[HN Gopher] House Democrats to propose ban on lawmaker stock tra...
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House Democrats to propose ban on lawmaker stock trading - report
Author : thesecretceo
Score : 113 points
Date : 2022-07-28 14:54 UTC (2 hours ago)
(HTM) web link (seekingalpha.com)
(TXT) w3m dump (seekingalpha.com)
| yieldcrv wrote:
| Make sure it includes their spouses or the marital unit.
| booleanbetrayal wrote:
| It's all for naught if this is overlooked.
| andrewjf wrote:
| "overlooked"
|
| Unfortunately I'm too cynical to think that something that
| obvious would be merely overlooked (rather than intentionally
| left out). If it's an incremental step forward, I'll take it
| anyway.
| frankbreetz wrote:
| First line of the article
|
| >>Democrats in the House of Representatives will propose a ban
| on lawmakers, their spouses and senior staff from trading
| stocks,
| cronix wrote:
| It's literally the first text and bullet point in the article:
|
| > Democrats in the House of Representatives will propose a ban
| on lawmakers, their spouses and senior staff from trading
| stocks, Punchbowl News reported Thursday.
| yieldcrv wrote:
| the point is that I didn't read it, good thing I follow
| cronix who reads the articles so I don't have to
| livinglist wrote:
| I don't know why this hasn't been proposed sooner? Or was there
| any attempt before this?
| rodneyhayes wrote:
| STOCK act 2012. I believe it was quietly repealed.
| JumpCrisscross wrote:
| > _STOCK act 2012. I believe it was quietly repealed._
|
| No, it wasn't.
|
| It was scoped back, uncontroversially, to not apply to _e.g._
| Congressional staffers. It still applies to "the President,
| Vice President, Congress, or anyone running for Congress"
| [1]. It also, more controversially, "eliminated the
| requirement for the creation of searchable, sortable database
| of information in reports, and the requirement that reports
| be done in electronic format, rather than on paper."
|
| The law and its penalties still apply to members of Congress.
| It just permitted them to file on paper. That leads to crap
| like this [2]. Still, a long shot from repeal.
|
| [1] https://en.wikipedia.org/wiki/STOCK_Act#Amendment
|
| [2] https://www.businessinsider.com/stocks-congress-trading-
| disc...
| encryptluks2 wrote:
| Nancy Pelosi wanted to try to profit from the CHIP act first.
| Apparently her husband sold his NVIDIA shares shortly before it
| was announced that the GOP was going to vote against it due to
| the Machin deal
| colinmhayes wrote:
| Nvidia isn't benefiting form the chips act, so this makes no
| sense.
| encryptluks2 wrote:
| I think it is silly to say they don't benefit from it just
| because they aren't directly getting handouts. Many
| suppliers would benefit even if they were not handed the
| money directly.
| ckardat123 wrote:
| Pelosi's Nvidia sale was timed poorly. $NVDA is up about 8%
| in the two days since they sold.
| encryptluks2 wrote:
| Here is the story:
|
| https://www.marketwatch.com/story/house-to-vote-thursday-
| on-...
|
| When you see the CHIPS socialism for the rich act stall,
| and ultimately NVIDIA will be affected and NVDA goes down
| below that.. what is a couple days ultimately, if you get
| out ahead of a much larger drop?
| ckardat123 wrote:
| I'm operating on the assumption that the market has
| already priced the possibility of the CHIPS Act failing
| into the current price of $NVDA.
|
| It's possible that new information will come out that
| will lead to the price of $NVDA dropping, but I think
| that your initial comment was pretty misleading as the
| new announcement has not lead to Pelosi's sale being
| profitable.
| _fizz_buzz_ wrote:
| This needs a big [citiation needed]! Why would you throw such
| serious accusations around without a source?
| tenpies wrote:
| Is this not common knowledge?
|
| Pelosi is a fantastic fund manager. If she weren't a
| politician she would crush almost every fund manager out
| there.
|
| You really have to be a die-hard Democrat to even pretend
| that it's a coincidence.
|
| See: https://unusualwhales.com/i_am_the_senate/pelosi
| ckardat123 wrote:
| The comment above is plainly false though.
|
| Pelosi's sale of Nvidia was timed incredibly poorly, if
| the goal was to avoid short-term price movement around
| the CHIPS Act news. $NVDA is up about 8% in the two days
| since the sale.
| encryptluks2 wrote:
| Up 8% now, down 15-20+% in the near future. Hm... would
| you rather sale now if you have a heads up that the CHIPS
| act is going to stall and affect the price, which is
| correlated to others in the industry, or wait until is
| down more?
