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Comment by hn_throwaway_99 | Hacker News Reader

> They're not particularly motivated to close this loophole either, for reasons which should be obvious.

Agreed, but the ban on federal officials owning individual stocks is actually gaining momentum and I think has a good chance of passing, though what happens in November may change that.

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Certainly hope it passes! Though with a high enough security clearance I'd imagine you could make a killing just going long/short on index funds, so I don't know how effective this would be at curbing the behavior.

What we really need is all assets of elected officials held in blind trust, bar none, no exceptions, I think. Though I'm no hedge fund wizard and I'm sure there's a loophole to exploit there as well.

> What we really need is all assets of elected officials held in blind trust, bar none, no exceptions.

Yes absolutely. I would also add:

- Mandatory retirement from public office at age 65. We have minimum ages for elected office, nothing wrong with a maximum age.

- Ban on lobbying for 10 years after leaving office.

Why the age cap? Is there a evidence that elderly are statistically more likely to be corrupt than the young? Or perhaps you think we (I'm 66) have suffered significant cognitive decline?

Older people are less likely to have to face the long term consequences of their corruption and depravity.

This is a credible take and I would love see more discussion about this.

Don’t target some bigoted stereotype. Target the problem of corruption.

You can as easily argue the opposite: older people can be more conscientious because they have less to gain and less to lose. Who cares more about a payoff: someone who already has their gains and fewer years left, or the hungrier younger person?

I suspect you have based your “fact” on sampling bias - we don’t get good visibility metrics on young corrupted politicians (not so many young politicians, not so much time for them to have been caught making egregious errors). Disclaimer: middle-aged engineer type.

> Who cares more about a payoff: someone who already has their gains and fewer years left, or the hungrier younger person?

How many people in their tweens to 40th have ever filled the roles they were talking about? That's the only timeframe this argument would make sense to me.

I really can't see their comment as bigoted as you claim. There really is a strong selection bias with people filling these roles at that age and them behaving like that. That's doesn't mean that people in that age braket are always corrupt, but people that have been in these roles for extended periods of time generally are corrupt.

So, maybe erase the age consideration of the argument and target the number of terms instead.

Agree, in almost all times and cultures I have read about or experienced, respecting your elders is a big deal. It is only in the last decade where it seems that attitude has flipped in popular liberal culture.

Yeah especially with arranged marriages where your mum decides who you will marry.

> Older people are less likely to have to face the long term consequences of their corruption and depravity.

Representatives, whether young or old, never face the consequences of their actions because they exist in a separate system from the rest of society. They have special health care, private schools, and so on.

The US at the federal level has other mandatory retirement ages, where the most similar role affected is the Foreign Service, but also pilots, air traffic control, and law enforcement. Many states have mandatory retirement ages for judges. One can easily argue that the risks if a senator undergoes cognitive decline are potentially just as serious as if a diplomat or judge has the same problem.

Most publicaly traded corporations have age limits for their c-suite, probably for good reason. Why shouldn't government?

Sears is a private corporation. They can organize how they see fit. The government is an open, public institution built by and for the people. Each decision regarding who can participate in this government must be met with the utmost scrutiny.

I’d argue that Lord Acton was correct when he said that power tends to corrupt and that absolute power corrupts absolutely. Age limits are an easy (but slow) way to defeat the loopholes and issues with term limits, and make sure that those exercising power do not end up in that position for too long.

Sure, a 65-year-old age limit would exclude some candidates who get into politics at a later age, or who are uniquely gifted. But there are plenty of examples from across the political spectrum of people who should perhaps move on to write their memoirs instead of running for that nth term.

I think there's a few reasonable reasons. I think 65 might be too low, I'd probably go with 70, but one reason is just to make room for new legislators which is good both to get new ideas & perspectives in from time to time, and also to ensure our government isn't excessively skewed towards the perspectives of older people. The average age of a senator is 64.3 years[1]– the average age!

Average age of US citizens is 38.8 years. I don't think this needs to be exactly the same & I think it's good for senators to skew older as wisdom accrues with age, but this doesn't simply mean "older is better."

Mostly I think it would be good to build the next generation of leaders periodically. Senate seats are and congress are zero-sum, the next person can't get into that seat until someone else gets out, and those "years as a legislator" are important to operate effectively.

1: https://crsreports.congress.gov/product/pdf/R/R46705#:~:text....

Why not just term limits then so people don't see this as a permanent career path.

One issue I've seen raised is committee assignments meaning power often are by seniority, so that also would have to change. Unlikely.

To cycle in fresh perspectives, and limit the power that can come from decades entrenched in office. People like Pelosi or McConnell are so powerful in part because they have been in office forever, have a network that is both deep and wide, have lots of people who owe them favors, etc. If you set a maximum age plus a lobbying ban, that enforces an end to that at some point.

