Hawley and Democrats vote to advance congressional stock trading ban
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The US would be far better off figuring out how to make its politicians do a good job before worrying about how outrageously they are compensated. Even the current fog of corruption they manage isn't as big a deal as the policies they push through as part of their routine above-the-counter activities. It's a sausage factory, the process of making the sausage isn't going to be pretty.
[0] https://en.wikipedia.org/wiki/List_of_United_States_presiden... alone and you just need to look at Obama before and after to see what the stress does.
As opposed to now with all the highly qualified congresspersons.
Rayiner is claiming we would get better members if we raise it to $1 million per year, to which your reply is unresponsive.
[1] https://en.wikipedia.org/wiki/Salaries_of_members_of_the_Uni...
The idea is that if you pay them $1M, they won’t do their side channel earnings (and therefore reduce their potential conflicts of interest)
Both seems highly unlikely to me.
If you pay them $1M salary, then a 50k donation/bribe/dinner is less convincing.
This isn’t going to stop it, but perfect shouldn’t be the enemy of better.
Another is assuming that the price to buy support is fixed and the coffers are limited. The price might be $50k because perhaps that is the sweet spot on your target, but support and donations will go higher if needed and the special interest is motivated to garner support.
There are less "causes" that have the ability to fund a $300k bribe so even with that argument, we're still better off. (And it costs those causes more, bigger paper trails etc.)
They just hire someone to do their trading for them and buy an island to go along with their yacht.
~150k sounds like a big salary but when you're very much in charge of trillions of annual revenue it's not.
Salary is not where congresspeople make their money and if you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
We're so obviously talking about total compensation. CEOs making $1 while getting billions in stock appreciation or literally hundreds of millions in stock grants are not making $1/year by any reasonable definition.
> f you don't think that being in congress is a good way to make lots of money right now I don't know what to tell you
So, you want to keep the status quo where the people who are correctly compensated for their role are the ones willing to front-run their own citizens? (And also spending their time front-running instead of their elected job?)
No, those are actually entirely different words than what I have said.
This is nothing but wishful thinking at best, and appeal to wealth at worst.
I would happily clear and re-populate both parties with candidates sharing those traits.
MTG, on the other hand, is and always has been an internet troll, and not even a high-quality troll - merely a ball of ignorance and bigotry that comes a dime a dozen in any competitive online game lobby or forum.
Google can bring many more examples. AOC is not more intelligent than MGT. They are two sides of the same coin.
https://www.washingtonexaminer.com/opinion/1857375/three-gaf...
https://www.cnn.com/2019/01/07/politics/alexandria-ocasio-co...
https://www.telegraph.co.uk/us/politics/2024/10/30/alexandri...
Favorites might include the one where she fails in trying to identify the three branches of government, or the one where she says congressional reps are inaugurated and sign bills. Those don’t have the amusing color of MGTs idiotic statement, but they are every bit as stupid and maybe even more shocking, given her job.
You can't effectively represent the interests of others when your own needs are barely covered. I want my elected representatives paid quite well so that they have fewer excuses to succumb to the various temptations of holding such a position.
You can wish all you want that people with incredible power and responsibility should live like spiritual monks and possess only the purest and noblest of intentions, but that's not how people work, and it sure as hell isn't how politics works.
Labeling the act of someone getting paid to do a job as "bribery" is even more weird. While I certainly wouldn't do by current job if I was paid minimum wage, I don't know if I would say I'm being "bribed" by my employer to stick around. Even if it does appear to align with your new definition.
You may not like the reasons for WHY they work or not, but that is not relevant to WHETHER they work.
When I made minimum wage working at Subway, I would sneak extra sandwiches for myself here and there. I didn't strictly NEED them to physically survive, but hey -- I'm busting my ass for $7.25, I'm gonna pay myself a little bonus here and there. No one's watching, so I'm going to decide what's fair for a change.
Now I make much more than that. I no longer steal sandwiches from my employer.
I think this is the pattern for the great majority of people.
The root problem is abusing their office for financial gain.
Reducing their above the table pay doesn't actually change the abuse aspect much and the degree to which it does change things is not in a good direction.
