Category Archives: insider trading

Close One Loophole, Open Another

Recently there was a shocked reaction to news that our Congress people used knowledge that was privileged (because, supposedly, it was politically necessary to the law-making process) to buy and sell stocks for their own personal gain. This is insider training and it is illegal for everyone, except, apparently our elected representatives in Congress.
In order to close this loophole in the insider trading of stocks a new law was passed in Congress and signed by President Obama. We were pleased that our reps voluntarily chose the path of fairness, which they sort of had to do given that their game had been exposed to the light of day. Now, however, we are told that once again the power these lawmakers hold has led to abuse. These lawmakers, who we thought had done something laudable, actually left a loophole in the law they themselves designed to close the insider trading loophole. Although they cannot use the info to which they are privy to buy and sell stocks, their families still can.
Are we right to be disillusioned by our government? Are we right to think they are possibly robbing us blind? Are we justified when we think about voting them out of office? Despite the fact that our answers to these questions would be “yes”, “yes”, and “yes” we know that there are risks to just replacing them all with their opposites. First of all, there is nothing to stop these new representatives from indulging themselves in exactly the same way as their counterparts. In the second place, we have seen the dangers of replacement just for the sake of replacement. Just because we are not happy with those who currently hold office does not mean we will be well represented by the opposition candidate.
We know our representatives are too intelligent to have left this loophole in the law by accident. In fact there were two versions of the law – one with the new loophole, one without. Guess which one they chose? This is exactly the kind of activity that makes us feel that our government is broken. We have relied on a certain idealism, on checks and balances, on public scrutiny, and on the necessities of facing frequent elections to provide us with a government that truly represents the American people, but what we often seem to get is a government that helps itself and its members first and provides the rest of America with the leavings. Get a grip on your greed Congress and stop undermining our democracy.