Josh Hawley sponsored a bill on government ethics?

https://www.nytimes.com/interactive/2022/09/13/us/politics/congress-members-stock-trading-list.html

Do I agree with Sen. Josh Hawley?  The guy who fist pumped the capital rioters?  This is the dude who was a reliable Trump lackey and election fraud conspiracy theorist?  Didn’t he vote against certifying the electoral college vote?  Yup.  That’s the guy.  This is a weird feeling.  I will probably need to take a shower.

Nonetheless, as a matter of ethics, principal and good governance – I agree, wholeheartedly, that elected officials in the federal government should be prohibited from owning or trading individual stocks or other securities.  This is a perennial issue in congress, that never quite seems to muster the votes to pass. In essence elected officials should be prohibited from engaging in what amounts to insider trading.  In the private sector corporate executives are prohibited from buying or selling stocks based on non-public information they have received as a consequence of their position.  For example, let’s say corporate executives at ABC, Inc. learn that XYZ, Inc. wants to acquire ABC, Inc.  In all likelihood, when information regarding the acquisition of ABC, Inc. is made public the stock price will climb because investors will anticipate their shares being bought by XYZ, Inc.  The CEO of ABC, Inc. cannot buy up ABC, Inc. at the lower pre-public-disclosure price to take advantage of the anticipated valuation bump. That is insider trading.  CEO of ABC, Inc. also can’t tell her brother to buy up ABC, Inc.  That is also insider trading.

Just like corporate executives, elected officials often possess nonpublic information that, once public, will have a substantial impact on a corporation’s stock value.  For example, elected officials become aware that a pandemic is likely to spread across the country forcing many workers to switch to a remote work.  Once in possession of that nonpublic information, Senator ABC buys up stock in Video Conferencing, Inc. at $1/share.  The pandemic then spreads as predicted, schools are closed, business send their employees home.  Schools race to adapt and children are taught via Video Conferencing, Inc.’s software.  Corporations begin using Video Conferencing’s Inc.’s software to conduct their regular meetings.  Due to the swift and dramatic increase in business, Video Conferencing, Inc.’s stock price jumps to $100/share.  As a result, Senator ABC made $99 for every share of stock he bought based on his non-public information. 

The inverse is also problematic.  Rep. ABC learns that Tech Goliath, Inc. is being investigated by the Depart of Justice for Antitrust violations.  Rep. ABC acquires this knowledge as a consequence of her position in Congress.  Rep. ABC holds 100 shares of Tech Goliath, Inc. stock that is currently worth $100/share (total value is $10,000).  Rep. ABC knows that once information regarding the investigation and charges become public, Tech Goliath, Inc.’s stock value will plummet.  Rep. ABC sells off all 100 shares, and pocket’s $10,000.  Once the investigation and charges are made public shares drop to $1/share.  If Rep. ABC had held her stock she would have lost $9,900 but she avoided that because she acted on information the general public did not possess.  Incidentally, our friend Rep. Nancy Pelosi may have done exactly that.  She appears to have sold large holdings of Google (Alphabet) stock just months before news of a major antitrust case became public.

So where does the infamous Sen. Hawley come in?  He sponsored a bill called the Pelosi Act to bar elected officials from owning and trading individual stocks and securities.  I am with you Sen. Hawley!  (I just threw up in my mouth a bit).  I agree wholeheartedly that this is a matter of the most basic government ethics. 

I do wish he was wholly sincere in his effort to hold public officials to account.  If only, doing the right thing for his constituents and the country was what guided his actions.  Unfortunately, the title of his bill the “Pelosi Act” demonstrates his true motivation – to “own the libs; score political points; attack one of the right’s favorite punching bags.  This sort of effort could have been bipartisan.  But by calling it the “Pelosi Act” he showed his true colors and prevented anyone from across the isle from supporting it. 

Logical and rational efforts for better government ethics will always be defeated by self-interest.  You need a healthy spoonful of cynicism to digest anything from the federal government.

The image at the top shows 97 members of congress that reported trades in companies influenced by their comittees.