(You see this in juries for example. They select the smart or authoritative person among them to be the foreperson and look to that person for direction. This is how humans naturally form hierarchies.)
This is a mischaracterization of juries. It's not a hierarchy. Every juror has an equal vote. And each juror gets paid the same, including the foreperson (not much, but they usually get paid something for their service).
The foreperson has two special roles: (1) to announce the verdict in court and (2) to guide the deliberations. Neither of those roles has any personal benefit to the foreperson. The second role exists merely to keep deliberations orderly, prevent them from devolving into cacophony and chaos. And in fact the foreperson is charged with making sure that every juror is allowed their input, otherwise one or a small number of jurors might dominate the discussion. Some kind of order is needed in group discussions. This is why Robert's Rules of Order exists, for example.
Democracy itself always requires some form of order: people entrusted with scheduling, administering, and counting the votes. But that doesn't make these people our leaders.
I'd much rather have a person there who doesn't need the money vs. one who does.
You want your pay to be higher? Work to raise the median salary in your state.
Will the salary cap prevent a congressman’s daughter from accepting a lucrative job offer? Will his wife’s law firm have to turn away new clients? Will his non-profit have to turn away donations?
Any system that could prevent personal enrichment of elected officials would require every freedom be taken away from them. You’d have to imprison them (and anyone who could proxy wealth for them) as soon as they take office and for decades after if you want to be sure that they were not motivated by self interest.
https://www.transparency.org/en/cpi/2024 Singapore is number 3 for the most recent report. USA by comparison is number 28. It’s an apples and oranges comparison given the vast differences in the two countries of course, and raising politician’s salaries isn’t a black and white fix for the problems in the USA.
We could make it something like 10x the median salary and still have the alignment you want, but would be more resistant to that effect.
Congressional salaries should be $1m+. It would only half a billion dollars a year. A pittance of the $6.75 trillion federal budget.
Combine that high salary with mandatory life sentences for accepting any form of graft and you have a recipe for honest people to enter government. Pretty much the Singapore model for compensation of https://en.wikipedia.org/wiki/Cabinet_of_Singapore
The problem with low or median salaries for politicians is the ratio of power to compensation. It directly encourages the griftiest of grifters to accept the low salary and abuse their positions of power.
With a high enough salary, you will attract honest people who will do the job functions knowing that any deviation from working on behalf of the people will not only make you broke, it will land you in prison for life.
That's what this purports to solve. By having the direct compensation for being an elected member of Congress be high enough that it would provide a well compensated life for someone who is not rich before becoming a politician.
Now don't get me wrong, given how often legislation in the USA and the UK seems to get rubber-stamped by members of the legislative body who did not (and in some cases could not have) actually read it, I think there's something structurally wrong with at least these two governments, where the senators and MPs are more like overpaid customer support agents and less like the legal/constitutional equivalent of software engineers doing code review or maintaining system architecture, but conditional on if we actually want the elected representatives to be the people's preferred choices amongst the best legal minds available, we have to pay enough to encourage… actually, even before that, even just to get the attention of the top m=contested_seats candidates whose views allow them to comfortably be members of each of the n=num_parties.
Now, I don't know what that pay rate is, and ChatGPT's guess would be better than mine, so the best I can do is link to a page that I only found because ChatGPT gave me a searchable phrase, "magic circle law firm": https://www.allaboutlaw.co.uk/school-leaver-law-careers/beco...
That suggests >>£1M/year in the UK. I assume the USA is more.
Consider: would you take a 90% pay-cut to do your current day job but for the public good?
(I know, not exactly what you meant though.)
What are your criteria for a "high quality candidate"?
I personally would start with honest, ethical, and selfless.
(Yes, I have no idea how you could architect such a system without having it easily gamed)
Or maybe the other way around: the ones most likely to run are the ones that shouldn't be in office.
Yeah, either way, you could probably do a lot worse than a national lottery. (Perhaps requiring some level of education but that's about it.)
In this case, start with knowing that rayiner is a lawyer who was a lobbyist for telcos… so his definition may be biased.
We're talking about politics. It's a game that simply does not select for those attributes.
We all would like altruistic bankers and energetic, ambitious DMV workers, too.
There are many people with those qualities, but you will not find them in those fields.
