians is the ratio of power to compensation. It directly encourages the griftiest of grifters to accept the low salary and abuse their positions of power.
With a high enough salary, you will attract honest people who will do the job functions knowing that any deviation from working on behalf of the people will not only make you broke, it will land you in prison for life.
How do you convince Congress to pass a law subjecting themselves to the death penalty? What do you do about the legal bribery? Do you really think that you can raise congressional salaries high enough that "speaking fees" or "campaign contributions" won't make them a drop in the bucket? Why is salary imagined to be an important factor when the majority of elected officials are not in any way wanting for money? The basic structure of representative democracies ensure that representatives are largely drawn from the class of the idle rich and upper-class who can afford to stop working at a relatively young age.
A constitutional amendment, brought about through a constitutional convention of the states, is probably the only way. Even then, the state legislators might be concerned that they too will be held to similar standards.
> The basic structure of representative democracies ensure that representatives are largely drawn from the class of the idle rich and upper-class who can afford to stop working at a relatively young age.
That's what this purports to solve. By having the direct compensation for being an elected member of Congress be high enough that it would provide a well compensated life for someone who is not rich before becoming a politician.
How can a non-rich person afford to campaign and do all the necessary politicking to get elected? Getting money after being elected has never been the problem - even those congresspeople who somehow get elected from humbler origins seem to become multimillionaires pretty quickly after gaining office. The reason the vast majority are drawn from the upper crust is the time and money costs involved in the initial campaigning.
Or this incentivizes either corruption to make up for the low salary, or else attract those of means as they don't need the money.
If you pushed through that legislation there would be an armed uprising led by DC landlords.
Modulo benefits like health care, pension, etc.
States should pay their reps.
What so they have more money to invest? "I have enough money already I don't need more" said basically no one ever.
Carrots and sticks.
Now don't get me wrong, given how often legislation in the USA and the UK seems to get rubber-stamped by members of the legislative body who did not (and in some cases could not have) actually read it, I think there's something structurally wrong with at least these two governments, where the senators and MPs are more like overpaid customer support agents and less like the legal/constitutional equivalent of software engineers doing code review or maintaining system architecture, but conditional on if we actually want the elected representatives to be the people's preferred choices amongst the best legal minds available, we have to pay enough to encourage… actually, even before that, even just to get the attention of the top m=contested_seats candidates whose views allow them to comfortably be members of each of the n=num_parties.
Now, I don't know what that pay rate is, and ChatGPT's guess would be better than mine, so the best I can do is link to a page that I only found because ChatGPT gave me a searchable phrase, "magic circle law firm": https://www.allaboutlaw.co.uk/school-leaver-law-careers/beco...
That suggests >>£1M/year in the UK. I assume the USA is more.
Consider: would you take a 90% pay-cut to do your current day job but for the public good?
Ha ha, I said that. It's why I retired when I did.
(I know, not exactly what you meant though.)
> if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
What are your criteria for a "high quality candidate"?
I personally would start with honest, ethical, and selfless.
Vote in people who do not want the job, lol
(Yes, I have no idea how you could architect such a system without having it easily gamed)
It's true though, probably the people you want are the ones least likely to run.
Or maybe the other way around: the ones most likely to run are the ones that shouldn't be in office.
Yeah, either way, you could probably do a lot worse than a national lottery. (Perhaps requiring some level of education but that's about it.)
> What are your criteria for a "high quality candidate"?
In this case, start with knowing that rayiner is a lawyer who was a lobbyist for telcos… so his definition may be biased.
> honest, ethical, and selfless.
We're talking about politics. It's a game that simply does not select for those attributes.
We all would like altruistic bankers and energetic, ambitious DMV workers, too.
There are many people with those qualities, but you will not find them in those fields.
> We're talking about politics. It's a game
No, it's deadly serious.
> that simply does not select for those attributes.
I agree that it does not select for those attributes. Whether that's a simple matter is debatable, though perhaps it is simple: in the political system I live under, elections are pay-to-play and self-funded, inherently favoring candidates who can raise vast sums of money and thereby encouraging political corruption.
> We all would like altruistic bankers and energetic, ambitious DMV workers, too.
Note that these are not elected positions.
Of course it's deadly serious. Politicians could end the entire world with nuclear weapons. (They might still!).
It is also a game, with players and objectives, and zero-sum outcomes for the players. You either get elected, or you don't, and it's up to each player to decide what they are willing to do in order to win.
