It infuriates me when members of Congress — whether Republican or Democrat — squander the public’s trust. There’s so little of it left to squander. So when I find a conflict of interest by members of Congress for which there’s an easy remedy, I’m ready to shout it from the rooftops. And when I discover Congress won’t take action, I’m ready to scream.
Today I want to talk about a very big conflict, with a very easy remedy. And I’d like your help getting the word out and putting pressure on Congress to adopt it.
First, some background. Unless you have special insider information about what’s going to happen to the economy or to certain companies — information that very few other investors have — the buying and selling of individual shares of stock is a terrible investment strategy. This is why the vast majority of Americans who invest in the stock market invest in index funds that are tied to the performance of the stock market as a whole.
So why do many members of Congress continue to invest in individual stocks? Could it possibly be that they learn useful things about what’s going to happen to the economy or individual companies before the rest of us do?
It certainly seems so.
In January 2020, a handful of senators — including Richard Burr, Dianne Feinstein, and Kelly Loeffler — made significant stock trades after receiving a classified briefing on COVID-19. This was January 2020, mind you — well before the public knew the full extent of the threat.
Then in the early weeks of the pandemic, nearly 75 federal lawmakers bought stocks in COVID-19 vaccine makers Moderna, Johnson & Johnson, or Pfizer.
I could give you a lot more examples, but you get the point. Even if these were innocent investments that weren’t based on inside knowledge, they certainly smell like insider trades. At the least, they create the appearance of self-dealing. They undermine public trust.
A huge amount of information about the economy and individual companies courses through Congress every day. Much of it is not available to the public. Some of it indicates what’s likely to happen to a particular company’s share prices. There is no possible way to guard against the misuse of this information for personal profit. So why allow individual stock trades? There is simply no legitimate reason why members of Congress (or their families) should be trading individual shares of stock.
(By the way, “Insider” has just published the most complete and detailed public accounting to date of the stock transactions of individual members of Congress — one for the Senate and one for the House. It’s eye-opening. But disclosure alone won’t solve the conflict-of-interest problem because it’s impossible to tell whether the transactions were based on inside information.)
There’s an obvious solution: Bar members of Congress from trading individual stocks.
The proposed Ban Conflicted Trading Act does just this. Lawmakers would have six months after being elected to sell their individual stock holdings, transfer them to a blind trust over which they have no control, or hold onto them until they leave office without trading them. (Senator Jon Ossoff of Georgia just introduced legislation that would also bar family members of our representatives and senators from trading stocks.)
This is an easy and appropriate fix. It doesn’t penalize members of Congress or their families. They can still invest in index funds, like most other stock market investors. They just can’t trade individual stocks.
But Congress has yet to hold a vote on this bill. Why?
Last April, Ron Lieber of the New York Times asked newly elected members of Congress if they would pledge not to trade individual stocks while in office. Few were willing. Most didn’t even respond.
It gets worse. Last month, House Speaker Nancy Pelosi rejected the idea of banning politicians and their families from trading stocks while in office. (She was asked about it by a reporter from “Insider,” which recently published an investigation about lawmakers’ trades.)
I’m a big admirer of Nancy Pelosi. But, with due respect, she’s dead wrong on this one.
With distrust in government near an all-time high, even the appearance of a conflict of interest hurts our democracy. Members of Congress are elected to represent the interests of the people, not the money in their brokerage accounts. Banning members of Congress from trading individual stocks should be a no-brainer.
Congress should pass the Ban Conflicted Trading Act. Now. You might suggest this to your own members of Congress.
What do you think?
Government oversight has gotten sloppy, and with a wink and a nod and no one really watching them, at least no one with power to do something, elected federal officials can safely engage in unethical and even criminal conduct that would land lesser mortals like you and me in jail, or at least cost us our jobs.
If you want to see the worst of runaway corruption, take a look at the four years of the Trump administration and how Trump, his family members and political appointees spent a lot of their time cashing in on their positions. Even once they're out of power, they can still cash in. Jared heads to Saudi Arabia to gather big bucks for his new hedge fund, while Trump fundraises many millions from his gullible followers who believe the Big Lie and want to help Trump battle against those who supposedly did him dirt, not realizing that those millions will largely wind up in Donald's pockets.
It's been an open and dirty secret that lobbyists, whose numbers have exploded in recent years, wine and dine and give special perks in order to convince Senators, Congressmen and top agency officials to vote or handle/ignore legislative requirements just the way the employers of the lobbyists want them to.
Ever wonder how a typical member of Congress, who enters federal service without much money, is able to retire not just on their government pension but with millions of dollars in bank accounts here and abroad, a beautiful estate and a cushy life in retirement? For lobbyists, it's a no-brainer: just give a solid stock tip to your pigeon, enabling that person to make some hundreds of thousands of dollars in the market and in the process the lobbyist gets a key vote on a committee considering a regulation that will save their employer tens or even hundreds of millions of dollars going forward. As the saying goes, a penny gets you a pound. Cheap any way you look at it; no wonder K Street is making a killing.
When was the last time an elected, or unelected, government official got busted so badly they went to prison for, let's say, insider trading? It's rare, but it happens. Occasionally individual investors or Wall Street folks do get busted and go to prison, sometimes for years but the occasional celebrity conviction is a smoke screen taking attention away from all the others who are doing the same thing.
It's a rich person's game. Money buys you influence, and influence buys you ever more money. And with politicians working steadily to weaken the IRS and the SEC, there are fewer financial or legal cops on the beat. Hobble the regulatory cops, and white collar crime becomes the easy way to riches. And nothing ever changes.
Forty years ago, only 8 percent of retiring members of Congress went on to lobby their former colleagues. Today, almost half of retiring members of Congress become lobbyists. The reason isn't that retirees 40 years ago had more scruples. It's that there's are more money to be made today from lobbying.
