Is it too much to ask members of Congress to stop day trading? | News, Sports, Jobs


It’s hard to find a national issue with 75% bipartisan support (and only 5% opposition). That’s the number of Americans who want to stop members of Congress from trading stocks. It’s no surprise that Congress still hasn’t acted; many members want to continue making money trading stocks during their tenure. A competent leadership of Congress would push this issue, but it is not clear that we have that today.

There is a growing sense in America that those in power are playing by a different set of rules. Politicians flouting their own COVID-19 restrictions have exacerbated this long-standing trend.

The Pew Research Center has been measuring trust in government for 70 years. During this period, trust peaked at 77% in 1964 under President Lyndon Johnson. Apart from some upheavals during the first war in Iraq and just after 9/11, trust in the government has steadily declined since. Today? Only 24% trust the federal government.

Try to think of anything more corrosive to a country than its people’s loss of faith in the inherent fairness of the system. Once trust is gone, people stop believing anything from official sources. People are likely to adopt all sorts of wild conspiracy theories. Sound familiar?

So why are those in power doing so little to restore trust? Nothing points more to the complete collapse of American politics than the complete lack of effort on the part of politicians to restore lost trust. In Washington, there is much lament for the state of affairs in America today, but there has been no real effort to address the key issue of trust. Partly because of this, according to Gallup, only 18% of Americans approve of the work Congress is doing. The president’s ratings aren’t much higher.

A majority of Americans feel that those they send to Washington are there for themselves, a conclusion that is not without factual basis. The days of citizen legislators serving their communities and then returning home are long gone. Of outgoing members of Congress heading to the private sector, nearly two-thirds now go to work for lobbying firms, consulting firms, trade groups or business groups that influence federal government activities. Corporate influence is now a business in its own right. Congress is just a stepping stone to the top of this multi-million dollar business. People are on it.

The revolving door in Congress is only part of the problem. In recent years, there has been an acceleration in the number of reports of national leaders getting rich with potential insider trading. Members of the Federal Reserve have the ability to move financial markets more than perhaps any other government official. The Vice Chairman of the Fed recently resigned following a stock market scandal. Many other Fed officials are involved in the same thing. A Wall Street Journal investigation identified 131 federal judges who traded shares of companies before them in the courtroom. Finally, Business Insider recently completed an investigation that found 55 members of Congress violated a federal law aimed at preventing insider trading in Congress. Members on both sides of the aisle are currently embroiled in stock trading controversies.

House Speaker Nancy Pelosi, whose husband makes millions trading stocks, has said publicly that members of Congress should be able to trade individual stocks. It defends its position on the basis of the proposition that “we are a free market economy” and members of Congress should be able to participate.

Yes, you have this right. Pelosi is in favor of government regulation of virtually every aspect of American life. Still, she and her husband made millions on trades while she was in a leadership role. So when it comes to trading stocks, she’s suddenly kind of a libertarian. She thinks people are going to buy this. I do not agree.

Due to the Democrats’ mishandling of the pandemic, the botched withdrawal from Afghanistan, and President Joe Biden’s inability to refute his own party radicals, Republicans have an opportunity to retake both the House and the Senate in 2022. Engaging the American people on the crucial issue of public trust could put them above. To date, Republicans have chosen not to accept this easy victory.

Victory is easy because, unlike many national problems, the solution is easy. The American people have the right to expect those in positions of trust and public responsibility to hold to high standards. Members of Congress have a lot of power. They have enough power to move the financial markets and affect the prospects of individual companies. It is not too much to ask them to refrain from taking advantage of this power. We already do this with executive branch officials who must comply with a federal conflict of interest law (passed ironically by Congress). Senior members of government must place their investments in a blind trust or hold diversified mutual funds. It’s so simple. If they fail to do so, they face potential criminal liability for participating in any debate that could affect their investment holdings.

There are numerous bills supported by members of both parties that would impose similar restrictions on the stock holdings of members of Congress. There is a legitimate argument that we do not want to impose restrictions so strict that they discourage competent people from serving. God knows we need every competent person we can find in Washington. But requiring investments to be placed in a blind trust or a diversified mutual fund isn’t too restrictive. Members could still benefit from gains in the US economy, but their constituents would know that their decisions are not designed to inflate personal stock portfolios.

For some reason, Republican leaders have yet to tap into this issue as a key way to distinguish themselves for the next election cycle. Fighting to rebuild trust is the right thing to do, and it’s a huge political victory. Pelosi gave them a present. Republicans should take it.



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Garland K. Long