It took six years, a “Sixty Minutes” expos that embarrassed congressional leaders from both parties and a decline in Congress’ approval rating into the single digits, but, finally, it happened.
Congress passed and President Barack Obama signed the STOCK Act. It was a bill that self-respecting members of Congress would have voted on the first time they laid eyes on it. It simply says that members of Congress and the government employees who work with them cannot use inside information they receive in the course of their duties to make a profit.
In other words, it is just one of a plethora of legislative proposals over the years that would level the playing field between the public and members of Congress and Washington bureaucrats.
Others pay the price
Every year, Wall Street insiders are caught profiting on inside information. And sometimes they even go to jail for it.
Safeguards against insider trading are an essential part of a free economy such as ours. Average people making investments in the stock market, either directly or through the retirement funds they hold, must be confident that they have as much chance to make a good investment as anyone else. If inside traders are allowed to skim the cream off the top of any trade, what’s left for everyone else is unpalatable.
Basically the law prohibits personal benefit through privileged information, makes it clear that there is no congressional exemption to insider trading laws, and requires new levels of financial disclosure in Congress.
More to be done
But as one of the long-time proponents of the bill, the non-partisan Sunlight Foundation points out, the STOCK Act isn’t perfect. It doesn’t address the possible abuse of the system by political intelligence firms, it could have provided provisions that made it easier to pursue prosecution of corrupt officials and it exempted the sale and purchase of real estate.
But given that until CBS-TV shed new light on an old problem the House leadership had been intent on blocking any reform legislation, this is a giant step forward.
As Obama said when he signed the bill, it recognizes “the idea that everybody plays by the same rules ... It goes hand in hand with our fundamental belief that hard work should pay off, and responsibility should be rewarded.”
Again, the only thing extraordinary is that passage took six years from the time that Reps. Louise Slaughter of New York and Tim Walz of Minnesota first introduced the bill.