Free Markets, Free People

insider trading


WaPo: Politicians loot treasury for personal gain. Apparently that’s news

Most of us have known about it for decades:

A U.S. senator from Alabama directed more than $100 million in federal earmarks to renovate downtown Tuscaloosa near his own commercial office building. A congressman from Georgia secured $6.3 million in taxpayer funds to replenish the beach about 900 feet from his island vacation cottage. A representative from Michigan earmarked $486,000 to add a bike lane to a bridge within walking distance of her home.

Thirty-three members of Congress have directed more than $300 million in earmarks and other spending provisions to dozens of public projects that are next to or within about two miles of the lawmakers’ own property, according to a Washington Post investigation.

This is why earmarks need to go away for good. 

Ask yourself how a person elected to office who essentially has nothing (in comparative terms) and ends up sleeping in his or her office to save rent somehow, after years in office, ends up going home worth millions.

It’s a common DC success story.  And yet, no one seems to question it.  It’s just quietly accepted as something that just happens apparently.  It certainly isn’t a result of their salary, unless they are budget wizards and live on dust and water.

Most disturbing though is this:

Under the ethics rules Congress has written for itself, this is both legal and undisclosed.

Talk about the fox guarding the hen house.

Earmarks have long been controversial, with the focus on spending that unduly favors campaign donors or constituents. The Post’s review is the first systematic effort to examine the alignment of earmarks with lawmakers’ private interests.

Earmarks are a fraction of the federal budget, and the numbers uncovered by The Post are relatively small in the scheme of the overall Congress, but the behavior by lawmakers from both parties points to a larger issue at a time when confidence in Capitol Hill is at an all-time low.

Earmarks are a fraction of the federal budget – that’s true.  But they are a perk that Congress has granted itself where lawmakers have the ability to loot the treasury in the name of their own interests (while using the façade of helping their district or state). 

And it’s not the only perk.  Insider trading for instance.  President Obama brought it up in the SOTU address:

In response,the Senate last week passed legislation that would require lawmakers to disclose mortgages for their residences. The bill, known as the Stop Trading on Congressional Knowledge (Stock) Act, would also require lawmakers and executive branch officials to disclose securities trades of more than $1,000 every 30 days.

I have about as much hope for that happening as Congress moving to prevent the use of earmarks.  At the same time the Senate introduced the insider trading legislation it defeated an amendment, 59-40, that would have permanently outlawed earmarks.

Read the whole article – it’s a litany of what is wrong with our system.  It incentivizes behavior like this and, it leave the policing of that system to the very people who benefit from it.

It is the very definition of “dysfunctional”.

~McQ

Twitter: @McQandO