It's interesting how you don't consider the voters to be among the players.
So religious nuts and ideologues?
> So religious nuts and ideologues?
I'll await your answer to my question about your criteria before I answer this unfortunately phrased follow-up.
Actually, I won't wait: Democracy depends on voters getting what they voted for. It's essential that there's consistency between a candidate's election campaign and the elected representative's behavior in office, otherwise you might as well vote for Mickey Mouse for all it matters. So yes, I'd take a consistent "religious nut" any day over someone who sells their soul to the highest bidder.
I have respect for people who do what they say and say what they mean, even if they don't agree with me. I have no respect for liars and con artists, regardless of their "intelligence" or "skill". The latter will always screw over the people they were elected to represent.
>Democracy depends on voters getting what they voted for.
That only works if each vote has the same worth in the election and governing. Otherwise the whole population might be getting something that only a small number voted.
Do you think that is the case today in the United States? Or are you unaware of all of the gerrymandering currently going on throughout the country?
I don’t know how “gerrymandering” became such a meme. Currently, Democrats have 6 more seats than their two-party share of the House popular vote. That’s only 1.3% off. The differences have been pretty small since the 1990s: https://en.m.wikipedia.org/wiki/File:Popular_vote_vs_actual_...
You can't look at gerrymandering at that scale. It exists on the scale of individual states. I'm in Tennessee, and Republicans gerrymandered the districts so that Nashville is divided across three, leading to the state only having one blue district instead of the two or three it should have (by votes, it should have two with a third competitive district). They were forced to keep Memphis' district around only as the minority-majority one (a federal court even ruled that it was a clear political gerrymander, but not a racial one, so it was upheld).
> You can't look at gerrymandering at that scale. It exists on the scale of individual states.
But Congress is a national body. Maryland is almost the exact flip of Tennessee (2:1 democrat) and democrats have gerrymandered the state so there's only 1 GOP district. Republicans have 35% of the vote, but only 12% of the representatives. At the end of the day, Congressional votes aren't taken state-by-state, and the delta between each party's share of the two-party popular vote and their share of seats typically is small.
There's no fair way to do districting. "Independent" redistricting commissions don't work. In California, which has an independent redistricting commission, republicans have just 17% of the seats despite getting 39% of the vote. It's not that much better than Illinois's extreme gerrymander, where the GOP got only 17% of seats with 46% of the popular vote.
If we mandated districts be drawn by independent commissions in every state, they'd get taken over by democrats, just like every other non-elected institution (everything from NPR to the ABA). At least the adversarial political process we have now results in relatively small, non-permanent advantages to either side. The only solution would be to ban districts all together and have a statewide vote for a party slate of candidates.
Of course I'm aware of gerrymandering. Do you think that I'm somehow in favor of it?
Or perhaps you were thinking that I was presenting a sufficient condition for democracy rather than a necessary condition for democracy?
They did say selfless.
That sure would be different than now
I very strongly doubt that salary is a driving force behind any kind of political corruption. Even those wealthy enough to support three generations without work won't pass up opportunities to make easy money.
It’s more to increase the social status of legislators in comparison to the people around them.
For the most part, the problem is not back alley “corruption.” It’s people trying to not rock the boat too much so they can exit to something reasonable when the kids need to go to college.
Nobody is running for Congress to pay for college tuition. That would be the stupidest, most improbable investment plan in the world.
The reason that legislators don't rock the boat is that they're paid by their wealthy campaign contributors to not rock the boat. But the reality is usually not honest candidates getting corrupted; rather, the wealthy campaign donors specifically select candidates who are naturally amenable to their interests, and give them boatloads of money (and needless to say, would stop giving them boatloads if they failed to do what the contributors wanted). It's a trade of money for political power, between willing parties. The political system, as it is, attracts and benefits those who are already corrupt or corruptible.
Increasingly, members of Congress are already wealthy even before taking office, so they never had any fear of paying for college. Stock trading itself is largely a luxury of the wealthy. Even those people of lesser means who do own stock typically don't trade it directly but have it managed for them by a pension or retirement fund.
They will become lawyers anyway if money is the key motivation.
The rule should be: One has to give up dream to become rich if they want to become congressmen. They should be able to live like a middle class, but not rich.
Also they need to have term limit.
“High quality candidates will become lawyers and lobbyists instead.”
