I'm on record here several times saying that members of Congress and employees of a lot of other federal governmental agencies -- pretty much anybody in Congress or in a job that requires Congressional approval -- shouldn't be able to trade stocks, bonds, futures or other marketable securities (MS). That's because they cannot avoid possessing either company-specific or macroeconomic inside information.
Alabama's own Senator, Tommy Tuberville, has in his inimitable wisdom objected because, hey...we don't make much money in Congress. How else are we going to make real money?
Lots of others on both sides of the aisle aren't liking it too much, Nancy Pelosi recently stonewalling. But Tuberville and Pelosi are far, far from alone. Most are just better at keeping their mouths shut.
Well, Josh Hawley has proposed a law that would address the issue. While I agree with Hawley's intent 1,000%, I don't think he goes far enough as to who is covered (Congress, and any future VPs or Presidents), and actually think he goes too far in the limitation.
Hawley's proposal doesn't cover enough officeholders. In addition to members of Congress, the VP and the President, I think SCOTUS, the Cabinet, and high-level employees of governmental agencies (in particular, financial and market regulatory agencies) should be added. Pretty much anybody in a job that requires the approval of Congress.
Hawley's proposal goes too far in that covered officeholders and their spouses are not allowed to own MS at all. While it certainly precludes profiting from inside information, it also divorces them from having a stake in the economy they're ostensibly trying to promote.
I'd suggest two alternatives:
1. They put all their investments into a blind trust. So even they don't know what they're invested in, or
2. They put all their investments into a total US market fund.
Either way, their first personal economic priority becomes the overall economy of the USA.
Barring these folks from even owning MS is well-intended but counter-productive.
It puts up a barrier for people just trying to provide for their families. It also incents them to invest in "alternatives." Art, coins, wine, metals, VC and hedge funds, etc. IOW, gamble. The problem there is that those investments are highly volatile, have huge transaction costs, and can be hard to liquidate.
You risk making a public officeholder and/or voting lawmaker vulnerable to outsized losses, and/or unable to liquidate investments when they have a legitimate need for cash. And we don't want lawmakers or high-ranking agency employees in the position of truly needing money -- as opposed to just wanting it like everybody in the world. Truly needing money makes them susceptible to all sorts of bribes, influence peddling, and other unsavory conduct to get their hands on cash.
So I wholeheartedly agree with Hawley that members of Congress, the VP and the President shouldn't be allowed to profit from the inside information that their jobs unavoidably generate. I would add anyone in a job that requires Congressional approval. But banning their ownership of MS isn't the best way to do that. Other ways are just as effective and have less downside.
Actually, the solution is so simple that the cynic in me wonders whether Hawley is proposing something that he knows won't pass, but will make him look (to people who don't look under the hood -- IOW, about 95% of journalists and the voting public) like he tried to drain the swamp, but it was just too full of alligators.
Alabama's own Senator, Tommy Tuberville, has in his inimitable wisdom objected because, hey...we don't make much money in Congress. How else are we going to make real money?
Lots of others on both sides of the aisle aren't liking it too much, Nancy Pelosi recently stonewalling. But Tuberville and Pelosi are far, far from alone. Most are just better at keeping their mouths shut.
Well, Josh Hawley has proposed a law that would address the issue. While I agree with Hawley's intent 1,000%, I don't think he goes far enough as to who is covered (Congress, and any future VPs or Presidents), and actually think he goes too far in the limitation.
Hawley's proposal doesn't cover enough officeholders. In addition to members of Congress, the VP and the President, I think SCOTUS, the Cabinet, and high-level employees of governmental agencies (in particular, financial and market regulatory agencies) should be added. Pretty much anybody in a job that requires the approval of Congress.
Hawley's proposal goes too far in that covered officeholders and their spouses are not allowed to own MS at all. While it certainly precludes profiting from inside information, it also divorces them from having a stake in the economy they're ostensibly trying to promote.
I'd suggest two alternatives:
1. They put all their investments into a blind trust. So even they don't know what they're invested in, or
2. They put all their investments into a total US market fund.
Either way, their first personal economic priority becomes the overall economy of the USA.
Barring these folks from even owning MS is well-intended but counter-productive.
It puts up a barrier for people just trying to provide for their families. It also incents them to invest in "alternatives." Art, coins, wine, metals, VC and hedge funds, etc. IOW, gamble. The problem there is that those investments are highly volatile, have huge transaction costs, and can be hard to liquidate.
You risk making a public officeholder and/or voting lawmaker vulnerable to outsized losses, and/or unable to liquidate investments when they have a legitimate need for cash. And we don't want lawmakers or high-ranking agency employees in the position of truly needing money -- as opposed to just wanting it like everybody in the world. Truly needing money makes them susceptible to all sorts of bribes, influence peddling, and other unsavory conduct to get their hands on cash.
So I wholeheartedly agree with Hawley that members of Congress, the VP and the President shouldn't be allowed to profit from the inside information that their jobs unavoidably generate. I would add anyone in a job that requires Congressional approval. But banning their ownership of MS isn't the best way to do that. Other ways are just as effective and have less downside.
Actually, the solution is so simple that the cynic in me wonders whether Hawley is proposing something that he knows won't pass, but will make him look (to people who don't look under the hood -- IOW, about 95% of journalists and the voting public) like he tried to drain the swamp, but it was just too full of alligators.
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