This is a perfect example of Democrats reaching out with obvious solutions that everyone should agree on. Hah! Again, they attempt to treat a symptom, but do nothing at all to cure the disease.
James Kvaal, national policy director for the Obama for America team sent out an email today brandishing the “isn’t this obvious” card, wondering why Republicans were so unwilling to pass legislation that made insider trading among congress-critters illegal. From the email…
Right now, members of Congress can make personal investment decisions based on confidential information they get in the course of regulating industries and doing their work.
It’s kind of unbelievable that this isn’t already illegal. President Obama wants to make it illegal once and for all — no one should profit from inside information about the very businesses they’re supposed to be regulating.
Today, the Democratic leadership in the Senate voted to move forward on a bill to extend to Congress the same strict rules that apply to anyone else whose job gives them access to sensitive information about businesses. This legislation is expected to pass the Senate with bipartisan support later this week.
But Republicans in the House have yet to move on it.
There aren’t a lot of good reasons to disagree with this bill. So the question here isn’t how many people we have to persuade, but simply how loudly we can speak up to prevent the House Republicans from dodging this issue.
Members of Congress already have to disclose financial information every year. Check out the Financial Disclosure section starting on page 247 of the House Ethics Manual. Every financial transaction more than $1,000 must be disclosed … even if they set up a college fund for their 10 year-old daughter.
Instead of cutting off those in Congress from making personal investment decisions or implementing more rules and reporting, why don’t we just limit the power the federal government has from picking winners and losers? I know, I sound like a broken record but almost every major issue in Washington can be solved if we take the time to consider this solution. Sure, you’d have issues a the state level with corruption, but with the action closer to home, state residents would certainly become more involved and bring the pitchforks during visits to their local town halls and state capitals when the need to call out corruption surfaces.
I’m not advocating violence, just pointing out that politicians would not be able to get away with most of the crap they get away with now since the decisions are made on another planet … in some parallel universe called Washington, DC.
As I noted, the problem with this legislation is that it treats a symptom and not the disease. We have to ask the question, will legislation like the STOCK Act do any good or will it actually embolden the congress-critters to do more “insider trading” once the rules are specified?
The legislation – and this post is specific to the law as it would be applied to congress-critters – reads in part…
… prohibit any person from buying or selling any commodity for future delivery or swap while such person is in possession of material nonpublic information, as defined by the Commission, relating to any pending or prospective legislative action relating to such commodity …
From Jonathan Macey in the Wall Street Journal on Dec. 13, with my emphasis in bold.
On closer examination, it appears that what Congress really wants is to keep making the big bucks that come from trading on inside information but to trick those outside of the Beltway into believing they are doing something about this corruption. For one thing, the rules proposed for Capitol Hill are not like those that apply to the rest of us. Ours are so broad and vague that prosecutors enjoy almost unfettered discretion in deciding when and whom to prosecute.
Congress’s rules would be clear and precise. And not too broad; in fact they are too narrow. For example, the proposed rules in the Stock bill are directed only at information related to pending legislation. It would appear that inside information obtained by a congressman during a regulatory briefing, or in another context unrelated to pending legislation, would not be covered.
So, currently we require full disclosure once per year. New rules would require reporting every 90 days – of course, their budgets will be increased to cover the additional cost of reporting and we’ll pay that tab in more taxes – and ensure congress-critters can not trade on information they learn from information related to pending or prospective legislation.
In other words, the STOCK Act writes into law that all information gathered by politicians inside the beltway – except when specifically associated with pending or prospective legislation – would be fair game to trade on. It will not stop insider trading, and will no doubt actually increase the amount of “insider trading” by the elected beltway elite, simply because their rules are clearly defined and very narrow. I’m telling you … most of the information gathered by politicians is not directly associated with pending or prospective legislation.
When President Obama talks about change in Washington, just remember it’s a total whitewash.