[HN Gopher] Fed to ban policymakers from owning individual stocks
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Fed to ban policymakers from owning individual stocks
Author : awb
Score : 346 points
Date : 2021-10-21 19:14 UTC (3 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| dogman144 wrote:
| 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.
| onenightnine wrote:
| finally. this is huge. hopefully there isn't some other angle we
| are not seeing
| pmorici wrote:
| 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.
| jefflombardjr wrote:
| Yes report the transactions real-time and make them available
| via publicly accessible api.
| N0tAThr0wAway wrote:
| 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.
| mywittyname wrote:
| 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.
| N0tAThr0wAway wrote:
| Index/bond funds are openly (all the holdings are open to
| public inspection) and passively managed. What you're
| describing is a mutual fund.
| bern4444 wrote:
| Even better, our fund is indexed against the positions of
| members of congress. Members can paper trade and we index
| against their decisions.
| nightski wrote:
| 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.
| dragonwriter wrote:
| > 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.
| jrockway wrote:
| 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.
| officeplant wrote:
| If they're 75 they should focus on retirement.
| googlryas wrote:
| Or - run for President!
| DavidPeiffer wrote:
| 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]
| neogodless wrote:
| Index funds can hold other assets than equities, including
| bonds.
| jonas21 wrote:
| There are bond index funds too.
| dhosek wrote:
| Exactly. My retirement funds have exactly two securities in
| them: A stock index fund and a bond index fund.
| sideshowb wrote:
| You could add the option of federal bonds then
| robbmorganf wrote:
| 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.
| whimsicalism wrote:
| 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.
| jquery wrote:
| best solution in the entire thread
| adolph wrote:
| 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...
| trident5000 wrote:
| 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.
| alkonaut wrote:
| 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.
| lastofthemojito wrote:
| 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...
| trident5000 wrote:
| It wasnt technically revoked (my fault) but it was
| conveniently modified:
| https://thehill.com/policy/finance/293919-obama-signs-
| stock-...
| lastofthemojito wrote:
| 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."
| trident5000 wrote:
| 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.
| lastofthemojito wrote:
| 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.
| parineum wrote:
| It was amended and basically rendered useless.
|
| https://www.npr.org/sections/itsallpolitics/2013/04/16/17749.
| ..
| lastofthemojito wrote:
| 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.
| gnopgnip wrote:
| 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
| tomohawk wrote:
| But thank goodness Nancy Pelosi still can.
| brodouevencode wrote:
| 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.
| mywittyname wrote:
| 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.
| bee_rider wrote:
| 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.
| dragonwriter wrote:
| > 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.
| flyingfences wrote:
| I don't think they will, but I do think they should.
| slowmovintarget wrote:
| 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.
| gnopgnip wrote:
| The SEC can still pursue criminal charges
| zrail wrote:
| 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.
| bcrosby95 wrote:
| 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.
| sgent wrote:
| 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.
| dragonwriter wrote:
| > 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.
| davidw wrote:
| 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...
| bcrosby95 wrote:
| 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.
| m0zg wrote:
| 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.
| google234123 wrote:
| Let's make this the rule for all politicians
| wanderingmind wrote:
| 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.
| octodog wrote:
| I am following you until your last sentence. How does having
| less regulation help here?
| 908B64B197 wrote:
| 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.
| leppr wrote:
| _> 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
| assets valuations (which is what index funds track). As the
| past two years have demonstrated, 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 (money supply
| increase combined with lockdowns to delay inflation until after
| the transfer of wealth).
| bee_rider wrote:
| 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.
| xyzzy123 wrote:
| 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.
| Moodles wrote:
| Why's that a joke? Sounds like a good idea on the face of it.
| honksillet wrote:
| This needs to happen for congressmen also.
| yelnatz wrote:
| Senators?
|
| https://fortune.com/2020/03/20/senators-burr-loeffler-sold-s...
| CountDrewku wrote:
| 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.
| unbalancedevh wrote:
| 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.
| B-Con wrote:
| 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.
| dhosek wrote:
| 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.
| awb wrote:
| 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.
| davesque wrote:
| 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.
| tshaddox wrote:
| 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.
| tessierashpool wrote:
| in many, many cases the bad stuff is already illegal, and
| it's the investigations and prosecutions that are missing.
| louloulou wrote:
| Welcome to the libertarian/small government world view!
| josho wrote:
| 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?
| leppr wrote:
| _> 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.
| dghlsakjg wrote:
| 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.
| davesque wrote:
| 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?
| Baeocystin wrote:
| 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.
| FormerBandmate wrote:
| 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
| spaetzleesser wrote:
| That invites short term decisions to pump up markets. I think
| the Fed should be concerned with long term health of the
| economy.
| newaccount2021 wrote:
| Heavyweight industry chops are a prerequisite for a Fed board
| job, none of them is a pauper.
| errantmind wrote:
| This breaks down when multi-term policy decisions need to be
| made. This would only push them to kick the can down the road
| srcreigh wrote:
| What if they are paid based on performance in 10 years,
| after they are out?
