Voters Think Congress Is Corrupt And Would Ban Them From Trading Stocks While In Office

 

The charts above reflect the results of the Economist / YouGov Poll -- done between May 22nd and 26th of a nationwide sample of 1,397 registered voters, with a 3.3 point margin of error.

Trump Is Misreading The Stock Market - It Believes T.A.C.O.!

Donald Trump is back on his tariff kick. After increasing tariffs on South Korea, Japan, Vietnam, and some other Asian nations, he has placed a 50% tariff on Brazil and a 35% tariff on Canada - and raised the tariff on most other nations from 10% to 15% or 20%. The tariffs are set to take effect on August 1st.

Trump is now bragging that his tariff regime has been good for the country. As proof, he said the stock market has remained strong.

He is right about the stock market remaining strong, but wrong about the reason for it. The market knows the tariffs would be bad for the economy - both for businesses and for consumers. That's why the market sank precipitously when Trump originally announced his tariffs a few months ago.

But since then, they have seen Trump impose and back off on tariffs several times. Now they no longer believe he will actually follow through on them. It was a market denizen who came up with the TACO moniker for Trump. It stands for Trump Always Chickens Out. The market believes he will again chicken out and delay the tariffs (perhaps endlessly).

Will he follow through and actually impose the tariffs on August 1st? He might, because he has been fooled by the strong stock market. But if he does, the market will react badly with a huge drop. Then he will react by delaying the tariffs because a bad stock market scares him. 

T.A.C.O. is a real thing - and the stock market knows it.

Stock Market And Dollar Were Much Better Under Biden And Obama

 

These charts are from Bloomberg.com.

Two-Thirds Of Voters Say ALL Government Officials Should Be Banned From Trading Stocks

The chart is from a Politico / Morning Consult Poll -- done between October 21st and 23rd of a nationwide sample of 2,005 registered voters, with a 2 point margin of error. 

Congress Should Not Own/Trade Individual Stocks

 The following is part of an editorial by the editorial board of The New York Times:

Americans are in a sour mood with their elected officials. Blame the pandemic or inflation or Trumpism or stress or structural problems like inequality, but people do not feel that the system, much less its leaders, are working for them. The nation is experiencing a crisis of confidence that is eating away at its strength and unity.

Addressing this problem calls for long-term vision and commitment — things politicians aren’t always known for. But a straightforward idea gaining traction on Capitol Hill could reassure a frustrated and exhausted public that lawmakers at least recognize this trust deficit: a ban on stock trading by members of Congress and their spouses.

This idea got a fresh jolt in the early days of the pandemic after some lawmakers faced awkward questions about whether they used nonpublic information to make lucrative stock trades just as the severity of the threat posed by the coronavirus was becoming clear.

A report in December by Insider was more definitive. It revealed that in 2020 and 2021, dozens of lawmakers failed to abide by rules requiring them to promptly disclose stock trades above a certain threshold. The investigation also found that Congress does a poor job of enforcing accountability and transparency measures.

In response to the uproar, there has been a push by both parties, in both houses of Congress, to establish stronger guardrails on congressional stock ownership. Multiple lawmakers have introduced bills pushing variations of a ban on trading individual stocks, some tougher and more expansive than others. . . .

In a high-stakes election year, with lawmakers eager to show voters that they feel their rage, now is the moment to drive home this popular, common-sense reform. Americans have lost faith in Congress. Restoring trust in this institution requires concrete, bipartisan change.

It has been a decade since Congress last made a significant effort at policing itself in this area. The Stock Act of 2012, among other measures, made it illegal for lawmakers to trade based on access to nonpublic information. The reforms were well intentioned but inadequate. In practice, there are too many legal shades of gray. A clearer, brighter line needs to be drawn. . . .

Members of Congress have access to a steady stream of information that regular Americans do not. They already exist in a different, more privileged situation.

The common argument that a trading ban would pose a hardship for lawmakers is no more compelling. Most of the proposals under consideration do not call for members of Congress to sell all their stock holdings. They would merely prohibit lawmakers from trading stocks in individual companies. Assets could still be held in vehicles such as index funds or blind trusts.

