Public officials should not own stocks full stop.
It pretty much prevents benefiting from "subtle insider" trading via being lobbied by corporate officials or getting any friendly hints from them. The problem with "follow Nancy's trades" idea is that by the time the trade is known, the price has already corrected. The first one to complete the trade is often the only one to collect a significant benefit, the followers get scraps.
And it indirectly disincentivizes owning individual stock because prearranged trade of one stock carries a risk of being screwed by market manipulators, while prearranged trade of a broad index fund is not a problem.
A complete disclosure of all holdings will also be required, so that you can see if they're picking policy to assist their existing portfolio.
https://radiotv.house.gov/house-data/salaries
That's several times over median but many of us on this site make that much or more. More reasonable restrictions would be things like requiring them to use a blind trust, to restrict investments to index funds or managed portfolios, or something.
If they are truly people-oriented as they oath when they join public service, why allow them to own stock at all?
The rules for rank and file employees already exist, it's the ones at the top that can flout the rules that are an issue.
You can bring coffee and donuts, those are even specifically called out:
> Modest items of food and non-alcoholic refreshments, such as soft drinks, coffee and donuts, offered other than as part of a meal;
I take this to mean you think that civil servants and members of the military should also be barred from holding stocks?
> But isn't that a significant conflict of interest if they are public service employees?
There is no inherent conflict of interest in owning stocks. The risk is when they own (especially if they are heavily invested in) individual stocks. Use a blind trust like I mentioned or disallow holding individual stocks if they want to manage their own portfolio, then they still have a vested interest in the economy (how well businesses are doing as proxied by the stock market) but their conflicts are limited or removed.
Why not? I've suggested solutions that let them invest without even being aware of what they're invested in or only minimally (index funds, specific portfolios). This resolves the conflict of interest problem while allowing them to still gain the financial benefits of investing some of their money.
Or is the idea that if they choose to work for the government, they need to work until they die.
I think if the only thing that they could invest in was total-market index funds (or something similar), that would not have too much of a conflict of interest. They'd have the incentive to make the entire market happy, not just individual stocks, which benefits nearly everyone.
If the only stock that politicians owned was VTI or something similar, I think most people would mostly be fine with that. That would still have problem in terms of the uneven weighting, but it would certainly better than what we have right now.
Don’t tell that to folks planning to retire soon.
What about owning any asset class? real estate? is that allowed? Metals?
There's no actual reason a congressperson needs to own stocks. In fact, we should be doing what we can to enforce a certain "Average American"-ness to their lives so they work to improve the lives of the average american.
Personally I would prefer restricting them to SNP500. US does well - they’ll do well.
If we work backwards from the observation that Donald Trump just got elected from his second term and start probing into the whys and wherefores; direct lobbying seems to be the major problem. Politicians stock trading is certainly unseemly but it isn't at all clear whether it is pushing the quality of the decision making in Washington up or down.
I'm intrigued at the extension to the idea that public officials shouldn't own anything at all. What do you want them to do?
No one is saying that public officials should own nothing, but the concern is that if they own stock in an individual company, they will have an incentive to vote to benefit that company to drive up the stock price. For example, if I owned a ton of stock in Lockheed Martin, I might be incentivized to vote to declare a war that isn't necessary in order to get a bump in my income.
This doesn't mean that they actually would do this, it's possible that the politicians would have integrity and vote their actual positions, but I think for things like this the appearance of impropriety is almost as bad as actual impropriety. We need to have some level of trust in our political leaders, and having things that look unseemly is almost as bad as actual corruption.
Even if you could prove that Trump now maintaining his businesses has no effect on his political decisions, it would still be bad, because it still gives an appearance of corruption, and that erodes trust in our institutions.
I don't think most people would have a huge problem with politicians having stocks in broad mutual funds, especially if they don't directly know what's being invested in. This would encourage them to make the entire market grow, instead of just individual stocks.