No, it's deadly serious.
> that simply does not select for those attributes.
I agree that it does not select for those attributes. Whether that's a simple matter is debatable, though perhaps it is simple: in the political system I live under, elections are pay-to-play and self-funded, inherently favoring candidates who can raise vast sums of money and thereby encouraging political corruption.
> We all would like altruistic bankers and energetic, ambitious DMV workers, too.
Note that these are not elected positions.
It is also a game, with players and objectives, and zero-sum outcomes for the players. You either get elected, or you don't, and it's up to each player to decide what they are willing to do in order to win.
I'll await your answer to my question about your criteria before I answer this unfortunately phrased follow-up.
Actually, I won't wait: Democracy depends on voters getting what they voted for. It's essential that there's consistency between a candidate's election campaign and the elected representative's behavior in office, otherwise you might as well vote for Mickey Mouse for all it matters. So yes, I'd take a consistent "religious nut" any day over someone who sells their soul to the highest bidder.
I have respect for people who do what they say and say what they mean, even if they don't agree with me. I have no respect for liars and con artists, regardless of their "intelligence" or "skill". The latter will always screw over the people they were elected to represent.
That only works if each vote has the same worth in the election and governing. Otherwise the whole population might be getting something that only a small number voted.
Do you think that is the case today in the United States? Or are you unaware of all of the gerrymandering currently going on throughout the country?
But Congress is a national body. Maryland is almost the exact flip of Tennessee (2:1 democrat) and democrats have gerrymandered the state so there's only 1 GOP district. Republicans have 35% of the vote, but only 12% of the representatives. At the end of the day, Congressional votes aren't taken state-by-state, and the delta between each party's share of the two-party popular vote and their share of seats typically is small.
There's no fair way to do districting. "Independent" redistricting commissions don't work. In California, which has an independent redistricting commission, republicans have just 17% of the seats despite getting 39% of the vote. It's not that much better than Illinois's extreme gerrymander, where the GOP got only 17% of seats with 46% of the popular vote.
If we mandated districts be drawn by independent commissions in every state, they'd get taken over by democrats, just like every other non-elected institution (everything from NPR to the ABA). At least the adversarial political process we have now results in relatively small, non-permanent advantages to either side. The only solution would be to ban districts all together and have a statewide vote for a party slate of candidates.
Or perhaps you were thinking that I was presenting a sufficient condition for democracy rather than a necessary condition for democracy?
For the most part, the problem is not back alley “corruption.” It’s people trying to not rock the boat too much so they can exit to something reasonable when the kids need to go to college.
The reason that legislators don't rock the boat is that they're paid by their wealthy campaign contributors to not rock the boat. But the reality is usually not honest candidates getting corrupted; rather, the wealthy campaign donors specifically select candidates who are naturally amenable to their interests, and give them boatloads of money (and needless to say, would stop giving them boatloads if they failed to do what the contributors wanted). It's a trade of money for political power, between willing parties. The political system, as it is, attracts and benefits those who are already corrupt or corruptible.
Increasingly, members of Congress are already wealthy even before taking office, so they never had any fear of paying for college. Stock trading itself is largely a luxury of the wealthy. Even those people of lesser means who do own stock typically don't trade it directly but have it managed for them by a pension or retirement fund.
The rule should be: One has to give up dream to become rich if they want to become congressmen. They should be able to live like a middle class, but not rich.
Also they need to have term limit.
That’s the way it should be. If they’re in it for a big pile of cash, they should go the proper routes. We’d be better off if our expectations were that politics does not pay well, and a politician that retires wealthy has not been a good public servant.
I'm sorry, but what? Are you proposing that being a member of Congress should come with legal insider trading as part of their compensation package?
That's downright abhorrent. Where on Earth are you getting the impression there should be a class of people uncovered by the constraints we put on literally everyone else?
1) Paying people more won't help corruption
2) You get what you pay for
So, both can be right and wrong at the same time.
I think that we need to pay them a lot more. Running and serving in congress is a hell of dumb idea for anyone that we'd want in the position. Your life gets pulled apart by the press, you spend absurd amounts of money just to get there, and you essentially have to quit your career and buy a house/condo in DC for an indeterminate timeline, you get yelled at. Smart people would not do this job; it really is a service for the people they represent. [0]
This really only allow the corrupt and the already wealthy to do the job. Issues there are obvious.
