STOCK Act Faces Uphill Battle, And Doesn’t Go Nearly Far Enough
Categories: Commentary, Media
MSNBC offers an important analysis of what is going on in Washington over the problem of congressional insider trading. As they point out, the big problem is going to be enforcing the law. The bottom line however is that the STOCK Act in my opinion does not go nearly far enough. It will not stop lucrative IPOs which are simply a form of legal bribery, and the act will do nothing about land deals. And do we honestly think that the Securities and Exchange Committee (SEC) or any agency is going to take on a powerful member of congress?
Finished reading your excellent book on the holiday and I share your concern that Senator Brown’s proposed legislation does not address several of the book’s reforms. However, even the proposed reforms at the end of your book appear to miss the structural problems which forty years of the duopoly (two-party system) have given us. I’m thinking of Rauch’s research, and how impressive combining your work with his results in a complete rigorous analysis of the structural problem, and suggests deeper, more fundamental reforms we need to make.
The strutural problem created by the duopoly is Redistributionism, the political practice of rewarding or benefiting a select few while socializing the cost to the many. In the agenda of ‘democratic socialism,’ the Democratic Party uses federal fiscal policy to reward those corporations and individuals who agree with their ideological point of view. In the agenda of ‘religious nationalism,’ the Republican Party uses federal fiscal policy to reward those corporations and individuals who agree with them. The result is “insidious socialism” and “crony capitalism,” the two similar practices that now entirely determine who is going to be re-elected in the two major parties.
Your suggested reforms are excellent, but even they do not address the more fundamental problem. Regardless of whether Members are denied IPO’s or trading equities or sharing insider information or improving their real estate by their votes, they still have instituted a method of politics which insulates their more extremist true-believers from public efforts at electing moderates. And they–both parties of the duopoly–have constructed a system that results in ‘gridlock’ at the same time record amounts of regulations and legislation are being adopted. The addiction of redistributionism combined with the corrupt practice of insider trading yields a disfunctional legislature, one simultaniously full of legal corruption and the insatiable desire to regulate.
The duopoly SHOULD be self-correcting, as each party checks the corrupt and ideolgically-frozen practices of the other. But over the past forty years, the American evolution from a Welfare State to an Entitlement State has meant both parties adopting the same methodology to winning elections and wielding power. Hence the dead-on apt title of your book.
On December 12th at the Press Building in Carson City, a new third party will go public. After more than a full year’s worth of monthly and bi-monthly deliberations and debate and discussions, a group of philosophers will launch the DuoFreedomist Party, the ‘Party of Prosperity.’ They very much intend to incorporate your ideas and Rauch’s in a political party dedicated to FIXING the structural problems in our governance created by the corrupt duopoly.
Throw Them All Out!
I agree with your statements. I will vote for the person who speaks for True change. The sad thing is most of the voting public is not informed enough to get what the true problem really is. They buy in to the BS they hear on the news. Can I get more infomation on the third party you speak about? Thanks
Dear Mr. Schweizer:
I am nearly finished with your book. Well done! I retired from Honeywell as a V.P. Of Finance so I am very familiar with insider trading laws and requirements. I have a couple of comments and questions if I may. First, a FOX News commentator said the SEC is not sure congressmen are exempt from “insider trading.” Have you heard anything about this SEC comment? The second, and more important question is in regards to non governmental people that trade on “inside governmental information,” specifically, it does not seem that these people (Buffett and Soros), should be exempt from insider trading prosecution since they are not congressmen. What are your thoughts on this issue?
Thanks for sharing any thoughts you have on these questions. I plan on reading more of your material.
Not only does Congress make money on insider trading, they manipulate policies and world events that move the market in certain direction. Create crisis, drive the market down then bail the situation out.
Congress, their friends and families all make fortunes swinging the market like a dog wags its tail.
This not only has to stop, it should have never been allowed
Don’t think the White House isn’t in on the game. Presidents leave office as multi millionaires.
