NEWYou can now listen to Fox News articles! House Speaker Nancy Pelosi is arguably the most powerful person on earth. President Joe Biden has fai
NEWYou can now listen to Fox News articles!
House Speaker Nancy Pelosi is arguably the most powerful person on earth. President Joe Biden has failed, internationally and domestically, to keep Americans safe or help us succeed. Seventy-five percent of Democrats want him to step aside in 2024. Vice President Kamala Harris is less popular than Biden (only 6% support her as the 2024 replacement for Biden) and she is viewed as incompetent, by a Biden administration that we all view as incompetent. Therefore, the American policy agenda is set and implemented by Speaker Pelosi, second in the line of succession, but without question the true leader of the ruling Democratic Party.
The person who is driving the economic policies of the world’s largest economy should not be trading individual stocks, and neither should the other 534 members of Congress.
On July 26, Pelosi’s husband sold over $4 million worth of shares in semiconductor company Nvidia (NASDAQ: NVDA). He acquired the shares using a derivative instrument that allowed him to purchase up to $5 million worth of NVDA if the price of the stock underlying the instrument hits a certain level. Meanwhile, on July 28, the U.S. House passed the CHIPS and Science Act to provide incentives for companies to manufacture semiconductors in the U.S. Although NVDA will not benefit directly from the incentives, the bill is designed and expected to grow the entire U.S. semiconductor industry. The derivative instrument he used to get access to the shares was exercised during the previous week as the bill was being deliberated, and when the trade came under public scrutiny the shares were sold at a loss before the bill passed.
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On a given day there are scores of policy initiatives floating around Capitol Hill, any of which could affect industry prospects and the prospects of individual companies in different ways. Any member of Congress would be acutely aware of the effects of a piece of legislation, if for no other reason because industry advocates communicate the effect directly to members when lobbying for, or against, legislation. Members of Congress know the probability of legislation passing, the timing of passage, and the impact on companies. The information reaches members through professional staff, advocates, constituents, and party leadership. The knowledge can be used to buy stock in companies with bright prospects, sell stock in companies with bleak prospects, etc.
Despite the potential for insider trading, Pelosi has opposed a ban on individual stock trading. She told reporters back in December “because this is a free market and people – we are a free market economy.” “They should be able to participate in that.” This is laughable. Setting aside the fact that no single individual has done more to undermine the free-market economy than Pelosi, the argument fails because members’ participation in the economy is already limited in many ways. For example, members are prohibited from earning more than about $30,000 above their $174,000 salary with certain exceptions.
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I’m not arguing that aiding companies, harming companies, or trading on inside information is pervasive in Congress. I am arguing that member stock trades add to a perception of corruption in Congress. A recent poll initiated by Convention of States Action, found that 76 percent of voters believe that members and their spouses have an “unfair advantage” in the stock market. The poll found that 70 percent of Democrats, 78 percent of Republicans, and almost 80 percent of independents say members of Congress should not be allowed to trade stocks.
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Pelosi’s reluctance to ban stock trading looks particularly suspect given that she has one of the best performing stock portfolios on Capitol Hill. With stock holdings in Big Tech giants like Google and returns that beat the S&P by nearly 15 percent in 2020, she may have missed here true calling as a hedge fund manager.
Members of Congress can participate in the free market economy as Pelosi suggests, but they should do so through investment vehicles like mutual funds and blind trusts that remove temptation and eliminate the perceived unfair advantage that concerns so many Americans.
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