Fed to ban policymakers from owning individual stocks(cnbc.com)
cnbc.com
Fed to ban policymakers from owning individual stocks
https://www.cnbc.com/2021/10/21/fed-to-ban-policymakers-from-owning-individual-stocks-restrict-trading-following-controversy.html
228 comments
You should assume that no one read the article. I certainly did not before coming to read the comments (although I have enough restraint to not comment myself on the substance of it when I do that).
For better or worse, the title and the link is just a discussion prompt. The guidelines all but state that you're not expected to read it before commenting:
> https://news.ycombinator.com/newsguidelines.html
> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
In this case, someone should probably edit the title.
For better or worse, the title and the link is just a discussion prompt. The guidelines all but state that you're not expected to read it before commenting:
> https://news.ycombinator.com/newsguidelines.html
> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
In this case, someone should probably edit the title.
> The guidelines all but state that you're not expected to read it before commenting:
No, noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article.
You can even point out that the article addresses a concern, as that is a useful contribution to the discussion.
No, noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article.
You can even point out that the article addresses a concern, as that is a useful contribution to the discussion.
> noting that accusations of not reading the article are never positive contributions to the discussion is not even in the neighborhood of advocating not reading the article.
That depends on whether you believe that accusations of not reading the article tend to cause people to read the articles.
That depends on whether you believe that accusations of not reading the article tend to cause people to read the articles.
> That depends on whether you believe that accusations of not reading the article tend to cause people to read the articles.
No, what it is fairly charcsterized as it was upthread does not depend on that.
Whether you agree that it is generally good advice might depend on that, or more generally what the net effect of tolerating such accusations is on the tone and tenor of discussions.
Having experienced online discussions in many fora since the 1980s, I tend to agree that accusations of not reading doing more harm than good, like most collateral attacks on presumed motive, background, or other reasons for a post you disagree with rather than addressing and supporting the substance of the disagreement directly.
No, what it is fairly charcsterized as it was upthread does not depend on that.
Whether you agree that it is generally good advice might depend on that, or more generally what the net effect of tolerating such accusations is on the tone and tenor of discussions.
Having experienced online discussions in many fora since the 1980s, I tend to agree that accusations of not reading doing more harm than good, like most collateral attacks on presumed motive, background, or other reasons for a post you disagree with rather than addressing and supporting the substance of the disagreement directly.
I certainly don't read the article most of the time. The comments here are more interesting than the post. They're what I come here for. Besides, it's nearly certain that any important information will be directly quoted here in a comment.
I think that this is a fantastic start, but I agree that this should be extended to Congress and the president and the supreme Court. If we are to trust our leaders, We need to know they are working in our interest and not some random companies.
dang, title should probably be changed :o
This is perfect policy, the Fed affects macros not individual stocks so it sounds like the government is doing something when it’s ensuring that Fed officials are only investing in indexes / macros which is where Fed policies are likely to affect markets the greatest.
In startup parlance the fed is the rising tide.
In startup parlance the fed is the rising tide.
Federal Reserve is not the government, and it's employees are not government workers. The Fed is a private cartel owned by large banks, which the government uses like a contactor to implement the setting of interest rates and purchasing of government debt.
It is part of the government. Its not “owned” by anyone, similar to a non-profit. It was created by the Federal govt.
It’s board of governors are employees of the govt.
Similar to most major corporations the “ownership” is highly nuanced. It’s roughly equivalent to three share classes, the govt has the shares that pay dividends and most of the voting shares. Chartered banks hold some shares that have some voting rights, roughly equivalent to holding shares in a credit union.
In some ways it’s a trust. As the beneficiary is the govt but it appoints a trustee and officially doesn’t own it.
Defacto it’s owned and operated lock stock and barrel by the govt.
It’s board of governors are employees of the govt.
Similar to most major corporations the “ownership” is highly nuanced. It’s roughly equivalent to three share classes, the govt has the shares that pay dividends and most of the voting shares. Chartered banks hold some shares that have some voting rights, roughly equivalent to holding shares in a credit union.
In some ways it’s a trust. As the beneficiary is the govt but it appoints a trustee and officially doesn’t own it.
Defacto it’s owned and operated lock stock and barrel by the govt.
[deleted]
The Fed is setting the example here that congress should follow but won’t cuz it’s already too corrupted by representatives with conflicts of interest.
I was noticing the same thing. Got confused at the comments talking about Congress and thought maybe I'd missed something.
Have to ask how this wasn't instituted in the first place, excluding the "well it's corruption, obviously" answers.
Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.
Every single financial job in the private sector has extreme guidelines around this, the Fed is like a buyside firm with ultimate private information access.
It is instituted. I work at the Fed in a relatively junior role.
I can't buy bank stock, or for any practical purposes any financial firm stock (or bonds). I can't buy funds finance-focused mutual funds or any kind. I can't buy stocks of any firm where I have any sort of insider trading, such as contractors.
Lastly, there's a window around FOMC meetings where anyone with any sort of insider knowledge is prohibited to trade at all.
But last I checked on my Robinhood account, I do own some GitLab, Cloudflare, etc. firms that I think are doing quite well compared to their current market prices. And that's mostly based on what I read (HN, etc).
The question is, should employees be disallowed to own stocks at all? (Right now this rule is aimed at officers, but officers are like 20% of the number of employees of my division, so it's still a lot). I would say doing so makes it quite more difficult for economists to take jobs at the Fed, where the salary is not as competitive as in other places such as the private sector (and already all the friends in my PhD Finance cohort earn more than I do..). To make a parallel, imagine that working at Google prohibits you from owning stocks at any firm that trades/buys/sells/interacts with Google or its competitors.
I can't buy bank stock, or for any practical purposes any financial firm stock (or bonds). I can't buy funds finance-focused mutual funds or any kind. I can't buy stocks of any firm where I have any sort of insider trading, such as contractors.
Lastly, there's a window around FOMC meetings where anyone with any sort of insider knowledge is prohibited to trade at all.
But last I checked on my Robinhood account, I do own some GitLab, Cloudflare, etc. firms that I think are doing quite well compared to their current market prices. And that's mostly based on what I read (HN, etc).
The question is, should employees be disallowed to own stocks at all? (Right now this rule is aimed at officers, but officers are like 20% of the number of employees of my division, so it's still a lot). I would say doing so makes it quite more difficult for economists to take jobs at the Fed, where the salary is not as competitive as in other places such as the private sector (and already all the friends in my PhD Finance cohort earn more than I do..). To make a parallel, imagine that working at Google prohibits you from owning stocks at any firm that trades/buys/sells/interacts with Google or its competitors.
Fellow economist here… I would have thought this rule would be irrelevant to us! I don’t think most of us think we can beat the market. I hold index funds only. (To be clear: I think this rule is a good idea and should apply to anyone with any serious role there. I’m just a little surprised it’s binding on anyone.)
Edit: clicked on your profile. Thanks for writing reghdfe. I use it with some coauthors on a project on healthcare now.
Edit: clicked on your profile. Thanks for writing reghdfe. I use it with some coauthors on a project on healthcare now.
The point of the regulation is that it would stop an economist (or anyone) from trading with non-public information.
And it would be perfectly rational for an economist (or someone else) to trade a single stock if they had non-public information and there was no downside. Right now the downsides (it’s unethical / a gray area but depending on one’s position not always illegal) are not fully baking in the costs to society (e.g. a trader with non-public knowledge can get ahead of the broader market, impacting the ability to have a “fair” market and increasing costs for other investors).
I strongly believe that policy makers need to be indexed with broad exposure across, at a minimum, industry sectors but more preferably the US economy (or a state’s economy if they are a state representative). There is too much room for misaligned incentives (buy our depressed stock, pass this bill, make a couple million) that should be removed.
And it would be perfectly rational for an economist (or someone else) to trade a single stock if they had non-public information and there was no downside. Right now the downsides (it’s unethical / a gray area but depending on one’s position not always illegal) are not fully baking in the costs to society (e.g. a trader with non-public knowledge can get ahead of the broader market, impacting the ability to have a “fair” market and increasing costs for other investors).
I strongly believe that policy makers need to be indexed with broad exposure across, at a minimum, industry sectors but more preferably the US economy (or a state’s economy if they are a state representative). There is too much room for misaligned incentives (buy our depressed stock, pass this bill, make a couple million) that should be removed.
It is hilarious that well-studied economists understand that it is difficult and unlikely to consistently beat market returns when using any decent size, yet a primary purpose of the Fed is explicitly to manipulate interest rates.
We would get more value, and much cheaper, by simply using a formula for money expansion and the resulting interest rate.