Nothing Congress could do, if they were willing, to restrain their insatiable appetite for power and wealth would ever assure or return this country back to the respected and hallmark of integrity it once enjoyed. As the population ages and the truth of a far better time of prosperity and wealth, the hope for change to the former state wanes.
The only solution is simple – Throw All Bums Out of Office. Finally, there is someone else in this world who agrees with me!
It isn’t about redistribution, duopoly or anything else. This practice is illegal, period. I dont care what the “law” says! I am really thinking of running for office so I can bring this machine down!
I wish Peter would investigate Apple. I realize they are the media’s darling but it would be really interesting to find out how Apple was able to convince the Obama Administration to Grant Billions of dollars of laptops to every child in ever school who received the grand even private colleges. Our local school bit and the only thing i see them doing with them is Moodle.
I would also add that Indiana State Law was violated with this grant as all purchase over a certain dollar amount are to be bid and these were not.
I have asked Peter for details on Pelosi’s Insider Trading.
We will file a Federal Suit against Her for Insider Trading.
They can’t hang Martha Stewart and not hang themselves!
Will be running Television Ads and Print Ads as Independents to voters of the SF Bay area to remove Pelosi. In our opinion Pelosi and Obama are absolutely incompetent even when they ran the majority. Will let you know when the ads will run. Keep up the good investigative work!
James P. Evanhoe
Thank you so much Peter, and I totally agree! We need new blood, new ideas, and new competant leadership on the Hill. The illegal backdoor deals, and idealogical deadlock needs to stop. How they seem to think this okay is beyond me. It has now become known that some of these politicians have a complete and total lack of integrity, and are utterly incapable of maintaining the high level of moral character expected of them by their constiuents and fellow Americans alike.
We down here in North Texas are having a heck of time trying to figure out why TX-24 Congressman Kenny Marchant WILL NOT sign the STOCK Act. Considering according to publically released information, he has seemed to DOUBLE his net-worth from 2008 through the present- while sitting on the House FINANCIAL SERVICES COMMITTEE! Either he is a clairvoyant investment whiz, or he has clearly made tens of millions off of non-public or classified information obtained through congressional privalage-while the majority of Americans lost: our retirements, our college savings, our life savings, our jobs, our dignity, and some of us lost the shirts off of our back! Congressman Marchant meanwhile, maintained silence and kept making a killing off of information that would send any one of us to the “slammer” for decades. I’m also curious as to why he felt he needed to engage in this immoral activity when he was already one the top 20 richest Congressman in office. One word, greed! Toss’m!
Keep up the great work Peter! And keep it coming.
thank you for the honesty, it is needed and never used. I would like to bring a very big idea to you for the fire. I do believe America needs to know some of the simple blatant abuse..Every American President gets a non for profit to rape these days after their term and suddenly gets free money from everywhere. They raise 500 mil for a reverse institutional repo and then they get they’re free ride forever. Bill Clinton got NAFTA, Jimmy Carter got Habitat for Humanity, Reagan, Just say no..now Obama, Let’s move..Just how many causes can we support? Bush raised his 500mil from Gates at the banking summit paying off Bush for his leave no child behind and averted his break up..Obama the Stimulus deal and Solyindra and the waiving the rights to us the tax payer and bank rolling his bundler, just why isn’t this insider trading illegal? the list of the Rape to the American people just goes on and on…I agree we need some rules of Profiteering from the white house. house and congress. We the People are not blind..they say the middle East and Europe are corrupt..let us not forget the North Eastern Alliance. I remember Bush discussing taking down the boarders..we are in affect predominately a socialistic government, all the dressings are there already. look into this non profit thing…it is a big money mover with many payouts, all along the way..it is also a blatant slap in Americans faces to believe we that stupid as to over look this OBVIOUS spiff. This is how the separation in classes is made real..as you described..there is no fairness left, just the division of profit between the predators..be careful my friend these guys play for keeps…
_Throw Them All Out_ is rather disturbing, of course. These folks seem to regard exploitation via government as “free enterprise”.