That's right, and it seems the nation is on a big money binge where aggressive people want to have millions (you need that to get a good apartment in a big city) and some go for billions and even that doesn't seem to be enough. It's almost as if it's a craze; everything is more expensive and more and more people are wealthy - except for the large majority of Americans who definitely aren't.
Leave it to George Carlin to lay it all out.
All members of Congress and their senior staff, the President and his Cabinet members and senior advisors, all Supreme Court justices and senior staff, and other senior government officials should have all their investments in a blind trust, managed by a disinterested party, period. They should have no idea where their money is invested to prevent the information from influencing their actions.
Will do. I will send my representatives some letters and weave it in to my on-line and person to person discussions.
May I suggest another strategy? All of us have local government officials - people that we elect like city council members, county supervisors and school board members. Local government meetings begin with a public comment section, but even in large cities, just a handful of citizens show up. And that needs to stop.
People take their local governments for granted. They'll fill out their ballots, cast votes for President Congress, Governor, etc. but won't even bother voting for local government candidates. They leave those sections blank or close their eyes and choose one. Shame, shame, shame. There is so little interest in local government, the typical campaign for city council hovers around $200.00. Big cities, bigger populations, bigger campaign budgets, but still the same pathetic percentage of civic interest, or engagement.
The Republicans are busy filling these local government positions with hand chosen people. People they are coaching and advising. And they are funding their campaigns. Its dirt cheap politics. For a measly $1,000. bucks, they can buy control of a school board, a city council or a board of supervisors. In his district, Kevin McCarthy is famous for showing up for a photo-op with some unknown candidate for local government office. That photo-op is all it takes to get someone elected.
I suggest we start attending at least one local government meeting a month. You don't have to do or say anything. All you have to do is show up and sit there until the meeting is adjourned. I can tell you - no I promise you - that just showing up makes a difference. Building a civic show-up network is the key to activists' success - and citizens' success. continued
Remember all those videos and tv coverage of school board meetings where lots of angry people showed up screaming and hollering about Critical Race Theory? Well, I watched the school board members and everyone of them was squirming. They had no idea what to do or how to run those meetings, so they just sat there while people screamed in their faces. Worse yet, the screaming citizens honestly believed those school board members could do anything they wanted. If that were true, those school board members would be dictators - not representatives.
Anyways, the point is this. When 200 people show up at a local government meeting, local officials gain power and I don't mean power over their communities. I mean local officials gain power with higher ranking officials - like state legislators, state senators and governors. Without us, local officials are powerless. We, are the fuel, that empowers them. We fuel them by showing up at their local government meetings.
Every one of us can kick start a grassroots revolution right in our own backyards, by showing up at one local government meeting a month. At the beginning of public meetings, there is a public comment section. Its usually a three minute time limit.
During public comment, go to the microphone and ask your elected officials their position on barring members of Congress from trading individual stocks? They cannot discuss it, because it is not an agenda item, so ask them to put it on their next agenda, so they can answer your question. Your goal is to force your local officials to take a stand on this issue so that everyone of their neighbors and co-workers knows exactly what they think about conflicts of interest issues with elected officials. Start nailing local officials on these kinds of issues, and they will carry your message up the political ladder.
Note. Public comments cannot limit the number of people who comment. So bring along some friends, some golf buddies, some neighbors and some family members. Each one of them gets up asks the same question then asks for the item to be placed on the agenda.
If you have the time, go to your local city hall, your school district administrative office and board of supervisor office and ask for a copy of the elected officials by-laws. They might charge you for the copies. Then read them. There should be something in there that addresses "conflicts of interest" When you find that by-law, you have the premise on which you have a right to an answer from your local officials.
The whole point is to turn this Congressional conflict of interest issue into a problem for local officials.
I like this Ossoff guy more and more. Time to back him up, by sending some money to Georgia's Stacey Abrams and Congressman Reverend Warnock.
yes, Yes, YES!!! Thanks for posting this, raffey.
Excellent idea, Raffey! Going Grassroots is a sure way of getting this on everyone's agenda.
I signed up for our city's on-line advisor. Now I get city council agendas and minutes in my email box. Makes it a whole lot easier to track. It also gives us time to gather information and meet to coordinate our efforts before they meet.
But is it safe for us older people to do this with omicron raging?
I just got the booster yesterday so I admit I'm still being cautious, and Massachusetts is being hit really hard right now. I probably won't be rushing into the fray immediately, but I will be looking into local opportunities.
Paula - write a dear editor letter for your local newspaper. Your local government may be meeting on-line, if so, do public comment there. If you can't find a way to do it safely, call city hall, or school district offices and ask them how to do it. Remember public input is law.
👍👍
Very wise advice, in my view. Thank you.
It is also personally rewarding, because it makes you feel like a real citizen.
Love this, raffey -- right on!
Amen, my friend! Thank you for pointing out that REPUBLICANS are using DEMOCRACY to defeat DEMOCRATS!
Only at the local level. But at the state and national level, Republicans are stealing power from Democracy itself.
Congressional lawmakers should not be allowed to trade stocks. Period. Their holdings should be in a blind trust when they enter government. However the consequences of Congressmen owning stock is far more harmful to American lives. Richard Burr and others not only knew of the severity of Covid but HID that knowledge until they were able to financially leverage big bucks for themselves first. They withheld catastrophic information about a pandemic to make money in pharmaceutical stocks. Diane Feinstein has for YEARS made money on the armaments industry. Feinstein's in Congress, keeps our "forever wars" going and her husband is the money guy behind her doing the investing. They're a team, Feinstein keeps the wars going and her husband keeps the money rolling in. Geez, the corruption in Congress is way worse than anyone can imagine. How many Americans have died in these endless wars because Congressman could enrich themselves sacrificing the lives of their citizens. Feinstein is not the only one. With this level of corruption where does it end? Ever? How bad does American life become because of practices like these? The AG hasn't done anything about Mark Meadows, why should Kevin McCarthy not get away with giving "the bird" to the January 6th committee. My point is this, IT'S ALL CORRUPT. Now what?