We would get more value, and much cheaper, by simply using a formula for money expansion and the resulting interest rate.
TBH 99% or more of what I hold is index funds. I started playing with Robinhood when trying to understand what was going on in the retail market (May 2021). On the other hand, I do think that from time to time you can get an insight that the rest of the market hasn't picked up.
About reghdfe, you are welcome! I wrote it because the server for my PhD thesis was a piece of crap, but it kinda found a life on its own!
About reghdfe, you are welcome! I wrote it because the server for my PhD thesis was a piece of crap, but it kinda found a life on its own!
Can verifiy. 20 yrs ago I worked for an investment/financial mgt company. Brokerage/MF/401k/IRA etc. I had to submit for and get permission to buy or sell any individual equities.
Most financial jobs in the private sector allow the ownership of individual stocks. This is quite a strong ban being implemented, it doesn't suggest there were no guidelines in the first place.
Does anyone think the SEC will take similar actions against elected officials? Given there have been plenty of stories about this happening it seems like it should be up for consideration.
It's literally not their job, because elected officials made it not their job. If you don't like that, it's our job to vote them out.
But that can't happen. Because people are more likely to vote for a knowingly corrupt politician as long as they're in the right party, over another politician in the wrong party.
Probably - in part - because of conditioning by our politicians, scaring us that the other "side" is going to do something real bad if they ever "win". Nevermind the other "side" "wins" every 8 years or so.
I don't say this disparagingly. I think I suffer from it to some extent too. I just don't know what to do about it and it makes me sad.
But that can't happen. Because people are more likely to vote for a knowingly corrupt politician as long as they're in the right party, over another politician in the wrong party.
Probably - in part - because of conditioning by our politicians, scaring us that the other "side" is going to do something real bad if they ever "win". Nevermind the other "side" "wins" every 8 years or so.
I don't say this disparagingly. I think I suffer from it to some extent too. I just don't know what to do about it and it makes me sad.
I think Congress makes its own rules up there, no?
One of my Senators is pushing for an end to trading of individual stocks: https://www.npr.org/2021/09/22/1039565467/many-believe-its-t...
One of my Senators is pushing for an end to trading of individual stocks: https://www.npr.org/2021/09/22/1039565467/many-believe-its-t...
I think you're right after doing some research. Getting Congress to police themselves is going to be a tough haul.
> Does anyone think the SEC will take similar actions against elected officials?
No, because the SEC doesn’t have authority to do that.
Congress did that, once, but then delayed it becoming effective until finally they decided to repeal it.
No, because the SEC doesn’t have authority to do that.
Congress did that, once, but then delayed it becoming effective until finally they decided to repeal it.
it'd be easier to make the trades of congress people (and anyone associated with inside information as part of the gov't) public as soon as they are placed (rather than any delay like today).
I think transparency is enough, because banning trades is too hard, and probably unfair.
I think transparency is enough, because banning trades is too hard, and probably unfair.
Even if they could ban them, it probably wouldn't curb their behavior. It's trivial to obscure trades.
A better approach, IMHO, is to make their trades available to the public as quickly as possible, and force brokers to mandate trading grace periods for elected officials. At least then, the public has a chance to get in on the action. So if a corrupt-ass senator on the house foreign intelligence committee buys up some pharma companies after a closed door briefing, r/WSB will have a chance to get in on the action first.
A better approach, IMHO, is to make their trades available to the public as quickly as possible, and force brokers to mandate trading grace periods for elected officials. At least then, the public has a chance to get in on the action. So if a corrupt-ass senator on the house foreign intelligence committee buys up some pharma companies after a closed door briefing, r/WSB will have a chance to get in on the action first.
The higher ups in the fed, under the plan reported in the article, will still be able to do things like invest in a mutual fund. Applying that rule to elected officials would seem to be a good first step toward getting or obviating the type of transparency you are looking for.
In fact, it's a better step. The rules should be stupid simple and leave no room for manipulation or collusion. Simply barring them from trading individual stocks and making that history public is far more enforceable than trying to ensure that their trades follow some arbitrary grace period.
I don't think they will, but I do think they should.
I don't think they can. Current law in that respect does not apply to members of Congress, IIRC. Instead, Congress has decided that its members should:
1. Self-report on themselves, their spouses, their dependent children (why dependent children would be trading securities is beyond me, but OK.)
2. Be subject to a $200 fine for conflicts of interest or failure to report "in a timely manner"
3. Have the fine waived at the discretion of the House or Senate ethics committees
In other words, the rules they've applied to themselves are toothless.
1. Self-report on themselves, their spouses, their dependent children (why dependent children would be trading securities is beyond me, but OK.)
2. Be subject to a $200 fine for conflicts of interest or failure to report "in a timely manner"
3. Have the fine waived at the discretion of the House or Senate ethics committees
In other words, the rules they've applied to themselves are toothless.
The SEC can still pursue criminal charges
Criminal charges for what exactly? The SEC exists by authority of Congress, and their purview is defined by Congress, just like every other regulatory body.
The SEC even in overt insider trading cases doesn't pursue criminal charges -- they refer it to the Justice Department.
Congress currently is exempt from insider trading that comes about due to executing congressional duties. They would have to pass a law subjecting themselves to it.
Congress currently is exempt from insider trading that comes about due to executing congressional duties. They would have to pass a law subjecting themselves to it.
> The SEC can still pursue criminal charges
The SEC can refer apparent criminal violations to the Department of Justice, which is the only federal agency which can pursue criminal charges.
The SEC can refer apparent criminal violations to the Department of Justice, which is the only federal agency which can pursue criminal charges.
The SEC is not a law enforcement agency. They can and do partner with the FBI but there's a separation of powers problem with that.
Fed says trading activity by top officials under independent review
Fed leaders have said the trading activities of its top leaders complied with existing, albeit insufficient guidelines. But the Fed’s latest statement reflected a more concerted focus on the trades themselves.
https://www.washingtonpost.com/us-policy/2021/10/04/fed-ethi...
Fed leaders have said the trading activities of its top leaders complied with existing, albeit insufficient guidelines. But the Fed’s latest statement reflected a more concerted focus on the trades themselves.
https://www.washingtonpost.com/us-policy/2021/10/04/fed-ethi...
This needs to happen for congressmen also.
I joked in the past that politicians should only be allowed to buy index funds. In their local currency and from their country of course.
Basically, do a good job for the economy overall and then your net worth will increase.
Basically, do a good job for the economy overall and then your net worth will increase.
Why's that a joke? Sounds like a good idea on the face of it.
It would be kinda interesting if each town/county/state/country had an associated index fund (maybe one for Earth as a whole, too) and elected officials were only allowed to invest in one "up" from their elected seat. I mean this would involve a ton of bookkeeping but it would be interesting to see
* how behavior changes when elected officials are required to have their interest in line with their constituents.
* what mixes people choose.
* how behavior changes when elected officials are required to have their interest in line with their constituents.
* what mixes people choose.
I like this. A few thoughts:
First (as usual) it incentivises short term-ism. Some penalty to initiatives where we take a hit now but benefit in 40 years, e.g. climate action.
It incentivises our entire political class to keep broad asset bubbles going and "not stop the party" while they're in control.
It increases incentives to misrepresent or obfuscate the state of the entire economy (money supply, inflation and other macro things that influence the market as a whole).
To be fair all these incentives exist right now, so it might not make things worse.
First (as usual) it incentivises short term-ism. Some penalty to initiatives where we take a hit now but benefit in 40 years, e.g. climate action.
It incentivises our entire political class to keep broad asset bubbles going and "not stop the party" while they're in control.
It increases incentives to misrepresent or obfuscate the state of the entire economy (money supply, inflation and other macro things that influence the market as a whole).
To be fair all these incentives exist right now, so it might not make things worse.
That's very true.
CEO compensation might be another thing to look at when designing these policies: Often it's paid out only if the company reaches certain goals or paid as options that can only be exercised in the future at a certain price, ie, they are completely worthless otherwise.
"You only get your pension if the carbon emissions are down by X% in 10 years", or something like that.
CEO compensation might be another thing to look at when designing these policies: Often it's paid out only if the company reaches certain goals or paid as options that can only be exercised in the future at a certain price, ie, they are completely worthless otherwise.
"You only get your pension if the carbon emissions are down by X% in 10 years", or something like that.
> Basically, do a good job for the economy overall and then your net worth will increase.
The economy's health is not necessarily accurately reflected in asset valuations (which is what index funds track).
