January 30, 2012
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appalling...not surprising. just appalling.
Since a lot of people were in a panic about the state of the stock markets, I think a ratio of the Congress trading compared to the average investor during that time would be more relevant. I agree in principle to the idea of the STOCK act, but this graphic doesn't really mean much to me right now.
WRT your concern, what you should be thinking about is this: Did the average investor have the power to introduce legislation or vote for bailout funds that would directly affect the financial companies they were trading? Furthermore, did the average investor have a backstage pass to Congressional closed-door meetings and deliberations that would have given them an inside track on what was going to happen on The Hill during that tumultuous period?
When Congress is called on to respond to a crisis, the citizens that elected them should be able to rest comfortably in the knowledge that Congress' focus is on making the right legislative calls, not gathering insider insights to fuel trading in their personal portfolios.
You are correct, however, in that this spike in trading doesn't *prove* that anyone was trading on insider info per se. However, if they were, it's unlikely they could have been prosecuted and at the time that this was all going on, the media and voters had no idea that lawmakers were doing all of this trading because the disclosure rules are so terrible.
The STOCK Act is hardly a cure-all, but it'd be a big step towards bringing light to an important issue and putting Congress and voters on a (more) even playing field.
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