That’s the way it should be. If they’re in it for a big pile of cash, they should go the proper routes. We’d be better off if our expectations were that politics does not pay well, and a politician that retires wealthy has not been a good public servant.
There's a reason to pay politicians well, it reduces corruption. The other side is to have enforceable ethics rules.
>Voters don’t like the idea, but if you ban stock trading high quality candidates will just become lawyers and lobbyists instead.
I'm sorry, but what? Are you proposing that being a member of Congress should come with legal insider trading as part of their compensation package?
That's downright abhorrent. Where on Earth are you getting the impression there should be a class of people uncovered by the constraints we put on literally everyone else?
Two issues going on here in this subthread:
1) Paying people more won't help corruption
2) You get what you pay for
So, both can be right and wrong at the same time.
I think that we need to pay them a lot more. Running and serving in congress is a hell of dumb idea for anyone that we'd want in the position. Your life gets pulled apart by the press, you spend absurd amounts of money just to get there, and you essentially have to quit your career and buy a house/condo in DC for an indeterminate timeline, you get yelled at. Smart people would not do this job; it really is a service for the people they represent. [0]
This really only allow the corrupt and the already wealthy to do the job. Issues there are obvious.
Look, the labor theory of value is wrong. Something is not worth what went into it (capital, labor, R&D, etc). Something is worth what you pay for it. This is why you don't see a lot of marxists about these days, because prices are determined by the market, not the production.
Same thing goes for CEOs and politicians. They are not worth what they produce (mostly headaches). They are worth what it takes to get them there. If you want a good one to run and try for election, then you have to make it worth their time relative to their other options. You want a good one? You have to pay exponentially.
Pro sports understands this. Sure, you can get a lot of people playing NFL any Sunday for like $10; they'll do it just for the crowds and the dream. Nearly all of them will suck. But if you incentivize correctly ($$$), then you get a much better game and viewing experience than a Sunday afternoon beer league. Better politicians means better incentive structures.
[0] campaign finance reform is also desperately needed, but that's another related subject.
The repeal of Citizens vs United was one major dagger in the lung of democracy.
A stock ban is some nice grandstanding but if they were truly serious, they'd remove money from politics.
It doesn’t solve every problem, but it is a nice step forward. Don’t let perfect be the enemy of good and all that.
I actually disagree.
Federal employees have more strict stock regulations and yet we still see problems with private influence on the government.
The issue is our bribery laws are ridiculously weak. It's not illegal for your pals at Nestle to pay you 10x for your house or send your kids to college.
Stock is fairly public knowledge and you owning shares in Nestle doesn't do nearly as much to influence the laws you write regulating Nestle. You can always dump the stock before sending the laws out of committee.
The one positive of banning congressional stock trading is that at least it might make congressional people more sensitive to the broad market.
Make your own crypto coin, maybe do a few press conferences about it and how great it is. If you find yourself in a situation where you might be legally immune to any prosecution, maybe just outright state that buying said asset will get you favoritism.
Crypto isn't stock.
But yes, I'd support outright banning crypto, especially for Congress. WAAAAY to easy to spin up a new coin that effectively works as money laundering.
That's a much worse scenario than stock currently is. It's a lot harder to create new stock.
*the ruling of Citizens United vs FEC.
For those unaware of it here’s a great podcast episode summarizing how it’s really cooked everything in politics: https://www.fivefourpod.com/episodes/citizens-united-v-fec/
"A podcast about how much the supreme court sucks"
Enh
https://jabberwocking.com/clarence-thomas-has-received-a-ton...
There is a lot of suckage on the Supreme Court to talk about.
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Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
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Please don't respond to a bad comment by breaking the site guidelines yourself. That only makes things worse.
https://news.ycombinator.com/newsguidelines.html
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Strict Scrutiny is a SFW alternative to 5-4. They both cover more or less the same events and issues. Strict Scrutiny's hosts are profs and former clerks, whereas 5-4 are "blue color" lawyers.
Though they have different POVs, I think they're both hysterical.
Former prosecutor Preet Bharara (Cafe Insider) has yet another POV. More nuts & bolts. Super informative.
YMMV.
Seems kinda libby.
Until this ACTUALLY passes and is rattified I these talks dont even get me excited. Its been tried so many times. Today is just Hawley's turn to grand stand. Just before it gets strangled in the crib, and then in 2 years it will be someone elses turn.