When it becomes clear the pie will stop growing for a little while, wealthy politicians have the perverse incentive to enact policies increasing asset prices at the expense of overall productivity (in 2021-2022 this manifested in money supply increase combined with lockdowns to delay inflation until after the transfer of wealth).
The economy's health is not necessarily accurately reflected in asset valuations (which is what index funds track).
When it becomes clear the pie will stop growing for a little while, wealthy politicians have the perverse incentive to enact policies increasing asset prices at the expense of overall productivity (in 2021-2022 this manifested in money supply increase combined with lockdowns to delay inflation until after the transfer of wealth).
Now, if only the same rules could be applied to Congress.
Congress critters giving themselves immunity from insider trading laws was a real sleeve move. I have friends who still believe that we have a fair and democratic government, but I just keep my mouth shut. Let them have their ignorance is bliss.
Congress critters giving themselves immunity from insider trading laws was a real sleeve move. I have friends who still believe that we have a fair and democratic government, but I just keep my mouth shut. Let them have their ignorance is bliss.
Let’s make this the rule for all politicians
I'm not sure banning is the answer. I think a better solution in general would be for officials to have to report all trades in real time.
I would like to see them required to give 24 hours notice of any trades. If a few members of the armed services committee want to sell Boeing stock tomorrow, fine, but the market can decide what that means first.
Yes report the transactions real-time and make them available via publicly accessible api.
Does this just mean that stock will now all be held in their spouse's name? I didn't see any provision for that in the article.
One would hope so. When I worked for Bank of America, as a lowly computer programmer I was required to make all of my investment information available to the compliance office as well as all of my wife's. In practical terms it meant moving my IRAs from Schwab to Fidelity, but it was still inconvenient (and cost me about $100 in fees for which I wasn't reimbursed). I would expect much stricter controls on people with this level of influence.
Disclosure responsibilities for Federal judges extend to spouses and any family living in the home IIRC, I would imagine this restriction would have similar coverage.
I would expect mutual funds are much more correlated than individual stocks to the effects of monetary policy.
Requiring them to trade slowly so they can't game short-term market effects from their day job makes a lot of sense.
I don't fully understand the ban on individual stocks vs mutual funds though. Is that just for ease of oversight? Is ex. tesla more responsive to monetary policy than mutual funds?
Requiring them to trade slowly so they can't game short-term market effects from their day job makes a lot of sense.
I don't fully understand the ban on individual stocks vs mutual funds though. Is that just for ease of oversight? Is ex. tesla more responsive to monetary policy than mutual funds?
[deleted]
How about their relatives and more important the head of their trusts who they can just instruct or pass information to under the table. This is a great first step but I'd encourage looking behind the headline.
Also the last time there was any rule about congress insider trading they just waited until nobody was looking anymore and revoked it.
Also the last time there was any rule about congress insider trading they just waited until nobody was looking anymore and revoked it.
As I understand it the STOCK Act hasn't been revoked, but members of Congress regularly ignore it and have never been punished for doing so: https://www.npr.org/2021/09/22/1039287987/outside-ethics-gro...
It wasnt technically revoked (my fault) but it was conveniently modified: https://thehill.com/policy/finance/293919-obama-signs-stock-...
You say "conveniently" as if it were modified to make the rules less onerous for members of Congress but that wasn't the case. From your link:
"Under the new law, the beefed-up reporting requirements will still apply to the president, vice president, members of Congress and candidates for Congress."
"Under the new law, the beefed-up reporting requirements will still apply to the president, vice president, members of Congress and candidates for Congress."
Yeah I just ran with the first paragraph in that article. But further reading shows the rules stuck for congress. Regardless theres still an issue in my opinion when Nancy Pelosis husband is buying Microsoft calls one month before they are awarded a large government contract and several other suspiciously timed trades.
Oh, I 100% agree about that. My pedantic side is just coming out and I wanted to point out the problem isn't that there's no rule, or there was a rule and it went away ... it's that we can't trust Congress to enforce rules on itself.
It was amended and basically rendered useless.
https://www.npr.org/sections/itsallpolitics/2013/04/16/17749...
https://www.npr.org/sections/itsallpolitics/2013/04/16/17749...
It was amended. I wouldn't say the law was made more useless. The members of Congress who sit on the appropriate committees to investigate and punish violations are what's useless.
There doesn't seem to be any problem with getting the reports that members of Congress are filing. Check out senatestockwatcher.com and housestockwatcher.com or https://sec.report/Senate-Stock-Disclosures.
The problem is that even though there are known violations, there are no punishments.
There doesn't seem to be any problem with getting the reports that members of Congress are filing. Check out senatestockwatcher.com and housestockwatcher.com or https://sec.report/Senate-Stock-Disclosures.
The problem is that even though there are known violations, there are no punishments.
It is true that the small fines for violating the STOCK Act aren't an issue. But the SEC prosecuted Congressman Christopher Collins and a few others for insider trading
Insider trading is already a crime and with all the ways to work around that law it’s still seen as a risky enterprise, so it seems to work.
But more importantly: lawmakers are judged by voters. If media reports that a lawmaker tried to dodge laws or even ethics frameworks then voters should deliver the punishment even if a court can’t.
But more importantly: lawmakers are judged by voters. If media reports that a lawmaker tried to dodge laws or even ethics frameworks then voters should deliver the punishment even if a court can’t.
Ban insider trading in Congress as well. Double their salaries, ban all speculative activity, and monitor their inflows/outflows and large property purchases so that no shenanigans occur under the table.
It's blindingly obvious corruption when Nancy Pelosi is able to do better in the stock market than Warren Buffett, and all hedge funds save for RenTech: https://twitter.com/nancytracker
It's nuts when congresspeople pretend to "grill" Big Tech and Big Pharma execs while holding multmillion dollar positions in their companies' stocks.
If there is a real "threat to our democracy", this is it. This is the threat. Of course this would deprive congresspeople of billions of dollars in stock gains, so you can be 100% sure no laws abridging any such activity will ever pass, but one can dream.
It's blindingly obvious corruption when Nancy Pelosi is able to do better in the stock market than Warren Buffett, and all hedge funds save for RenTech: https://twitter.com/nancytracker
It's nuts when congresspeople pretend to "grill" Big Tech and Big Pharma execs while holding multmillion dollar positions in their companies' stocks.
If there is a real "threat to our democracy", this is it. This is the threat. Of course this would deprive congresspeople of billions of dollars in stock gains, so you can be 100% sure no laws abridging any such activity will ever pass, but one can dream.
For the Fed, this doesn't seem enough. Their policy has a predictable effect on the whole market, so I think they should not be trading in the couple of weeks leading up to a Fed announcement.
Or just require them to plan their trade and publicly disclose like at least a week in advance.
If you become known for being uh.. "corrupt", the market will price out your gains.
If you become known for being uh.. "corrupt", the market will price out your gains.
This is a much better idea than the one I had.
best solution in the entire thread
Now do congress
Next we need this for Congresspeople and their families.
Policymakers but not legislators lol
They will do it through friends / shell corporations.
finally. this is huge. hopefully there isn't some other angle we are not seeing
I have long felt that once you get elected to Congress or higher office that you should be stripped of all of your assets like real estate, stocks, etc. After you are done serving the people you would be given a reasonable salary, a free home, and would live the rest of your life like some sort of monk barred from ever participating in the capitalist system again.
Not members of Congress?
No problem. The policymakers will let their trust fund or family members do all the trading with *information that they might have. Are they going to also stop anyone related to the policymakers from not trading? That will be a violation of their constitutional right to own property. There is always a way out for the rich. This is what happens when we have too many regulations.
I am following you until your last sentence. How does having less regulation help here?
There is a term called regulatory capture where large corporations lobby governments to write regulations that stifle competition. When hundreds of millions or billions ride on such regulations that is created by a few individuals, they have enormous power that is susceptible to corruption. And its very difficult to remove this corruption. The long term stable approach is to have as few regulations as possible that removes such absolute power from a few unelected individuals. An example of thriving with few regulations is the tech industry. It was able to boom and dominate because it had few regulations.
While I certainly agree that tech has been able to 'dominate,' your use as an example of a 'stable approach' with 'as few regulations as possible' that 'removes such absolute power from a few unelected individuals' feels ironic, considering the... absolute power that unelected individuals like Zuck have.
Alas, I don't think it's likely any legislative body will pass meaningful tech regulation anytime soon.
Alas, I don't think it's likely any legislative body will pass meaningful tech regulation anytime soon.
It's a start.
Maybe they’ll just start issuing their own stocks instead, like Trump / truth social / DWAC !