Don't forget what Eisenhower said in his farewell speech, "beware of the military-industrial complex".
We have forgot. his warning, and Now the police are now more militaristic!!!
I don’t understand Feinstein at all. She’s nearly 90 and rich. Why does she need more money? She’s been a plague on California for decades. She needs to go,
She is a classic example of why we need, desperately need, term limits in Congress AND the Supreme Court! I could list all the old folks I want to see out of there.
Let me add she totally dropped the ball on the way she handled the information regarding Kavanaugh's accuser! I used to love her, but its time to go!
Also, I don’t know if this is true but I’ve heard she’s got Alzheimer’s.
I heard that also
It is pretty obvious that our Government Leadership does not know what they are doing on just about every level. There should be time limits on how long ANYONE holds any kind of office. It is set up that way for being President. Should be the same rule for every other office held by anyone who is VOTED into a position.
Do you think the problem may be that potential candidate that could run against her in a primary will not do so because people in her district may not support a younger candidate? Our youth must be encouraged and supported to run for political positions to make changes.
No. I think it’s because she has name recognition.
Yes, Feinstein needs to go.
I KNOW! TOTALLY AGREE! Californians have kept electing her for years, unbelievable. She's a Congressional kleptocrat. By that I mean, the money she and her husband have amassed and the lives lost in wars she continually supported is shocking....but her constituents don't know or they don't care.
I voted for Kevin DeLeon the last time she ran. So frustrating.
Good for you! At least you tried to get her out.
Amen. thank you for reading my mind...and saying it so eloquently.
Thank you....I also remember Feinstein's behavior during the Kavanaugh hearings and was disgusted with her. But I have long been furious with her over her greed, amassing money through our wars with her husband being her financial guy.
Well said. Can I copy and paste?
Thank you. Of course, copy and paste all you like.
While employed as a federal employee we received ethics training. The rule of thumb was, if something has even the possible appearance of being a conflict of interest/unethical, DON’T DO IT.
So simple!
Yet, apparently, so difficult.
As I recall, the last guy's Ethics Czar abandoned ship early on. It was a hopeless position.
There’s an oxymoron for you.
Mark Borgman ; No doubt.
Dear Sir,
Before anything else, I want to let you know that I shared your last video, "Taking on your tweets," on Facebook, Twitter, and Reddit with the following comment: "Robert Reich is the medication that corporate media brained-washed Americans should take every day!" More mean tweets coming your way...
Speaking of sickness, our representatives are ailed with FOMO. They consider themselves important public servants but do not want to miss out on the money either. They should probably be reminded that the United States is a country, not just a shopping mall.
And yet, a "shopping mall" is precisely what most of the world views us as.... sadly.
Is there a petition out to send to our representatives to pass this act? if so, please post and I will sign.
https://secure.ngpvan.com/ivecXOHAZkKkv-noZM5ipA2
Almost more than anything else, I am ashamed of our legislators who almost never put the country before their partisan or personal interests. Few are there who display the genuine qualities of "leadership".
I know many principled legislators. The problem is with a relative minority who give most lawmakers a bad name. That's why it's so important to get this law enacted. Even the appearance of impropriety hurts all of them.
This is a no brainer for anyone with integrity.
Totally agree & power to Ossoff!
Interesting that you mention index funds, as my understanding is that generally speaking (I assume there are exceptions; always seem to be exceptions) index funds support a broad swath of businesses in the US economy & allowing investment in index funds by the country's representatives in Congress would thus support the broader economy if I am understanding correctly -- thus also aligning with the purpose of those that hold seats in Congress.
Will keep a eye out for when Ossoff brings this bill to the floor & do what I can to support/cajole/pressure others on the floor (& in states other than those in my neck of woods who do support this type of legislation) to support the passing of this particular bill.
Trading in individual stocks by members of Congress actually feels & sounds to me like said Congress members are "ripping off" the general populace in addition to not upholding their oath of office -- should be illegal & those that break such a badly needed rule should suffer heavy penalties, including loss of office.
As you said, It should be a no-brainer. It's so obvious that I can't help being suspicious of anyone who doesn't support it. Even the venerated Nancy Pelosi. We ask it of our President - for obvious reasons - and for the same reasons we should ask it of anyone who serves in higher office. There is no ground for debate.
P. S. When do you ever sleep?
I was asking myself the same question.
There should be one code of ethics for all federal positions which would include Congress, the President, the Supreme Court, etc. That code of ethics should not only cover stock tradings but also business dealings where the federal employee or family members (elected, appointed, etc) must recuse themselves from any decision making, rule making, etc. that may impact their business/financial interest. This would preclude someone like Joe Manchin from having any say on environmental rules related to the fossil fuel industry. I could go on and on on the lack of trust people have regarding governmental decision makers due to a lack of enforcement of a strong code of ethics.
You know, Robert, this is just ONE example of why the general public does not trust it's own government. Why Should They??? There is so much corruption surrounding the whole governing system that people doen't even know who to trust, much less support or vote for. The rest of the world is showing signs of mistrust toward our government. I think it is safe to say that a lot of people (especially Independent Voters} are very leary about expecting much REAL support from their government both now and in the future. It might be better in the future to NOT remind the public of these kinds of "Crimes Against Justice". There is really nothing that the general population of our country can do to get our governing appointed agents to respect our existing Constitution of Laws. We don't seem to have a very good screening system of who should be allowed to run for the office of anything in our government system. And if all of that is not enough, I would like to know if there are any limitations on who can run for all of the jobs that people vote on throughout the entire USA. Any kind of background checks that should exist? Our Government is in BIG trouble on so many levels, and nobody knows how to deal with all of these issues. My personal outlook on all of this is that the existing government appointed people are going to have to do the job for the entire nation. The general public's only strength left is our VOTE. Even that is under assault from the criminal elected subject's that currently seem to have the power to obstruct voting rights. Everything is up to our current Government elected officials. Not a very promising picture considering who we have left that can be trusted.
