Yesterday’s “60 Minutes” on CBS included a report on members of Congress profiting from privileged information. The report was based on a upcoming book by Peter Schweizer, a research fellow at the conservative Hoover Institution, and includes instances of Rep. Spencer Bachus and House Minority Leader Nancy Pelosi, among others, benefitting from investing in industries affected by legislation they were working on at the time. The segment is worth reading/watching.
As Schweizer suggests in the piece, members of Congress should be required to place their assets in blind trusts, as is mandatory for many officials in other branches of the government. While there’s nothing technically illegal about Congressmen using their insider knowledge about legislation to make a profit in the markets, it’s clearly unethical and problematic. I’m a little skeptical that there’s a signficant problem with Congressman passing bad laws for personal profit — there are already far more and greater perverse incentives in effect for insider trading to make an overwhelming difference. The idea, though, that a job as an elected official is a path to investment riches is troubling for other reasons.