| sschueller wrote:
| Is this headline missing a comma or is it me? It sounds like they
| would ban lawmakers from trading stock only in August?!
| heavymark wrote:
| Confused as well. I read it as ban only applies to August and
| was wondering what was special about August. Think it's missing
| at least an "a" before ban but ideally a comma before that too.
| [deleted]
| d23 wrote:
| Looks fine to me. If the modifier were placed at the end of the
| title it would be misplaced and would imply what you've said.
| billfruit wrote:
| Yes, it does look odd.
|
| Perhaps it should have been: In August, House Democrats to
| propose ban on lawmaker stock trading.
| corrral wrote:
| Yep. Currently reads like they're going to propose... something
| (marriage?) "in August ban on lawmaker stock trading". Problem
| is that phrases like "August ban" are common in headlines, but
| that's not what's intended here--it's not saying "the ban that
| happened/will-happen in August", as in "alleged mob boss nabbed
| in August sting operation", but describing _when they 'll
| propose_ a ban.
|
| A fix could indeed involve commas:
|
| House Democrats to propose, in August, ban on lawmaker stock
| trading
| kyleblarson wrote:
| I would hope that lawmakers' spouses would also be disallowed.
| Paging Nancy and Paul Pelosi.
| ckardat123 wrote:
| The proposed legislation extends to spouses and senior staff
| goodpoint wrote:
| Isn't this seriously illegal in most countries?
| arcticbull wrote:
| It's illegal in these here United States too unless you're a
| lawmaker.
| nostromo wrote:
| Hear me out... few people want to run for federal office already.
| The pay isn't great and it's hard work.
|
| If the US was a company, there'd be no question that we'd need to
| pay our leadership much better to attract top talent. We pay
| senators $170k a year to manage our country with a $20 trillion
| economy.
|
| So what we end up with is activists who crave power and elites
| from rich families for whom $170k a year is a rounding error.
| Those families then use the power from being in office to enrich
| their families even more.
|
| One solution could be to double or triple pay for US
| representatives along with banning stock trading and things like
| "speaking fees."
| jc_811 wrote:
| I think one issue with this line of thinking is that the USA is
| completely and fundamentally _not_ a company, and shouldn 't be
| run as such. A company's goal is to maximize profits. A
| country's goal is to maximize the well-being of their citizens.
| A company's employees are expendable. A country's citizens need
| to have their needs looked after 24/7 and are indispensable.
| oneoff786 wrote:
| Stock trading bans are huge detriments to rich people and minor
| detriments to poor people. 170k is frankly a lot of money.
| Sure, it could be more. I don't think it's all that necessary
| though.
|
| Something that makes it hard for rich people to represent poor
| people without losing some wealth seems great to me.
| devmunchies wrote:
| I could get behind something like this. If you are re-elected,
| it would raise your salary.
|
| At the very least, I don't see a problem with blind trusts or
| only investing in broad index funds and in a specific trading
| window. Politicians should be able to invest for retirement
| like everyone else.
| Sevii wrote:
| Let's do a trade. Congress people get paid 1mil/year adjusted
| for inflation plus pension, but in return they don't get to own
| stocks or real estate while they are in office.
| AlgorithmicTime wrote:
| brianwawok wrote:
| Lawmaker pay is a rounding error.
|
| Clearly we can't pay lawmakers $0 and expert high effort + no
| corruption.
|
| is there any proof of any way that saying pay from 170k a year
| to ??? 1 million USD? a year would have any impact on the
| problems?
|
| Do countries with less corrupt lawmakers pay more than the US?
| I doubt that...
| AlgorithmicTime wrote:
| ckardat123 wrote:
| I've been collecting and sharing (@QuiverCongress on Twitter)
| data on stock trading by U.S. congressmen for the past couple
| years.
|
| While there is currently legislation that requires congressmen to
| disclose their financial dealings, enforcement around it is
| incredibly weak.
|
| Congressmen are supposed to disclose stock transactions within 45
| days of when they are made, but in practice there are dozens of
| violations of this rule which result in hardly a slap on the
| wrist. I've seen a couple cases of politicians conveniently
| waiting till after election cycles to disclose controversial
| trades.
|
| While I'm generally pessimistic about the odds of congress voting
| to regulate itself, I'm still hopeful that something comes from
| this push. There's certainly a lot of room for improvement.
| SoftTalker wrote:
| I'm not sure a complete ban is necessasry, but their
| investments should be moved to a blind trust while they are in
| office, and perhaps for some time afterwards.