Look, the labor theory of value is wrong. Something is not worth what went into it (capital, labor, R&D, etc). Something is worth what you pay for it. This is why you don't see a lot of marxists about these days, because prices are determined by the market, not the production.
Same thing goes for CEOs and politicians. They are not worth what they produce (mostly headaches). They are worth what it takes to get them there. If you want a good one to run and try for election, then you have to make it worth their time relative to their other options. You want a good one? You have to pay exponentially.
Pro sports understands this. Sure, you can get a lot of people playing NFL any Sunday for like $10; they'll do it just for the crowds and the dream. Nearly all of them will suck. But if you incentivize correctly ($$$), then you get a much better game and viewing experience than a Sunday afternoon beer league. Better politicians means better incentive structures.
[0] campaign finance reform is also desperately needed, but that's another related subject.
A stock ban is some nice grandstanding but if they were truly serious, they'd remove money from politics.
Federal employees have more strict stock regulations and yet we still see problems with private influence on the government.
The issue is our bribery laws are ridiculously weak. It's not illegal for your pals at Nestle to pay you 10x for your house or send your kids to college.
Stock is fairly public knowledge and you owning shares in Nestle doesn't do nearly as much to influence the laws you write regulating Nestle. You can always dump the stock before sending the laws out of committee.
The one positive of banning congressional stock trading is that at least it might make congressional people more sensitive to the broad market.
But yes, I'd support outright banning crypto, especially for Congress. WAAAAY to easy to spin up a new coin that effectively works as money laundering.
That's a much worse scenario than stock currently is. It's a lot harder to create new stock.
For those unaware of it here’s a great podcast episode summarizing how it’s really cooked everything in politics: https://www.fivefourpod.com/episodes/citizens-united-v-fec/
Enh
Though they have different POVs, I think they're both hysterical.
Former prosecutor Preet Bharara (Cafe Insider) has yet another POV. More nuts & bolts. Super informative.
YMMV.
There is a lot of suckage on the Supreme Court to talk about.
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and taking the intended spirit of the site more to heart, we'd be grateful.
Does the 14th amendment survive? 19th? Maybe bibles become required equipment in classrooms. Anything becomes open for editing during a convention.
Insider trading steals money from people who are not involved with politics at all... stock owners.
At least lobbyist money is voluntarily given.
If we all did then the title would have been adequate as is.
But standard American and European options contracts are neither complex nor uniquely suited to speculation. These instruments are so fundamental that in many treatments you use them as the atoms from which to build more familiar instruments (theres a great MIT OpenCourseware about the martingale construction of an equity from binaries and calls, British guy, forget his name). You can explain such instruments to a precocious child and they've been in use by merchants and farmers and all kinds of people into the mists of antiquity.
It gives responsible financial regulation a bad name to be like "its the puts and those damn calls!"
The further away from this basic framework we go the more dangerous it gets. Derivatives are not inherently antithetical to the basic framework, but they present new options and opportunities for market distortion that can't be ignored. We've seen how badly things can go, numerous times. And that doesn't even address the problems you get with wealth concentration, especially when your currency is untethered to some sort of commodity and can inflate more freely.
I'd like to see some real changes, but the problem is that the people who would make changes are so tied up with the market itself that any changes are superficial and often merely present new avenues of chicanery. It's not likely anything will be done, and when the next collapse happens, no lessons will be learned.
Just like car insurance or home insurance. They are called options, because when you get in a car crash you have the option of calling your insurer, because you purchased insurance. When your stock crashes, you have the option to call the counter-party to cover the loss.
If options were called "insurance contracts", they would still be the same thing, and probably more understandable to the public.
Kind of similar to how Spain is fighting vacation rentals. Yes, each individual new law and change won't immediately fix the problem, but each enacted change makes a small difference and currently we seem to be moving in a really great direction to eventually have at least that particular problem solved.
Like buying the stock? You're not talking about reform - you can't remove speculation from the stock market without banning stock markets entirely.
