Why Nancy Pelosi is wrong about lawmakers trading in stocks
A few days back, House Speaker Nancy Pelosi said lawmakers should not be prevented from trading stocks.
"We are a free market economy. They should be able to participate in that," Pelosi said.
Her remarks are probably owing to the fact that Pelosi's husband holds stocks and options worth tens of millions of dollars.
This includes stocks in big tech firms such as Amazon and Apple that are each worth between $5 million and $25 million. In Comcast, Pelosi's husband holds stock worth between $1 million and $5 million and in Visa, worth between $5 million and $25 million. He also holds stock options in Google's parent company, worth between $1 million and $5 million.
Pelosi insisted that she had no involvement in or prior knowledge of her husband's stock investments. She also stated that she has no stock in her name.
However, the fact that Pelosi's husband made millions from various Big Tech firms that she is supposed to regulate, at the very least, is a huge conflict of interest.
Pelosi is not the only one.
Back in April, a study by the Campaign Legal Center discovered that both Republican and Democratic lawmakers bought and sold stocks hundreds of times throughout the coronavirus pandemic.
Many lawmakers had invested in industries whose importance and relevance were elevated owing to the COVID-19 pandemic. They also sold their stocks from the hospitality industry, restaurants, and other sectors that were adversely affected by the pandemic.
Another investigation in September revealed that "49 members of Congress and 182 senior congressional staffers have violated laws aimed at preventing insider trading."
They obviously had prior information about the pandemic-related restrictions, which enabled them to reap an instant profit.
Back in 2012, the Stop Trading on Congressional Knowledge Act, also known as the STOCK Act, was passed, which bars lawmakers from using inside information to make investment decisions and requires that all stock trades be reported to Congress within 45 days.
To date, no one in Washington has been charged in connection with stock trading investigations undertaken by the Justice Department and the Securities Exchange Commission.
A law that is not enforced can almost be regarded as nonexistent.
What about people beyond Washington?
A former Netflix engineer and his "co-conspirator" were sentenced to 14 months in prison and $10,000 in fines for insider trading.
A former McKinsey & Co. partner recently pleaded guilty to using inside information to profit on the acquisition of a fintech company by client Goldman Sachs Group. The one count of securities fraud carries a maximum sentence of 20 years in prison.
There are myriad cases of citizens being deservedly punished for insider trading.
Nancy Pelosi's statements place her at odds with her fellow Democrats such as Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez, AKA AOC.
AOC had tweeted, "It is absolutely ludicrous that members of Congress can hold and trade individual stock while in office. The access and influence we have should be exercised for the public interest, not our profit. It shouldn't be legal for us to trade individual stock with the info we have."
Senator Warren said, "We need both tougher laws and enforcement of those laws. The American people should never have to guess whether or not an elected official is advancing an issue or voting on a bill based on what's good for the country or what's good for their own personal financial interests."
Perhaps in the same way broken clocks are correct twice a day, both Warren and AOC are absolutely right in this particular instance.
If AOC and Warren continue to maintain this position and act on their words, they will probably discover a sharp decline in their re-election funds, or perhaps a primary challenger from their party, or perhaps a few media hit jobs may come their way.
Back in September, Nancy Pelosi said the following during her trip to the U.K.:
In America, capitalism is our system, it is our economic system, but it has not served our economy as well as it should.
You cannot have a system where the success of some springs from the exploitation of the workers and springs from the exploitation of the environment and the rest, and we have to correct that.
Free-market principles should allow any individual, including lawmakers, to invest where they desire. But a primary qualifier for a free market is a relative amount of fairness.
A regular investor simply doesn't have the level of access to insider information that lawmakers have. This means that only a few in Washington can profit from inside information.
This is the exploitation of the system that Pelosi was talking about when she offered her critique of capitalism.
The function of a public servant is obviously to serve the citizen. With this responsibility come certain sacrifices. The first among these sacrifices is not to use their office for profit.
But these fundamental principles no longer apply to the Democrat Washington Establishment, of which Pelosi is a prominent leader.
The members of this establishment may say the right thing to appear noble and virtuous. But when you scrutinize their actions, it is clear that their claims are hollow.
There are quick to act against the likes of President Trump, who challenges their monopoly. They impeached him twice without reason. They conducted baseless and partisan investigations into the Russia collusion hoax and January 6 "insurrection."
But no laws apply to the member of the club.
They claim to want to resolve income inequality but have no problem trading in stock based on information available only to them.
The fact that these acts have gone unpunished proves that they co-opted various agencies and the news media, who are ideally supposed to function as watchdogs.
To be fair, they should be allowed to invest wherever they please, but there has to be a strict regulatory mechanism to avoid conflict of interest.
Is there a way to bring down this self-serving cabal?
Firstly, the citizen must actively participate and vote in brave, honest, and fearless individuals who will not be tempted by various inducements.
Secondly, all elected officials must have term limits, perhaps not more than two terms.
Thirdly, for various administrative services and agencies, there must be mandatory transfers after a fixed period of time.
Fourthly, stronger laws must be passed that prevent abuse of power and profiting by virtue of office, and these laws must be enforced.
The question remains: will the self-serving, self-promoting, and self-sustaining Democrat Washington Establishment permit changes that will harm them?
Of course not!
The change has to begin at the grassroots, with the citizen being engaged in the political process and voting for the right candidate after carefully scrutinizing all the candidates' records.
Having honest and upright elected officials for a few decades may bring about the first step in the journey of change.
We live in hope for a better tomorrow.
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