How wise was Niccolò Machiavelli, when he wrote in 1521 –
…just as good customs, if they are to be maintained, have need of the laws, so the laws, if they are to be observed, have need of good customs. Furthermore, INSTITUTIONS and LAWS MADE IN THE EARLY DAYS OF A REPUBLIC WHEN MEN ARE GOOD, NO LONGER SERVE THEIR PURPOSE WHEN MEN HAVE BECOME BAD (my emphasis).
Discourses on the First Ten Books of Titus Livius, Niccolò Machiavelli
I suppose that if he had been present in Philadelphia, when Jefferson, Franklin, Adams, et al were deliberating and formulating the founding documents, Machiavelli would have predicted our present dilemma.
I’m just about finished with the book and like others find the information very disturbing, but, anything the politicians do doesn’t surprise me anymore. Having liberal leanings I greatly missed the mention of President Bush and Vice President Cheney’s activities. Surely they were on par with the President Obama’s administration. Nonetheless thank you for a very enlighting read.
I agree. I’m sure the same thing happened under Bush rule, how could it have not happened. Although we have different point of views We all need to satnd up and demand more from our leaders they are robbing us blind.
You forgot G. Norquist, Halaburton,&so on.
I forgot the Koch bros.
Is there a way to find out if your Senator has been trading in a particular stock? I am curouis about Senator Claire McCaskill from Missouri and if she ever bought some stock in Cerner Corp, involved in healthcare out of Kansas City. I heard her speaking in front of the Cerner headquarters about 3 years ago and since then the stock has gone from about $36 a share to $112, which includes a stock split during this time frame.
I would like to know more also, I dont think she is clean and I want to know as I live in Missouri.
I did not buy/read your book yet, but I plan to do so soon.
I just saw your talk on CSPAN. Thanks so much for exposing the incredible corruption in Washington/Congress due to insider trading and other abuses (land deals). My blood is boiling now while I think of the astounding hypocrisy of people like Pelosi and Kerry. These are Limousine Liberals who are lining their pockets while purporting to be champions of the poor and oppressed. Keep up the fantastic and excellent and important work you are doing. Where in the heck has the national press been all these years?? They should have reported on this decades ago.
Just received another 10 of Throw Them All Out. Already passed out 4 and will now pass these out as well. Hopefully they will continue to circulate. As a mutual fund portfolio manager I am appalled at this abuse of trust.
while this examination of congressional corruption is fair and balanced in being bipartisan, it’s not so balanced in that corporations escape the same scrutiny.
bigness of both government and business is the real problem. but your criticism on c-span of the mainstream media is off-target. those reporters who don’t work for news outlets that are owned by large corporations are generally not working as reporters, so they probably have to choose between muckraking and eating. in case you hadn’t noticed, the investigative journalism business model is broken.
lastly, if you think researching congressional graft is tedious, researching white-collar crime makes congress look earnest and transparent. do have a go, since the sec seems toothless. maybe you should team up with elizabeth warren.
After reading a small portion of your new book, I came to the conclusion that you only a right wing conservative. You don’t mention names like Gingrich or Cain because we all know how honest, caring and truthful they are. After all, they are Republicans, and we all know that they must never be questioned about their money making. Some day they will be deemed to Sainthood I am sure. the only D.C people you attack are the Democrats. What does that say about YOUR truth and honesty?
Mike…do some reseach..will ya… Peter singled out Republicans as well as Democrates.. TRUST is what is lacking in our congress and gov. now…please do some investigation before you talk about TRUTH and HONESTY..
I’m just in the process of reading your book but I can already tell you that the primary problem with congress is not insider trading. The important problem is that members are elected by money donated by a small number of individuals and corportation who expect to be rewarded in return. And they are rewarded very well indeed. Thus, the legislation enacted in the US is done so for the benefit of who the “Occupiers” call the 1 percent and not the general population. The general poplulation simply provides the bodies needed to conduct the war industry and the money to pay the bills. Unfortunately it will require an act of congress to change through campaign finance reform. Most of the members love the situation the way it is now and the possibility of changing it is very low indeed. Welcome to Banana Republic America!
