Ban members of Congress from buying, trading stock while in office

Our democracy is predicated on the consent of the governed. But the minute the American people think that their representatives are putting their personal interests first is the minute the American people start to reconsider that consent.

SHARE Ban members of Congress from buying, trading stock while in office
A sign for Wall Street hangs in front of the New York Stock Exchange, on July 8, 2021.

A Wall Street sign hangs in front of the New York Stock Exchange, on July 8, 2021.

AP Photos

There’s an iron rule of investing: Unless you’re Warren Buffett or have access to insider information, you won’t make money trying to outsmart the stock market. In fact, according to a report by CNBC, nearly 80% of professional investors fail to beat the market every year and hardly anyone does over a 10-year period.

And yet, members of Congress continue to have unusual success trading stocks while in office. Between 2004 and 2010, research found that members of Congress beat the stock market by 20%, with some even beating the market by up to 35%.

When I look around the halls of Congress, I don’t see many Warren Buffetts, but I do see a lot of people with access to insider information. That’s a problem.

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And there is an easy solution: Members of Congress should be banned from buying and trading stocks while in office. Full Stop. And we can get this done today — by passing the already written “Ban Conflicted Trading Act,” of which I am a proud co-sponsor.

Since I was first elected in 2018, I’ve not traded a single stock, nor do I own any. I’m no Warren Buffett, and I don’t try to be. Of course, I’ve known when new federal investments were going to cause surges in value for certain sectors and companies. But I refuse to engage in any financial transaction that would cause the American people to question whether their elected officials were putting their self-interest above their public obligations.

I wish my colleagues felt the same way. But too many of them — on both sides of the aisle — have put their self-interest first. The surge in purchases by members of Congress of vaccine and telehealth stocks just before COVID-19 shut our economy down may have an innocent explanation. But to the American people, it’s a hustle that looks out for our private interests and only then addresses the public we serve.

That behavior is unethical. But it’s not illegal. Right now, there’s nothing that bars lawmakers from trading shares of companies that could be affected by laws they pass. The Stock Act, passed in 2012, does ban senators and representatives from using nonpublic information for financial benefit, but it’s almost impossible to enforce. In a world of information abundance, our “insider information” is often knowing which pieces of public information are true rather than holding the smoking-gun of truly private intel.

Our democracy is predicated on the consent of the governed. That consent cannot be mandated. But once it is lost, our entire democracy crumbles — because the minute the American people think that their representatives are putting their personal interests first is the minute the American people start to reconsider that consent. That’s why congressional ethics matters.

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In 2021, Gallup polling found that just 12% of Americans say they have a “great deal” or “quite a lot” of confidence in Congress; 51% said they had “very little” or “no” confidence in Congress. “Internet news” instills more confidence than we in Congress do.

That distrust puts our democracy in danger, but we can fix it. Not through our words, but through our deeds.

Democracy matters. Ethics matters. Integrity matters. We must pass the “Ban Conflicted Trading Act” today.

Sean Casten is the U.S. representative from Illinois’ 6th Congressional District.

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