If you want stock trading by congressional representatives (or government officials more broadly) to be banned, I don't think it matters whether they actually beat the market.
The best argument against stock trading is that even the appearance or potential for impropriety of this kind violates the public trust and undermines faith in our governing institutions.
Being an elected official should come with borderline draconian limits on how you are allowed to spend your money.
Is there any risk this just filters out any sensible people from ever wanting to be a politician and selects for the wrong type of person entering those jobs
Yes and in fact, banning individual stock trades would likely force anyone who already owns individual stocks that have appreciated and wants to run for office to sell them and pay a large capital gains tax bill. That disincentivizes anyone who is financially successful from running for office, unless long ago they decided to only invest in mutual funds.
It seems as this article indicates, the 2012 stock sale reporting requirement has made it hard for members of Congress to trade on insider knowledge. However, the public perception hasn't caught up, leaving to demands for more restrictions.
Yes. The reality is (and always has been, really) that we should pay our politicians very well. It would make corruption less appealing and attract a higher level of candidate in the first place. Unfortunately it’s an enormously unpopular idea.
There are numerous jobs where corruption would make more than the pay. It has to be about oversight and accountability, not paying so much corruption is not appealing.
I would be concerned about timing the trades of index funds, so I would propose something like you have to do a one-time rebalancing of your portfolio into index funds and it remains locked up for the entire duration of your term.
But they should definitely be able to invest in index funds at the start because you want them to have some skin in the game of the economy that they are in effect managing.
I think you could have restrictions that make it extremely risky for friends and families to trade as proxies. You could have statutes that codify a judicial presumption for the proposition that a friend or family member of a congressperson making a trade anywhere near close in time or that could be plausibly related to the elected official's access to information is guilty, almost a strict liability standard for this kind of thing.
The degree to which this touches extended circles of friends and families does start to implicate reasonable tradeoffs between who would decide to run for office in the first place.
But I think we're just construing the moral standard for elected officials totally wrong. Nobody is making you run for office. You don't need to be doing this, and you are literally in charge of some of the most awesome power, authority, and responsibility human beings on this planet have ever known.
For God's sake, members of the clergy have to wear a uniform and abstain from sex and having families. I'm not saying we should have our elected officials become a priesthood, but I think we can look to other models of human organization and the way groups keep leaders entrusted with awesome responsibility in check to figure out ways to preserve the public trust that elected officials wield.
Plenty of people who work in the financial services industry face FAR more draconian restrictions on what sort of trading is allowed. Between trade limits, and many unable to invest in anything other than (a limited set of) passive mutual funds and ETF's. And we're not talking about portfolio managers and financial planners -- we're talking even entry level people picking up the phone to find out who to transfer you to jobs.
Expecting that persons in Congress be subject to the same limitations is hardly an issue. And if they don't like it, perhaps they should reflect on the fact that prior to their breaking the fiat currency by spending FAR more than we'd ever be able to pay back, you could, you know, actually just save MONEY and not have the value of your labor stolen by monetary debasement.
Give them a little motivation to return us to the sound money the Constitution calls for and who knows, they might even do it.
So you're convinced that there's more risk of filtering sensible people out of politics with such a ban rather than the opposite, meaning having people act out of self interest because of their portfolio or knowledge?
I think we tend to have a very different perception of Representatives' job requirements than what they do. To them, their job is (a) an obedient voter and speaker for their caucus, (b) a superstar fundraiser for their caucus, and (c) a broker-at-large of power and funds. Probably in reverse order of ambition, as well.
> Overwhelming bipartisan majorities favor prohibiting stock-trading in individual companies by Members of Congress (86%, Republicans 87%, Democrats 88%, independents 81%), as well as the President, Vice President, and Supreme Court Justices (87%, Republicans 87%, Democrats 90%, independents 82%) according to an in-depth survey by the Program for Public Consultation at the University of Maryland’s School of Public Policy.
Yet there is barely any movement to do anything about it. A pretty blatant failure of democracy in the US
Yes part of the problem is the "invisible" part which is more about what policy changes get enacted that wouldn't be if investors weren't part of market? Or what potential regulations -- that might be in the majority's interest -- are not being enacted...
Like, there's legitimate reasons to believe that real estate is as f*cked here in Canada as it is because a large % of members of parliament are either landlords or closely associated with them or at least feel beholden to the property market and realtors as a constituency. Policies which punish housing market inflation are simply inconceivable to them because of their intrinsic biases. Regardless of whether they themselves are "cashing in", or whether they're doing better than the average real estate owner, they still don't represent the general public
Or, put it another way: the foxes are in charge of the hen house.