It also bears noting that only a sliver of American families, about 15 percent, directly hold stock in individual companies, as opposed to indirectly through mutual funds and the like. A stock trading ban would put lawmakers more in sync with the 85 percent of Americans who own no individual stock, rather than align their interests with the 15 percent who do.

A ban on congressional trading enjoys a bipartisan appeal that is rare in this polarized age. A January poll found that 63 percent of American voters are at least somewhat in favor of such a move — with strong backing among Democrats, Republicans and independents alike. . . .

Proponents of reform need to keep the pressure on to ensure that this effort does not get slow-walked or bogged down in the devilish details. . . .

Lawmakers’ top priority — arguably, their first duty — should be to clean up their own branch of government. They are, as elected officials, directly accountable to their voters, and many of the people to whom they owe their jobs and salaries have grave doubts about their ethical guidelines and rules of fair play.

In a series of recent Times Opinion focus groups, voters across the political spectrum described their frustrations and even anger at the political class and the system, seeing elected officials in both parties as acting in self-interest without rules or consequences. “They all just go to their barbecues and cocktail parties and laugh,” said one independent voter. “They just want the power. They couldn’t care less about us.” Some Democratic voters expressed interest in term limits, curbs on lobbyist influence on lawmakers and new rules on money in politics.

The push for a trading ban is about more than imposing rules to keep lawmakers on the straight and narrow. It is about changing the widespread perception of public service as a playground for corruption and self-dealing. It is about restoring Americans’ faith in their government. For Congress, there may be no worthier cause.

Warren's Statement On Congress Owning/Trading Stocks

There is a movement in Congress to ban the ownership or trading of stocks by members of Congress. One of the people pushing this is Senator Elizabeth Warren (D-Massachusetts). Here is what she had to say about it in an e-mail to her supporters:

I think this is pretty basic, but apparently it’s a newsflash to some people in Washington:

The American people deserve to have complete confidence that members of Congress are making decisions based on what’s best for the country — not what’s best for those lawmakers’ own personal finances.

So we need to ban members of Congress from owning and trading individual stocks. 

I’m coming out with a new bill to do exactly that — and it’s already got bipartisan support. Now, to get it over the finish line, we need to show that the American people are demanding action.

Remember: Not so long ago, Republican Senators Kelly Loeffler and David Perdue played down the danger of COVID-19 in public while privately trading stocks to profit from the pandemic. They both lost their re-election campaigns, but the potential for conflicts of interest still lurks around Capitol Hill — and we’ve got to clear it out.

Now, let’s be clear — I’m more than ready to go even further than this plan. My larger bill to root corruption out of Washington would ban Cabinet secretaries, federal judges (including Supreme Court justices), and other top officials from owning and trading individual stocks.

But this bipartisan plan, focused on Congress, is a straightforward first step. And there’s real momentum behind it right now.

Here’s how the ban would work:

• After a short transition period, members of Congress and their spouses won’t be allowed to own or trade individual stocks.
• Instead, they can put their money in conflict-free investments like diversified mutual funds.
• And if they break the rules, they’ll have to pay a $50,000 fine per violation.

It’s clear and sharp. It says that senators and representatives shouldn’t be able to write laws to enrich themselves. And anyone who isn’t ready to follow these basic rules can pick a new line of work.

I’ve been working on this issue for years, and I believe we’re closer than ever to making it happen. Republicans and Democrats are working together to say enough is enough. Now is the moment for everyone to raise their voices.

Thanks for being a part of this,

Elizabeth 

Congress Should Be Banned From Owning/Trading Stocks

 

Congressional Stock Trading Violates Ethical Rules

I have heard some saying Congress should be paid the minimum wage, and then they might be concerned more about working people. But the truth is that most in Congress are rich, and those who are not are trying to get rich -- and they do that by buying and selling stocks. This is an ethical concern, since much of what they do with legislation affects the prices of the stocks they are trading (some of it is obvious insider trading). 

Much of this is legal for Congress (while not legal for other government employees), and the part that is already illegal is ignored. We need new laws and ways to keep this from happening. They are supposed to be there to help the American people -- not make themselves rich (or richer)!