The relatively low salaries compared to the huge amounts of power is almost begging for insider trading, influence peddling, etc.
> The salary of a Congress member varies based on the job title of the congressman or senator. Most senators, representatives, delegates and the resident commissioner from Puerto Rico make a salary of $174,000 per year.
https://www.indeed.com/career-advice/pay-salary/congressman-...
Then again, some people have near insatiable greed and even at a $1M/year salary, some would be looking for ways to further boost their income at the boundaries of ethics, or beyond.
> The salary of a Congress member varies based on the job title of the congressman or senator. Most senators, representatives, delegates and the resident commissioner from Puerto Rico make a salary of $174,000 per year.
https://www.indeed.com/career-advice/pay-salary/congressman-...
Then again, some people have near insatiable greed and even at a $1M/year salary, some would be looking for ways to further boost their income at the boundaries of ethics, or beyond.
Some?
How many people would compromise their ethics a bit for $1,000,000? how about $10,000,000? $100,000,000?
Most everybody.
It's easy to be virtuous when there's no temptation.
How many people would compromise their ethics a bit for $1,000,000? how about $10,000,000? $100,000,000?
Most everybody.
It's easy to be virtuous when there's no temptation.
> Most everybody.
It depends what you mean, but I think you underestimate people. We all contain virtue and greed, and have the free will to choose which we will favor.
Of course, it's more complicated than that anyway: What happens is that some kinds of corruption become normalized and thus people don't feel they are violating ethics, and some corruption, though objectively no worse, is not normalized and is responded to with outrage.
It depends what you mean, but I think you underestimate people. We all contain virtue and greed, and have the free will to choose which we will favor.
Of course, it's more complicated than that anyway: What happens is that some kinds of corruption become normalized and thus people don't feel they are violating ethics, and some corruption, though objectively no worse, is not normalized and is responded to with outrage.
I agree that a culture of non-corruption needs to be created, and that culture flows down from the top. Caltech did a good job of that with the Honor System. The Tour de France did a miserable job, as competitors feel they have to cheat in order to have a chance.
It's still not a good idea to tempt people too much, and any system should be set up to not be too tempting.
It's still not a good idea to tempt people too much, and any system should be set up to not be too tempting.
'Locks keep honest people honest.'
Also think about the thing they’re doing to compromise their ethics: they’re buying stocks with an ‘unfair’ advantage. This isn’t exactly sending kids to war for kickbacks.
just to expand, indeed their salaries are relative average. But, their benefits package both during and after tenure is generous.
Their package include health & life insurance outside the general public market, social security, FERS, CSRS, personnel & office and mail allowances, office space, furniture, office equipment, food, laundry, and much more.
It will definitely not make them millionaires, but will allow them to live an upper echelon life; compared to some of us, even luxurious life.
Their package include health & life insurance outside the general public market, social security, FERS, CSRS, personnel & office and mail allowances, office space, furniture, office equipment, food, laundry, and much more.
It will definitely not make them millionaires, but will allow them to live an upper echelon life; compared to some of us, even luxurious life.
Listen, I know we're all senior developers working at a FAANG, making between $300k-500k/year in total compensation, but $160k/yr is a giant pile of money for many, many Americans. The fact that it's $160k + health insurance plan that qualifies as "really fucking good" makes that $160k far more than the already-above-average Joe's 160k.
I didn't realize GP was using that number too make it sound low. At first I thought the 175k number was an attempt to show how much better paid that position is compared to the rest. The fact that the average position in the source is just under 200k/year and people are reading it as a bad package seems incredibly out of touch.
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> compared to some of us, even luxurious life.
Quoting what I wrote about "some of _us_", as I am unclear if you are being tongue in cheek, or seriously think I think they are underpaid.
Quoting what I wrote about "some of _us_", as I am unclear if you are being tongue in cheek, or seriously think I think they are underpaid.
I'm a geek working at a nontechnical nonprofit, outside the US, and I don't even have a 6-figure annual salary. And yet, I was reading a book about capitalism and democracy in my current country, and I realized that my salary, which is decent compared to many Americans, puts me in the top 20% of earners here.
So I agree wholeheartedly: $160k is a large salary for the vast majority of the world, and I would guess that its large for many of HackerNews' global readers.
So I agree wholeheartedly: $160k is a large salary for the vast majority of the world, and I would guess that its large for many of HackerNews' global readers.
Don't forget that all Congress members and former members get a fully vested pension after only 5 years in Congress, which can be collected at age 62, or even lower ages for longer time served.
However, the Fed is distinct from Congress. Not sure if the Fed also participates in FERS.
https://en.wikipedia.org/wiki/Congressional_pension
https://en.wikipedia.org/wiki/Federal_Employees_Retirement_S...
However, the Fed is distinct from Congress. Not sure if the Fed also participates in FERS.
https://en.wikipedia.org/wiki/Congressional_pension
https://en.wikipedia.org/wiki/Federal_Employees_Retirement_S...
> Don’t forget that all Congress members and former members get a fully vested pension after only 5 years in Congress
Fully vested, but at 1.0% of the top 3 years salary per year of service. So, sure, at 5 years of service @ 174K per year, they could draw pension at 62 – but that pension would only be $8,700/year.
Fully vested, but at 1.0% of the top 3 years salary per year of service. So, sure, at 5 years of service @ 174K per year, they could draw pension at 62 – but that pension would only be $8,700/year.
Your last sentence is really the key thesis. This isn't an argument to pay representatives (whether that be Congressional or at monetary policy orgs) more, but to have robust controls to better detect and action corruption. Greed knows no bounds (see: corrupt billionaires and Dark Triad personality traits [1]) and humans will be humans, so strong systems must be designed and implemented to defend against improper behavior.
[1] https://en.wikipedia.org/wiki/Dark_triad
[1] https://en.wikipedia.org/wiki/Dark_triad
Alternatively - maybe it's not so great that government is so big and central and has so much power. Politicians are gonna find ways to corrupt that power no matter what.
The same could be said for megacorps.
Unfortunately, we don't live in an ideal world. China and Chinese SOEs are going to be big and powerful and centralized for the foreseeable future no matter what - and if we don't have anything to oppose them - that doesn't seem great either.
The same could be said for megacorps.
Unfortunately, we don't live in an ideal world. China and Chinese SOEs are going to be big and powerful and centralized for the foreseeable future no matter what - and if we don't have anything to oppose them - that doesn't seem great either.
Deliberately getting rid of "big government" just leads to even more unaccountable megacorps filling the void. That's been the lesson of America for the past 40-50 years.
If you want any chance of competing on the global stage in the 3rd millennium, the solution is to embrace big government and do it right. It is possible to implement anti-corruption mechanisms. Like any security measure, they will never be infallible, but they will certainly increase the friction required to be corrupt.
Otherwise, your country will be a sickly host to parasitic & transnational megacorps. Like America and many smaller countries today.
If you want any chance of competing on the global stage in the 3rd millennium, the solution is to embrace big government and do it right. It is possible to implement anti-corruption mechanisms. Like any security measure, they will never be infallible, but they will certainly increase the friction required to be corrupt.
Otherwise, your country will be a sickly host to parasitic & transnational megacorps. Like America and many smaller countries today.
Meh. It’s a lot easier to hold big mega corps to account with small government than it is to hold big government to account by any means whatsoever.
Besides, in practice big government rather prefers doing business with a few big companies and national labor unions who will pay for the politicians’ campaigns and talk up their agenda — applying discretionary enforcement to hobble enemies, and big-time regulation can be a major barrier to entry that reduces competition for your friends. Perhaps you don’t believe me? For a trivial example in recent memory about how government is happy to oppress its enemies by “holding them to account”, consider Operation Chokepoint.
It’s a valid concern, mind you! I’m just skeptical of the remedy. You need a hell of a lot of faith in the policies of the next several decades to think this is a good idea. I don’t.
Besides, in practice big government rather prefers doing business with a few big companies and national labor unions who will pay for the politicians’ campaigns and talk up their agenda — applying discretionary enforcement to hobble enemies, and big-time regulation can be a major barrier to entry that reduces competition for your friends. Perhaps you don’t believe me? For a trivial example in recent memory about how government is happy to oppress its enemies by “holding them to account”, consider Operation Chokepoint.
It’s a valid concern, mind you! I’m just skeptical of the remedy. You need a hell of a lot of faith in the policies of the next several decades to think this is a good idea. I don’t.
Private businesses are the only thing that kept America relevant. If it wasn't for Big Tech, the USA would be poorer and much less relevant.
The centralised American army, with its huge spend, doesn't have much to show for.
