Congressional Insider Trading
When I saw the headline “Congressional Insider Trading” at Stephen Bainbridge‘s place, I thought he was being metaphorical. As he explains in his TCS piece “Insiders on the Hill,” he is not.
Imagine you’re a United States senator. You own a lot of stock in a big defense contractor. In a confidential briefing from the Pentagon, you learn that a major weapon system being built by that contractor is about to be cancelled. When the decision is made public, the contractor’s stock will drop significantly. You’re tempted to pick up your phone, call your broker, and sell the stock so as to avoid the loss. Would you?
A study of stock trading by senators found that many of them routinely succumb to that temptation.
I had, quite naturally, just operated under the assumption that this practice was illegal. One can hardly imagine a more obvious ethical conflict than allowing those who legislate and oversee interstate commerce to have a profit motive.
James, but you forgot Congress never meant for those laws to apply to themselves.
I would be very supprised if there are those that think that our glorious members of Congrass didn’t succomb to “Insider Trading”
You’re such a kidder, James. If we started a list of the Congressmen who had entered office as paupers and left as millionaires, we’d probably never complete it.
Oh, I don’t know Dave – I’m pretty sure the days when someone could get into Congress as a pauper are long gone… If you’re not independently wealthy before you start campaigning, you need not apply.
Nonsense, legion. Check out the bios of Congressionbal representatives from Chicago districts. And just a few years ago a district here elected a Congressman who’d never made more than $20,000 a year in his life.
The issue is regular party candidates vs. insurgents. Regular party candidates don’t need to be wealthy. Insurgent candidates do.