Ban stock trading

It seems to me that some people are so obsessed with “equality” they also become naive. The narrative below is a good example. One point of view wants members of Congress to be more like average Americans. In other words, not wealthy with stock market investments – more patriotic candidates of average means they say.

A ban on Congress and spouses owning individual stocks sounds appealing – of course, one has to assume we elect people to represent us who are devoid of ethics so not owning stocks matters. 🤔

Sometimes electing people without investments and who received a raise when elected to Congress, even with a good education, is risky business. Consider this from former bartender Representative Alexandria Ocasio-Cortez.

HJRes23 Proposing an amendment to the Constitution of the United States extending the right to vote to citizens sixteen years of age or older.

The prefrontal cortex of the brain performs reasoning, planning, judgment, and impulse control, necessities for being an adult, but is not fully developed in teenagers. Without the fully development prefrontal cortex, a teen might make poor decisions.

Hey AOC, well thought out move‼️

But more to the point below.

Balderdash‼️

Doesn’t one have to ask where folks of average means would get the finances to run and stay in office and who they may be beholding to?

House Democrats are close to introducing a ban on stock trading for members of Congress, their spouses, and senior staff members, Punchbowl News first reported, citing multiple unnamed sources.

Source: https://www.businessinsider.com/congress-stock-trading-house-dems-close-proposing-ban-report-2022-7

Most of those who endorse a stockholding ban focus on the ways in which such a measure would reduce conflicts of interest and strengthen congressional ethics. But beyond that, a ban could improve of the state of substantive representation’s sibling: descriptive representation. That term refers to the supposition that elected officials should be demographically representative of their constituents. That representation can be conceptualized along axes of race, gender, sexual orientation, and so on.

Descriptive representation has been increasing in Congress for years, but the progress is uneven. While Congress has become more diverse in terms of genderand race with each recent election, the socioeconomic standing of its average legislator has not. Analyses in recent years have pegged the median net worth of a member of Congress at upwards of $500,000, more than five times the median household income of an American family.

In 2020, the majority of Congress’s 535 members were millionaires, compared to eight percent of the U.S. population.

And while stock ownership is not a direct stand-in for overall wealth, stock ownership by members of Congress also outpaces that of the average American. As recently as 2011, 92 percent of congresspersons owned some form of stock, compared to 54 percent of the American public (with the vast majority of circulating shares owned by the wealthy). That leaves middle- and working-class Americans underrepresented in Congress.

A stockholding ban could indirectly close that gap, boosting socioeconomic descriptive representation and ensuring wealthy candidates who do choose to run for office are willing to put the public before financial gain. With the affluent harboring much of their wealth in stocks, legislation barring the possession of such assets while in Congress would give candidates a binary choice between retaining those investments and holding federal office. That might dissuade some deep-pocketed candidates from choosing to run and make more room for aspirants of average means.

Rather than punishing the wealthy for their assets and unfairly excluding them from Congress, an ownership ban would merely select for patriotic congressional candidates who hold public service in higher regard than their stock portfolios; that fewer of the ultrawealthy might advance to Congress when forced to make that choice would simply be a result of the overrepresentation of the wealthy among those Americans who own stock and thus see divestiture as a non-starter to mounting a congressional bid.

Source: Brookings

5 comments

  1. “… Analyses in recent years have pegged the median net worth of a member of Congress at upwards of $500,000, more than five times the median household income of an American family. …”

    Not even an apples and oranges comparison, more like apples to baloney. Net worth and income tend to move in the same direction, but not always.

    Yes, the stock and bond investments for all public officials (and anyone in their immediate household) should be limited to broad based index mutual funds. Yes, all public officials should recuse themselves from voting on anything that offers a specific identifiable benefit to any family business. (As a result, if someone has a business, voters should know about it before voting for individuals who will have to recuse themselves). Yes, all public officials should take an oath of office that confirms they are to act as a fiduciary – solely in the best interest of the population they represent. And, yes, they should be liable in civil (and criminal for egregious violations) court for violating those fiduciary duties upon a finding of a conflict of interest. The legal standard in civil court should be a preponderance of the evidence and individual citizens should have standing to bring suit.

    If you disagree, that’s OK. I just don’t understand why members of Congress should be held to a lesser standard (or no standard) on behalf of those (s)he represents when compared to your everyday pension fiduciary who performs their duties subject to those rules.

    I think specific duties should apply to their performance:
    – Duty of care – Members of Congress should inform themselves prior to proposing legislation, retaining 3rd party expert input as necessary. They would follow the regular legislative process of hearings, committee meetings, etc.
    – Duty of Loyalty – Not only no conflicts of interest, but, a unitary requirement to act solely in the best interest of the individuals they represent. Any situation where there is mutual or incidental benefit to the members of Congress must be identified and disclosed, and minimized.
    – Duty of Good Faith – Members of Congress must act within existing laws – in other words, all laws must apply equally to members of Congress and their staffs, and all other government employees.
    – Duty of Prudence – Perform their duties, legislate, investigate, etc. with a degree of care, skill and caution that a “prudent expert” would apply/exercise.

    A guy can dream, can’t he?!

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  2. The idea of representatives being a reflection of all the people in the US is an idea that intrigues the academic class I suppose. The gerrymandering of districts to guarantee black representatives leads to people thinking that Latinos, Asians, Pacific Islanders, native Americans and who knows who else should be guaranteed a slot also. There is no end if you think about it enough.
    The idea of stock ownership is somewhat amusing since a lot of people hold equities in their 401k and IRA. The prevention of insider info is always needed. Just ask Nancy Pelosi.

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  3. I agree with Dwayne that a blind trust to hold stocks makes sense. It does not surprise me that AOC is unaware of the logic in classifying people as children or minors under the law.

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  4. There is a simple reason so many Congressman are millionaires before they get into Congress. It is not cheap to run for office. Many work their way up from local races and supporting their local party $100 a plate chicken dinners. Now in my area, state senate candidates are having $500 dinners. In most cases you have to be of means to start your political career. There are a few who do get sponsored such as AOC.

    As far as stock, I do believe that they should be put into a blind trust so they can’t act on insider information but they should be allow to own stock.

    As far as voting at 16, that is totally wrong. 16 -yr-olds have no idea how the world works. Very few now a days even have jobs and pay taxes. But I have a big issue with age limits. How come a 2-yr-old can self-determinate to “transition” to another sex, a life changing decision, but can’t own a gun until age 21 because they are not responsible. You can’t have it both ways.

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