I dislike megacorps as well: I would prefer to have smaller businesses so that the power would be more spread across society.
Incidentally the government and their regulations are often what helps monopolies to solidify and become unbeatable. Maybe if you get rid of all government and not only of "big government" you will have less corruption and mega corporations as well.
The centralised American army, with its huge spend, doesn't have much to show for.
I dislike megacorps as well: I would prefer to have smaller businesses so that the power would be more spread across society.
Incidentally the government and their regulations are often what helps monopolies to solidify and become unbeatable. Maybe if you get rid of all government and not only of "big government" you will have less corruption and mega corporations as well.
Mega corps don’t have tanks.
People who live in normal nations laugh at both the people subject to the China authoritarian monstrosity and the people subject to the USA authoritarian monstrosity. Building and subjecting oneself to such a giant voracious parasitic automaton is obvious folly. They don't laugh too loudly, however, because they've read The Jakarta Method. China is actually less of a threat (except to close neighbors like Vietnam) because they have millennia of tradition and scholarship encouraging them not to care too much what barbarians say.
While I think all western countries can easily be considered authoritarian countries, given most of them demand half of the profits of everyone doing anything productive on their land, you're terribly deluded if you think they rank anything close to what China is.
China has concentration camps, kill businesses with a whip of the hand and apparently have half of the world (probably including your government) on their payroll.
https://www.youtube.com/watch?v=UlCYFh8U2xM
China has concentration camps, kill businesses with a whip of the hand and apparently have half of the world (probably including your government) on their payroll.
https://www.youtube.com/watch?v=UlCYFh8U2xM
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Living in DC on 174k/yr with a family and a spouse whose job prospects are limited by your profession is a tough order.
You are effectively demanding that policy makers be self sufficient, which selects for those policy makers most likely to benefit financially from policy decisions.
You are effectively demanding that policy makers be self sufficient, which selects for those policy makers most likely to benefit financially from policy decisions.
Median household income in DC is 92k. Their single income is almost double what the average person in DC makes.
To claim living on an income of $174k is a tough order is the most HN thing I've heard in a while.
That's an absolute ton of money. You can live comfortably (but not luxuriously) anywhere on earth with that salary.
That's an absolute ton of money. You can live comfortably (but not luxuriously) anywhere on earth with that salary.
Unfortunately, Congress people must live in the districts they represent. And while $174k is quite decent even in SF, this person will have a standard of living below even what a software engineer with no management responsibilities is going to have.
Maybe they would be able to better empathize with the vast majority of people they represent.
Why would an ambitious person run for office if the pay is low? We’ve already tried this experiment with government industries like teaching, and then we wonder why American educational policy is loosing global competitiveness.
175k/year isn't low for most of America. Not even half of that is considered low in most areas.
Perhaps congressional pay should be determined by cost of living then. Or maybe each state should set and fund compensation for their delegation (including aids). It’s at the point where random county supervisors in CA cam make more than a congressperson.
> Why would an ambitious person run for office if the pay is low?
Power. Exposure. Experience and connections that are useful in highly-paid lobbying and other political influence positions. Serving their own direct, or others who will be thankful, financial interests in ways that will generate orders of magnitude more returns than the direct pay of the position. Etc.
Power. Exposure. Experience and connections that are useful in highly-paid lobbying and other political influence positions. Serving their own direct, or others who will be thankful, financial interests in ways that will generate orders of magnitude more returns than the direct pay of the position. Etc.
That seems like exactly the sort of behavior citizens would want to minimize.
Have you ever looked at the spouses of Congressional reps? Many are very well employed. Bankers, layers, professors, etc.
And $174k is a solid upper middle class income, even in DC. Many Congressmen live near my parents in Alexandria in lovely homes.
And $174k is a solid upper middle class income, even in DC. Many Congressmen live near my parents in Alexandria in lovely homes.
Ok, but there’s no way the speaker from California could afford a decent home in Alexandria, VA and a nice home in SF on that kind of salary. It’s quite likely these congressmen are already wealthy.
This is about the Fed banning it's own policymakers from owning them, not about congress.
thank you for this extremely important correction. I was reading the comments instead of the article and wondering in the back of my mind how the Fed even had jurisdiction over Congress.
sure hope it remains visible in the comment hierarchy.
sure hope it remains visible in the comment hierarchy.
I went to the article; the UI is horribly broken, and prevented me reading past the first para (by continuously reloading); but I got that it was about their own staff.
Yeah but who has time to do such an in-read depth of *checks notes*... the headline?
Perhaps someone will start a “Speaker of the House” index fund which the officers from the Federal Reserve can buy, since they won’t be able to buy individual stocks.
Folks are doing it manually: https://www.npr.org/2021/09/21/1039313011/tiktokers-are-trad...
This is good
“The Speaker has no prior knowledge or subsequent involvement in any transactions," said the spokesperson.
“The Speaker has no prior knowledge or subsequent involvement in any transactions," said the spokesperson.
Correct, the article has zero mentions of congress
Would the Fed actually have the authority to even do that, regulate what securities Congress members are allowed to hold?
No, the Fed (which always means the Federal Reserve Bank) sets monetary policy and has 0 control over Congress.
“The Fed” as in the Federal Reserve: no.
“The Fed” as in the Federal Government: yes.
“The Fed” as in the Federal Government: yes.
"Blind Trust" > "Use by US government officials to avoid conflicts of interest"
https://en.wikipedia.org/wiki/Blind_trust
https://www.oge.gov/
... If you want to help, you must throw all of your startup equity away.
... No, you may not co-brand with that company (which is not complicit with your agenda).
... Besides, I'm not even eligible for duty: you can't hire me.
... Maybe I could be more helpful from competitive private industry.
... How can a government hire prima donna talent like Iron Man?
... Is it criminal to start a solvent, sustainable business to solve government problems, for that one customer?
... Which operations can a government - operating with or without competition - solve most energy-efficiently and thus cost-effectively? Looks like single-payer healthcare and IDK what else?
(Edit)
US Digital Services Playbook: https://github.com/usds/playbook
From https://www.nist.gov/itl/applied-cybersecurity/nice/nice-fra... :
> "NIST Special Publication 800-181 revision 1, the Workforce Framework for Cybersecurity (NICE Framework), provides a set of building blocks for describing the tasks, knowledge, and skills that are needed to perform cybersecurity work performed by individuals and teams. Through these building blocks, the NICE Framework enables organizations to develop their workforces to perform cybersecurity work, and it helps learners to explore cybersecurity work and to engage in appropriate learning activities to develop their knowledge and skills.
From "NIST Special Publication 800-181 Revision 1: Workforce Framework for Cybersecurity (NICE Framework)" (2020) https://doi.org/10.6028/NIST.SP.800-181r1:
> 3.1 Using Existing Task, Knowledge, and Skill (TKS) Statements
(Edit) FedNOW should - like mCBDC - really consider implementing Interledger Protocol (ILP) for RTGS "Real-Time Gross Settlement" https://interledger.org/developer-tools/get-started/overview...
From https://interledger.org/rfcs/0032-peering-clearing-settlemen... :
> Peering, Clearing and Settling; The Interledger network is a graph of nodes (connectors) that have peered with one another by establishing a means of exchanging ILP packets and a means of paying one another for the successful forwarding and delivery of the packets.
https://www.oge.gov/
... If you want to help, you must throw all of your startup equity away.
... No, you may not co-brand with that company (which is not complicit with your agenda).
... Besides, I'm not even eligible for duty: you can't hire me.
... Maybe I could be more helpful from competitive private industry.
... How can a government hire prima donna talent like Iron Man?
... Is it criminal to start a solvent, sustainable business to solve government problems, for that one customer?
... Which operations can a government - operating with or without competition - solve most energy-efficiently and thus cost-effectively? Looks like single-payer healthcare and IDK what else?
(Edit)
US Digital Services Playbook: https://github.com/usds/playbook
From https://www.nist.gov/itl/applied-cybersecurity/nice/nice-fra... :
> "NIST Special Publication 800-181 revision 1, the Workforce Framework for Cybersecurity (NICE Framework), provides a set of building blocks for describing the tasks, knowledge, and skills that are needed to perform cybersecurity work performed by individuals and teams. Through these building blocks, the NICE Framework enables organizations to develop their workforces to perform cybersecurity work, and it helps learners to explore cybersecurity work and to engage in appropriate learning activities to develop their knowledge and skills.