I personally think killing earmarks was just as bad. It removed a key avenue for congressmen to do the "right thing" in defiance of the party line while still remaining safe on the reelection cycle. These days there's a ton more party-managed back room vote trading and whatnot and the legislators are substantially less free to be reasonable.
Then it’s time for a constitutional convention. Article V. Two-thirds of the states (a lower threshold than to pass the amendment).
A constitutional convention would be terrible. Our already purchased politicians would dispose of many protections.
Does the 14th amendment survive? 19th? Maybe bibles become required equipment in classrooms. Anything becomes open for editing during a convention.
We’re already on the verge of eliminating birthright citizenship, with the Supreme Court’s blessing. This is a major and pretty unequivocal clause of the 14th amendment. If they can do that, then none of the other amendments are going to matter either.
1st would be the first to go. Can't have pesky dissent. Trump is on record praising how the CCP crushed the Tiananmen Square protests.
Yea, let's not make anything better until we can solve all of our problems all at once.
This will make lobbying more powerful. If you can’t make money from insider trading, you have one less alternative to accepting bribes. I’d rather require insider trading than ban it.
I completely disagree with the idea of justifying one unethical action by promoting another.
Insider trading steals money from people who are not involved with politics at all... stock owners.
At least lobbyist money is voluntarily given.
The title makes it appear like a bipartisan move when every republicans but one voted against the proposal. We all know where the GOP's true interests are, no need to whitewash them. A better title would have been "GOP representatives massively vote against insider trading regulations".
> We all know where the GOP's true interests are…
If we all did then the title would have been adequate as is.
I support the idea, but I don't think it will make much of a difference because there are bound to be too many loopholes to be effective. I think stock market reform would be more effective - ban calls and puts and other forms of speculation. Speculation invites manipulation and incentivizes unethical actions, especially when paired with power and information. The best, but least realistically possible, thing would be to fix the problems with regulatory capture in the SEC and other oversight and enforcement agencies that are supposed to be punishing politicians.
I take as dim a view as anyone of hyper-financialization: the incentive for a sophosticated market participant to market high complexity instruments to cless sophisticated counter parties is clear and pernicious. If we had allowed the CFTC to regulate OTC derivatives products in the 90s we'd be living in a different timeline.
But standard American and European options contracts are neither complex nor uniquely suited to speculation. These instruments are so fundamental that in many treatments you use them as the atoms from which to build more familiar instruments (theres a great MIT OpenCourseware about the martingale construction of an equity from binaries and calls, British guy, forget his name). You can explain such instruments to a precocious child and they've been in use by merchants and farmers and all kinds of people into the mists of antiquity.
It gives responsible financial regulation a bad name to be like "its the puts and those damn calls!"
The purpose of stocks is to raise money for a company. The purpose of the stock market is to give those stocks liquidity.
The further away from this basic framework we go the more dangerous it gets. Derivatives are not inherently antithetical to the basic framework, but they present new options and opportunities for market distortion that can't be ignored. We've seen how badly things can go, numerous times. And that doesn't even address the problems you get with wealth concentration, especially when your currency is untethered to some sort of commodity and can inflate more freely.
I'd like to see some real changes, but the problem is that the people who would make changes are so tied up with the market itself that any changes are superficial and often merely present new avenues of chicanery. It's not likely anything will be done, and when the next collapse happens, no lessons will be learned.
Options are literally just insurance plans for stocks.
Just like car insurance or home insurance. They are called options, because when you get in a car crash you have the option of calling your insurer, because you purchased insurance. When your stock crashes, you have the option to call the counter-party to cover the loss.
If options were called "insurance contracts", they would still be the same thing, and probably more understandable to the public.
Options and futures are very good price discovery mechanisms. Forcing people to only take long positions is not a good solution. Speculation is not a problem, nor is utilizing asymmetric information in markets, since this all comes out as the price. The problem is that congress has a government enforced monopoly on a large quantity of various types of important information.
Why is it one or the other? Why not both? Maybe this ban can have a small dent, and some other laws have other dents too, when added together makes at least some difference.
Kind of similar to how Spain is fighting vacation rentals. Yes, each individual new law and change won't immediately fix the problem, but each enacted change makes a small difference and currently we seem to be moving in a really great direction to eventually have at least that particular problem solved.
I never suggested it was one or the other, I just don't think this approach will be effective because it's filled with obvious loopholes and the existing laws aren't enforced anyway, but I am generally of the opinion that a smaller legal code is better, because people have to be able to know it to follow or enforce it.