True, Im seeing that 10% of the intra day trades were were on companies that changed 5% of value that same day. I uploaded the raw data here if you want to check.
If you only measure median performance as this is doing, do any group of individuals' stock trades beat the market? I'd expect most of the alpha to come not from the median transaction but from a few well timed buys or sales.
But at the same time, if I buy a bunch of NVDA stock and lobby congress to loosen export rules and fail then I’ll have a bad return but its still not behavior we want.
> It does not show that no member ever trades on what they know: a few well-timed trades can hide inside thousands of ordinary ones, and this test looks at the typical trade, not the best one.
Not sure the average representative is the right benchmark, that's not the real insiders. The real insiders would be in the upper ranks of congress, with prominent seats in commissions, part of security briefings, and with front row in draft legislations (the average representative first discovers the proposed new law when a 7000 pages final version is dropped on their desk 20 minutes before the vote).
So it seems of the intra-day trades, 10% of the trades occurred on companies that gained 5% in value that same day? Not sure about this, uploading the data to a Google spreadsheet for everyone who wants to analyze this.
I remember reading they don't disclose the exact date and hour of the purchase and sale, so intra-day trading or tight timeline trades are impossible to measure, is that correct?
If I remember right you can also disclose days, weeks or months after the actual transaction took place and just pay some miniscule fine as a slap on the wrists.
You remember wrong, sort of - the law requires the paperwork to be filed within 45 days, so there's no real-time disclosure requirement at all. The fine is very small, though, starting at $200 per violation.
Okay, so the above criticism really only applies to day trading or buying the day of news. I’m guessing that’s very uncommon. If I were a congressman with information I wouldn’t wait until the day of to buy.
Sure, as long as you actually follow through and go to primary sources and do that analysis, I see no problem with using Claude as a starting point. However, please actually go to the sources it gave you and do the analysis yourself. This is way too important for someone to be able to handwave us and say we are wrong.
Tl;Dr please double check with the sources that Claude gave you?
So it seems of the intra-day trades, 10% of the trades occurred on companies that gained 5% in value that same day? Not sure about this, uploading the data to a Google spreadsheet for everyone who wants to analyze this.
I used it as high-level analysis, I'm downloading the data to do my own analysis. Seems 12% of trades are intra-day... but that's the early data I'm seeing
Yeah, I've looked at the net worth of various congressmen recently, and most of the wealthy members were wealthy from before politics. Americans complain about their politicians only getting into the career to get rich, but that doesn't seem to be true. In fact, it's kind of shocking how little they get paid, considering they run one of the most powerful countries in the world. This is even more true at the state level.
They should be paid a ton. And in exchange, no stock trading, complete divestiture from any private businesses, and like a 10 year ban on employment in any private sector capacity remotely related to anything they legislated on or worked on while in office, to name a few sensible restrictions.
I wonder why the US compensates the judges comparatively well, but not Congress. Should Congress be similarly well compensated like the judiciary so that Congress attracts more talent.
Right, but then as others point out, it leads to self-selection: they're also the ones who can already afford to work for reasons other than getting paid.
Another nice example of Claude vibe coding put to good use. It's going to be weird to wrap my head around purpose built websites that organize and sort deep dive info being as accessible and interchangeable as spreadsheets.
>Measured from the day a trade became public, the median purchase did −2.4% against the equal-weighted index over six months (90% range −3.9% to +0.1%), and the median stock members sold did −1.7%: what they bought did no better than what they sold. Measured from the members' own trade dates, purchases did −1.5%. No group of purchases (by party, size, account or disclosure delay) did clearly better than the index.
Not what you would have guessed, given that the topic was inspiring enough to make one person ask AI to vibe code a website to present the info. But negative results are results too and deserve to be reported.
The best argument against stock trading is that even the appearance or potential for impropriety of this kind violates the public trust and undermines faith in our governing institutions.
Being an elected official should come with borderline draconian limits on how you are allowed to spend your money.
It seems as this article indicates, the 2012 stock sale reporting requirement has made it hard for members of Congress to trade on insider knowledge. However, the public perception hasn't caught up, leaving to demands for more restrictions.
But they should definitely be able to invest in index funds at the start because you want them to have some skin in the game of the economy that they are in effect managing.
Seems like this could be a component. You can trade index funds but only once a quarter.
The degree to which this touches extended circles of friends and families does start to implicate reasonable tradeoffs between who would decide to run for office in the first place.
