Congress has done it again, giving their members special consideration other Americans can only dream of. For some time now, Congressional insiders have been able to enrich themselves on the basis of knowledge not available to the public. (Washington officeholders have access to a treasure trove of economic data not available to ordinary citizens.)
After prime time exposure of Congressional insider trading depicted on CBS’s 60 Minutes recently, there was a sudden moment of understanding by many members of Congress and Senators that public anger demanded a change in standard Washington behavior. It was assumed that legislation would be passed to prohibit Congressional members and staffers from using privileged information to engage in stock trading as is the law of the land for the general population.
Actually, a bill to ban insider trading by office holders in Washington was introduced seven years ago called Stop Trading on Congressional Knowledge (STOCK) Act by Representatives Louise Slaughter and Brian Baird, both Democrats. However, since it was introduced, this measure has languished in Congress irrespective of whether Republicans or Democrats had majorities, with members of neither party apparently wanting to terminate a potentially lucrative practice. Then, Congressmen and Congresswomen suddenly “got religion” when their insider trading was prominently disclosed, with the story kept alive by the media amid a public outcry.
Unfortunately, Congressional shame and remorse has evidently been short-lived. The House Financial Services Committee Chairman, Alabama Republican Spencer Bachus, on December 7 postponed a vote on legislation that would have proscribed insider trading. After meeting with other House Republicans, he claimed that “a significant number of members of the committee on both sides of the aisle have indicated a desire for additional time to study the issue.” This ignored the fact that the bill to end insider trading had over a hundred co-sponsors and overwhelming public support. Why should we not be surprised by this action? Over the years, it has been shown that Congressional insiders who trade in stocks outperform the market by about 12% annually, a better result than most hedge fund managers. Obviously, the access to privileged information that members of Congress and their staffers are able to acquire has been very profitable for some of them and it is easy to comprehend their reluctance to give it up. And Chairman Bachus was identified as someone who traded in stock options, having done so after having received a Treasury report in 2008 focusing on problems with the economy.
Is it any wonder that Congressional approval ratings are currently in single digits and that the public views politicians with such disdain? Their personal goals and ethics are not aligned with those of other citizens, and they can enact legislation (such as banning insider trading by ordinary Americans) that does not necessarily apply to them.
Chutzpah is a bipartisan characteristic. It is a Yiddish term that denotes acts or conduct of unusual effrontery, arrogance, brazenness, or hypocrisy in disregard of normal standards of behavior and other people’s sensitivities. Members of Congress certainly are imbued with an inordinate amount of chutzpah. On the other hand, the American electorate lets them get away with it.
A VietNam vet and a Columbia history major who became a medical doctor, Bob Levine has watched the evolution of American politics over the past 40 years with increasing alarm. He knows he’s not alone. Partisan grid-lock, massive cash contributions and even more massive expenditures on lobbyists have undermined real democracy, and there is more than just a whiff of corruption emanating from Washington. If the nation is to overcome lockstep partisanship, restore growth to the economy and bring its debt under control, Levine argues that it will require a strong centrist third party to bring about the necessary reforms. Levine’s previous book, Shock Therapy For the American Health Care System took a realist approach to health care from a physician’s informed point of view; Resurrecting Democracy takes a similar pragmatic approach, putting aside ideology and taking a hard look at facts on the ground. In his latest book, Levine shines a light that cuts through the miasma of party propaganda and reactionary thinking, and reveals a new path for American politics. This post is cross posted from his blog.
Political junkie, Vietnam vet, neurologist- three books on aging and dementia. Book on health care reform in 2009- Shock Therapy for the American Health Care System. Book on the need for a centrist third party- Resurrecting Democracy- A Citizen’s Call for a Centrist Third Party published in 2011. Aging Wisely, published in August 2014 by Rowman and Littlefield. Latest book- The Uninformed Voter published May 2020