| [deleted]
| melony wrote:
| Somebody please ban this person. You have been spamming Reddit
| with your fintech startup's content marketing disguised as
| activism for months. Please don't do here on HN.
| munk-a wrote:
| If it becomes a big enough liability that prominent
| representatives are concerned about their reelection due to it
| then it will happen.
|
| Yes, Congress is reluctant to specifically legislate against
| itself, so to make it happens a stink must be raised.
| ckardat123 wrote:
| Yeah, I definitely don't want to write it off entirely.
|
| The STOCK act passed 96-3, so while congress might not tend
| to be keen on regulating themselves, it's not completely
| allergic.
|
| Interestingly, one of the 3 'no' votes on the STOCK act was
| later engaged in some of the fishiest trading I've seen
| around the start of COVID. Here's a visual I made on it:
|
| https://www.reddit.com/r/dataisbeautiful/comments/gwocvt/sen.
| ..
| yndoendo wrote:
| Binding resolution allows for We the People to force the
| legislative body to enact legislation that they oppose. This
| is now cannibals become legal in Colorado. Unfortunately not
| all states have binding resolution nor are legislative body
| willing to empower the people. Binding resolution also needs
| to be bound at a Federal level, which it is not, to bring in
| true balance of power and laws that have true accountability.
| Such as all money gained through insider trading is forfeited
| along with possible jail time and possible loss ability to be
| a constitute representative.
|
| If binding resolution was an available tool for We the
| People, legislative body would work move together than
| separately.
| [deleted]
| matt3210 wrote:
| Lol this win never happen. Politicians will never vote to
| bankrupt themselves
| thesecretceo wrote:
| they gotta do something to save face... i agree with you tho,
| this is just posturing
| JumpCrisscross wrote:
| > _this is just posturing_
|
| Eh, I don't think it is. Most members of Congress aren't
| minting money trading stock. The revolving door is far more
| insidious. Pointing at this lets pass make minor reforms,
| chuck a surprise at the eternally cynical and keep the goose
| that lays the golden eggs.
|
| The partisanship of the accusations also helps galvanize
| support. Republicans can claim to be sticking it to Pelosi.
| Democrats can better cover their flank. The base will eat it
| up. Nobody in finance cares. And like two members of Congress
| will be slightly diminished millionaires. Broadly, a win-win.
| (Even if more marginally than presented.)
| chabes wrote:
| How would that lead to bankruptcy?
| tootallgavin wrote:
| So should all politicians receive money exclusively from
| lobbyists/donors? Or I guess they should go get paycheck jobs
| somewhere?
|
| Where does a politicians money come from? If they exclusively
| received their money from stock trading as opposed to
| lobbyists/donors, how do you think the policy decisions would
| change?
| ch4s3 wrote:
| Senators make $174,000/yr and most are already wealthy
| before running for election.No one is asking them to give
| up all income streams outside of their jobs, just to stop
| trading individual stocks. Senators have a LOT of knowledge
| about things that will effect stock prices that is outside
| of the public realm. Trading on that knowledge is a clear
| violation of public trust.
| tootallgavin wrote:
| > just to stop trading individual stocks
|
| Why?
|
| Is buying a particular car not an investment? what about
| a house? Buying and selling assets should not be
| criminalized. Having privileged knowledge is part of the
| game. Someone who cannot read and write is going to have
| a tough time in life.
|
| Insider trading is already illegal.
|
| Also, investing in a publicly traded company is a weird
| way of violating public trust. Its as if the public does
| not know it too can invest where their politicians have
| invested.
| danaris wrote:
| ....They get a salary?
|
| It's not huge, by rich-people standards (which is a
| legitimate concern, as it does lead to very rich people
| being more able to take politician jobs than regular
| people), but, what, you thought they _relied_ on graft to
| buy their dinners??
| tootallgavin wrote:
| > but, what, you thought they relied on graft to buy
| their dinners
|
| They will if this ban is instituted
| willcipriano wrote:
| It is huge by the people they are supposed to govern
| standards though. It would be a raise to virtually
| everyone except the top 1% of people in terms of
| household income. They also receive top of line medical
| care and retirement benefits in addition to the salary.
| The salary isn't preventing poor people from becoming
| elected officials.
| tootallgavin wrote:
| > The salary isn't preventing poor people from becoming
| elected officials.
|
| I agree, and trading stocks is not keeping poor people
| from becoming elected officials either
| ziddoap wrote:
| > _So should all politicians receive money exclusively from
| lobbyists /donors? Or I guess they should go get paycheck
| jobs somewhere?_
|
| Am I mistaken? I thought most political position are paid
| positions. Currently north of $150,000 USD for members of
| congress, I think?