From "NIST Special Publication 800-181 Revision 1: Workforce Framework for Cybersecurity (NICE Framework)" (2020) https://doi.org/10.6028/NIST.SP.800-181r1:
> 3.1 Using Existing Task, Knowledge, and Skill (TKS) Statements
(Edit) FedNOW should - like mCBDC - really consider implementing Interledger Protocol (ILP) for RTGS "Real-Time Gross Settlement" https://interledger.org/developer-tools/get-started/overview...
From https://interledger.org/rfcs/0032-peering-clearing-settlemen... :
> Peering, Clearing and Settling; The Interledger network is a graph of nodes (connectors) that have peered with one another by establishing a means of exchanging ILP packets and a means of paying one another for the successful forwarding and delivery of the packets.
Fed or no, wouldn't you think there'd be money in solving for the https://performance.gov Goals ( https://www.usaspending.gov/ ) and the #GlobalGoals (UN Sustainable Development Goals) -aligned GRI Corporate Sustainability Report? #CSR #ESG #SustyReporting
probably not. Then again, does the fed actually have the authority to do some of the things that it does?
Chair of the Federal Reserve has a salary of US$221,400.
This is the case all over the Western world. Federal Government politician salaries need to be 10x higher.
Sometimes I feel like congress and representatives should make the minimum wage of the area they represent. Might encourage them to actually improve things for the people.
> Might encourage them to actually improve things for the people.
The history of unpaid and low-paid legislatures (of which there is quite a lot) does not really support this idea.
The history of unpaid and low-paid legislatures (of which there is quite a lot) does not really support this idea.
It's a good way to only get the rich to become federal politicians.
Congress gets paid like 174k a year. Sure, it's a lot of money compared to the US median, but anyone who can get elected to Congress can earn that elsewhere.
For tech, 174k isn't even a big salary; we're talking an industry where a starting SE salary at a FAANG is around there. That's not a huge paycheck for a 24/7 job like federal politics.
Congress gets paid like 174k a year. Sure, it's a lot of money compared to the US median, but anyone who can get elected to Congress can earn that elsewhere.
For tech, 174k isn't even a big salary; we're talking an industry where a starting SE salary at a FAANG is around there. That's not a huge paycheck for a 24/7 job like federal politics.
170k is already a functional equivalent of the minimum wage, relative to the power they yield.
You're describing what we already have.
The argument being made is that if you're going to pay people a low wage, they'll just increase it by trading some of the power they yield in exchange for money for themselves, which is the problem we're trying to solve for :)
You're describing what we already have.
The argument being made is that if you're going to pay people a low wage, they'll just increase it by trading some of the power they yield in exchange for money for themselves, which is the problem we're trying to solve for :)
10x higher in combination with term limits. This would actually be a great incentive for them to actually vote for it.
That’s very dangerous. If they make that much money they will have even less understanding of how the average citizen lives. That’s already a big problem. I wouldn’t want to make it worse.
It will increase the pool of individuals competing for the job, and even encourage new political parties.
In fact, that might be the reason that politicians are paid so poorly now: they can just be drawn from the pool of political insiders and parachuted into districts.
Like another poster said, political term limits of 10 years in combination with this seems reasonable.
In fact, that might be the reason that politicians are paid so poorly now: they can just be drawn from the pool of political insiders and parachuted into districts.
Like another poster said, political term limits of 10 years in combination with this seems reasonable.
What? You're suggesting we pay politicians upwards of $1 million are year? Absolutely not.
I don't want people making careers out of politics. Nothing good comes of that.
I don't want people making careers out of politics. Nothing good comes of that.
You already have to be wealthy to win an election...no one in Congress is there to build their retirement fund
Mr. Senator, is that you?
Honestly, we should give the Federal Reserve performance-based pay. Elon Musk has literally been paid billions for Tesla's phenomenal stock outperformance, why shouldn't we pay the Fed Chairs tens of millions for sustained real GDP growth above 4% balanced with low wealth inequality, low inflation, and low unemployment? They have the most important job in America and they should be paid like it if they do well
This breaks down when multi-term policy decisions need to be made. This would only push them to kick the can down the road
What if they are paid based on performance in 10 years, after they are out?
Would certainly be better but I would say ten years is not a crazy long time when it comes to borrowing decisions that often have 30 years timetables.
Also doesn't capture in the the unequalness of gains. Which is better - the fed doing something that has 90% chance of huge gains or a 10% chance of catastrophic economy shattering loss? Or an 80% chance of huge gains and a 20% chance of gains netting 0? The first is much more desirable if maximizing a bonus and could be tempting - but I dont think we want that risk.
Also doesn't capture in the the unequalness of gains. Which is better - the fed doing something that has 90% chance of huge gains or a 10% chance of catastrophic economy shattering loss? Or an 80% chance of huge gains and a 20% chance of gains netting 0? The first is much more desirable if maximizing a bonus and could be tempting - but I dont think we want that risk.
Yeah, this is about what I’m thinking. Normal salaries but options for massive payouts if things do well
It’s the same problem as CEO pay. But measuring success is even harder.
Businessman + lots of money = bigger/new business/investment in business.
Politician + lots of money = golden toilet?
In other words, money works for building a competence hierarchy in business. It doesn't for politics.
What you want is a competence hierarchy in politics. It needs its own separate currency that can only purchase political decisions.
Because it doesn't have that, money is used and that creates a business-in-politics aka corruption problem.
ps. Has this been tried anywhere? This is an idea I thought of on the fly and have not looked into or thought through.
Politician + lots of money = golden toilet?
In other words, money works for building a competence hierarchy in business. It doesn't for politics.
What you want is a competence hierarchy in politics. It needs its own separate currency that can only purchase political decisions.
Because it doesn't have that, money is used and that creates a business-in-politics aka corruption problem.
ps. Has this been tried anywhere? This is an idea I thought of on the fly and have not looked into or thought through.
That invites short term decisions to pump up markets. I think the Fed should be concerned with long term health of the economy.
It would just incentivise short-term policymaking.
Yeah, the other day this really hit home for me. I don't know why I hadn't previously thought about it in such clear terms. Being a congressperson has to be one of the most morally hazardous occupations in the world. I mean, you have more direct control over how our entire society works than almost anyone else. So you become the perfect target for bribery and gain access to countless levers that you could pull in your own favor or the favor of your friends. I suppose this all goes without saying but for some reason it only recently dawned on me just how much this is true. And the position must select for people who are the most willing to exploit all those opportunities. Not sure how to really solve for it. Maybe getting paid more would help but I don't know.
Singapore does a good job of matching public servant pay to private sector pay for that exact reason. They go so far as to index government pay scales to private sector pay.
The entire intent is to attract very talented people that want to do a good job. Having access to the levers of power is much less of an incentive as a (theoretical) result.
The entire intent is to attract very talented people that want to do a good job. Having access to the levers of power is much less of an incentive as a (theoretical) result.
Yeah, that all seems like a great idea. I'm sure Singapore has its issues, but sometimes I think it's funny how logically other countries seem to approach their problems. It's almost as though they actually want to solve them. In the mean time, in the US, we can't have nice things because reasons. It's sort of like how Japan has toilets with warmed seats. In the US, we don't have that because...honestly I have no idea; it's a great idea that we're simply missing out on.
P.S. To be fair, I think part of the reason Japan has this is that a lot of homes lack house-wide heating systems. They have things like kotatsus (heated tables) or space heaters. So it actually gets really cold in the winter. Having a warm toilet seat then seems like more of a necessity. But still...can't we just have warm toilet seats?
P.S. To be fair, I think part of the reason Japan has this is that a lot of homes lack house-wide heating systems. They have things like kotatsus (heated tables) or space heaters. So it actually gets really cold in the winter. Having a warm toilet seat then seems like more of a necessity. But still...can't we just have warm toilet seats?
> I'm sure Singapore has its issues, but sometimes I think it's funny how logically other countries seem to approach their problems.
Singaporean here. Some of us think that there's a fair bit of legalised "corruption" and cronyism in the public system. :)
(For the sake of avoiding any potential defamation suits that Singapore politicians are so famous for, this is entirely my opinion.)
Singaporean here. Some of us think that there's a fair bit of legalised "corruption" and cronyism in the public system. :)
(For the sake of avoiding any potential defamation suits that Singapore politicians are so famous for, this is entirely my opinion.)
I think there is an inevitable trade off between getting stuff done in a corrupt way, and not being corrupt but being unable to get stuff done.
And I would argue that historically you see this. Saudi Arabia modernized with a lot of corruption. The US modernized with a lot of corruption -- the period of American industrialization and modernization was called "The Gilded Age". Now there are huge bureaucratic processes, checks and balances, all sorts of oversight -- and it's extremely hard to get anything done.