When we point our fingers at the government, we are pointing more at ourselves. Changes can be made., The problem is that the public have become apathetic, and have tolerated some of the things that are occurring in D.C. You say that there is so much corruption surrounding the whole governing system. I do not see it that way, there are thing that our elected officials are doing that should not be allowed, however we the people continue electing these same people and we do not demand that changes be made. Our government as a whole is not as corrupt as you think. As to candidates, you as a voter have to perform your due diligence and determine what the candidate's position is on issues that you deeply care for. If a candidate is a felon, he/she can't run for a public elected position.
I do not point my fingers at the Government. I just have expectations of what they are responsible for while in office, and if they fail, I don't vote for that person or those persons ever again.
There are some who give me hope in Congress. Off the top of my head I must say Jamie Raskin. Outside of Congress, Robert Reich....there are others in Congress. Maybe that would be a good exercise, how many of us can name those we have faith in?
My two hopefuls for being Governing Saviors are: Bernie Sanders and Robert Reich. The other hopefuls are the elected people who agree with my choices of solid leadership.
Bernie Sanders for sure...AOC, Katie Porter....some good people...I know there are more, just not enough.
yes, to me the midterms are critical to our democracy. we've got to overwhelm them with numbers. and then defend the vote counts. my rheumatiz says there's a storm a comin'
It makes me livid. For heaven’s sake, didn’t Martha Stewart do time for this? If the Democrats won’t do the right thing, what party do we have left? None.
Yes, Martha Stewart did time for the same crime! Does this whole subject sound fair minded to you?
please to forgive #1 son he is slow and does not understand 'fair minded'
Being "Fair Minded" can cover a multitude of subjects. It is really a very 'Slippery' way of discrediting any subject issue.
Our Representatives should be in office to serve the people. PERIOD. There should be no opportunities for self enrichment.
BOTH HOUSES = PASS A BASIC LAW _ PROHIBITING THIS BEHAVIOR + JUST STOP = NO MORE !!
Right on, Mr. Reich, as amazingly usual! I would like to bring to everyone's attention a wonderful organization which is fighting such trust-crushing conflicts of interest in Pennsylvania- March on Harrisburg (moh.org). They are fighting creatively and often bravely for gift bans in the PA House and Senate and other measures which seem necessary and common sense to most except sometimes not enough elected representatives and those who influence them! I will write to my U.S. Representative Mike Doyle, to Jerry Dickinson who is my favored candidate to replace him and I imagine would be on board, and to our U.S. Senators. You are not "preaching to deaf (or passive) ears" in my case.
Ed Wrenn ; I wonder about the 'junkets' given to the Supreme Court?
I wonder about a lot of things like this. We should hold all of our "public servants" to a high standard of fairness to us.
Sorry, fellow libs, but Nancy Pelosi and corporate Dems are almost as corrupt as Republicans. Almost, but not quite. It's not just Manchin and Sinema who take bribes from Big Pharma, Big Ag, military lobbyists, Big Energy,etc.
definitely bipartisanship working here...no wonder manchin has no problem with it
You are SPOT-ON, Dave DiDemenice!!!
NO. seems they have more revenue streams then the Mississippi delta
Wasn't Chris Collins from upstate NY forced to retire and pled guilty for giving inside information from on the White House lawn??
Yet if he personally had purchased stock based on that same information he received in the regular course of business while working as a member of Congress, that's ok???
Do I have that right??
As an attorney we are supposed not to only avoid a "conflict" or "impropriety", but also the 'appearance' of any conflict or impropriety. That should be the same standard for members of Congress.
A bipartisan commission (acting similar to the State Disciplinary Bars) would never work.
In the end it would be used for political motivations.
However, the Congressional Code of Ethics must be amended to strictly prohibit members from trading in individual stocks.
Importantly, it should also contain a provision that any violation of that rule would be automatic grounds for impeachment.
I’m wondering if people realize how much damage Congress does to our tax system yearly, including tax avoidance themselves? There are so many ways they have shifted the bulk of the tax burden to their constituents and away from businesses and the wealthy. Tha ACA was supposed to be a great step in the right direction, payment schedule to cover the cost without all the burden placed on the American people. It passed, then the lobbyist descended upon Washington.
Ways to pay for ACA:
-Small businesses reporting-17 billon over 10 years-eliminated.
- Cadillac tax 200billion over 10 years
-no insurance penalties, 4billion 2018- eliminated
-tax on medical devices, 200billion over 10 years- eliminated
- penalties for large corporations who don’t offer health insurance- eliminated
-billions in fees to health insurance and drug companies- eliminated or delayed
- yes we’re still subsidizing hospitals for the cost of treating the uninsured, estimated cost for uninsured Covid patients 17 billion.
Your elected representatives have done this everywhere in our government, nickel and dimming the American tax system.
Even worse, look at Steve Bannon. Bannon not only continues to hold court with his podcast but is busy behind the scenes getting anti-democratic/fascist, dismantle the administrative state actors working in local politics in states nationwide. NOTHING TO STOP HIM! Imagine, just for a moment the massive damage a guy like that is doing right out in the open, non-stop, no one stopping him, least of all the rule of law.
The problem is not only insider trading, which is bad enough. Members of Congress are in a position to enact legislation that benefits the companies in which they hold stock. For example, members of Congress who own stocks in fossil fuel companies may vehemently oppose legislation forcing the companies to clean up the environmental messes they have created because it would adversely affect their personal bottom lines.
yup!!
What reasoning did Nancy Pelosi offer for members of Congress to trade stocks? That is amazing to me. Who is left in power with a strict moral compass.
Nancy's "reasoning" can be found here https://www.youtube.com/watch?v=CPbZMneLTjg
A questionable deal by Nancy can be found here https://www.youtube.com/watch?v=xNDHiiJaxes
Ridiculous
I agree it should be passed, but when has Congress EVER passed something that limited their own powers?