The following is part of an article by Richard Painter at MSNBC.com:

This year, 52 members of the House and Senate violated the STOCK Act, a 2012 law that requires prompt and accurate reporting of stock trades by members of Congress, Insider reported. Apparently, they were too busy trading to focus on filing accurate reports in a timely manner.

It seems like the simple solution would be to prohibit congressional members from trading individual stocks to avoid potential foul play. Yet House Speaker Nancy Pelosi, D-Calif., recently announced that she would oppose efforts to prohibit members of Congress and their spouses (her own husband being one of them) from trading individual stocks.

This is a dangerous move, for many reasons. Ordinarily, Pelosi’s stubborn defense of congressional stock trading would be an opportunity for House Republicans to take the high ground on ethics, put their assets in mutual funds or blind trusts and then promise that if they get control of the House in 2022, stock trading by all members will be prohibited. Good luck with that; Republicans in Congress are way too busy trading their own stocks to worry about ethics.

The hypocrisy of Congress is astonishing when you look at the fact that every other federal employee is subject to a criminal statute that prohibits financial conflicts of interest with official duties. It is a crime for a federal officer to participate in a particular government matter, including supporting or opposing a bill in Congress, that has a direct and predictable effect on the federal officer’s financial interest.

Of course, the very people who make the laws — members of Congress, as well as the president and the vice president — are exempt from this law. They are allowed to have financial conflicts of interest with their official duties that for other federal employees are a crime.

Then there is the insider trading problem. Members of Congress know a lot of information the rest of us don’t know, and some of this information can be useful for stock trading. Trading on the basis of nonpublic information misappropriated from Congress or any other employer, however, is a crime. Investment bankers and corporate officers routinely go to jail for insider trading, and the Securities and Exchange Commission, when it suspects insider trading, can commence an investigation and subpoena corporate emails, texts and other records showing what traders knew and when they knew it. It's not so easy in the case of Congress because the speech and debate clause of the Constitution is interpreted to severely limit the ability of federal investigators to obtain records and find out who said what to whom in congressional offices and on the floor.

Investigating allegations of congressional insider trading is thus left to the House and Senate ethics committees, which have little experience with such investigations and furthermore report to the very members of Congress they are investigating. . . .

The New York Times reported recently that “politicians and their immediate families bought $267 million and sold $364 million worth of assets this year,” pointing out that “Democrats are really into tech stocks, which accounted for some $35 million” and that “Republicans are more about energy, buying $32 million worth of stock in companies in the sector during the year.”. . .

Congressional stock trading must come to an end; members should be required to place their assets in blind trusts or diversified mutual funds and focus their attention on the nation’s business, not their own. Anyone in Congress unwilling to make this commitment should find another job.

Judges Are Making Decisions Affecting Stocks They Own

 

We hear about presidents (like Trump) and members of Congress that own stocks, and make regulations or laws that affect those stocks (making themselves richer). It's not supposed to happen, but the laws governing it are too weak to effectively prevent it. There is a bill in Congress (the protecting Democracy Act) that would help curb these abuses.

But there is a branch of our federal government that won't be covered in that law -- the judiciary. And they are also sometimes doing the same thing -- making decisions that affect stocks they own. This needs to be stopped. In fact, all federal judges and Supreme Court justices should be required to divest themselves of any individual stocks before being allowed to assume office.

Here is part of what Richard W. Painter has to say about this at MSNBC.com:

In recent years, the United States has experienced an unprecedented number of financial conflicts of interest in its executive and legislative branches. Thanks to recent reporting by The Wall Street Journal, we now know how bad financial conflicts of interest are in the federal judiciary. According to the newspaper’s report, 131 federal judges broke the law by participating in 685 cases in which they had a financial interest, chiefly because of their holdings in individual stocks. This is a violation of the disqualification statute for United States judges prohibiting them from deciding cases in which they have a financial interest.

We have an ethical crisis across all three branches of government because those holding high office have been unwilling to divest from assets that conflict with their official duties. . . .