And I would argue that historically you see this. Saudi Arabia modernized with a lot of corruption. The US modernized with a lot of corruption -- the period of American industrialization and modernization was called "The Gilded Age". Now there are huge bureaucratic processes, checks and balances, all sorts of oversight -- and it's extremely hard to get anything done.
Interestingly, the pandemic seems to have greatly spurred the speed of bidet adoption, which includes such things as heated seats.
https://www.theguardian.com/us-news/2020/apr/14/us-bidet-toi...
I've had one installed in my house for years, and am 100% going to install one wherever I live in the future. The hygiene and comfort improvements are phenomenal.
https://www.theguardian.com/us-news/2020/apr/14/us-bidet-toi...
I've had one installed in my house for years, and am 100% going to install one wherever I live in the future. The hygiene and comfort improvements are phenomenal.
How about just actually making the bad stuff illegal and actually investigating and prosecuting it? Note that we’re discussing known bad things that congresspeople are doing.
in many, many cases the bad stuff is already illegal, and it's the investigations and prosecutions that are missing.
Welcome to the libertarian/small government world view!
Wow, so that actually deters me from libertarian ideals. It sounds like your logic is something like the following:
Government is corruptible, so we should have small/weak governments.
But, a small gov. doesn't solve the root problem, it just make it easier to corrupt what little power is left. Isn't the real solution to have some group responsible for providing oversight and enforcement to elected officials?
Government is corruptible, so we should have small/weak governments.
But, a small gov. doesn't solve the root problem, it just make it easier to corrupt what little power is left. Isn't the real solution to have some group responsible for providing oversight and enforcement to elected officials?
In my opinion small government doesn't make sense because that isn't even a good target to begin with. An effective government may be small or big. The dogmatic insistence on big or small governments often bought by a less effective government which just reinforces existing prejudices.
Those who advocate for small governments tend to remove the best parts first because they are "optional". A lot of tax cuts are financed by cutting government investments which ultimately result in less overall investment in the economy.
Those who advocate for small governments tend to remove the best parts first because they are "optional". A lot of tax cuts are financed by cutting government investments which ultimately result in less overall investment in the economy.
> Isn't the real solution to have some group responsible for providing oversight and enforcement to elected officials?
Most US citizens seem to consider their government to be a "Democracy", that responsibility/authority should therefore naturally fall on the whole of their citizens.
Most US citizens seem to consider their government to be a "Democracy", that responsibility/authority should therefore naturally fall on the whole of their citizens.
Most US citizens are told and taught we live in a democracy, but our systems were designed as a republic.
Saying that it is the citizens fault for our politicians corruption is the same flavor as saying it is citizen’s faults for global warming because we use plastic and drive cars.
Saying that it is the citizens fault for our politicians corruption is the same flavor as saying it is citizen’s faults for global warming because we use plastic and drive cars.
If Jerome Powell was greedy he would simply get a job in the private sector.
Anyone who is capable of getting the job as Fed Chairman will have no problem making a lot, easily and legally.
Believe it or not, some people go into public service with the desire to serve the public. Sometimes there are people who have already achieved tremendous financial success.
Anyone who is capable of getting the job as Fed Chairman will have no problem making a lot, easily and legally.
Believe it or not, some people go into public service with the desire to serve the public. Sometimes there are people who have already achieved tremendous financial success.
>"Believe it or not, some people go into public service with the desire to serve the public."
If under "public" you mean riches who buy those "public servants" in bulk using legalized bribes and cushy corporate jobs after terms then I would agree.
I am sure there are few good exceptions but they do not paint the whole picture.
If under "public" you mean riches who buy those "public servants" in bulk using legalized bribes and cushy corporate jobs after terms then I would agree.
I am sure there are few good exceptions but they do not paint the whole picture.
I wonder is this is intentionally set to match the top level of the GS (civil service) pay scale in the DC area.
CEOs make $20 million a year and have done crimes like insider trading. Lots of congresspeople are already independently wealthy.
I don't think a pay raise would impact it at all
I don't think a pay raise would impact it at all
[deleted]
I feel the same thing can apply to cops too. I'm all for paying people in these positions market rate or even slightly above. That has to be coupled with effective oversight and higher penalties which are actually enforced. We need to stop treating white collar crime lighter than blue collar crime.
This doesn't apply to Congress
>The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff.
>The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff.
I hold the unpopular opinion we should pay elected officials waaaaaay more.
Like 1B/year for President or something.
Some amount that would attract the best, and make being corrupt seem so very counterproductive.
Like 1B/year for President or something.
Some amount that would attract the best, and make being corrupt seem so very counterproductive.
Or how about we allow only Nobel prize winners to be president?
If they're bad at being a president, then at least they contributed to society.
If they're bad at being a president, then at least they contributed to society.
This is an example of the "you can pay people not to be corrupt" argument. It relies on people who are both willing to be corrupt, and happy to leave money on the table.
It's exactly the same argument as paying for media not to include advertisements.
What we should do is stop filtering for trash by having jobs that pay $174K require multi-million dollar application fees (i.e. a campaign.) That's exactly how you would hire for a job if you wanted to make sure that the primary purpose of having that job was personal enrichment. We talk about being saddled with college debt; we can see the results of being saddled with campaign debt.
How does that happen when your government is run by two tiny private clubs fueled by exactly that sort of personal ambition? It doesn't. Getting a handle on corruption in the US is going to take a lot more than a few tiny adjustments. Especially when the people responsible for making those adjustments would be the corrupt class we would be claiming to fix.
Expecting Congress to fix itself when Congress is composed of the people who were good at this process is bizarre. The best a centrist can do is wait for the courts to fix it.
edit: The court broke it more with Citizens United. It simply doesn't believe that self-enrichment from politics is bad in and of itself. It believes that part of democracy is that the elected person has a mandate to do what they think is best, within the rule of law, and helpfully abolishes any laws or norms that would prevent bribery.
https://www.newyorker.com/news/amy-davidson/the-supreme-cour...
It's exactly the same argument as paying for media not to include advertisements.
What we should do is stop filtering for trash by having jobs that pay $174K require multi-million dollar application fees (i.e. a campaign.) That's exactly how you would hire for a job if you wanted to make sure that the primary purpose of having that job was personal enrichment. We talk about being saddled with college debt; we can see the results of being saddled with campaign debt.
How does that happen when your government is run by two tiny private clubs fueled by exactly that sort of personal ambition? It doesn't. Getting a handle on corruption in the US is going to take a lot more than a few tiny adjustments. Especially when the people responsible for making those adjustments would be the corrupt class we would be claiming to fix.
Expecting Congress to fix itself when Congress is composed of the people who were good at this process is bizarre. The best a centrist can do is wait for the courts to fix it.
edit: The court broke it more with Citizens United. It simply doesn't believe that self-enrichment from politics is bad in and of itself. It believes that part of democracy is that the elected person has a mandate to do what they think is best, within the rule of law, and helpfully abolishes any laws or norms that would prevent bribery.
https://www.newyorker.com/news/amy-davidson/the-supreme-cour...
This is not a US only problem, virtually any country is run by a couple of political parties and their friends and they can do pretty much anything with little repercussions.
I agree better pay is not the answer. The only reasonable alternative is to reduce their powers (especially reducing the amount of money they can spend and the laws they can impose on people) and spread them to local entities.
Decentralisation is the only antidote to government corruption and waste.
I agree better pay is not the answer. The only reasonable alternative is to reduce their powers (especially reducing the amount of money they can spend and the laws they can impose on people) and spread them to local entities.
Decentralisation is the only antidote to government corruption and waste.
> This is not a US only problem, virtually any country is run by a couple of political parties and their friends and they can do pretty much anything with little repercussions.
Citation definitely needed on this one.
Citation definitely needed on this one.
> Citation definitely needed on this one.
Not the parent, but Singapore comes to mind as a great example of one party having their fingers everywhere, including the supposedly-apartisan civil service, the trade unions, the political grassroots organisations, and most of the mainstream media organisations.
Singapore's two sovereign wealth funds invest in a massive number of local and foreign companies, and often install people they're grooming (usually ex-military) in fancy positions to boost their resumes [1].
Quite a few Members of Parliament hold quite a few directorships in supposedly private companies [2], but it's all fine and dandy as long as the affiliations are declared.
[1] https://www.reddit.com/r/singapore/comments/i2bnzz/how_does_...
[2] https://singaporearmchaircritic.wordpress.com/2014/07/23/mps...
Not the parent, but Singapore comes to mind as a great example of one party having their fingers everywhere, including the supposedly-apartisan civil service, the trade unions, the political grassroots organisations, and most of the mainstream media organisations.
