May 27, 2011

House Members Score ‘Abnormal’ Stock Profits

You know how corporate executives are banned from trading stocks based on inside knowledge? Even Martha Steward went to jail for it. Well, it seems that there are some Democrats in Congress operate under no such restriction. In fact, I thought this was an Onion article at first - mostly because it's such a Duh.

An extensive study released Wednesday in the journal Business and Politics found that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually, suggesting that lawmakers are taking advantage of inside information to fatten their stock portfolios.

…Despite the GOP’s reputation as the party of the rich, House Republicans fared worse than their Democratic colleagues when it comes to investing, according to the study. The Democratic subsample of lawmakers beat the market by 73 basis points per month, or 9 percent annually, versus 18 basis points per month, or 2 percent annually, for the Republican sample…

…Strict laws ban corporate executives from trading on their insider knowledge, but no restrictions exist for members of Congress. Lawmakers are permitted to keep their holdings and trade shares on the market, as well as vote on legislation that could affect their portfolio values…

It's the government that is the most powerful, unaccountable and monopolistic “corporation” of all. Which is why the Framers created the Constitution the way they did: to constrain government, not us.

Consider the Democrat swamp un-drained. Maybe it's not a bribe if some stock tip is just left on the desk? Oops I've misplaced some vital information somewhere? I'll look around for it in the other room. Let me know if you find it. On your desk. On top of all your papers there, Congressman.

Related: The Secret Garden (and Mansion) of Christopher Dodd

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