I recall Martha Steward was convicted of insider trading so there must be some laws on the books about it. She wasn't the only person to be convicted. Don't these laws apply to members of congress?
Actually, Martha Stewart was convicted of lying to federal officials. They could not prove insider trading. Yes, trading stocks on non-public information is a federal criminal offense, for members of Congress and everyone else. The problem is that it is often difficult to prove that someone traded a stock based solely on information unknown to the public. That said, a member of Congress named Chris Collins was convicted of securities fraud and other offenses for advising his son to sell stock based on nonpublic information. In that case, he was caught in the act. Trump pardoned him at the end of his presidency.
Astonishingly, as Rachel Maddow reported last night, while the serious federal charges were pending against Collins, he was reelected. Although he did subsequently resign, clearly the public needs to pay more attention to what members of Congress are doing.
1000% agree! We need to completely disentangle $ from politics, so that our lawmakers are acting in their constituents best interests instead of their own. This is huge reason why so many people are fed up with BOTH parties. How can we help get this passed if there is so little interest from self-interested politicians?
The more opportunities a position in Congress affords its members insider ways to enrich themselves via insider information, the more it distorts the sacred service to the public such positions are suppose to represent, and turn them into a self aggrandizing careers dedicated to their own ends. A number of studies have shown that it is easier for crocks to steal from the public the more removed they are from getting caught. Like a bombardier, dropping bombs from 30,000 feet during a war, on people who look like little specks, Congress members who "work the system" become so removed from their feelings to their wrong doing, they no longer relate to the consequences of theirs acts, and how it creates destructive ripples throughout society. So what they can get away with to accumulate wealth and power becomes the primary driver of their job, rather then what they can do to serve their constituents. Thus the old saying "power corrupts" rings as true today as it ever did. Everyone should be subject to term limits in such a way as to preserve the sacred nature of service to the public.
This is an extension of the theme "get the money out of politics" which should not only apply to elections but also to using any political office as a means to make money.
Until we get a younger generation involved in administration, with a new mind set, we will see no change in greed and power on either side of the isle. A new form of service to the nation, excepted by all and especially the elected, will put confidence back in the country
Oh gosh, I hope you’re right. But which younger generation? Not the Jared Kushners and the Eric Trumps, I hope.
Yet another symptom of too much money awash in Washington (say that 10x real fast), drowning out the needs of everyday working class, poor and middle class Americans for a level economic playing field, a fair and just safety net, affordable college, clean air and water, reliable electricity, and affordable internet access. For a full list of grievances refer to Dr. Reich's videos!
Pelosi's stance sucks, but not at all unexpected since she's part of the pro-corporate Congressional delegation. Zero of these reform bills on any issue will pass with this Congress, but we have a more immediate problem with cult addled Republicans seeing the world through orange tinted glasses, and taking what little spine (if any) the Murkowski's, Romney's and Collins' had in their invertebrate bodies. Actually that sentiment really applies to Susan Collins.
She just won another 6 years in office, so what does she have to lose politically in an electorate rife with short term memory loss? She's no Margaret Chase Smith or John McCain (her supposed heroes) that's for sure.
The cult Rs have to go first, so at least some of these popular bills can pass, with pro-corporate modifications to be sure (b/c progressives are still a minority group in the D party), and to paraphrase Dr. King "bend the arc" of public policy in the right direction.
I think this ban on members of Congress trading individual stocks is a good idea and plan to request that my representatives in Congress pass such a law.
Yes, indeed. Won't they then ask Jill, the girlfriend of cousin Rich, to do the trading for them? And what about the tsunami of anonymous money financing their campaigns? Much more difficult to eliminate, you will say. We do trust the powerful and the rich to continue rigging the system for their profit, at our expense. The "Vile maxim of the Masters of Mankind: all for us, and nothing for the rest" is well and alive, exercised in constantly updates multiplicity of ways. Plug a hole here, and the robbery moves to the other holes. We need regime change.
Lagardere ; But the secret to triumph is in the first syllable, tri, as in try. Why make it so easy with no actual law? That in law may have principles, or may not, and now they have something on the one who wants to cheat.
Back when 3 members of my family were in government in DC we each got lucrative tips on what to buy.
Thanks, Martha, for posting this . . .
Add this to the list of wishful thinking reforms that will not happen until the entire climate of opinion changes within the Democratic Party.
The idea that you will individually benefit from betting on a stock rather than having the state tax incomes, assets, and profits, and then provide you with the basics of a human existence such as healthcare, education, and affordable housing absolutely infects the centrists who dominate the Democratic Party.
These people vote with their corporate benefactors because they want to personally benefit. They know they are at most very junior partners in the capital allocation process. Trump is a veteran of paying off these people.
Until the climate of opinion changes amongst centrist Democrats and they understand that they have more in common with the 90% of the population that have no spare capital to invest in anything there is no prospect for the reform you suggest.
I have no doubt that workers hate those in Congress that call themselves Democrats and do this type of self aggrandisement even more than they hate Republicans. Hypocrites!
Just another reason why we are headed down the drain of Fascism.
Interesting point, Peter, on hypocrisy getting folks' goat, & turning them away from Democratic party, more than digging into generally advantageous policies for the working population supported even by some of the centrists . . . I tend to be left of left, but gravitate towards supporting the center to actually get things accomplished in my lifetime. I always appreciate hearing about others' perceptions of the fault lines that keep the "common man/woman/they" from adopting a party more beneficial to their bread & butter issues than the other, currently disastrous and deadly, party given we are currently stuck in the two-party system, even as I might wish to upend/undermine this harmful, simplistic & unproductive system altogether. Thanks for posting your thoughts.
Who is charged with investigating insider trading at companies - the SEC? Members of Congress who have used confidential information to buy and trade stocks should be investigated for insider trading - or is the SEC as corrupt as our current Congress?
