Regulating for Their Own Benefit
Not surprisingly, politicians are strongly bipartisan in protecting their own unique ability to engage in insider trading:
A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006.
“Congressional staff are often privy to inside information, and an unscrupulous person could profit off that knowledge,” says Vincent Morris, a spokesman for Rep. Louise Slaughter (D., N.Y.), a leading backer of the “Stop Trading on Congressional Knowledge Act,” or STOCK Act. “The public should be outraged there is no law specifically banning this.”
When the bill was introduced nearly five years ago, just 14 other lawmakers endorsed it. The current version of the bill has fared worse: Only nine lawmakers support it. There is no companion legislation in the Senate.
Veronique de Rugy points out that the very same activity would be illegal outside the halls of government. You won’t be surprised that I think a critical component of the appropriate solution would be smaller, less micromanaging, government. That’s after, of course, elected officials and their staffs are held to the same standards as everybody else.