Options can be used for speculation but they are also frequently used to reduce risk/exposure. Covered calls and married puts are just a couple of such strategies frequently used by retail investors. We shouldn’t ban those tools just to prevent political corruption. We should be enforcing the law when it comes to insider trading and market manipulation much more effectively.
That's silly. Futures are an essential part of commodity trading and market liquidity. We don't need to kill market functions to prevent blatant political corruption. Just limit congresscritters to blind trusts. Done.
"And other forms of speculation"...
Like buying the stock? You're not talking about reform - you can't remove speculation from the stock market without banning stock markets entirely.
I agree that market manipulation (especially by those in power) is an enormous problem. Can we hope to truly fix that? Or are we just going for damage control by banning derivatives or the entire stock market?
> I think stock market reform would be more effective…
Not disagreeing that reforming the Stock Market is important, but the discussion is more generally about removing money from politics.
The legislation is trying to stop insider trading by legislators. Stock market reform could mitigate much of it (although I don't know that it's something that causes any kind of real-world harm, it provides incentives for legislators to do even more unethical things, like manipulating the markets). Removing money from politics is much, much broader and way more complicated.
Historically, speculative instruments such as options as well as short selling have been outright banned in many countries. The British options trading ban in the 1800’s lasted for over a century.
I just want to point something out that has irked me since it happened, and continues to fuel a mythos to this day.
Nancy Pelosi and the infamous insider trading of Nvidia.
A few weeks before the CHIPS act passed congress in July 2022, Nancy Pelosi made a large purchase of Nvidia shares. This made headlines everywhere as obviously she was going to pass the CHIPS act, obviously Nvidia stands to benefit, so of course she loaded up knowing these things.
But the media, who will readily obscure any nuance that can kill a story, only mentioned that she executed call options to purchase nvidia shares. Which to 99% of the public is technical babble that is ignored.
But what actually happened? Well Pelosi, looking at her trading history, likes to buy deep ITM LEAP calls and hold them to expiry. This means in the simplest terms, that she signs a contract 1yr+ before a date, where she gives herself the option (hence the name) to purchase a set number of shares at a set price. So when Nancy purchased Nvidia shares in June 2022, she had set the contract in motion to do that at least a year prior.
But even worse for the inflammatory story, because she purchased that option over a year prior, and Nvidia was down ~15% in the last year (remember 2022 was a bad year for stocks), she actually would have lost money on the trade.
So here we have the foundational story that set this whole thing is motion, which is based on public ignorance of how stocks and options work, where Pelosi was vilified for a trade she lost money on, because the execution date of a contract she signed at least a year prior happened to be within a few weeks of the CHIPS act.
If she likes to hold them to expiry like you pointed out, then isn’t it odd to not have let the nvidia options expire? I’d need to see her full trading history to make sense of whether or not she is using insider information to influence her trading patterns. Given her net worth of over 100 million dollars I am a little suspicious, but lacking details it’s hard for me to make a judgement and I assume you are correct.
Or we can ban members of the government from trading stocks and investing while they hold office and then not have to have this discussion. I hate all politicians republicans democrats and Bernie’s (not picking on Mr. Sanders but I don’t know if there’s another registered independent in high level government) if they even have a sniff of engaging in fuckery, the job should be too important to show any possible signs of impartiality. That boat seems to have sailed away though minus their being an actual grassroots populist movement to overhaul government. And those keep seeming to dissipate or get co-opted when they do start to foment, like the occupy Wall Street type things that in my life seem to keep popping up, gaining traction, and then becoming something no one hardly talks about anymore.
> The measure, originally called the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act, would prohibit members of Congress and their spouses from trading or holding individual stocks
I genuinely laughed out loud at the bill's original name.
That one is fun, but it's part of a general trend of childish naming of US laws that is not a good sign for the health of the country making them. It's a Brown M&M for the country that you're focused on sound bite names for laws, not their content.
Years ago I ran into the fun hack introduced in Britain's laws during my lifetime. Modern laws provide short names for themselves, so an Act might say you can refer to this as the "1996 Goat Prevention Act" and even though it has an unwieldy long full name that shorter name works everywhere you need to name it, but some older laws don't do this, so that's annoying, and also if you've repealed the law you can't use a short name which no longer exists because the law itself was repealed and that's where the short name comes from.