But I think we're just construing the moral standard for elected officials totally wrong. Nobody is making you run for office. You don't need to be doing this, and you are literally in charge of some of the most awesome power, authority, and responsibility human beings on this planet have ever known.
For God's sake, members of the clergy have to wear a uniform and abstain from sex and having families. I'm not saying we should have our elected officials become a priesthood, but I think we can look to other models of human organization and the way groups keep leaders entrusted with awesome responsibility in check to figure out ways to preserve the public trust that elected officials wield.
Expecting that persons in Congress be subject to the same limitations is hardly an issue. And if they don't like it, perhaps they should reflect on the fact that prior to their breaking the fiat currency by spending FAR more than we'd ever be able to pay back, you could, you know, actually just save MONEY and not have the value of your labor stolen by monetary debasement.
Give them a little motivation to return us to the sound money the Constitution calls for and who knows, they might even do it.
https://drum.lib.umd.edu/items/6dbca567-f940-4897-bde1-02610...
> Overwhelming bipartisan majorities favor prohibiting stock-trading in individual companies by Members of Congress (86%, Republicans 87%, Democrats 88%, independents 81%), as well as the President, Vice President, and Supreme Court Justices (87%, Republicans 87%, Democrats 90%, independents 82%) according to an in-depth survey by the Program for Public Consultation at the University of Maryland’s School of Public Policy.
Yet there is barely any movement to do anything about it. A pretty blatant failure of democracy in the US
https://www.bloomberg.com/news/articles/2026-11-12/congressi...
So it’ll be interesting if they actually do it.
Like, there's legitimate reasons to believe that real estate is as f*cked here in Canada as it is because a large % of members of parliament are either landlords or closely associated with them or at least feel beholden to the property market and realtors as a constituency. Policies which punish housing market inflation are simply inconceivable to them because of their intrinsic biases. Regardless of whether they themselves are "cashing in", or whether they're doing better than the average real estate owner, they still don't represent the general public
Or, put it another way: the foxes are in charge of the hen house.
To calculate proper stock returns you need weighted mean. Often in stocks you have a few outliers that give the vast majority of your profit.
I don't know if this is ignorance, but from a methodological standpoint this seems like an attempt to deceive or hide data.
https://docs.google.com/spreadsheets/d/1PD84w61HrL1a6lyAMGCO...
https://docs.google.com/spreadsheets/d/1PD84w61HrL1a6lyAMGCO...
I'm having tons of fund.
But at the same time, if I buy a bunch of NVDA stock and lobby congress to loosen export rules and fail then I’ll have a bad return but its still not behavior we want.
> It does not show that no member ever trades on what they know: a few well-timed trades can hide inside thousands of ordinary ones, and this test looks at the typical trade, not the best one.
https://docs.google.com/spreadsheets/d/1PD84w61HrL1a6lyAMGCO...
Does this article take into account intraday trading or trading where the purchase and the sale occurs within 45 days?
And:
"Is there a way someone could have generated a positive revenue even though they reported as negative?"
Conclusion -- their numbers could still allow someone to make positive return even though they report mostly negative alpha
Gosh I love AI for analyzing lousy reports and articles that are inaccurate.
Tl;Dr please double check with the sources that Claude gave you?
ASCII Table below:
+-------------------------------------+---------+----------+----------+-----------+ | Days compared | Count | Close-to | Close-to | Intraday | | | | close | close | high-low | | | | >= 5% | >= 3% | range >=5%| +-------------------------------------+---------+----------+----------+-----------+ | Same-day buy+sell (loose) | 420 | 6.7% | 14.5% | 10.7% | | Same-day buy+sell (strict) | 245 | 5.7% | 13.1% | 8.2% | | Members' other trades, same stocks | 10,957 | 5.2% | 14.5% | 9.0% | | Every trading day, same stocks | 415,259 | 3.4% | 10.7% | 6.8% | +-------------------------------------+---------+----------+----------+-----------+
Many democracies have similar rules that prevent conflict of interests, but compensate you well.
Yes, it’s almost as if they’re doing this job for some other reason.
An obvious edge that can be abused for insider trading in congress.
So do they beat the market or not?
>Measured from the day a trade became public, the median purchase did −2.4% against the equal-weighted index over six months (90% range −3.9% to +0.1%), and the median stock members sold did −1.7%: what they bought did no better than what they sold. Measured from the members' own trade dates, purchases did −1.5%. No group of purchases (by party, size, account or disclosure delay) did clearly better than the index.
Not what you would have guessed, given that the topic was inspiring enough to make one person ask AI to vibe code a website to present the info. But negative results are results too and deserve to be reported.