By Luke Savage
December 17, 202:
Information Clearing House
- All told, it’s difficult
to imagine something more darkly symbolic of a
decadent ruling class than a multimillionaire member
of Congress mounting a transparently self-interested
defense of political insider trading. Nonetheless,
that’s
exactly what House Speaker Nancy Pelosi did this
week when asked about a proposed ban on members and
their spouses holding and trading stocks while in
office.
“This is a free market, and people — we are a
free market economy,” Pelosi said during a weekly
press conference. “They should be able to
participate in that.”
The “they” in Pelosi’s formulation is certainly
doing interesting work. Like many things about the
United States’ “free market economy,” stock
ownership is a kind of liberty most familiar to
people with money: some 89 percent of adults in
households earning $100,000 or more
reportedly own it compared with less than a
quarter of those in households earning less than
$40,000. Pelosi was referring more specifically to
members of her own profession and their staffs: a
group that, when taken together, represents a much
narrower sample of the population — not to mention
one much closer to key economic decisions and
legislative changes.
Members of Congress tend to be
far wealthier than the general population, and
it’s common practice for many of them to own and
trade chunks of the very economy they’re tasked with
managing and overseeing. At just over $46 million in
net worth, Pelosi is herself among the richest
members of Congress — ranked fifteenth overall,
thanks in part to her husband’s holdings in the
likes of Slack, Tesla, Disney, Visa, Salesforce,
PayPal, Alphabet, Facebook, and Netflix, all of them
major corporations that spend untold millions every
year to lobby the government.
It’s a clear and visible conflict of interest,
and the kind of thing that wouldn’t be allowed in a
functioning democratic society. And, as recent
history quite clearly shows, it’s one that quite
easily leads to naked abuses of power.
There are many
documented cases of federal lawmakers trading
stocks in industries they oversee while holding
important committee assignments. Several US senators
infamously
off-loaded a smorgasbord of stock following a
classified briefing about the potential economic
impact of the coronavirus — and instances like these
are almost certainly just the tip of the iceberg.
The case for banning the trading or ownership of
stocks among members of Congress is straightforward
and has been made many times by the likes of
Elizabeth Warren and Alexandria Ocasio-Cortez. As
the former
put it in May: “Every senator, member of
Congress, president, Cabinet secretary, federal
judge, and other senior officials in charge of
writing the rules for our financial system should
not be able to own or trade individual stocks.” “We
are here to serve the public, not to profiteer,”
argued AOC earlier this year, adding, “It’s
shocking that it’s even been allowed up to this
point.”
Both have a point. But considering the
overbearing influence of money on America’s
government and both of its major political parties,
nothing about the current rules is even remotely
shocking. The campaign finance system, to take an
obvious example, is essentially legalized
corruption. Retired politicians and
staffers regularly cash in on their time in
office, settling into plum corporate gigs and
leveraging the personal networks they built while
ostensibly public servants for individual gain.
Against such a backdrop, the practice of allowing
sitting lawmakers to own and trade stocks seems no
less outrageous but becomes decidedly less shocking.
Much of the corrupt behavior that occurs regularly
in Washington is, in effect, perfectly legal and out
in the open: so much so that it can even elicit
spirited defenses from the country’s most powerful
elected officials.
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