US politicians and the stock market: are they guilty of insider trading?
Legislators are pushing for members of Congress to be banned from trading in individual stocks
Ever wondered why regular Americans hold their leaders in such low esteem? It’s partly because they suspect them of playing the system, said the St. Louis Post-Dispatch – and who can blame them when you see how politicians speculate on the stock market.
In January 2020, the public had no idea of the impact Covid was about to have, but many members of Congress did, because they were getting classified briefings from experts. In the wake of those briefings, then senator Kelly Loeffler sold off millions in stocks, and invested in a teleconferencing firm. Senator Richard Burr sold his hotel holdings. Senator Rand Paul’s wife bought stock in a pharma company making antivirals.
Whether these were “just happy coincidences or something more sinister”, they looked very dodgy. Some legislators are rightly now pushing for members of Congress to be banned from trading in individual stocks.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The proposed legislation “comes not a moment too soon”, said Katrina vanden Heuvel in The Washington Post. The problem is not just that lawmakers can unfairly enrich themselves; it’s that they’re open to glaring conflicts of interest. How can Congress be trusted to dispassionately regulate Big Tech, or the drug giants, when so many of its members have a financial stake in these firms?
To see how it can cloud their judgement, just look at the way Speaker Nancy Pelosi initially tried to resist reform: “We are a free-market economy,” she said. Members of Congress “should be able to participate in that.” This, of course, is the same Nancy Pelosi who, with her venture capitalist husband, has done so well from trading that “there’s an entire community on TikTok” that follows her portfolio – calling her the “queen of investing”.
The proposal is that members of Congress should put their assets in blind trusts while serving, said Theo Wayt in the New York Post. That would help restore public confidence. And for some Democrats it would have “an added bonus: revenge on Senator Joe Manchin”. They’re furious with their colleague for blocking President Biden’s $2tn Build Back Better Act, which would have allocated tens of billions of dollars to fight climate change. If a new law forces Manchin to give up control of his stake in a coal company, they’ll be happy.
It’s “amazing” that we’re even debating this reform, said Robert Reich on CommonDreams.org. It’s a “no-brainer. Let’s get it done.”
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Create an account with the same email registered to your subscription to unlock access.
-
Italian senate passes law allowing anti-abortion activists into clinics
Under The Radar Giorgia Meloni scores a political 'victory' but will it make much difference in practice?
By Chas Newkey-Burden, The Week UK Published
-
Magazine interactive crossword - May 3, 2024
Puzzles and Quizzes Issue - May 3, 2024
By The Week US Published
-
Magazine solutions - May 3, 2024
Puzzles and Quizzes Issue - May 3, 2024
By The Week US Published
-
Shein: could the year’s mega-IPO fall apart at the seams?
Talking Point Latest hitch is a pre-float 'security review' that could deter potential investors
By The Week UK Published
-
Labor market strong as inflation sinks
Feature And more of the week's best financial insight
By The Week US Published
-
Midair blowout: another black mark for Boeing
Feature This isn't the first production issue Boeing has encountered
By The Week US Published
-
Behemoths of the seas
The Explainer Cruise liners keep getting bigger, with the world’s largest 'megaship' ever built set to make its maiden voyage this month.
By The Week Staff Published
-
Holiday season: Fed optimism cheers investors
Feature The feds believe their 'pivot' will make a recession unlikely
By The Week US Published
-
Older workers stay in the labor force
Feature And more of the week's best financial insight
By The Week Staff Published
-
America's most in-demand job
Feature And more of the week's best financial insight
By The Week US Published
-
Currency: the long reign of the mighty dollar
Feature Argentina is planning to drop the peso in favor of the US dollar
By The Week US Published