In the United States, members of Congress wield substantial power in allocating funds to public corporations through various means, such as subsidies, government contracts, and tax incentives. Moreover, there exist less obvious conflicts of interest. Federal legislation inevitably impacts the business environment, as the government establishes the rules governing various industries. Often, these regulations align with the interests of companies in which members of Congress have personal investments. Concurrently, they are legally permitted to invest in the U.S. stock market, allowing them to potentially profit from the success of these same companies. This situation raises concerns about potential conflicts of interest within the legislative branch, which we will explore in this article.
An entire online community has emerged in the United States, dedicated to monitoring and mimicking the investment decisions of congresspeople. This practice is rooted in the belief that investing in companies favored by lawmakers can be a sound financial strategy. It’s important to acknowledge that these investments are based on public information about public representatives, but it does underscore the issue of potential conflicts of interest. The public can see what trades congressmembers make, but not why they make those trades. I believe the WHY behind many of these trades, is due to the access congressmembers have to confidential information discussed in congressional committees which help them make incredibly successful investment decisions. To assume that these incentives are not occasionally exploited by members of Congress would be overly optimistic.
Consider the case of Nancy Pelosi, a former Speaker of the House, who has faced allegations of using her influence to benefit her stock trades. These allegations have been corroborated by the stock trading successes of the online community of traders I referred to earlier. This example illustrates how public servants can personally gain from their positions, seemingly contradicting the ideals they claim to uphold. The common thread is clear: our representatives are not consistently acting in the best interest of the American people. They must be held accountable, especially when their involvement in allocating funds ultimately derives from taxpayer dollars.
The transparency of such investments is undeniable, and defending congresspeople’s right to buy stocks in public companies can be seen as either uninformed or supportive of corporate cronyism. These members who are abusing their positions, or obfuscating their responsibilities in order to avoid the blame for what the government does, are in my opinion acting like Fascists. Certainly this accusation is overused and we don’t make it lightly, nor do we mean it laterally. We are not saying our congressmembers ARE fascists. Some of them just seem to be fascism-curious based on their actions. We use the term “fascism” cautiously, not in the sense of racist ultranationalism but rather in the context of government intervention in economic affairs and the concentration of authority in the executive branch.
While there have been efforts by a handful of congresspeople to introduce bipartisan bills aimed at prohibiting stock trading by elected representatives, unfortunately, these measures did not pass. Regrettably, the movement advocating for such reforms has yet to gain significant momentum, making it unlikely for such a bill to pass in the foreseeable future. It appears that, for many, the alignment of their representatives’ rhetoric with their political beliefs takes precedence over concerns about potential corruption. However, it is perhaps more accurate to suggest that the lack of widespread public engagement or investment in these matters contributes to the prevailing apathy toward this issue.
In conclusion, it is imperative that we address the issue of congresspeople trading stocks while in office. If there is a belief that lawmakers are inadequately compensated for their qualifications and credentials, they have the authority to adjust their own income, and the American people can choose whether to support such adjustments. Allowing individual stock trading by members of Congress diminishes our ability to influence their compensation packages. Instead, it is crucial that we advocate for measures that mitigate potential conflicts of interest and uphold the principles of transparency and accountability in our democratic system.