I agree that market manipulation (especially by those in power) is an enormous problem. Can we hope to truly fix that? Or are we just going for damage control by banning derivatives or the entire stock market?
Not disagreeing that reforming the Stock Market is important, but the discussion is more generally about removing money from politics.
Nancy Pelosi and the infamous insider trading of Nvidia.
A few weeks before the CHIPS act passed congress in July 2022, Nancy Pelosi made a large purchase of Nvidia shares. This made headlines everywhere as obviously she was going to pass the CHIPS act, obviously Nvidia stands to benefit, so of course she loaded up knowing these things.
But the media, who will readily obscure any nuance that can kill a story, only mentioned that she executed call options to purchase nvidia shares. Which to 99% of the public is technical babble that is ignored.
But what actually happened? Well Pelosi, looking at her trading history, likes to buy deep ITM LEAP calls and hold them to expiry. This means in the simplest terms, that she signs a contract 1yr+ before a date, where she gives herself the option (hence the name) to purchase a set number of shares at a set price. So when Nancy purchased Nvidia shares in June 2022, she had set the contract in motion to do that at least a year prior.
But even worse for the inflammatory story, because she purchased that option over a year prior, and Nvidia was down ~15% in the last year (remember 2022 was a bad year for stocks), she actually would have lost money on the trade.
So here we have the foundational story that set this whole thing is motion, which is based on public ignorance of how stocks and options work, where Pelosi was vilified for a trade she lost money on, because the execution date of a contract she signed at least a year prior happened to be within a few weeks of the CHIPS act.
Or we can ban members of the government from trading stocks and investing while they hold office and then not have to have this discussion. I hate all politicians republicans democrats and Bernie’s (not picking on Mr. Sanders but I don’t know if there’s another registered independent in high level government) if they even have a sniff of engaging in fuckery, the job should be too important to show any possible signs of impartiality. That boat seems to have sailed away though minus their being an actual grassroots populist movement to overhaul government. And those keep seeming to dissipate or get co-opted when they do start to foment, like the occupy Wall Street type things that in my life seem to keep popping up, gaining traction, and then becoming something no one hardly talks about anymore.
I genuinely laughed out loud at the bill's original name.
Years ago I ran into the fun hack introduced in Britain's laws during my lifetime. Modern laws provide short names for themselves, so an Act might say you can refer to this as the "1996 Goat Prevention Act" and even though it has an unwieldy long full name that shorter name works everywhere you need to name it, but some older laws don't do this, so that's annoying, and also if you've repealed the law you can't use a short name which no longer exists because the law itself was repealed and that's where the short name comes from.
So, they passed a law which said when you repeal a law which gives any law a short name, those short names still work anyway. Then they passed a law which just provides convenient short names for laws people often want to refer to but don't come with short names, then they repealed that second law. Done.
Personally I think they names should be more humorous and creative but I think this one is way, way better than stupid contradictory names like the PATRIOT act.
She's a poster child for "evil congress lizard" the same way that the Kochs and Soros and Murdoch are poster children for "evil billionares" even though there's richer ones.
I'd say that we reached a nadir with "119th Congress (2025-2026): One Big Beautiful Bill Act", but that would be tempting fate.
Same reason why salary increases for senators and etc affect the _next_ session instead of the current one.
Chances are the current administration is already running awfoul of existing laws (especially the part where TrumpCoin conferred actually benefits to its holders). But given the lack of appetite from the current majority parties at enforcing the law I don't expect any changes. Can't wait for anything besides FTTP to become more widespread.
To me, it's completely obvious that this legislation should apply to the president. All the legislators know that too. Perhaps they're afraid. Perhaps they're ambitious. Either way, I'm not a fan.
> Hawley also said the legislation would ban the next president and vice president from holding or trading individual stocks while in office, meaning the legislation wouldn't affect President Trump.
If I am reading this correctly, it does apply to future presidents, right?
The '[the act] would prohibit members of Congress and their spouses from trading or holding individual stocks' made me think it only applied to them.
We have a long road still to go.
"He made a reference to billionaires, okay?" Scott said of Hawley. "I don't know when in this country it became a negative to make money. But somehow, if you've made money, you're supposedly — I think Senator Hawley suggests — you shouldn't be serving, because you might trade stocks."