The 131 federal judges mentioned in the Wall Street Journal report, judges holding stocks in companies affected by cases before them are required to recuse themselves. It’s likely that some judges aren’t watching their portfolios or their spouses’ portfolios or aren’t aware that many larger publicly traded companies have multiple subsidiaries. The identify of those subsidiaries is unknown to the many investors (judges included) who don’t read the parent company’s annual report. Other judges simply may not care about complying with a statute that requires recusal.

This problem could easily be avoided if judges, like most Americans who invest for their retirement, invested in the “mutual or common investment funds” that are specifically exempt from the conflicts of interest provisions under federal law. It is unlikely that a single case would affect the value of an entire fund. For whatever reason — perhaps the belief that they can beat the market because they have more information than professional fund managers — some judges, like some members of Congress, insist on owning, and sometimes actively trading, individual stocks.

Some judges may think that, when the occasion arises, they can sell a stock so they can participate in a case. Not so fast. If the judge has any inside information from the court about how the case might come out, selling the stock while in possession of that information could expose the judge to prosecution under federal criminal insider trading laws. The judge who has a conflict of interest in a case may be stuck with a stock by the time the conflict is noticeable.

Matters get worse on the Supreme Court. At least three justices — Chief Justice John Roberts and Associate Justices Stephen Breyer and Samuel Alito — own individual stocks, and all three have recused themselves from cases because of their stock holdings. The problem is, unlike on the lower federal courts, there are no replacement justices to take their place. A case could be decided by eight justices or seven justices because of recusals. This is problematic for the Supreme Court, which often grants review in certain cases not just to resolve a particular dispute but to clearly state what the law is going forward. A Supreme Court decision that does not have the support of at least five justices has little value as a precedent because the ruling could be reversed in a future case in which none of the justices recuse themselves.

This is also a problem that could be easily solved if justices were to invest the same way most Americans invest their retirement funds — in broadly diversified mutual funds. . . .

Last month, Congress introduced the Protecting Our Democracy Actto curb abuses in the executive branch. The bill, among other things, provides for enforcement of the Emoluments Clause of the Constitution by the Department of Justice and Congress. Never again should concerned citizens have to wait four years, as we did in the CREW litigation, while a president openly flouts the financial conflicts of interest laws. . . .

The Protecting Our Democracy Act also needs to include a provision requiring presidents, vice presidents, members of Congress and all federal judges to divest from individual stocks and any other investments that pose conflicts of interest with their official duties. House and Senate leadership may not like such a divestment mandate, perhaps because they also own individual stocks, but they need to do it anyway. Investments in broadly diversified mutual funds are good enough for most individual investors, and they should be good enough for federal officers at the pinnacle of all three branches of our government.

Virtually every other federal employee is prohibited by criminal statutes from participating in matters in which they have a conflict of interest. Holders of the highest federal offices — executive, legislative or judicial — should be required to do the same.

Stock Market Rises Sharply In Month After Biden's Election

 One of the scare tactics that Donald Trump used in the 2020 presidential campaign was about the stock market. He told investors that the market would fall drastically if Joe Biden was elected, and investors would lose huge amounts of money.

As expected, that turned out to be just another of his thousands of lies.

The market rose sharply in the month after Joe Biden's election, and rose significantly more than it rose after the 2016 election. In fact, the Dow, NASDAQ, and S&P 500 all rose more after Biden's election than after Trump's election.

Investors in the market hate surprises, like the crazy actions by Trump (such as a trade war against China and many of our allies). They see Biden as returning to solid economic principles, and they like the team of economic professionals he has chosen.

Stock Market Did Better Under Obama & Clinton Than Trump

Donald Trump loves to brag about how well he's done with the economy (even though the economy was doing well when he became president and just continued that course). He especially likes to brag about the stock market. He would like you to believe that the stock market did better under his presidency than under any other president.

But that is simply not true. Axios.com looked at stock market performance during the first terms of the last 8 presidents. There were three presidents who did better than Trump. George H.W. Bush did slightly better, while Bill Clinton and  Barack Obama did much better. As a percentage, the market rose 1.3 points better under Bush I than under Trump. It rose 17.5 points better under Clinton and 21.5 points better under Obama.

