Its funny -- out of all the corruption you see from Washington this one seems the most benign. For whatever reason this one gets almost the most constant press. Maybe because its the easiest to fix but isn't.
> out of all the corruption you see from Washington this one seems the most benign
Lawmakers deciding what laws to argue against/for based on how much money it'll get them personally is a benign issue? It's a very hard problem to solve, when the people making the laws have to outlaw behavior that makes them rich, but it's a very worthwhile one if you manage to get it down, because then you'll again get politicians working for the people rather than against.
Trading on inside information has that causality going on the other direction. It's them picking what stocks to buy depending on what laws are being most argued for/against. Every stock looks the same from their POV, and there's no reliable mechanism for making them prefer one law over another.
The GP is right. It's campaign contributions, career rolling doors, and direct payments that make them pick one law over another. Inside trading only let them directly steal money from the population with no strings attached.
Peoples understanding of what "corruption" is differs by a surprising amount.
The boundaries between corruption, lobbyism, incompetence and nepotism can get very blurry (sometimes even actually representing your constituents interests can look this way!).
But policy makers enriching themselves by insider trading are seen as corrupt by pretty much everyone.
What is the less benign corruption seen in Washington that you feel is most pressing?
Insider trading is a form of theft. Every trade has a counterparty who missed out on those capital gains because they did not have their thumb on regulatory levers.
Well it’s pretty benign if they aren’t making different decisions on laws based on existing holdings. That’s just insider trading which is a tax on the shareholders.
Bribery or anything else that affects their lawmaking decisions is significantly worse because the impact is so much larger.
But there is a third option: They are making decisions based on what will move something the most - doesn't matter what, and doesn't matter which way, and doesn't matter for how long. Then they invest in that thing a bit before the decision becomes public that moves that thing.
How can you be certain that policymakers won't make decisions that help their trading instead of their constituents? The incentive is already there, and the whole thing is legal, too.
Don't get me wrong, I think campaign donations or even more explicit bribes are a huge problem, too, but it is already insane to me that you would ban and prosecute "ordinary insider traders" and just let lawmakers do whatever. If presidents have to give up peanut farming, then asking for congressmembers to be utterly decoupled from stock trading decisions is only fair and sensible in my view.