Dee Long ; I agree that this behavior should be investigated and can't see why it would be legal. It's guaranteed that people doing this are part of a conflict of interest, or even a 'protection racket' and they would never support legislation to end it, or police any corruption of Wall street.
I totally agree Robert. I also appreciate your recommendations for investing. I will make my opinion know to Congress and will pressure Nancy. Its discouraging since they have zero respect for a democracy and voting rights. I’m thinking she’s part of the problem since banning insider trading is the obvious right thing to do. Reminds me of running a business. Do we offer incentive to an employee to a better job or do we reward him for what he has done on his own? The dynamics are different. They resent not having been paid more in the first place versus proud of being a team member and contributing as though they are a owner of the company. Congress takes their incentives for granted and now they want it all.
Maybe at some point we can move onto health care benefits.They deny Americans universal healthcare but have it for themselves. In case we missed it, they are already a dictatorship. Thank you
Robert, I am one month older than you. Most of what has is currently happening does not surprise me. I have been following politics and society since 1956 when President Eisenhower ran against Stevenson. I was raised in a large family where my dad, a steel worker, was a union member who strongly believe that the Democratic Party was the party of the working class. I have made it a point of getting involved in some local elections and to a limited extend national elections. Today many if not all politicians have an ego larger than a house. They are more concern with acquiring wealth, than providing for the needs of the citizens they represent. Most politicians can't empathize with the people they represent. What is the average age of the politicians in D.C.? Why don't we have term limits? Why have we not controlled political financing? For this and many other reasons politicians will not limit their opportunity of acquiring wealth. Many of those that preach that the LOVE of MONEY is the root of all evil are the very ones that LOVE MONEY (Wealth, Materialistic). We have become a very materialistic society. Some people put their hope on the future generation to bring about positive changes. I have doubts if the changes will be sufficient. When I was in college, during a sociology class, the professor stated that race relation problems would greatly improve with the new generation. My comment was, "Children are the sons and daughters of their parents". (Many values are learned at home).
Look at Kevin McCarthy who just told us that the January 6th committee is "illegitimate" and partisan. What an immense farce that statement is given his pervasive partisan statements and actions. Let's change "Let's go Brandon" to "Let's go Kevin"!
Republicans can’t win elections anymore so they short the market instead
What Congress is doing in broad daylight is in violation of SEC Rule 10b-5. According to the SEC -
Rule 10b-5 Prohibition on Insider Trading.
"SEC Rule 10b-5 prohibits corporate officers and directors or other insider employees from using confidential corporate information to reap a profit (or avoid a loss) by trading in the Company’s stock. This rule also prohibits “tipping” of confidential corporate information to third parties."
There should be no distinction between corporate rules to Congressional rule, they’re both in a position to manipulate investments based on inside information. Congressional is even worse because they enact bills and regulations that could benefit their stock portfolios at the expense of every American. This must stop now.
Your suggestions are wonderfully very helpful, decent, fair and well supported by your very plausible data. So the current make up of Congress makes passage of the program not just difficult but likely impossible, especially given how the economy has been rigged for the 40 years since Ronnie took the throne. I'm afraid I can see no plausible path from the current oligarchy given all the cards in its hands to a game resembling that our Western European allies have been creating for the past 75 years.
Addiction to making lots of money is very hard to cure. Once in power and making lots of money its hard to quit. There should be term limits so many moire people will have a chance.
Robert Reich, I agree with you completely. This should have been done long ago. It’s yet another form of money in politics. Money out of politics!… and this goes for stock trading too. Insider information and political contributions based on self interest is not good for our democracy!
I always used to imagine the former president saying, "Caesar's wife? Who's she? Anyway, I bet she's a dog."
I guess I should have thought of more politicians with that attitude.
I'm flummoxed. At 69 years of age it's difficult to find hope. Fortunately the younger generations seem to have more sense. (I hope)
Hey, 69, do not write yourself off so easily & be cautious in regards to optimism with the younger generation -- in this country, we still do not widely venerate, honor & respect the wisdom & accumulated knowledge of our elders. In addition, our continued youth-centric focus allows our youth to continue to ignore historical forces that they did not live through & thus, either ignore or feel that they can ignore because it did not touch them directly. (I blame the long standing disrespect for this country's intelligensia & a more recent turning away from "expertise" as well on this simple youth-centric ridiculousness.) The elders of the thirties generation taught me that change/transformation happens excruciatingly slowly -- we are still fighting the same battles that they were fighting in regards to class, race & sex, & those of us that are older still have much to offer as foot soldiers alongside youth's new fangled ideas and energy.
You are so correct. I'm just exhausted
Hang in there, sounds like you need to put yourself & your personal needs completely front & center
Robert: I fully agree with your concept, these people and many others should not use inside information for personal gain, EVER. However, do we need more laws on the books that are not enforceable? Did #45 violate any of the currently investment refs? Family members? We’re gov regs used to enhance financial status? Jarred and the Enterprise Zone expansion, specifically? Your proposal would yield either a Congress infinitely investigating each other or ignoring their responsibility to do so. Unfortunately, the correct solution would be for a united, knowledgeable voting public to replace them with responsible individuals, is an equally unworkable option.
Not more laws, I think, the law. It already exists against insider trading. What is missing is the political will to apply it. Once a principled democrat will be in power and with enough pressure from ordinary citizens, applying the law will become an evidence to the political flock in Washington. Almost trendy.
Totally agree.
I agree that self dealing with insider knowledge by our representatives should not be allowed.
Robert, if 45 and his confederates (word chosen carefully), his cabinet members, his family, etc., etc. are "above the law," why not Congress? As far as I can tell, an increasing number of them either haven't read or are unable to read the Constitution or other laws. (see my essays Testing to Save Democracy (https://www.insidehighered.com/views/2021/10/21/civics-test-should-be-required-hold-public-office-opinion) and The History of Book Bannning (https://www.publishersweekly.com/pw/by-topic/columns-and-blogs/soapbox/article/88195-harvey-j-graff-examines-the-history-of-book-banning.html) No one should be surprised. I wonder about the unSupremes, too.