"Anybody want to be poor? I don't." Scott continued. "Right? So this idea that we're going to attack people because they make money is wrong. Is absolutely wrong. We should cherish all of our different backgrounds. ... So, I think it's disgusting what is going on here."
Seems like he's using some form ad hominem to distract from the actual purpose. The purpose is not to prevent congress from getting rich. The purpose is to remove conflict of interest. Congress can have insider info on individual stocks. For example, knowing that Oracle will get approval to buy Tiktok early can change Oracle's stock price. That's insider info.
I think only allowing congress members to buy and sell index funds is fine. Not individual stocks. Or if they want to trade individual stocks, make them declare 1 month earlier and make it public.
[0] https://www.politifact.com/factchecks/2014/mar/03/florida-de...
Sensor Scott opposes the blanket ban because insider trading is already illegal, and thus the ban makes punishable otherwise entirely legal behavior. And he's right- it isn't, and shouldn't be, illegal or considered wrong to be successful, if done the right way.
There's a middle ground somewhere in there I'm sure, but given how suspiciously well some members of Congress have done, and how there's been seemingly not enough accountability of it, I'm not terribly empathetic.
It speaks volumes about the relationship between the government and the people that they nailed Martha for (a bullshit follow on charge stemming from an investigation into) a small time variant of basically the same thing.
Like how if the police shoot your dog it's just property but you shoot one of theirs and well you might as well shoot the officer too because it's another count of the same crime.
Goddamn double standards everywhere. What ever happened to equality under the law?
I see no reason not to do the same thing for Congress. The legal space is well-traveled and the fundamental concern - namely, the perverse incentives resulting from asymmetric access to valuable information - is present in Congress the esame way as in a sizable investment firm.
Index funds and mutual funds are often exempt or subject to less scrutiny, and that could be here too.
https://www.newsweek.com/stock-act-congress-violations-tradi...
Making the rules simpler will make it easier to comply. Removing the incentive for insider trades strikes me as a good thing.
The fact is, the vast majority of Congress people _own index funds_ or similar portfolio construction.
When there are outliers they regress after a few years. The last time I ran the numbers the the majority of the outliers just got into Nvidia a little early. They mostly had tech heavy portfolio construction.
The big outliers were people like Pelosi who were married to wealthy spouses who were doing exotic trading, but several of them did poorly as well.
The fact is, Congress people have more scrutiny on their trades than the average person and more downsides.
We should restrict trading by Congress people because of the image of impropriety not because it’s actually common to make a bunch of money doing it.
The parent commenter pointed out the middle ground:
> I think only allowing congress members to buy and sell index funds is fine.
They’re the smarter place for people to put their money but I wouldn’t consider them a comparable product.
Additionally, your description of how people purchase and make money on indexes funds is incomplete at best. Really, it's just factually incorrect in that it presumes a certain purchase strategy. People do short-term, dopamine-inducing trades of index funds all the time.
But, I don't think elected representatives should be able to do that, either. At the very least, successful short term trading - directly or through an advisor, of an individual security or a fund - creates the appearance of impropriety.
If congress has to bet on the overall economy instead of e.g. spotting that riot gear providers goes up when country goes down, that would be a good thing?
If a congress person gets that info from oracle or TikTok or someone with fiduciary duty to their shareholders that’s insider info (in the US) and that congress person is subject to existing insider trading laws.
If they get it as part of their duties in Congress it’s not insider info, the same way any other person without the fiduciary duty.
It may be an abuse of power and we may want to ban it, but it’s not insider trading.
It’s an important distinction because insider trading laws (in the US) are not predicated on open access to information, rather on not stealing from people you have a duty to. It’s not a fairness doctrine it’s property rights one.
Nice little carve out for the big guy.
Ban money in politics. Overturn citizen v united.
https://www.harvardmagazine.com/2012/06/a-radical-fix-for-th...
But stopping it by saying we should tilt at another windmill? I don't see the benefit of that, I only see it being used as a tactic to stop good legislation in favor of the impossible great.
Agree. But allowing legislators to trade and vote on legislation that affects their holdings is a part of "ban money in politics".