Market Capitalism and Politics

By: J. Crawford, Columnist

Views expressed in the column are the author’s own.

Economic policy is a touchy area for a lot of Americans; often there’s a bit of nuance and a fine layer of debate over where the nuance ends and where the incoherent pontification begins. It’s hard enough to navigate–and, worse, form opinions on–tax code, market restrictions, stimulus initiatives, and annual federal budget proposals without the creative magician-like misdirection character of some of those on Capitol Hill.

Every issue, if concerned with money and how our government and congresspeople spend it, requires perspective and an open mind. For example, the claim that vast unemployment benefits are contributing to the national supply crisis because, to quote a colleague, “you would receive money specifically for not working,” is ridiculous. When you acknowledge that federal and state unemployment benefits yield more money to working-class families than their own job does, we might figure that (perhaps) it’s time for corporations to increase their wages rather than force Americans back into squalor.

But the main issue at hand–one of those subverted misdirections–is the influence of the market on decision-making. We won’t look at lobbying or Citizens United v FEC, campaign funding or the NRA. Instead, the spotlight falls on recent attempts by progressive Democrats to cripple–and hopefully ban altogether–stock ownership and undisclosed trading in Congress.

U.S. Senator John Ossoff (D-GA) introduced with Senator Mark Kelly (D-AZ) a bill in early January that would force all members of Congress to place any corporate shares into “blind trusts,” which is a bit like keeping your stock locked in a box under your bed, until they leave office. That way, Ossoff’s website reads, “they cannot use inside information to influence their personal stock trades and make a profit.”

It’s no secret that members of Congress have access to certain materials that the general public does not. They’re made aware of the small nuances in economic policy that we miss, and they have experts and–more importantly–lobbyists to predict the market impacts, however minute, of passed bills. Allowing them to buy and sell shares with information the American public isn’t privy to is shamefully unethical.

There are, as in all debates over economic policy, strong arguments against adopting Ossoff and Kelly’s proposal. A particular criticism picks on its lean towards populism, an appeal to middle and working class citizens who may feel neglected by the ruling class; the opposition claims that forbidding stock trading is a short-sighted rush-to-action that could exclude those with hefty stock portfolios from the political sphere.

Good. They’re the problem.

Then, there’s a matter of technicality: members of Congress using inside information to flesh out their trading decisions is already illegal. It’s a blanket financial crime called “insider trading.” Maryland’s resident conservative Democrat-who-has-to-go Steny Hoyer fights on this hill. When asked if he supported a ban on trading individual stocks in Congress in late January, Hoyer called it “an issue I think is dealt with in present law.” 

Enter the nuance. What Hoyer (unsurprisingly) and so many other members of Congress fail to understand is that we don’t have a law that “says you can’t do what people are concerned about.” This is the typical creative misdirection of politicians: the American People aren’t necessarily worried about insider trading, we’re concerned with the effect existing stock portfolios have on how decisions are made. Joe Manchin–another conservative Democrat infamous for voting against environmental regulations because he worries about impacts to shareholders–comes to mind. He owns stock in fossil-fuel industries.

For the unsuspecting eye that claims this is a Democrat-Republican issue or a Liberal-Conservative issue or a Socialist-Capitalist issue, I point toward the bipartisan efforts of Senators Elizabeth Warren (D-Mass), Debbie Stabenow (D-Mich), Steve Daines (R-Mont), and Marsha Blackburn (R-Tenn), who in February introduced new legislation to ban stock trading in Congress, but with a different flavor to their argument. 

“No one should ever have to wonder whether their Member of Congress is working for the public interest or their own financial interest. I’ve fought for years to root out corruption in Washington, and to ban federal officials from owning and trading individual stocks,” said Senator Warren. “With Senator Daines and this strong coalition, I’m proud to introduce the first bipartisan bill in the Senate on this critical issue, and now we have a real chance to get it done.”

It’s strange to see this level of bipartisan support on something so progressive. The motion is not unique to the Senate; in late January, Representative Jared Golden (D-ME) delivered a letter to both Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy demanding reform. It was signed by twenty-seven representatives, and though only two Republicans joined the letter, the fact that one of them was Matt Gaetz (R-FLA) isn’t insignificant.

We have a responsibility, as the electorate, to demand change. The United States is a representative democracy. Our representation should derive from the will of the people–every person–instead of the pocketbook. “Thinking of the investors” should be permanently removed from the functional rhetoric in Congress. This shouldn’t be a radical thing to suggest.

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