This should also include all immediate family members. All members of congress should respond to the needs of their constituents without personal gain. Additionally, Madison considered that ethics in government required term limits in order to assure appropriate behavior. I suspect the halls of congress would be empty!
The name Republican(as in party) is a cover name for 'rump's' party.People need to know,a vote for that party(at this time) endangers our democracy,(disgracefully)
Here is a petition to sign: https://www.thepetitionsite.com/500/712/066/
Good afternoon Mr. Reich. When I worked for FDA, we had to divest of any stocks in FDA regulated industry. It was as simple as that. If these folks are being elected to serve in the U.S. government, then let them follow the same regulations as those of FDA and other government agencies that requiring divestiture of stocks in regulated industry.
You have just exposed congress who is more concerned with $$ than any semblance of consern for we,, the people of the Unite States
Check out the latest analysis from Unusual Whales: https://unusualwhales.com/i_am_the_senate/full. They scoured the 2021 congressional financial disclosures and present a month-by-month analysis by sector, member and party. Some excellent visuals. Usual disclaimers: DYOR and check their sources before quoting anything.
Totally agree. Nancy Pelosi might be a great tactician as Speaker, and she may be a democracy first politician, but she is still a corporate Democrat.
I don’t agree that buying and selling individual stocks is a terrible investment strategy. I think buying index funds is a not-so-good nvestment strategy. If you know how to analyze companies and have an investment strategy that is time-proven, you can be much more successful than buying index funds.
However, I do agree that insider trading is not an acceptable practice for our representatives so investing in Index funds is an option that would be better than nothing for them. There may be an alternative but I’m not an expert in knowing how it could be executed, but perhaps a wealth manager with no input from them?
I certainly don't want my representatives supporting bills because they know it benefits them (and not the American people in general). However, how do you get this implemented and who would vote for it? I suppose we could form a separate organization (watchdog group), created in the interests of the American people and the World...an outside ethics/think tank organization made up of scientists, and experts of all kinds, perhaps some spiritual leaders, that help run the country by keeping an eye on government and the direction the people of the planet need to go in to survive at a high level....at a much higher level than our current system.
But, let’s say we continue with the current system, we would still need representatives and leaders that are sane with a high level of ethics, experts in their fields, and exceptional judgment. If they don't meet these standards, they should not be allowed to run for office.
Unfortunately, I'm not convinced our current system of government is the best we can do. Perhaps we should consider a government similar to the watchdog group I mentioned above with experts that listen to the American people and the international landscape, who are interested in solving real problems based on the latest knowledge base (a knowledge base that grows in knowledge over time), and that would have a way to implement them.
“Trading” stocks is gambling. “Investing” in company stocks is a legitimate way for those who have money to participate in our capitalist system. It seems OK to me for elected officials to OWN individual stocks. The conflict of interest arises when (a) those elected are allowed to “play” the markets because they inevitably are privy to information that gives them an advantage as “insiders,” and (b) when they can influence the finances of a company they “own” through legislation, taxation, and government funding.
The proposal to ban trading and to require existing individual stocks to be in a true blind trust seems to be the obvious way to return a modicum of trust in elected legislators.
The core reason we need governing is the fact that we are flawed beings. Left on our own we will choose our own benefit over that of others. The reason for democratic government is to curtail our worst instincts and to provide a
mechanism to allow robust individual freedom while safeguarding the common good while setting standards for civic life. Ideas like limiting unfair personal gain for those entrusted with governing, ensuring equal participation for all, and demanding integrity from those given our sacred trust are ideals we have to continue to demand of our leaders and our representatives if we are to keep this experiment going.
It is definitely something that should get passed. I believe my congressman Ihlan Omar would think this is a good idea and agree to it.
Should be criminalized!
Not a good day for the American people today...
https://www.msnbc.com/msnbc/watch/supreme-court-blocks-enforcement-of-biden-administration-s-vaccine-mandate-for-businesses-130802757642
https://www.msnbc.com/msnbc/watch/sen-sinema-will-not-support-senate-rules-change-for-voting-rights-reform-130791493749
https://www.msnbc.com/opinion/mitch-mcconnell-wants-break-senate-if-filibuster-abolished-n1287334
.....and, Mr. Manchin and his extended family have hands filthy--with coal dust and other billion-dollar investments that ride on his political seating.
Re: Index Funds vs. Individual Stocks. Though worthy, a ban will never pass.
Caveat: I am offering my perspective, and not suggesting anyone does what I do.
I dislike Bond funds. I can buy a few bonds, and hold them to maturity or call. With funds, whenever others think one fund offers attractive rates, they invest, and the managers keep buying less attractive bonds, until everyone shares in lousy returns. Then investors sell, managers sell, and the residual fund is not what I wanted.
IMO: Equity-based funds have similar risks to bond funds. The market may fluctuate wildly, especially as Build Back Better's fate sways. Fund managers must buy and sell on market highs or lows to accommodate investors' whimsical purchases and withdrawals. I like to control when I buy and sell. I like to see which (fossil-free!!) companies are significant components in some funds, and decide if I like their ESG policies.
I don't want to come across greedy, rich, or a potential tax-cut lover, concerned about a vast portfolio. False, false, false, false. I am the child of very risk-averse parents whose families struggled during the Depression. My mom constantly berated my father for his weekly socializing via penny ante poker games. I have modest savings for my future retirement, and I'm risk-averse. After the 2008 ARRA, Municipal bonds (states, cities & transit agencies; General Obligation) were also a good low-risk investment that helped folks, and offered attractive interest rates. Those bonds were Called early when interest rates plunged, and my modest retirement savings were barely accumulating belly button lint. Reluctantly, I gambled (equity) more than I was comfortable doing, and it seems to give me more anxiety than it's worth.
