slibhb parent
Despite Congress' general dysfunction, this seems like a problem that could feasibly be solved. It would make most Congressmen of both parties look good to pass a bill that e.g. restricted sitting members to index funds/mutual funds/etc.
Even that is open to massive bias. Who would vote to curtail the 7 tech giants when their own portfolio is basically the SP500 those companies dominate?
The SP500 is probably the most popular investment in America, perhaps aside from housing. Wouldn't hurt to have lawmaker's fortunes broadly aligned versus narrowly aligned with specific corporations.
That can go very poorly like in 1929, 1965, 2000, etc. and it is going to go poorly again and show everyone why it is a bad idea.
https://www.currentmarketvaluation.com/models/s&p500-mean-re...
Whenever the S&P 500 craters, it is the best time to buy. Warren Buffet talks about it all the time: "Don't bet against America." There is no other large rich nation on Earth with such a dynamic economy. That (partly) explains why the US can bounce back so quickly (compared to other countries) from devastating economic downturns.
Great intention, but too simplistic. The lawmaker has a third party set up a trust for the benefit of his children and the trust owns a company in yet another jurisdiction that just happens to not only take a position in a certain stock, but probably provides "consulting services" for a healthy fee. And that is the simple version. By the time the lawmaker's interest is fully obfuscated, the legal structure is fully compliant with every letter of the law, just not the intention. Better to have fewer laws that are actually enforceable.
That's like saying "why bother banning insider trading? People can just obfuscate their illegal trades".
Yeah, sometimes people can break laws and not get caught. But that's no argument against laws. Some congressmen might be able to hide their investments, but sometimes they'd get caught and plenty of them would not take the risk.
There are already insider trading laws which almost everyone has to comply with, congress people being an exception. They specifically allow insider trading for themselves while prohibiting it for everyone else.
If you work in a financial company which does trading often times you are very restricted in what you could do. You also have to report all of your accounts plus close relatives accounts.
And if you have an insider info and give it to someone else, no matter how remote from you it's still against the law to trade based on that and it's not "fully compliant with every letter of the law"
A new "boutique" mutual/ETF would spin up overnight which included just the assets already being insider traded.