| spaetzleesser wrote:
| It's the same problem as CEO pay. But measuring success
| is even harder.
| handmodel wrote:
| 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.
| sofixa wrote:
| It would just incentivise short-term policymaking.
| missedthecue wrote:
| 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
| [deleted]
| WalterBright wrote:
| 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.
| kolbe wrote:
| 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.
| wolverine876 wrote:
| > 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.
| WalterBright wrote:
| 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.
| plandis wrote:
| 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
| toomuchtodo wrote:
| 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
| onlyrealcuzzo wrote:
| 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.
| pphysch wrote:
| 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.
| jessaustin wrote:
| 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.
| RcouF1uZ4gsC wrote:
| >because they have millennia of tradition and scholarship
| encouraging them not to care too much what barbarians
| say.
|
| Except if the barbarians talk about Taiwan (see Jon Cena)
| or Uygars. China has cowed even the NBA and western movie
| companies from going near those subjects.
| alexashka wrote:
| You've contradicted yourself.
|
| Maybe it's not great, but then China does it and we need to
| oppose them somehow.
|
| Which is it? Lol. If it's not great, then China will self
| destruct under all that 'corruption', right? :)
|
| Maybe it's not coca cola vs pepsi aka communism vs
| capitalist aka centralized vs decentralized.
|
| Maybe it's people with a brain doing shit with a high
| degree of competence, in the circumstances they've been
| given.
|
| I'd love a politician to say _that_ shit one time - you
| know, it 's actually that most of my colleagues are
| incompetent idiots and we need to replace them, vote for
| me! :)
| [deleted]
| lumost wrote:
| 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.
| Larrikin wrote:
| Median household income in DC is 92k. Their single income
| is almost double what the average person in DC makes.
| dahfizz wrote:
| 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.
| smolder wrote:
| This is about the Fed banning it's own policymakers from owning
| them, not about congress.
| tessierashpool wrote:
| 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.
| denton-scratch wrote:
| 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.
| Roboprog wrote:
| 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.
| glial wrote:
| Folks are doing it manually:
| https://www.npr.org/2021/09/21/1039313011/tiktokers-are-
| trad...
| smnrchrds wrote:
| Chair of the Federal Reserve has a salary of US$221,400.
| whimsicalism wrote:
| Yeah but who has time to do such an in-read depth of *checks
| notes*... the headline?
| animal_spirits wrote:
| Correct, the article has zero mentions of congress
| nerfhammer wrote:
| Would the Fed actually have the authority to even do that,
| regulate what securities Congress members are allowed to
| hold?
| dnautics wrote:
| probably not. Then again, does the fed actually have the
| authority to do some of the things that it does?
| kolbe wrote:
| "The Fed" as in the Federal Reserve: no.
|
| "The Fed" as in the Federal Government: yes.
| westurner wrote:
| "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.
|
| ... 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?
| poulsbohemian wrote:
| 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.
| macintux wrote:
| Remember that $174K is typically spread between two
| households, and cost of living in DC is definitely not low.
| poulsbohemian wrote:
| 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.
| chillacy wrote:
| 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.
| 99_00 wrote:
| 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.
| FpUser wrote:
| >"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.
| pessimizer wrote:
| 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...
| fdgsdfogijq wrote:
| Not really, most people very high up in the FED are already
| independently wealthy
| Factorium wrote:
| This is the case all over the Western world. Federal Government
| politician salaries need to be 10x higher.
| newaccount2021 wrote:
| You already have to be wealthy to win an election...no one in
| Congress is there to build their retirement fund
| trident5000 wrote:
| 10x higher in combination with term limits. This would
| actually be a great incentive for them to actually vote for
| it.
| spaetzleesser wrote:
| 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.
| Factorium wrote:
| 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.
| FpUser wrote:
| Mr. Senator, is that you?
| CountDrewku wrote:
| 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.
| officeplant wrote:
| 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.
| dragonwriter wrote:
| > 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.
| alexashka wrote:
| 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
| :)
| kesselvon wrote:
| 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.
| 01100011 wrote:
| 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.
| ootsootsoots wrote:
| They absolutely should not make above market when they also
| get a locked in pension, benefits, as if this is some Nordic
| socialist state.
|
| Chuck in qualified immunity and baby, you got a state
| effectively assuring police loyalty while tossing the rest of
| us into the ring.
| zz865 wrote:
| Its the other way around - it encourages wealthy people to
| serve as a public service.
| giaour wrote:
| I wonder is this is intentionally set to match the top level of
| the GS (civil service) pay scale in the DC area.
| CountDrewku wrote:
| 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.
| whiddershins wrote:
| 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.
| amelius wrote:
| 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.
| WaitWaitWha wrote:
| 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.
| aspenmayer wrote:
| 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.
| ..
| dragonwriter wrote:
| > 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.
| fragmede wrote:
| 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.
| jkepler wrote:
| 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.
| xboxnolifes wrote:
| 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.
| hikerclimber1 wrote:
| How about ai which is our government?
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