According to a recent ABC News/Washington Post poll, only 13 percent of Americans approve of the way Congress is doing its job. Apart from wondering what that 13 percent was thinking, you also have to wonder if Congress could possibly make matters worse.
Last week, they did.
One reason Americans are so dissatisfied is the sense that Congress doesn’t play by the same rules it imposes on the rest of us. Take, for instance, the matter of Congressional insider trading–the trading of stocks and other securities by people who have access to non-public information.
Insider trading is a felony, and for good reason: The belief that markets can be gamed by people with privileged access to information can destroy confidence in the honesty of those markets. People who are in a position to know things that the general public doesn’t must be like Caesar’s wife: above suspicion.
Congress failed that test, as a 60 Minutes broadcast in November exposed. So, Congress, in damage-control mode, pulled a 2006 bill, the “Stop Trading on Congressional Knowledge Act,” called STOCK, off the shelf and put it on the fast track to passage.
STOCK was supposed to do three things: first, it outlawed the buying or selling of securities on the basis of non-public information by congressmen and their staffs. Second, it required that these same people disclose trades worth over $1,000 within 90 days of the trade.
The third provision would subject a new class of Washington insider, so-called political intelligence consultants, to the same rules as lobbyists. If you have never heard of “political intelligence consultants,” that’s because they want it that way.
Unlike lobbyists, you see, who advocate for the passage or defeat of a bill or regulation, these consultants pump people in Congress for information that they then pass on their clients, hedge-fund managers and wealthy investors. This information gives their clients an insider’s advantage when it comes to buying or selling securities.
The version of STOCK passed last week by the House omits this key provision. It was stripped out by the Republican leadership.
If the goal was to restore confidence in Congress, the Republican leadership failed. If the goal was to assure ordinary Americans that financial markets are on the up-and-up, the leadership failed. If the goal was to send a message that the rules are the same inside the Beltway as they are outside, then they failed.
After all, nobody is talking about putting these firms out of business — we just want to know who is benefitting from information the rest of us don’t have access to. But apparently even that was too much to ask of the House.
You know what else is too much to ask? Asking the American people to believe that Congress is sincere about cleaning up its act.
Folks, I’ve said this before and I’ll say it again: Free societies and the free market cannot flourish in the face of rampant corruption. We must re-build a culture of virtue at every level of public life if we are to survive.