Congressional Insider Trading

by Daniel Foster

This 60 Minutes feature piggybacking on Peter Schweizer’s new book about congressional regulatory profiteering is worth the watch.

Obviously, both parties are guilty of it — though at the risk of sounding baldly partisan, I think Boehner gives a better answer (in short, ‘I don’t handle my day-to-day trades and haven’t in years’) than does Pelosi, whose answer is simply blithering incoherence.

Of course, the best solution to the problem of a congress profiting from its own ability to move markets is to eliminate — or at least substantively reduce — congress’s ability to move markets. Since we’re not within hollering distance of a small government utopia, I have to think that Schweizer’s proposed solution — putting MOCs’ assets in blind trusts during their terms of office — is a reasonable fix. The president has to. A number of executive officials have to. Why shouldn’t the congress-critters? Anyone think that’s wrong?

Also, the always readable Megan McArdle has an interesting short piece complicating the idea that congress has made money hand over fist under the current scheme. Basically, competing studies show MOCs outperforming the market by a significant margin, and just the opposite. One of the big problems is getting a hold of the disclosure data. Members are required by law to disclose trades, but reporting standards are poorly designed and compliance is shaky.

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