I am thrilled to be able to bring you news that the Democrats and Republicans are both trying oh so hard to explain closed door meetings with lobbyists in which insider tips on stocks are being bandied about. Now, you may not know, but lawmakers are actually allowed by their own written laws to actively trade in these stocks, while at the same time holding public policy power over the market’s head. It’s really a great racket.
What’s new now seems to be that assorted hedge fund insiders and others pay to access the insider information trough in Washington. With a rigged game, anyone in the know can make trades on either some upcoming deregulation windfall or perhaps early information on a policy mandate on safety helmet densities (for the children, of course), or a smorgasbord of new laws that effect any given industry each year. The incentive to attend these meetings or buy these reports is obvious even for a fool like me.
Here’s how they try to defend it:
Lawmakers defend the meetings. Republicans say they seek the views of hedge fund managers to help shape laws that spur investment.
Democrats say the conversations lead to better public policy because investors tell them about loopholes, inefficiencies or unseen consequences of existing laws.
They completely fail to address the underlying problem: a super-privileged class who can trade on very powerful information before the rest of the market.
The worst part is they’re absolutely telling the truth here… really sarcastically.
UPDATE: I have learned that the FBI is actively pursuing insider trading schemes, in a sting operation called “Perfect Hedge” (what a clever name, seriously). At least we know there will continue to be show trials of corrupt Wall Street banksters to give the impression that something is being done, even though it is rather clear the targets are small potatoes.