Singapore's two sovereign wealth funds invest in a massive number of local and foreign companies, and often install people they're grooming (usually ex-military) in fancy positions to boost their resumes [1].
Quite a few Members of Parliament hold quite a few directorships in supposedly private companies [2], but it's all fine and dandy as long as the affiliations are declared.
[1] https://www.reddit.com/r/singapore/comments/i2bnzz/how_does_...
[2] https://singaporearmchaircritic.wordpress.com/2014/07/23/mps...
sortition
What if we substantially raised salaries — let's say to $100m/yr for the president, and lower but proportional amounts for all other major officials at the federal level — while on the other hand treating corruption-related crimes for those officials as tantamount to light treason?
(Just a thought experiment, not something I'm seriously proposing.)
(Just a thought experiment, not something I'm seriously proposing.)
More income means more leverage.
> The best a centrist can do is wait for the courts to fix it.
That is not how corruption is fixed.
That is not how corruption is fixed.
No he's right. The courts will fix this. After the people "come up with a solution" that doesn't involve going through the courts. The courts hate that.
Yet they get randomly replaced every few years. Ask Hilary Clinton how mucb she managed to raise. That randomness keeps a potential American Xi or Putin on their toes.
Not really, most people very high up in the FED are already independently wealthy
Its the other way around - it encourages wealthy people to serve as a public service.
The Federal Reserve doesn’t have the power to regulate members of congress AFAIK. This is specifically them regulating people that work for the Federal Reserve
I'd rather see Congressional salaries indexed to household incomes. While sure, $174K might be nominal in the private professional world, it's still 3x average US household income. They have health insurance and pensions. Better gig than the vast majority of their voting constituents. It might give them some humility and understanding of the plight of those constituents if they were remunerated similarly.
If one believes that legislators should be drawn from a pool of competent individuals who have options in private industry, you'd look at executive salaries in industry instead of the average US household.
Singapore indexes its government pay to that of the private industry for this reason, but they're also ruthlessly meritocratic and some might say, elitist. Yet also very effective. The two seem related to me, but it might not mesh well with American values.
Singapore indexes its government pay to that of the private industry for this reason, but they're also ruthlessly meritocratic and some might say, elitist. Yet also very effective. The two seem related to me, but it might not mesh well with American values.
Living in Singapore, I know a number of people who would have trouble with that statement.
Remember that $174K is typically spread between two households, and cost of living in DC is definitely not low.
Well, there's a solution for the housing thing too: dormitories or a flat housing allowance. These folks are intended to maintain a life in their constituencies, therefore their homes in WA DC should be treated as transient. Thus, a housing allowance similar to what other Federal employees encounter, and/or a Congressional dormitory, to me sounds like a perfectly acceptable solution. This is a job intended to be for the good of the American people, not a stepping stone to further wealth as it's been treated.
But thank goodness Nancy Pelosi still can.
I’m curious why all the heat is on Pelosi for trading? I see people on twitter making similar remarks. Is she more corrupt than the other politicians or are people just parroting each other and it’s become a meme to be negative towards Pelosi in particular?
Part of the problem is that she is the rep for Silicon Valley and the Speaker of the House, allowing her to wield a lot of power over a big chunk of the market.
Someone once told me that a stipulation for public service should involve converting all your holdings into index funds only. Thought that was an interesting proposal.
Hi Senator, congratulations on the election results!
I'm u/mywittyname with Beutsche Dank I run an index fund for senators. How it works is, you give me a call anytime you hear about an opportunity and my team of crack investors will look into it, making the trade if we feel it is a good fit. We currently have 200 congresspeople on board and have been beating the S&P500 benchmark by 500% annually.
It's a $1,000,000 minimum, but we can line up financing if you can't swing that just yet.
I'm u/mywittyname with Beutsche Dank I run an index fund for senators. How it works is, you give me a call anytime you hear about an opportunity and my team of crack investors will look into it, making the trade if we feel it is a good fit. We currently have 200 congresspeople on board and have been beating the S&P500 benchmark by 500% annually.
It's a $1,000,000 minimum, but we can line up financing if you can't swing that just yet.
Index funds are typically passively managed unlike mutual funds. I'm not saying what you are suggesting is impossible, but generally it would go against the definition of an index fund.
Index funds allow for options to be traded using the underlying holdings. This is one of the ways a specific index fund can outperform (or underperform) the index.
Trading options on sure things can easily generate >10,000% returns in a matter of days if the swing is large enough. All it takes is a few of these sure things a year to generate staggering returns.
Imagine what you could do with $100,000 in options contracts if you knew about the next Lehman Brothers collapse. That particular event turned a $0.01 option into $50-75, the on the flip side, the manager could offer OTM puts on existing holdings that would practically nullify any loses. Granted, you don't get a LB-level event every year, but there's always a few pretty good ones each year.
Trading options on sure things can easily generate >10,000% returns in a matter of days if the swing is large enough. All it takes is a few of these sure things a year to generate staggering returns.
Imagine what you could do with $100,000 in options contracts if you knew about the next Lehman Brothers collapse. That particular event turned a $0.01 option into $50-75, the on the flip side, the manager could offer OTM puts on existing holdings that would practically nullify any loses. Granted, you don't get a LB-level event every year, but there's always a few pretty good ones each year.
Even better, our fund is indexed against the positions of members of congress. Members can paper trade and we index against their decisions.
Index/bond funds are openly (all the holdings are open to public inspection) and passively managed. What you're describing is a mutual fund.
> Someone once told me that a stipulation for public service should involve converting all your holdings into index funds only.
For most elected officials (that have broad scope of potential jurisdiction and thus are almost impossible to avoid conflicts of interests), blind trusts are probably even better.
For most public servants, even those that have decision-making authority that could potentially raise conflict interests, disclosure and recusal rules are probably all that is needed (and, actually, lots of public servants have no decision–making authority that is likely to even require that.)
Appellate and Supreme Court judges could arguably fit in either category; trial court judges seem squarely in the second.
For most elected officials (that have broad scope of potential jurisdiction and thus are almost impossible to avoid conflicts of interests), blind trusts are probably even better.
For most public servants, even those that have decision-making authority that could potentially raise conflict interests, disclosure and recusal rules are probably all that is needed (and, actually, lots of public servants have no decision–making authority that is likely to even require that.)
Appellate and Supreme Court judges could arguably fit in either category; trial court judges seem squarely in the second.
>For most elected officials (that have broad scope of potential jurisdiction and thus are almost impossible to avoid conflicts of interests), blind trusts are probably even better.
Most elected officials (almost all federally) already employ blind trusts.
>For most public servants, even those that have decision-making authority that could potentially raise conflict interests, disclosure and recusal rules are probably all that is needed (and, actually, lots of public servants have no decision–making authority that is likely to even require that.)
True there are many levels and for lower level (comptrollers and such) that is probably fine. For senators, representatives, judges, etc. the index/bond fund would be even better than the blind trust, since these index funds are publicly inspectable, passively managed, and anyone can buy them.
Most elected officials (almost all federally) already employ blind trusts.
>For most public servants, even those that have decision-making authority that could potentially raise conflict interests, disclosure and recusal rules are probably all that is needed (and, actually, lots of public servants have no decision–making authority that is likely to even require that.)
True there are many levels and for lower level (comptrollers and such) that is probably fine. For senators, representatives, judges, etc. the index/bond fund would be even better than the blind trust, since these index funds are publicly inspectable, passively managed, and anyone can buy them.
Not sure that's necessarily fair. If you're 75, you probably don't want your retirement nest egg in 100% stocks. There isn't a policy congress could institute that guarantees stocks will retain their value in a 4 year window.
Index funds can hold other assets than equities, including bonds.
You could add the option of federal bonds then
If they're 75 they should focus on retirement.
Index funds aren't necessarily 100% stocks. A basic target date fund will taper down the stock percentage as you get closer to the targeted retirement date, not to mention the myriad of dedicated bond funds with every focus/tilt you can imagine.
[deleted]
Just make them have to declare at buy/sell time. That will allow instant information transmittal through the market.
Too many comments on here about Congress. Congress isn't affected by this:
>The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff.
>The ban includes top policymakers such as those who sit on the Federal Open Market Committee, along with senior staff.
> The Federal Reserve announced sweeping new rules for its top officials Thursday, banning trading in individual stocks and bonds.
The top officials of the Fed. not congress people.
The comments thread here is making me wonder if all HN comment threads are made up mostly of posters who haven't read beyond the headline.