I'd be in favor of a two-term limit personally, for many of the same reasons. If it's good enough for the President it should be good enough for other offices. I don't think political office should be a lifetime career. It attracts too many power-seeking, controlling personality types. We don't need those people around forever. Too many people in office have no private sector experience at all, yet they are making the rules that the rest of us live by.

They are powerful in part because there are so few of them that the lobbyists can bear hug them. Let the House of Reps again grow with population and there would be too many Reps for lobbyists to control so each individual Rep would have less influence.

We have a census to grow the numbers in the House, but they passed a law to stop that.

"The Number of Representatives shall not exceed one for every thirty Thousand..."

"Representation based on population in the House was one of the most important components of the Federal Constitutional Convention of 1787."

https://history.house.gov/Institution/Origins-Development/Pr...

Because legislators should have at least as much skin in the game of what happens in the future as the average person. Gerontocracy has not led to good outcomes, historically.

And yes, as people age, they do tend to suffer cognitive decline. You may be the exception, but as a rule it's still a factual statement.

By “skin in the game”, do you mean legislators should be allowed to hold & trade securities while in office? Because having insider trading information gives you an edge up, and thus less skin in the game than everyone else.

No, I mean the older you are, the less invested you are in the long term consequences of your actions, personally. An 85 year old senator only needs to care about the consequences of their actions 20 years on in a very abstract, moral sense, as they are very unlikely to have to experience them personally.

>- Ban on lobbying for 10 years after leaving office.

I'd rather see a lifetime vow of poverty, where officeholders were forbidden to derive any income at all other than their pensions.

Yes. Let's violate the first amendment, that should be fun.

The term "lobbying" is essentially slang.

Lobbying is just the name we give to the act of paying someone to petition the government for a redress of grievances on someone else's behalf. So to ban someone from lobbying for any amount of time is essentially banning them from petitioning the government. Which is forbidden by the Constitution.

It's a way more complicated issue than "ban lobbying".

There are all kinds of existent laws and regulations on former elected officeholders allowed lobbying activities, many of the toothier ones at the state level but there’s still a 2 year cool off at the federal level for congress. They’d run afoul of 1A protections if there was indeed an unfettered right to be paid to lobby on the behalf of others.

- Mandatory retirement from public office at age 65. We have minimum ages for elected office, nothing wrong with a maximum age.

Match it to social security age.

I don't know about age limits, but it wouldn't be a bad idea to have term limits (both consecutive and total)

I wouldn't impose mandatory retirement age on congressmen, but think there should be a age limit for the presidency and committee chairs. I think this is not particularly controversial.

What people hate but I strongly believe in is that we should pay people a stipend to run for office. And we should pay congressmen and senators more than we do. And give them a full years salary when they leave office. Seriously guys producing webshit for FANNG companies are making more than their congressman.

Raise capital gains taxes on elected officials to 70%?

That way the tax payer can still get the payout

> killing just going long/short on index funds

Going short is always a bad idea. The market can stay irrational longer than you can stay solvent. In other words, you can win at most 100% while you can lose more than 100%, so why make such a bet.

It's not true that you can make at most 100% once you take into account leverage. But I agree with your general point that shorting is much harder than longing

If you knew your spouse is going to announce an interest rate hike the next morning, shorting might be a relatively safe bet. And it's not like an index fund will move more than a few points at a time anyway.

Regarding the security clearance, while you are not technically wrong in theory, in practice things are heavily compartmentalized at an individual human level by "need to know" practices.

It kind of opened my eyes to how much a maze the IC is regarding classifications and data restrictions. We may both have TS clearances, but I may have access to wayyyy more crazy stuff than you do, based on what I am officially working on. However, on paper we may have the same levels of "trust" from the system's perspective.

In this case, though, they were not buying & selling individual stocks. So we would need to ban them from owning any equities, even shares of S&P 500 index funds.

I don't see why they should be banned from being a part of a double blind fund.

Double blind? Consider e.g. knowledge the Fed is planning on raising interest rates before the public has it. That affects the market as a whole, so they could short sp500 and have a leg up on us regular folks.

The solution is simple. Being in office (or working for the federal government, or any level government for that matter) is a privilege, not a right. If you want to exercise that privilege, then you should have to give up the right to directly trade any stock/fund. Your broker whom you can't divulge any info to then has the same footing as the rest of us.

"(or working for the federal government, or any level government for that matter)"

I don't think this is right. My small town government isn't going to make any money on trading. Even if we contracted with a company big enough to be public, the contract would be too small to make any impact. Also, most in the military or civilian contractor positions have no real insight into the market moving deals. Nor do they generally have the capital to really take advantage.

It's the high level officials and bureaucrats that need to be restricted, not the rank and file.

You could argue the high level officials will find a way around any restrictions anyway, so all you will do is punish the rank and file no matter what.

> Double blind? Consider e.g. knowledge the Fed is planning on raising interest rates before the public has it. That affects the market as a whole, so they could short sp500 and have a leg up on us regular folks.