"Advice" fwiw: because inflation jumped, the US TreasuryDirect is offering good safe rates on its I-series Savings Bonds, but individuals can only buy small amounts per year!!
Once again you are so right.
I had no idea corruption was so widespread. And would be so hard to target and eliminate. But Raffey's idea of citizen participation might do the trick. However, it would take real organizing and ongoing participation. I don't go anywhere these days, but maybe we could get virtual meetings to fill the gap?
Of course they should be banned from trading individual stocks! But, like everything else NOTHING WILL HAPPEN! There are only two ways to fix what is broken in this country: 1) Armed and violent revolution - something I dearly hope does not happen but which has historically the ONLY way repressive and corrupt governments get replaced, or, 2) A NATIONAL LABOR STRIKE that doesn't end until campaign finance reform, universal healthcare, climate change, and wealth taxes get passed. The choice is ours to make.
I think your comment about trust in government is the key. Isn't Boris battling to keep his job because he couldn't be trusted to follow the rules applied to everyone else?
Agreed. Use a truly blind trust or index funds.
have you been asked to return to active nursing...covid nursing. thanks
Yes, but I would only do remote tele work & employers not interested.
What reason did Pelosi give for not supporting laws to regulate government privilege cheating? I don't think such laws will stop the wrong doing, because Congressional cheaters can invest under pseudonyms and/or get their friends to invest for them, if they can no longer use family members to hide their malfeasance. Nevertheless, at the very least, paying lip service to end government corruption is a step in the direction of reclaiming the public trust. At this point, however, it appears that only a fool would trust government officials to honestly serve their constituents. But, that's no reason to give up on efforts to make things better. Go Robert! I'm hanging in, with your leadership, and the leadership of others like you.
And BRAZENLY.
I too am so afflicted...hippie so sad and frustrated by losing a 3D chess match to these repugnicants. what happened to Lincoln's gene pool?
Why shouldn't the general public be informed; if so, there would not be insider information?
The Ban Conflicted Trading Act's option to allow a member of Congress to own individual stocks as long as the stocks are not traded while in office has a major weakness. The weakness is that it allows someone with a significant portion of their investment wealth (say greater than 50 percent) tied up in a single stock to continue to openly own the stock. This cannot help but suggest that the member's actions may be heavily influenced by what effect their actions have on the value of that stock. The best fix, in my opinion, is to eliminate this option from the Act. Another fix would be to limit the value of any owned single stock to a small portion (say 5%) of the member's investment wealth.
While voting themselves raises is seldom done, voting for larger pensions is part of the gameplay as well. Corruption in government office is as old as our government itself!
FYI, Jon Ossof has a petition supporting his legislation: https://secure.ngpvan.com/ivecXOHAZkKkv-noZM5ipA2.
I have a problem with Senator Ossoff's legislation. Suppose your profession was that of a stock market day trader or "market maker". Your sister, with whom you have a distant relationship, decides to run for Congress. You have no input into her decision. If she is elected, would Ossoff's law prevent you from continuing in your profession? This sounds unfair to me. Maybe Ossoff's proposed legislation addresses this, I don't know.
Excerpt from his Web site: “… the Ban Congressional Stock Trading Act will require all members of Congress, their spouses, and dependent children to place their stock portfolios into a blind trust — ensuring they cannot use inside information to influence their personal stock trades and make a profit.”
Paula B., thank you very much! His requirement makes sense by narrowly defining "family member".
Any time, Tim. 😀
This is probably a very naive question. Why can't campaign contributions be separated from the candidate running for office? Why should a candidate running for office benefit personally from the contributions that put him or her in office?
By law, they are supposed to be separate. Legally, a candidate may not benefit personally.
Another example of how our laws have no teeth.
I'm willing to bet Trump uses money from PACs for his own personal use.
There is a case before the Supreme Court right now that deals with this. Ted Cruz is the plaintiff so you can imagine how that will go. If the Court decides in his favor it will be legal to bribe politicians.
Thank you.
When working for the FAA, I was told, repeatedly, that appearance is everything. If it appears you are doing something wrong, then it doesn't matter what else is really going on, the appearance is what people see and believe. Unfortunately, the only way we will solve this problem is to vote them all out of office.
All true. But with the current congressional opposition to this wholesome idea, I think it should not take precedence over such legislation as the voting rights bill and other Democratic priorities.
We've been looking the other way for decades. https://www.cbsnews.com/news/frist-wont-face-insider-trading-charges/
Bill Frist, then the Senate Majority Leader, would share news of upcoming opportunities in stock trades with reporters. These were based on laws Frist was working on. Wall Street noted large buys and sales with no announcements from the companies involved. Reporters and staffers supposedly made out like bandits during Frist's reign.
I predict that the only truly bipartisan effort in congress will be to defeat the "Ban Conflicted Trading" act. Whenever one applies for a job demanding a security clearance, one has to fill out a 'conflict of interest and economic disclosure' questionnaire. Why doesn't this this apply to congress and the executive branch?
How do you think McConnel became so rich??
I agree that Nancy Pelosi needs to turn around on this one. It's common sense.
Somehow, all this elicits the memory of a quote I've long known, which is discussed in the following article: https://themoderatevoice.com/rich-mans-war-poor-mans-fight/ Put that in perspective with Mr Reich's essay today.
Members of Congress are elected to represent the interests of the people. For some reason most have forgotten they represent their people. A good example is Liz Cheney. The majority of folks from Wyoming are furious at her. She is not representing the majority of people from Wyoming. Don't get me wrong. Wyoming does have many democrats and independents. BUT, she needs to listen to the majority of the people she represents. I will communicate with my congressman in my state about trading individual stocks. I will conduct more research. I believe people like Nancy Pelosi have become very, very rich while in office. Perhaps it was just good luck and hard work.
Absolutely correct and thanks. Pelosi is dead wrong on this. I don't Tweet so this is my answer.