| tootallgavin wrote:
| And so how do these members of congress pay for staffing,
| research, etc? with just 150K per year?
| ziddoap wrote:
| Through your taxpaying dollars, just like every other
| government worker?
|
| > _pay for [...] research_
|
| Thanks for the laugh.
|
| They might read research, but they aren't _personally_
| funding it.
|
| You may wish to read up on the subject of government
| work, salaries, etc. before you go debating about it on
| the net. Most of this stuff is covered in early Civics
| classes, and as someone who presumably pays taxes, you
| might be interested in finding out where and how those
| dollars get distributed!
| paulcole wrote:
| It's called the Members' Representational Allowance and
| is north of $1,000,000 per year.
|
| https://sgp.fas.org/crs/misc/RL30064.pdf
| wbsss4412 wrote:
| Politicians don't receive money directly from lobbyists and
| donors. Doing so would be a violation of rules against
| taking bribes.
|
| Lobbyists and donors give money to campaigns, which require
| untold sums of money these days, and a congresspersons
| power within the party is directly correlated to their
| ability to fundraise for the party.
|
| As to their actual personal means of a congresspersons
| wealth, they're paid fairly high salaries (close to 200k
| per year, which, despite the expectations of this forum is
| quite a bit for the US) and yes, they have the ability to
| engage in their own investments and business dealings on
| the side. Not to mention their incredibly generous
| pensions.
| tootallgavin wrote:
| > Politicians don't receive money directly from lobbyists
| and donors. Doing so would be a violation of rules
| against taking bribes.
|
| > a congresspersons power within the party is directly
| correlated to their ability to fundraise for the party
|
| I agree, trading stocks is an easy, relatively passive
| way of doing this.
| epgui wrote:
| > Where does a politicians money come from?
|
| They have an annual salary.
| tootallgavin wrote:
| What about the salaries of the staff? What about the
| tools needed to perform the job?
| jandrese wrote:
| This is dead on arrival. They aren't even going to get a solid
| majority of Democrats on board and there's going to be absolutely
| zero Republican support. I would honestly be amazed if it even
| made it to the house floor.
| morninglight wrote:
| Let's get real...
|
| *** TERM LIMITS ***
|
| .
| jdlshore wrote:
| Term limits increase the power of lobbyist, according to what
| I've read. They're not a panacea.
| JumpCrisscross wrote:
| > _Let 's get real...term limits_
|
| This is a proven strategy for tanking legislation.
|
| Ten lawmakers on a linear political spectrum. Compromise is at
| 5. 1, 2, 9 and 10 said no; 3 and 8 grudgingly accepted. The
| measure looks poised to pass with six votes.
|
| What can you do to tank it? Propose a sizzling 31/2. 3 can't
| help but demand it at all costs. It's so juicy! And so close to
| the _real_ intent behind 5! 8, meanwhile, horrified and
| betrayed, tells everyone to kindly fuck off. The centre holds.
| But the fringes have frayed enough to compromise passage.
|
| We're in a rare state of inching bipartisanship. That mitigates
| the last decades' go-to strategy of lobbing landmines from the
| extremes, aiming to tear apart that delicate ground of
| negotiating space from the poles; to make moderation tantamount
| to treason. I suspect we'll now see more baiting of edges to
| chew away at the most-extreme moderates instead, an escalating
| game of No True Scotsman at the fringes.
| arcticbull wrote:
| I don't really get the appeal. We don't term limit anyone in
| any other job, generally we believe tenure and experience
| corresponds with competency. Would you accept a term limit for
| a software engineer? Of course not. Your value to an
| organization, your ability to be effective, to do good work,
| increases the longer you stay. You're good, you stay.
|
| Term limits feel tantamount to demanding a lawmaking body
| comprised entirely of amateurs - instead of professional public
| servants.
|
| The problem is incentives. It should be illegal for lawmakers
| to receive any money or other in-kind support for their re-
| election campaign from anyone other than the Federal Election
| Commission. Everyone who gets more than a few thousand
| signatures gets the exact same budget.
|
| This way, everyone has the same war-chest, and has to run on
| their own merits - not on raising capital - and they're
| measured on their ability to succeed. It also instantly nerfs
| the allure of lobbying.
| paulgb wrote:
| > We don't term limit anyone in any other job
|
| Moreover, lawmaker is the only job you have to re-interview
| for every 2-6 years.
|
| I personally wish there was more turnover of a few long-
| standing incumbents who have managed to cling to power for
| decades, but the voters apparently don't, and adding term
| limits won't magically make the voters pick the people I'd
| rather see in those positions.
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