Just finished your latest book, ‘Throw Them All Out” I was soo inter-
sted in your book, “Architects of Ruin”, [the very best book in its cat-
egory], that I was compelled to order this one. Thank you for all the
time and work you put into it, as it provides documentation of all
we might have suspected but, in reality, had no specific knowledge.
You have revealed what a shocking mess is Congress! Can we hope
for or expect reform??
If the STOCK act doesn’t go far enough, I propose that any profits made during terms in office must be split with the tax payers, since it’s our tax dollars that pay their salaries. I’d be happy to split their profits 50/50. Okay, call this wishful thinking…lol
Just finished your book: Throw them all out…. Informative reading, but how do we Americans implement your changes. Congress is not going to cut the hand that feeds them. Perhaps getting your message to the “Occupy” groups giving them a more realistic focus like “Occupy Congress”. I believe Congressional term limits would also help.
Illegal insider trading refers generally to buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security. Insider trading violations may also include “tipping” such information, securities trading by the person “tipped,” and securities trading by those who misappropriate such information.
Examples of insider trading cases that have been brought by the SEC are cases against:
Corporate officers, directors, and employees who traded the corporation’s securities after learning of significant, confidential corporate developments;
Friends, business associates, family members, and other “tippees” of such officers, directors, and employees, who traded the securities after receiving such information;
Employees of law, banking, brokerage and printing firms who were given such information to provide services to the corporation whose securities they traded;
Government employees who learned of such information because of their employment by the government; and
Other persons who misappropriated, and took advantage of, confidential information from their employers.
Instead of whining about insider trading violations why not just enforce the law on the books. SEC RULE SEC Rule 10b5-1
The Martha Stewart Rule. She went to jail for violating this rule.
I was an NASD, New York Stock Exchange, Pacific Stock Exchange Arbitrator for 13 years and sat on numerous panels some of which were in regards to insider trading.
I was a stock broker for 25 years and this rule was part of every compliance continuing education course ever required.
What can we do as the public to get the SEC to enforce the law?
I write my congressman and they laugh.
I write newspapers and it becomes a 2nd page issue and then it is forgotten.
I give this information to individuals and they would rather watch the bachleor or football instead of becoming proactive.
What they dont realize is Our elected officials create bills and projects that will enhance a portfolio. That act often timess increases the budget. Our taxes pay for thier greed.
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I wish Peter would run for office!!
Just read “Throw them all out” and was impressed by your findings. What we need now is someone or a group to pursue your suggestions for solution. It is one thing to know about corruption and cronyism but another to initiate action.
Peter, have you considered organizing a movement to bring change? Have you considered partnering with “thrive movement” (thrivemovement.com) to bring about change? Sadly, without this initiative I am afraid your book was a waste of time.
It would be nice to expand your website to include any initiatives that we can take (I have already written Reps to support the Stock Act) or are being taken to bring about change.
The impact of your book “Through them all out” will no doubt be responsible for significant changes in the way politicians conduct thier affairs. I would like to suggest a topic that would serve as a sequel to your book. Tax loop holes, their origin and the politicians who championed them. Such a story would expose a lot of greedy people and shed light on just how people with money buy law makers.
Mr. Schweizer’s book was recently featured on the Project On Government Oversight’s “15 Books That Matter” summer reading list. It truly is a remarkable contribution to the literature on corruption in Washington. (The full list is here for those who are interested: http://getinvolved.pogo.org/site/PageNavigator/books_that_matter_summer_2012_reading.html.)
Peter, can you detail who the house and senate members are who have invested in obamacare by their stealthy insider trading?? After reading your book I’m convinced that it’s all about how much they can steal even if it ruins the country. I noticed the repubs don’t rat anyone out ever so they are in on it. Hope you can name them and shame them. Hannity would let you do it I think. We need you to do it now more than ever.