Trump's bragging about the stock market (and the economy) are just more of his lies.

Democratic Presidents Are Better For Economic Growth

 

Republicans have been selling Americans a lie for decades now -- that Republican presidents are better for the economy than Democratic presidents. And sadly, many Americans have bought that lie. 

That does not make it true though. In fact, it turns out that Democratic presidents are significantly better for economic growth than Republican presidents -- and that is true of both Gross Domestic Product (GDP) and stock market growth.

This is not just my opinion. The data bears it out. Here's how Business Insider (a conservative publication) reports this:

It's a widely held view that Republican presidents are better for the economy and stock market than Democratic presidents, because of their drive to cut taxes and reduce government spending. But the data says otherwise.

According to an August 21 note from Liberum, a UK-based investment bank, historical stock market returns and gross domestic product data points to a stronger economic expansion under Democratic presidents than under Republican presidents.

The firm looked at data going back to 1947, which is when official GDP calculations were introduced, to analyze who did better. Liberum credited a new president with the economic performance of the first quarter of his first year in office.

According to Liberum, the average annual US GDP growth rate under a Democratic president was 3.6%, compared to 2.6% for a Republican president. And those economic gains trickled down to stock market gains as well.

Liberum found that the stock market, represented by the S&P 500, posted an average annual total return of 10.8% under a Democratic president, compared to just 5.6% for a Republican president, since 1947.

Many would likely argue that the data is skewed to favor a Democratic president because it includes the Great Recession of 2008, and the COVID-19 induced market sell-off of 2020, both of which happened under Republican presidents.

Therefore, Liberum also looked at the historical data from 1947 to 2006, which excludes both the Great Recession and the COVID-19 pandemic.

But the data is more of the same. From 1947 to 2006, the average annual return for stocks under a Democratic president was 10.5%, versus 6.1% under a Republican president.

The difference in economic and stock market gains between a Democratic and Republican president can be explained by "fiscal multipliers," according to Liberum.

While Republicans aim to stimulate the economy via tax cuts and deregulation, Democrats aim to stimulate consumption (and thus the economy) with redistribution policies like increased unemployment benefits, increased child credits, and food stamp support, Liberum noted.

And those policy differences can lead to sizable differences in their economic impact.

If a tax cut introduced by Republicans led to a 1% decrease in tax income for the government, it would boost economic growth by 0.3% to 0.4%. 

Meanwhile, expanding unemployment benefits and other policies often pushed by Democratic presidents "has a fiscal multiplier of 1.2 to 1.7," Liberum found.

In other words, tax cuts would have to be 5x larger than increases in welfare spending to have a similar economic impact.

Trump Didn't Want To Panic The Stock Market - Not People

Donald Trump's "playing down" of the seriousness of the Coronavirus was not just incompetence. It bordered on criminality. That's the opinion of economist and Nobel Prize winner Paul Krugman. Trump said he didn't want to cause a panic. That's probably true, but it wasn't the American public he didn't want to panic -- it was the stock market.

Here is just a small part of what Krugman had to say about Trump lying about the virus in his New York Times column:

Until this week I thought that Donald Trump’s disastrous mishandling of Covid-19 was basically negligence, even if that negligence was willful — that is, that he failed to understand the gravity of the threat because he didn’t want to hear about it and refused to take actions that could have saved thousands of American lives because actually doing effective policy isn’t his kind of thing.

But I was wrong. According to Bob Woodward’s new book, “Rage,” Trump wasn’t oblivious; he knew by early February that Covid-19 was both deadly and airborne. And this isn’t a case of conflicting recollections: Woodward has Trump on tape. Yet Trump continued to hold large indoor rallies, disparage precautionary measures and pressure states to reopen business despite the risk of infection.

And he’s still doing the same things, even now.

In other words, a large fraction of the more than 200,000 Americans who will surely die of Covid-19 by Election Day will have been victims of something much worse than mere negligence. . . .

Trump justified his concealment of Covid-19’s dangers as a desire to avoid “panic.” That’s pretty rich coming from the guy who began his presidency with warnings about “American carnage” and who’s currently trying to terrify suburbanites with visions of rampaging Antifa hordes. But what exactly were the dangers of panic that worried him?

