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You may have missed this story on Marketplace, which is aired on many public radio stations.  Just file it under Another way everybody else gets screwed.

Members of Congress and other Washington insiders have average returns on the stock market that are well above average, according to a study by a professor at Georgia State University.  The study was done by Prof. Alan Ziobrowski, who analyzed hundreds of financial statements from elected officials in DC.  He shows that the returns reported are often more than one percent above the average investor -- that's 12 percent more per year.

Why?  Because what happens in Washington can move markets, so if you know about pending legislation before most people, you can place your stock trades accordingly.

But wait a minute, isn't insider trading illegal?  Whoops, apparently not, according to Craig Holman of Public Citizen.   The Securities and Exchange act does not apply to elected officials, their staffs or lobbyists.

As the professor says, " the real danger is that members of Congress will vote their portfolios, instead of in the interests of their constituents."

Memo to activists: After we get some decent healthcare legislation, this might be a good act to get behind

THE LINK TO THE MARKETPLACE STORY IS HERE.

Originally posted to Atlanta Biker on Thu Sep 17, 2009 at 06:36 PM PDT.

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Comment Preferences

  •  why are you shocked? (2+ / 0-)
    Recommended by:
    DBunn, JerichoJ8

    Business and government have always been in bed together. Besides, I'd love to have that ability to perform insider trading.

    This is why health care is such a tough issue. It's not losing momentum because of smears or "death panels" or FOX News; think of how intertwined the health care industry is with the economy, and then try to please everyone in there. See, you can't do it so quickly, can you?

    People panic too much on this site.

    by thematt523 on Thu Sep 17, 2009 at 06:45:32 PM PDT

    •  Reason to never change anything (0+ / 0-)

      I'm fine with change, as long as everything stays the same as always. Heh.

      Seriously, though, you have a legitimate point. Real change will always mean a big bump for someone, maybe a lot of people. The 'bump' can be a new expense, or a drop in revenues (like, say, losing your job), or having to give up familiar avenues and learn new ones, or all of these together. That's why we tend to be cautious about change, unless the need is urgent and dire. As it is with health care today, for instance.

      The other side of the argument, of course, is the cost of NOT changing. Sure, we'd like to keep doing things the way we always used to, but if external factors change and we do not, eventually that doesn't work in our favor. We have to be honest with ourselves-- does the behavior that seemed to work well enough in the old days still deliver the goods? Have we in fact reached the point where the high cost of change is a bargain compared to the cost of not changing?

      Clearly, we're at that point with health care, but that's not quite the whole list. The need for change-- urgent, dire need-- is everywhere. Global warming, peak oil, we gonna fix those things without changing much? The rise of China (and India, Brazil, Russia, the Gulf States... etc), the increasingly wierd distortion of our own society into a collection of bankers, congressmen, and beggars, these things look like changes in external factors to me.

      So, maybe what we need to do is recognize that we're in an era of change, and our big choice is not between change and no change, but between change that we choose and manage, and change that just happens to us all chaotic and willy-nilly. One thing is for sure: if we don't pick the former, we will surely get the latter.

  •  Backwards, my friend: (3+ / 0-)
    Recommended by:
    Marie, carpunder, JerichoJ8

    "Memo to activists: After we get some decent healthcare legislation, this might be a good act to get behind"

    It is doubtful we'll ever get good HCR if we do not fix stuff like this first. Not to pick on 'ol Charlie Rangel, but please explain to me how you go to Washington as a public employee (which is all he's ever done) making around 100k a year, and now he's a worth many, many millions?

    And he is hardly the only one.

    "And so, my fellow Americans: Ask not what your country can do for you - ask what you can do for your country." -JFK

    by RyanBTC on Thu Sep 17, 2009 at 06:47:02 PM PDT

  •  This is misguided, in my opinion (0+ / 0-)

    Legislators don't vote their portfolios in some kind of dynamic, holdings-specific sense.  That would be much too risky.  Rather, they vote their class interests, and they are mostly from the same class.  

    Al que no le guste el caldo, le dan dos tazas.

    by Rich in PA on Thu Sep 17, 2009 at 07:06:17 PM PDT

    •  Medicine is big business and (0+ / 0-)

      any cuts (or true cost savings) for medical care, reduces the profit in their portfolios.  It's not that private health insurers return that much to them, but they are very helpful in keeping the left distracted from seeing all the other businesses and corporations that are profiting off real and imagined ill health of Americans.

      "Dulled conscience, irresponsibility, and ruthless self-interest already reappear. Such symptoms of prosperity may become portents of disaster!" FDR - 1937

      by Marie on Thu Sep 17, 2009 at 07:20:56 PM PDT

      [ Parent ]

  •  Funny typo (1+ / 0-)
    Recommended by:
    etbnc

    ... from the link in the diary:

    Inside information on dozens of issues, from bank capitol requirements to new student loan rules, can move markets. (my bolding)

    We knew banks have capital requirements, but apparently they now have capitol requirements as well. Which is pretty much the theme  of the diary, I suppose.

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