Sen. Warren wants to bar members of Congress from trading individual stocks | Hacker News Reader

Sen. Warren wants to bar members of Congress from trading individual stocks

businessinsider.com

60 pointsArkanExplorer23 comments

Warren's Current Holdings, according to the Annual Report for CY 2020, filed 2021-05-14: https://sec.report/Senate-Stock-Disclosures/Warren/Elizabeth...

That’s way less than what I expected as a non American.

A good idea. We should also add strict term limits and bar them from ever working for any [large] company after holding office. That would prevent the existing revolving door of the "you help me with this law and we'll give you a cushy do-nothing consulting gig when you retire." Give them a good pension and bar them from any non-volunteer work.

Incentivizing legislators to hold on to their positions, by guaranteeing a painful exit, is definitely a bad idea. In fact, that was cited as a reason that Ford pardoned Nixon, to ensure that peaceful transfers of power would continue to be the norm. Countries that are eager to lock up past rulers slide into dictatorship more often.

> Countries that are eager to lock up past rulers slide into dictatorship more often.

Are there historical trends that show this? If true, South Korea may be in trouble. Out of the 3 most recent ex-presidents, 2 have been jailed and 1 committed suicide due to bribery charges.

> would prevent the existing revolving door

It would also limit higher office to the otherwise unambitious or independently wealthy.

Sadly, that limit already exists. And I did say "nice pension"

Intuitively and not as a constitutional scholar, but would that survive a pursuit of happiness constitutional challenge? It seems like you probably can't put too many additional requirements on the role without needing an amendment.

> Intuitively and not as a constitutional scholar, but would that survive a pursuit of happiness constitutional challenge?

Yup.

For one reason, because the federal courts don’t tend to mistake the Declaration of Independence for a part of the Constitution that limits express powers like the Commerce Clause.

Haha oh shoot, you're right. So the government could pass a law that anyone who is elected must give up all their wealth upon quitting office and there is nothing in the constitution that would prevent that?

so they'll just open a "consultancy" and "consult" ?

The members of congress will receive lots of gifts from family members who get strangely wealthy for no reason at all.

Index funds tend to outperform individual stocks anyways, unless you know where the roulette wheel is about to land...

> unless you know where the roulette wheel is about to land

And I think this is the whole idea behind keeping them from trading individual stocks, because they have priveleged information that may tell them exactly where it will land, plus they often have the power to force it to land in a particular way.

That's precisely the point. They affect the wheel and can affect it mightily.

Nothing is going to change this. Maybe very harsh term limits and blind trusts, and some serious anti-corruption laws.

Basically. keep dreaming.

In the public market, yes. This is not necessarily true of private investments.

This is a misguided idea that can lead to negative results. Members of the government should be able to involve themselves in commerce. It is a sign of a healthy capitalist society. The financial economy directly impacts millions of Americans. Detaching the lawmakers from this economy can lead to regulations that hurt it. Thinking back to history, a government friendly towards commerce was a major factor of capitalism's taking off in Britain.

> Members of the government should be able to involve themselves in commerce. It is a sign of a healthy capitalist society.

It is certainly a sign of a capitalist society, but whether it is a healthy one or not is rather in dispute. Since the late-19th and early 20th Century, relatively pure capitalism has been broadly viewed as unhealthy in the places that have practiced it, generally replaced by the modern mixed economy which shares a common general shape of drift from capitalism in its various implementations, one aspect of which tends to be limitations on public officials engaging in commerce especially within the realm of their official responsibility, and Members of Congress (as well as the President) have, unlike officials of most particular agencies, an essentially universal domain of official responsibility.

Indeed, the mixed economy the society has shifted to is a form of capitalism constrained by regulatory frameworks. Imposing limitations on public officials engaging in the commerce they are designed to regulate can be quite reasonable, such as done in Stop Trading on Congressional Knowledge (STOCK) Act passed in 2013. I think you would agree that the proposed legislation is pushing the boundaries further. Legislations based on fundamental principles such as maintaining public confidence and avoiding conflicts of interest can serve a legitimate interest of the public, but when appropriate legislations are already in place, artificially separating public officials and the stock market further poses an unreasonable burden on congress members and harms their ability to understand and represent their constituents.

> but when appropriate legislations are already in place

Whether the legislation in place is sufficient to be the “appropriate legislation” on the issue is...rather the point in debate, an argument which simply takes that it is for granted and proceeds from there is missing the entire point.

Glad we are on the same page. The point of debate is indeed whether the existing regulations are enough. In case this has not been made clear, my contention is that existing regulations such as the STOCK act are sufficient.

They still can, this is only about individual stocks. Under this, members of Congress could still hold index funds, just not individual stocks.

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