After all, telling the truth about the coronavirus wouldn’t have been like shouting “Fire!” in a crowded theater. The only things the truth might have scared people into doing would have been staying home where possible, avoiding crowds, washing their hands and so on. And these were all things people should have been doing — in fact, once people started “panicking” in places like New York, infection rates came way down.

Of course, we all have a pretty good idea what Trump was actually talking about: All through this crisis credible sources have reported that he wanted to downplay the crisis out of fear that bad news might hurt his beloved stock market. That is, he felt that he needed to sacrifice thousands of American lives to prop up the Dow.

As it happens, he was wrong: Stocks have stayed high despite an ever-rising death toll. But the fact that he was wrong about the trade-off doesn’t alter the fact that his willingness to make that trade-off was utterly immoral.

The bottom line is that it’s wrong to say that Trump mishandled Covid-19, that his response was incompetent. No, it wasn’t; it was immoral, bordering on criminal.

Stocks Are Booming But The Economy Is Mired In Recession

The stock market reached a record high this last week, and both Trump and Pence said it showed the economy is bouncing back and is in good shape. Unfortunately, that simply isn't true.

The stock market is not the economy. It's not even a reliable indicator of how the economy is doing. The stock market tells us the rich are getting richer -- even in the midst of this deep recession.

But the poor, working class, and middle class are not doing so well. They remain prisoner to the real economy -- the one with high unemployment and low GDP -- the one stuck in a deep recession.

Here is how Nobel Prize-winning economist Paul Krugman describes the economic situation in his New York Times column:

On Tuesday, the S&P 500 stock index hit a record high. The next day, Apple became the first U.S. company in history to be valued at more than $2 trillion. Donald Trump is, of course, touting the stock market as proof that the economy has recovered from the coronavirus; too bad about those 173,000 dead Americans, but as he says, “It is what it is.”

But the economy probably doesn’t feel so great to the millions of workers who still haven’t gotten their jobs back and who have just seen their unemployment benefits slashed. The $600 a week supplemental benefit enacted in March has expired, and Trump’s purported replacement is basically a sick joke.

Even before the aid cutoff, the number of parents reporting that they were having trouble giving their children enough to eat was rising rapidly. That number will surely soar in the next few weeks. And we’re also about to see a huge wave of evictions, both because families are no longer getting the money they need to pay rent and because a temporary ban on evictions, like supplemental unemployment benefits, has just expired.

But how can there be such a disconnect between rising stocks and growing misery? . . .

The truth is that stock prices have never been closely tied to the state of the economy. As an old economists’ joke has it, the market has predicted nine of the last five recessions.

Stocks do get hit by financial crises, like the disruptions that followed the fall of Lehman Brothers in September 2008 and the brief freeze in credit markets back in March. Otherwise, stock prices are pretty disconnected from things like jobs or even G.D.P.

And these days, the disconnect is even greater than usual.

For the recent rise in the market has been largely driven by a small number of technology giants. And the market values of these companies have very little to do with their current profits, let alone the state of the economy in general. Instead, they’re all about investor perceptions of the fairly distant future. . . .

So big tech stocks — and the people who own them — are riding high because investors believe that they’ll do very well in the long run. The depressed economy hardly matters.

Unfortunately, ordinary Americans get very little of their income from capital gains, and can’t live on rosy projections about their future prospects. Telling your landlord not to worry about your current inability to pay rent, because you’ll surely have a great job five years from now, will get you nowhere — or, more accurately, will get you kicked out of your apartment and put on the street.

So here’s the current state of America: Unemployment is still extremely high, largely because Trump and his allies first refused to take the coronavirus seriously, then pushed for an early reopening in a nation that met none of the conditions for resuming business as usual — and even now refuse to get firmly behind basic protective strategies like widespread mask requirements.

Despite this epic failure, the unemployed were kept afloat for months by federal aid, which helped avert both humanitarian and economic catastrophe. But now the aid has been cut off, with Trump and allies as unserious about the looming economic disaster as they were about the looming epidemiological disaster.

