Think Congressional Insider Trading Is Bad…Money In Politics Is Worse
- Posted by TheArmoTrader
- on November 18th, 2011
We all saw or heard about the 60 Minutes piece about all the Insider Trading that goes on in Congress. If you thought that was bad, money in politics is worse. At least when a congressperson does insider trading, he or she is not technically harming anyone (although that can be argued). He or she is just using information to gain an advantage themselves. It’s bad, dont get me wrong, but at least when Representative Spencer Bachus or Representative Nancy Pelosi make $20,000 on a stock trade, it does not hurt my everyday life.
However, this could not be less true about money in politics. What do I mean by money in politics? I am talking about the crony capitalism that allows our government to be bought at auction by the highest bidder. This is done through our politicians. Our politicians NEED money when they run for office or re-election. What better way to get it than from those who can easily hand it out without much cost? “Those” include the ’1%’, corporations, unions, and special interest groups (obviously not ALL use their money to buy government). These entities have the money to drop to “buy” candidates.
Besides the crony capitalism argument, why else should we get rid of money in politics? Because the cost of running a campaign is just getting “too damn high”(to quote the great Jimmy McMillan). In 1976, the average spent on a presidential campaign was $67 million and the average spent by a congressperson was $87,000. Today (using 2008 numbers), those numbers have skyrocketed to $1.3 Billion and $1.5 million, respectively.
Think about this problem for a second. If you don’t raise $1.5 million each election cycle, most likely, you will lose your race (proof on this below). That is just RIDICULOUS. Its gotten to the point, where a congressperson is spending 25-50% of their time raising money. No wonder they can’t solve anything.
So what are the solutions? I talk about it here on my personal blog, but to summarize.
- Pass a constitutional amendment, getting money out of politics.
- Ban Corporate personhood by repealing The Citizens United case.
- Enact public campaign financing.
- Limit political contributions to $100.
Below is the only data you need to see to know why money in politics is corrupting our system. The chart below shows the percent of Representatives and Senators who won their race that raised the most money. So take 2004 for example. 98% of representatives and 88% of senators who raised the most money WON their race.
This is just bad. The Correlation here is just too strong to ignore. The winner for office should not come down to a money fund-raising issue. Remember, nobody likes a rigged game (unless you’re the rigger). Watching a football game where you know the referee is bought by Team ‘A’ is no fun. Get Money Out.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Jerry Khachoyan is currently an undergraduate student at UCLA pursuing a degree in Political Science. He started trading in September of 2008. He concentrates on using technical analysis and reading the tape to enter the best risk/reward trades. The stock market to him is one of the greatest inventions by man.
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