Forum Post: require members of congress to divest holdings of individual companies
Posted 12 years ago on Oct. 9, 2011, 6:41 p.m. EST by apossiblesolution
(13)
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academic work has found that using data from 1985 to 2001, stock trading by members of the house and senate yielded returns far and beyond broad market indices. members of the senate, on average, earned nearly double the returns of the broader stock market.
http://www.bepress.com/bap/vol13/iss1/art4/
maybe one place to start would be requiring our elected officials to divest from specific companies, to eliminate their conflict of interest, and instead hold all of their assets in one of the following:
a fund that mimics the broader stock market (S&P 500, or better yet an index of the smallest 90% of companies publicly traded), or
government issued t-bills
thoughts?
the only bill i have been able to find related to this was intended to prohibit insider trading for congress, executive, and staff. it died in committee:
http://insidertrading.procon.org/view.answers.php?questionID=001032
They already do that dumdum.
as far as i've been able to tell, members of congress are free to trade common stocks as they wish. they don't even have to disclose trades to the SEC to check on insider trading concerns.
what they do already do is have the option of a 401k that does these things, see providence's post below.
if i'm wrong, give me a source that says congresspeople are required to divest their assets when they assume office.
The federal 401(k)/403(b) program is called the TSP (Thrift Saving Plan). It has an SP500 index, MSCI EAFE index, Russell 3000 index, T-bills pegged to the average 5 year auction and a standard bond fund.
All Congressman and staffers should be limited to these as investments.
nice... thanks for the facts. do you know if this has every been proposed in congress?
No, staffers and Congressman are required to file a disclosure.,.. it may be similar to the OGE (Office of Govt Ethics) 450 that many federal employees file. Ironically some (honest) corporations complain bitterly about the disclosures that the corporations are required to make because of fear of "front running" by persons in the federal govt.
yup... i found a description of the disclosure requirement, which applies across federal government. i guess nobody in government looks at these disclosures to see how they impact voting behavior. too bad.
http://www.oge.gov/Financial-Disclosure/Public-Financial-Disclosure-278/Public-Financial-Disclosure/
i'm a firm believer that there are a lot of small, obvious solutions that could weaken the link between wall st. and washington. this one seems like a no-brainer. would small actions that close legal loopholes and conflicts of interest be enough?
sounds good
AND all congressional staffers should divest of all holdings
and executive branch, agencies, courts, etc... they've all got the same conflict of interest.
True, insiders in Government make lucrative inside trades in Business markets, and although I'm all in favor of taking down today's ineffective and inefficient Top 10% Management Group of Business & Government, there's only one way to do it – by fighting bankers as bankers ourselves. Consequently, I have posted the Strategic Legal Policies, Organizational Operating Structures, and Tactical Investment Procedures necessary to do this at:
http://getsatisfaction.com/americanselect/topics/on_strategic_legal_policy_organizational_operational_structures_tactical_investment_procedures
Join
http://finance.groups.yahoo.com/group/StrategicInternationalSystems/
if you want to support a Presidential Candidate Committee at AmericansElect.org in support of the above bank-focused platform.
this goes back to the to the early 1900s. it has just been getting worse and worse the last 25yrs. congress will not care or let anything move them because they have no real power it is an illusion.
would be hilarious to see government officials stumbling over their words trying to describe how this initiative would kill jobs.
Probably most Americans think this is already the case. Reminds me of how LBJ set up a secret phone system so he could discuss his stocks (supposedly in a trust) with his trust holder.
probably not talking to the right crowd here, but wanted to get some thoughts from the OWS scene. i also had not heard of this paper until today, and have no connection to the people that wrote it. just found it interesting.
That is a tough one. Lets first try and get them to stop taking corporate bribes and money from unions so they vote for what is best for the country rather than corporations. https://sites.google.com/site/the99percentdeclaration/
this is true... but i wonder how much of them "voting for corporations" is really just them "voting for their own stock portfolio".
I am sure you are correct and it is a form of insider trading. I think the Supreme Court judges have to recuse themselves from ruling on cases if it will impact their stock portfolio. It's a good idea for ethics reform. You should run for one of the 780 delegate seats for the new Congress meeting on July 4, 2012. See below for more info
https://sites.google.com/site/the99percentdeclaration/home/the-steps-to-non-violent-revolution
not just insider trading (trading on non-public information), but just a blatant conflict of interest, by having power over rules that impact their financial positions. how many congresspeople fighting to destroy the EPA have massive investments in coal, oil and utilities? i would guess most of them.