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Archive for June, 2010
Jon Stewart on Obama
Jun 22
Insider trading is legal…
Jun 16
Insider trading is legal… as long as you’re a member of the United States Congress. A bill has been proposed to stop members of Congress from trading on insider information, but the bill seems to be stalled in Congress. Convenient.
The bill, H.R.682 – Stop Trading on Congressional Knowledge Act (STOCK Act), sponsored by Washington Democrat Brian Baird, has only been able to garner 7 sponsors in 18 months.
It is a little suspicious that members of Congress routinely outperform the market. According to Stephen Bainbridge,
A 2004 study of the results of stock trading by United States Senators during the 1990s found that that senators on average beat the market by 12% a year. In sharp contrast, U.S. households on average underperformed the market by 1.4% a year and even corporate insiders on average beat the market by only about 6% a year during that period. A reasonable inference is that some Senators had access to – and were using – material nonpublic information about the companies in whose stock they trade.
See this article by Stephen Bainbridge for more information.
Read the full text of H.R.682 – Stop Trading on Congressional Knowledge Act.
See a summary of the bill below:
1/26/2009–Introduced.Stop Trading on Congressional Knowledge Act – Amends the Securities Exchange Act of 1934 and the Commodities Exchange Act to direct both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to prohibit purchase or sale of either securities or commodities for future delivery by a person in possession of material nonpublic information regarding pending or prospective legislative action if the information was obtained:
(1) knowingly from a Member or employee of Congress;
(2) by reason of being a Member or employee of Congress; and
(3) other federal employees.
Amends the Code of Official Conduct of the Rules of the House of Representatives to prohibit designated House personnel from disclosing material nonpublic information relating to any pending or prospective legislative action relating to either securities of a publicly-traded company or a commodity if such personnel has reason to believe that the information will be used to buy or sell the securities or commodity based on such information. Amends the Ethics in Government Act of 1978 to require formal disclosure of certain securities and commodities futures transactions to either the Clerk of the House of Representatives or the Secretary of the Senate. Amends the Lobbying Disclosure Act of 1995 to subject to its registration, reporting, and disclosure requirements, as well as requirements for identification of clients and covered legislative and executive officials, all political intelligence activities, contacts, firms, and consultants. Requires the Comptroller General to include political intelligence activities, contacts, firms, and consultants in its annual compliance audits and reports.
The pictures of (mostly) former presidents on US currency implies the false notion that these presidents supported paper money, when in fact, they did not. Nor did the constitution.
United States Constitution – Article One, Section Ten
No state shall… coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts
The principal author and “Father of the Constitution” James Madison agrees.
Paper money is unjust; to creditors, if a legal tender; to debtors, if not legal tender, by increasing the difficulty of getting specie. It is unconstitutional, for it affects the rights of property as much as taking away equal value in land. It is pernicious, destroying confidence between individuals; discouraging commerce; enriching sharpers; vitiating morals; reversing the end of government; and conspiring with the examples of other states to disgrace republican governments in the eyes of mankind.
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George Washington
Paper money has had the effect in your State that it ever will have, to ruin commerce–oppress the honest, and open a door to every species of fraud and injustice.
George Washington letter to Jabez Bowen – 9 January 1787
Thomas Jefferson
Paper is poverty,… it is only the ghost of money, and not money itself.
Thomas Jefferson letter to Colonel Edward Carrington – 27 May 1788
Abraham Lincoln
No duty is more imperative on the government than the duty it owes the people of furnishing them with a sound and uniform currency.
Lincoln during the Log Cabin campaign – 1840
Alexander Hamilton
To emit an unfunded paper as the sign of value ought not to continue a formal part of the constitution, nor ever hereafter to be employed; being, in its nature, pregnant with abuses, and liable to be made the engine of imposition and fraud; holding out temptations equally pernicious to the integrity of government and to the morals of the people.
Alexander Hamilton – Resolutions - June, 1783
Andrew Jackson
In reviewing the conflicts which have taken place between different interests in the United States and the policy pursued since the adop tion of our present form of government, we find nothing that has produced such deep-seated evil as the course of legislation in relation to the currency. The Constitution of the United States unquestionably intended to secure to the people a circulating medium of gold and silver. But the establishment of a national bank by Congress with the privilege of issuing paper money receivable m the payment of the public dues, and the unfortunate course of legislation in the several States upon the same subject, drove from general circulation the con stitutional currency and substituted one of paper in its place.
Andrew Jackson - Farewell Address – 1837
Thanks to Lawrence Parks and his lecture for the idea.