So everything suggests that even if the pandemic subsides — which is by no means guaranteed — we’re about to see a huge surge in national misery.

Oh, and stocks are up. Why, exactly, should we care?

The Rich Get Richer While Everyone Else Is Hurting

Trump loves to brag about the stock market. That's probably because it's the only economic bright spot in this Trump recession.

But while the stock market might tell how much money Trump and his friends are making in spite of the recession, the stock market does not reflect the economy as a whole.

The truth is that while the rich are getting richer, the bottom 90% of Americans are being hurt by the recession. And they will likely be hurting for many months to come.

Here is how former Labor Secretary Robert Reich describes this economic mess:

Since the start of the pandemic, American billionaires have been cleaning up. As more than 50 million Americans filed for unemployment insurance, billionaires became $637 billion richer. Facebook’s Mark Zuckerberg’s wealth has ballooned 59 percent. Amazon’s Jeff Bezos’s, 39 percent. Walmart’s Walton family has added $25 billion.

Big drug company CEOs and their major investors are doing nicely, too.  Since the start of the pandemic, Big Pharma has raised prices on over 250 prescription drugs, 61 of which are being used to treat Covid-19.  

Apologists say this is the “free market” responding to supply and demand – the barons of Big Tech, online retailing, and Big Pharma merely providing what consumers desperately need during the pandemic.   

But the market also operates under laws that ban profiteering, price gouging, and monopolizing, and that tax excess profits in wartime. Where did they go? 

The Trump administration hasn’t enforced them.

Trump is also ignoring laws that ban trades on insider information. The White House is distributing billions in subsidies and loans to select corporations – enabling CEOs and boards to load up on stocks and stock options just before deals are announced, then rake in fat profits after stock prices surge. 

Insiders from at least 11 companies have sold shares worth over $1 billion after such announcements, according to an analysis by the New York Times. 

In late June, a San Francisco company called Vaxart announced that the Trump administration had selected it to develop a coronavirus vaccine. Presto. The value of stock options distributed to company insiders just weeks before increased six-fold. Stock options held by Vaxart’s CEO went from $4.3 million to more than $28 million.

Moderna, based in Cambridge, Mass., has never brought a vaccine to market, but company insiders have sold some $248 million of shares – most of them after the company was selected in April to receive Trump funding. (Moderna plans to sell its vaccine for profit although taxpayers have footed its research and development.)

The most blatant involves the venerable old camera and film maker, Kodak. On July 28, Trump announced a $765 million deal with the firm to bring drug production back to the United States. He called it “one of the most important deals in the history of the U.S. pharmaceutical industries,” even though Kodak isn’t even a pharmaceutical company. 

Before the announcement, Kodak had handed its board of directors 240,000 stock options, and just the day before had given its CEO 1.75 million stock options. After Trump’s announcement, Kodak shares shot up more than 2,757 percent. Suddenly, the board’s stock options were worth about $4 million, and the CEO’s, about $50 million. 

Is this sort of insider trading against the law? You bet. The Securities and Exchange Commission is looking into the deal, now temporarily on hold. 

But the SEC’s co-director of enforcement, Steven Peikin, who had been investigating several of the deals involving the White House and corporate insiders – including Kodak – has resigned, without explanation. Another in the lengthening list of independent regulators and inspectors general forced out by Trump? 

This much is clear: Trump and his Republican enablers won’t provide $600 per week to tens of millions of Americans who need the money to survive the pandemic, because Trump and the GOP believe the money undermines incentives to work. 

Yet Trump has no problem letting billionaires illegally profit off the pandemic. He thinks that as long as they buoy the stock market, they’re helping the American economy. 

That’s pure rubbish. The stock market is not America. The richest 1 percent of Americans own half the value of all shares of stock held by American households. The richest 10 percent owns 92 percent. For years now, stock prices have risen largely because profits have been siphoned from the wages of ordinary workers. 

In the worst economic crisis since the Great Depression, stock prices are almost back to where they were before the pandemic began. Big corporations and major investors are doing fine. Billionaires are doing better than ever. But most Americans are sinking fast. 

This isn’t just unfair. Much of it is illegal.