So, they passed a law which said when you repeal a law which gives any law a short name, those short names still work anyway. Then they passed a law which just provides convenient short names for laws people often want to refer to but don't come with short names, then they repealed that second law. Done.
Naming laws after people who did bad stuff you're trying to legislate away or their victims is at least a hundred years old. Only a rabid partisan would complain about a law about insider trading being named after one of the politicans most notorious for it.
Personally I think they names should be more humorous and creative but I think this one is way, way better than stupid contradictory names like the PATRIOT act.
There are nine members of congress who trade more profitably than her, but for some reason certain people use her as the poster child for this problem.
She became the poster child for it because she's the daughter of a politician who did the same sort of thing.
She's a poster child for "evil congress lizard" the same way that the Kochs and Soros and Murdoch are poster children for "evil billionares" even though there's richer ones.
> That one is fun, but it's part of a general trend of childish naming of US laws
I'd say that we reached a nadir with "119th Congress (2025-2026): One Big Beautiful Bill Act", but that would be tempting fate.
It’s like bit.ly for laws except you can still reference the laws when it goes away.
I preferred the Hubris Afflicts Weak Legislators Every Year Act.
Love how it skips the current, most-corrupt-in-history President.
There is precedent for exempting the sitting President. For example, Harry S Truman was exempt from the two term limit enacted during his presidency.
Don’t feed people that kind of nonsense trying to pretend it’s the same situation. It’s fine to just call a spade a spade or in this case to call corruption corruption.
I'm not trying to discount corruption. I'm just saying that there is precedent for this sort of thing.
There is also precedent for divesting from your businesses before taking office but that hasn't happened.
Previous / current behavior is nearly always exempted from legislation.
Same reason why salary increases for senators and etc affect the _next_ session instead of the current one.
Chances are the current administration is already running awfoul of existing laws (especially the part where TrumpCoin conferred actually benefits to its holders). But given the lack of appetite from the current majority parties at enforcing the law I don't expect any changes. Can't wait for anything besides FTTP to become more widespread.
That's not what's happening here. It's not a one-time Trump exception, it just doesn't apply to presidents.
To me, it's completely obvious that this legislation should apply to the president. All the legislators know that too. Perhaps they're afraid. Perhaps they're ambitious. Either way, I'm not a fan.
To quote the article:
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump.
If I am reading this correctly, it does apply to future presidents, right?
Apologies, I missed that line.
The '[the act] would prohibit members of Congress and their spouses from trading or holding individual stocks' made me think it only applied to them.
There’s a much bigger chance of the president signing something that doesn’t restrict him personally.
And this is just about individual stocks, completely separate from the 1000's of Conflicts of Interest.
https://theweek.com/politics/trumps-conflicts-of-interest
Yeah, and we can't even agree on what should be the low hanging fruit.
We have a long road still to go.
Seems like he's using some form ad hominem to distract from the actual purpose. The purpose is not to prevent congress from getting rich. The purpose is to remove conflict of interest. Congress can have insider info on individual stocks. For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info.
I think only allowing congress members to buy and sell index funds is fine. Not individual stocks. Or if they want to trade individual stocks, make them declare 1 month earlier and make it public.
Rick Scott made his money by being the CEO of a company that paid a $1.7 billion fine for Medicare fraud.[0] He’s one of the most corrupt people in Congress.
[0] https://www.politifact.com/factchecks/2014/mar/03/florida-de...
Have you ever watched CSPAN? He's doing the same stupid routine they all do. Trying to spew keywords and generate soundbytes he thinks will be useful to him and bad for the opposition. I'm pretty sure they all get taught this or something. It's so f-ing tiresome. I wish they'd just discuss things more normally.
What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades.
Sensor Scott opposes the blanket ban because insider trading is already illegal, and thus the ban makes punishable otherwise entirely legal behavior. And he's right- it isn't, and shouldn't be, illegal or considered wrong to be successful, if done the right way.
There's a middle ground somewhere in there I'm sure, but given how suspiciously well some members of Congress have done, and how there's been seemingly not enough accountability of it, I'm not terribly empathetic.
>What they're doing is having someone else manage their stocks, but by some strange coincidence their manager makes amazingly successful trades.
It speaks volumes about the relationship between the government and the people that they nailed Martha for (a bullshit follow on charge stemming from an investigation into) a small time variant of basically the same thing.
Like how if the police shoot your dog it's just property but you shoot one of theirs and well you might as well shoot the officer too because it's another count of the same crime.
