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Comment by Aurornis | Hacker News Reader

Restricting public servants to only government bond investments would be a great way to discourage anyone with financial sense from running for congress.

I think the simplest way forward would be to require immediate, not delayed, disclosure of trades. If they’re doing something, let everyone see it immediately and it specific detail.

We could also implement some planned trading requirements for large purchases of individual stocks: If someone wants to trade more than $100K of something, make them announce it 7 or even 1 day in advance. They still get to buy it, but the market can front-run the investment if they believe there’s inside info at play.

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It's not so challenging and it happens widely in industry: people are often heavily restricted in the range of trading they may conduct in cases where their business would give them insider knowledge, such as in certain parts of banks, accounting firms, credit rating agencies etc

> It's not so challenging and it happens widely in industry:

Restricting people only to government bond investments (the first line of my post, the point I was responding to) does not happen widely in industry.

Restricting people’s trades of a few stocks where they have insider knowledge does happen. I would be in favor of laws against congressional insider trading, too, but not laws forbidding all stock ownership or restricting them to government bonds as was proposed above. That’s just short sighted.

You're creating a straw man (perhaps accidentally) which makes your argument seem such stronger than it is against the actual proposals.

Neither the comment you replied to, nor the proposed law, suggest the limit should be solely government bonds, which is what you're arguing against in your comment, they both say government bonds OR publicly traded diverse stock funds, for example ETFs.

Maybe you still believe that's restrictive enough to be a problem, but considering many people, even the likes of Warren Buffet, consider the best investment advice to be either "just invest in ETF/funds that track the whole market" or "just invest in a mix of ETFs/funds and also some bonds", while nobody considers "just invest in government bonds" to be good advice, your argument would be a hell if a lot weaker if actually applied to what IS being proposed rather than pretending that the proposal only allows investing in government bonds.

This is what needs to happen.

Banning trading outright is impossible and won't happen.

Congressional staff and congresspeople (and their families + extended families) should be forced to trade via an exchange that publicly discloses immediately, and any person on public dime needs to disclose specifically WHY they made the trade or, there needs to be some sort of mechanism that forces said congressfolk to disclose their trades 48 hours prior to execution, and held for at least X amount of time. Any selling of security needs to be announced well ahead of time.

They should also, like judges, be recusing themselves from decisions and deliberations known to directly favor or hinder those personal holdings.

Ha! The supreme court (what a joke) has said that it's cool to give "gratuities" after the fact to judges or lawmakers who do what you want. It's not a bribe, it's just a gift or a tip!

Yes, well, it’s obvious the current Supreme Court is ethically and politically compromised.

Well, currently we have a ton of Congresspeople who are primarily motivated by their "good financial sense" (for obvious reasons e.g. this study). So, I think we could do with a few more Congresspeople with less financial sense and more genuine motivation to improve the lives of their constituents.

> discourage anyone with financial sense from running for congress.

What's wrong with that? "If you choose a life in government, you'll never be rich, but you may be powerful" seems like a perfectly acceptable situation.

Even the most disruptive proposals in these comments aren't banning representatives from being rich, it's just banning them from adding extreme amounts of additional wealth while in office.

It may be acceptable for them, but I'd prefer people who have financial sense in charge of the budget and people who are so power hungry as to forgo money kept as far from governance as possible

So you're saying we currently have a Congress with financial sense?

Only moreso than the counterfactual. The status quo only rewards those with financial sense who are willing to be a little corrupt, which undermines the effect. Really, we should just pay them 7 figures

People who want to enrich themselves rarely care about others. It's the opposite of people you want running a government.

You shouldn't be punished for being financially intelligent. You are conflating corruption with financial competence.

We don't stop athletes who use the gym regularly from competing because all the guys using steroids also went to the gym a lot.

> You shouldn't be punished for being financially intelligent. You are conflating corruption with financial competence.

And you're conflating "being financially intelligent" with "being primarily motivated by profit and personal gain".

A conman is often "financially intelligent", too, but what they're inclined to do with that intelligence matters.

You aren't being punished, nobody is forcing you to run for Congress.

And if you consider "I'm not as rich as I am physically capable of being" to be "punishment", you have absurd priorities and should not be in congress.

There's so much more to life and the world than the number on your portfolio for christs sake.

