Being a career politician can have some pretty good benefits. Lets talk about some of those benefits. And some of the controversies surrounding those benefits. Lets also take a look at some of the common misconceptions regarding politicians and government pay.
Lets take a look at one of the biggest advantages that a politician reaps from being elected. And that would be a politicians exemption from insider trading laws. What is that? What does that mean? And how does this make most politicians very wealthy? Suppose you are the CEO of publicly traded company that supplies anti ballistic missile systems to the United State of America. Your company has been competing with several other large companies for a multi-billion dollar contract. Its Monday morning and you have just received a call from US budget appropriations committee and your US Senator that your company has been selected for the contract to supply this missiles. This contract will mean hundred of millions of profits that will have a massive effect on your company stock price. You have this information and you are very happy, but you cannot do is buy stock in your company until after you have released a public statement, and then only after the statement has been released you must wait to make the purchase. These are called insider trading laws meant to protect average investors.
However, suppose you are the US Senator, the appropriations committee chair, the local congressman, the staff of those US Senators and Congressman, and any other person working in government that has pre-release information on the company that is going to be awarded that huge contract. You have hugely valuable information, and you use this information to make a massive purchase of the company that is being awarded the contract…before the public release. Is this legal? Yes. Its perfectly legal and its been used by politicians since the dawn of your country to make politicians extremely wealthy.
Of course, I dont expect you to believe me. In fact, every time I mention this loop hole to the average person, they roll their eyes in a expression of total disbelief. And so I invite you to do your own research!
When we read about this type of nonsense, its really difficult to not become cynical and frustrated with our political system. As a rule of thumb, whenever politicians agree on something, without a debate an with a unanimous vote…then you, the public should be worried. This is the very moment when the public is about to get screwed. A perfect case in point would be the Stock Act of 2012. The stock act was supposed to eliminate insider trading of politicians and their cronies. And subject them to the same rules as everyone else. But my oh my, what an uproar of uniform disapproval from normally argumentative politicians. The politicians, both D’s and R’s, and all their friends pressured Obama into repealing the rule.
And so, what do we have left? Well, its the status quo. Politicians of every ideological stripe and stance are using insider information to get rich.