Learn it, live it:
If Wall Street has done pretty well by investing in Washington, the more despair-inducingly germane fact is that Washington has done pretty well by investing in Wall Street. A catalogue of recent congressional insider-trading, self-dealing, IPO shenanigans, and inexplicably good investment luck would fill an entire volume, and in fact it has: The book has the Tea Party–bait title Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison, by Peter Schweizer of the Hoover Institution. That’s a lot of title for a fairly slim book (176 pages of reportage, plus end notes), but, despite its relatively slender dimensions, it cost me an entire night’s sleep: I spent half the night reading it in a single sitting and the other half having nightmares about it. It’s the most offensive and disturbing thing I’ve read since sampling the oeuvre of the Marquis de Sade as an undergraduate.
I’m reading this exact book right now, and the corruption in Washington, particularly in Congress, is stunning. Members of Congressional committees work on legislation that will impact entire financial sectors — and at the same time, trade stock in the companies within those sectors, while possessing strategic and material information that affects the future of the stock price dramatically.
This is the very definition of insider trading. But it is completely legal. Can you say “fox guarding henhouse”?
I’ve been hammering this point in conversations and on this blog and in comments on other blogs for about 5 years now: it is a mistake to focus obsessively on Democrat vs. Republican, Left vs. Right, Liberal vs. Conservative because it misses the big picture, which is: we are all suckers compared to the Permanent Political Class described by Schweizer in this book. And that’s just the way they like it.
They use the D vs. R thing to distract us while they lift our wallets from our pockets. So, the way to stop this is to start paying attention to the way the world really works instead of fantasies about noble, honest, trustworthy Democrats and Republicans.
It’s time to wake up and smell the coffee.