People have this mindset like they are the buddha or something, and then you show them a trick to save 25% on every amazon order, and they are all over like addict shown a pill stash. So dumb

> Restricting public servants to only government bond investments would be a great way to discourage anyone with financial sense from running for congress.

The flip side is it also discourages anyone primarily looking to profit off it, rather than being interested in actual governance.

People think that quality governance is all about the intelligence to know the best rules to decide for the greater benefit of society. Politicians behave badly because of incentive. Good rules would require correct incentive, not merely higher quality individuals. Intelligence doesn't dissuade corruption of power, if anything it accelerates it.

Unintended side effect might be that congress would use their power to make bonds a more profitable avenue of investment, creating a very reliable, high-interest retirement vehicle for average people (rather than getting into the roulette wheel of the stock market). Imagine if USG-backed 15% treasuries were a thing?

Where do you think the money for those 15% interest payments would come from?

There are historical examples of what happens when lawmakers mandate high amounts of money creation. It doesn’t end with the people being better off. It usually destroys the economy.

> would be a great way to discourage anyone with financial sense from running for congress.

So it's better to encourage people without any morals?

I think we need politicians who have the financial sense to see that the government is built to serve people whether or not they're invested in the market. As it is now now we've completely failed the American people.

Right now congresspeople are only paid about $200k. People who want that position are likely to be people who plan to profit off of it in other ways, at the expense of the nation. We should pay congresspeople more, as well as increasing trading and lobbying restrictions, to help attract honest, capable candidates.

Agreed. The whole idea that they are in it for the “service” is a really naive idea. If we want honest hardworking and qualified people to do the job the salaries should be in the 500k to 1.5m (senate) range. Then knock out the corruption.

According to this link [1] 200k would put someone above the 80th percentile and not far below the 95th percentile in terms of household income for the DC metro area, so I don't see how that could be considered "underpaid", especially when you consider the benefits.

[1] https://statisticalatlas.com/metro-area/District-of-Columbia...

The type of person who gets elected to Congress is likely to be far above average in charisma/intelligence/skill, and hence underpaid relative to what they could attain in the private sector

If someone is paid 500k-1.5M, do they suddenly lose interest in further enriching themselves? I don't understand this argument.

I mean, it sounds dumb, but returns from further wealth are logarithmic; after a certain point, the only thing you can buy more of is power. And you’ve already got that, in this case!

If you’re in a situation where getting more wealth could endanger your power, it makes sense not to wealth-max since, again, what else could you buy with it? But you need to get into the “what else could you buy with it” regime for this reasoning to make sense.

Someone who only has basic needs gets there pretty early. But even the relatively unenlightened don’t need the second jet except, yannow, for power.

i'd support that if and only if it required congresspeople to divest from individual stocks. with perhaps some compromise like...maybe they could hold "total market" index funds, or are only able to trade once a year, or etc

> Restricting public servants to only government bond investments would be a great way to discourage anyone with financial sense from running for congress.

Running for congress is already kind of a financially silly thing to do, that ship has sailed. Let’s pull the trigger on this and just see what happens.

We've been doing it. There has been a severe degradation in quality.

Congressmen's salaries need to increase by 10x.

>Running for congress is already kind of a financially silly thing to do

Evidently it's not. There's another problem that it seems to me that it's mainly wealthy elite who get in. How many working class people are there in major leadership positions?

> Evidently it’s not.

Cards on the table: I just don’t think people operate with single incentives like that, and even if they did, it’s a cost I’d pay easily.

Not just individual disclosure, as families and friends share information. It's a sticky web.

ETFs and mutual funds wouldn’t suffer from this?

Restricting them to invest in equities via index funds/ETFs, on the other hand, is not nearly as problematic.

To what end? Most congressional actions that could conceivably lead to insider trading benefit aren’t directed at single companies anyway. They’re directed at sectors or policies which impact many companies, which is easily captured by ETFs.

If Congress is acting on singular companies, the congress people are usually smart enough to avoid obviously trading that singular stock.

> They’re directed at sectors or policies which impact many companies, which is easily captured by ETFs.

The abstract doesn't seem to agree. The use of "firms" and "corporate" implies individual companies.

"purchase of stocks whose firms receiving more government contracts and favorable party support on bills. The corporate access channel is reflected in stock trades that predict subsequent corporate news and greater returns on donor-owned or home-state firms."

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