No, that's not how that would work. You'd treat it the same way that you do with executives owning stock but having insider knowledge. All of their transfers are done on a schedule and changes to the schedule have to be done in advance.

Agreed. You become an official? Congrats, you no longer have direct control of your investments.

Would that be such a downer for people looking to serve in government? Certain special limits seem reasonable to apply to government officials that have special knowledge or other authority.

That's a much harder case to make.

Then we just need term limits and to kill civil asset forfeiture

Let's get rid of qualified immunity and add stronger protections against eminent domain while we're at it. Also, we need to address corrupt judges, we have very few legal mechanisms for that.

I would like to drastically claw it back but I think there are limited circumstances where that immunity should apply.

At the very least, criminal immunity and being required to carry large insurance policies for civil damages. Paid for out of pocket and underwritten based on their job performance/complaints.

Police are people and people make mistakes, this needs to be recognized on some level, but QI as it is now is positively un-American. We're supposed to have checks and balances and recourse for misdeeds. Nobody should be above the law. You literally need circumstances like those surrounding George Floyd to hold police accountable in this country.

2A was supposed to be insurance against nonsense like this.

and gerrymandering. And FPTP.

> Then we just need term limits

The best argument I know against this is that it shifts power toward lobbyists and all those awful "deep state" people (you know, career civil servants) everyone suddenly started being worried about a few years ago, and away from elected officials.

Abolishing term limits just encourages politicians to start thinking about "What, after?" sooner.

Not sure that's what we want to incentivize.

Cronyism and back door politics within the government are far from the worst outcomes, especially compared to private industry having more power over government officials.

It also means that the entirety of their last term is basically consequence-free. Currently a voted-out senator is a lame duck for 2 months; a "last term" senator has 6 unaccountable years to do whatever they want.

I'm more in favor of a mandatory retirement age than term limits.

Asset forfeiture has definitely got to go.

We have term limits in several places (including California), I think TL proponents should make their case based on how that has worked out rather than pleasant hypotheticals. One downside I've seen is that it promotes a sort of legislative ladder-climbing mentality where ambitious legislators are primarily focused on using their office as a springboard to the next level of political power, and incentivized to propose changes with quite short-term payoffs.

What would keep them from telling their extended family or close friends the insider information?

That’s the same problem as any other kind of insider trading.

With the added bonus of possibly dipping into classified information.

Inside trading is illegal to begin with. The problem is with prosecutions. That’s why I don’t think more bans will do anything.

Having the profits owned by another person adds risk from an insider trading scheme. Both risk in terms of information leaking and the "friend or family" simply having control of the money/goods.

This is as good a start at curbing this behavior, as is practical right now.

Stiff prison terms

Honestly, I would be okay with allowing them to continue to own stocks, but all trading activity is published in real time. I honestly think that would be more telling than just making them not own them.

I am pretty sure all trading activity is published in real time. That is just how the stock market works.

They meant the insider trading.

Rather than banning officials from owning individual stocks, just make all trades transparent in real time along with actual beneficial ownership (e.g., if someone owns stocks through an LLC, Trust, etc.).

This would nearly instantly eliminate most of the advantage of insider trading with far less regulatory overhead and the inevitable over- and under-prosecution of crimes. Elon Musk or Mark Cuban or some legislator starts buying batches of options? Everyone already knows and the market can move on it's own.

does it include spouses? Also doesn't prevent them from getting paid for information via other means. Or being promised cushy board positions once they are out of congress

won't pass if GOP controls house and/or senate post-Nov

Pelosi and her husband are the worst offenders in all of the house, it won't pass if the GOP or the Dem's control the house, don't kid yourself.

Agreed on Pelosi. But at least you have a pretty vocal contingent of House Dems pushing for it who might get their way; whereas on the GOP side nothing.

In both the House and Senate, Republicans have proposed legislation to close this loophole. It's been Democrat-controlled committees that have prevented these from moving forward. Even Democratic bills have not made it out of committee, despite public pronouncements back in September. This seems like a issue that could get true bi-partisan support, but it will take Democratic leadership to move a bill out of committee at this point in time.

House: H.R.6490 - Banning Insider Trading in Congress Act (https://www.congress.gov/bill/117th-congress/house-bill/6490), Sponsor: Rep. Hartzler, Vicky [R-MO-4]

Senate: S.3504 - Banning Insider Trading in Congress Act (https://www.congress.gov/bill/117th-congress/senate-bill/350...) Sponsor: Sen. Hawley, Josh [R-MO]

Found this Democrat-sponsored bill: H.R.8990 - Combatting Financial Conflicts of Interest in Government Act (https://www.congress.gov/bill/117th-congress/house-bill/8990...), Sponsor: Rep. Lofgren, Zoe [D-CA-19]

EDIT: removed markdown formatting

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