Goddamn double standards everywhere. What ever happened to equality under the law?
Some jobs place restriction on your ability to trade individual stocks - I discovered this when I went to work at an investment management firm. This was a policy applied to all people that worked there.
I see no reason not to do the same thing for Congress. The legal space is well-traveled and the fundamental concern - namely, the perverse incentives resulting from asymmetric access to valuable information - is present in Congress the esame way as in a sizable investment firm.
Index funds and mutual funds are often exempt or subject to less scrutiny, and that could be here too.
It's very difficult to get caught, and then to prove wrongdoing, under the current rules. There has already been reporting of filing irregularities.
https://www.newsweek.com/stock-act-congress-violations-tradi...
Making the rules simpler will make it easier to comply. Removing the incentive for insider trades strikes me as a good thing.
I run the numbers every couple of years and I’ve never had a year that shows individual Congress people are particularly better at trading than an index over the course of their terms.
The fact is, the vast majority of Congress people _own index funds_ or similar portfolio construction.
When there are outliers they regress after a few years. The last time I ran the numbers the the majority of the outliers just got into Nvidia a little early. They mostly had tech heavy portfolio construction.
The big outliers were people like Pelosi who were married to wealthy spouses who were doing exotic trading, but several of them did poorly as well.
The fact is, Congress people have more scrutiny on their trades than the average person and more downsides.
We should restrict trading by Congress people because of the image of impropriety not because it’s actually common to make a bunch of money doing it.
> There's a middle ground somewhere in there I'm sure
The parent commenter pointed out the middle ground:
> I think only allowing congress members to buy and sell index funds is fine.
That’s not a middle ground; index funds are profitable based on the country’s success, not the trader’s. And you don’t get that same dopamine hit as gambling.
They’re the smarter place for people to put their money but I wouldn’t consider them a comparable product.
Yes, it is a middle ground. The extreme positions here are "no equity ownership, directly or indirectly" and "no trading restrictions at all." Allowing index fund purchases is squarely in the middle of that continuum.
Additionally, your description of how people purchase and make money on indexes funds is incomplete at best. Really, it's just factually incorrect in that it presumes a certain purchase strategy. People do short-term, dopamine-inducing trades of index funds all the time.
But, I don't think elected representatives should be able to do that, either. At the very least, successful short term trading - directly or through an advisor, of an individual security or a fund - creates the appearance of impropriety.
Perhaps Congress have a way of influencing the country's success in a way that Uvix can't?
If congress has to bet on the overall economy instead of e.g. spotting that riot gear providers goes up when country goes down, that would be a good thing?
Only broad index funds would be the no-brainer solution.
> For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info.
If a congress person gets that info from oracle or TikTok or someone with fiduciary duty to their shareholders that’s insider info (in the US) and that congress person is subject to existing insider trading laws.
If they get it as part of their duties in Congress it’s not insider info, the same way any other person without the fiduciary duty.
It may be an abuse of power and we may want to ban it, but it’s not insider trading.
It’s an important distinction because insider trading laws (in the US) are not predicated on open access to information, rather on not stealing from people you have a duty to. It’s not a fairness doctrine it’s property rights one.
Also surprised it didn’t mention that Rick Scott got rich by defrauding Medicare. To the tune of 14 felony counts against his company and a 1.7B dollar fine.
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump
Nice little carve out for the big guy.
The current GOP deserves no benefit of the doubt, but there's also a history of excluding the people currently in office. If anything I'm surprised it gives current congresspeople 180 days to sell, rather than being something like "nobody not currently in office" like the 22nd amendment.
With them already printing "Trump 2028" hats, I doubt that would be enough.
Banning stocks will not do anything. Most congressman lose money when they sell. There is an incorrect notion passed by there loud people on twitter that congress people got rich while in congress. Oh contrare, they were already rich. They had be to run for office.
Ban money in politics. Overturn citizen v united.
https://www.harvardmagazine.com/2012/06/a-radical-fix-for-th...
Do you see the danger in introducing this dichotomy? A stock ban is not bad even if you believe that it won't help. Many do believe it is a good idea, and therefore is worth a vote.
But stopping it by saying we should tilt at another windmill? I don't see the benefit of that, I only see it being used as a tactic to stop good legislation in favor of the impossible great.
> Ban money in politics. Overturn citizen v united.
Agree. But allowing legislators to trade and vote on legislation that affects their holdings is a part of "ban money in politics".