Everything's corrupted. Pretty much every branch of government is rife with corruption. Even the enforcement is corrupt. Money has infiltrated everything and justice is now truly blind.
And if by some miracle you're tried and found guilty, you can even buy your way out of serving any time and you can even buy a presidential pardon and have your crime expunged.
If you're rich, vast majority of laws simply don't apply to you. Yet there's so many laws on books and many of those laws are so vague that an average person commits several felonies every day. [1]
(I think you are misunderstanding this metaphor, as Justice being blind is actually supposed to be good: it means Justice makes decisions without bias or regard for who the parties are, only able to analyze the facts. A corrupt court that benefits some people over others based on connections or group affiliation would imply Justice not being blind.)
Kenneth Lay, Bernie Madoff, Martin Skreli, and countless others served hard time.
There is no such thing as a corruption-free government because it is made of human beings but I think that the US Govt has definitely trended in the right direction over time. I hope the trend continues, more transparency is a good thing.
You've got it backwards.
Shkreli served time because of public opinion and the things he revealed about the medicare drug pricing [1,2,3]
Shkreli's case shows the partiality, politics and bias embedded in our justice system. He was unable to even serve the remainder of his sentence under house arrest as very reasonable covid safety precautions despite his crime being entirely nonviolent.
The justice system is in many ways the government's instrument of vengeance. You can clearly see this with O.J. Simpson's 33 year sentence in 2008 for armed robbery. Essentially, a new fluff case was used to dole out an improportionate sentence. as retribution for the murder of Nicole Brown and Ron Goldman. [4,5]
The truth is that Shrkeli pissed off a lot of people in powerful places. None of the investors wanted him tried because he ended up making them all a lot of money.
Someone counter to popular narrative, George W Bush's administration prosecuted more corporate criminals than both the Clinton and Obama admins combined. This means even more when you remember that Enron was a financial backer for the Bush campaign and GWB personally knew many Enron execs. (Enron was HQed in Houston).
The negative influence of Big Money in politics has been proven to be vastly overblown. Small dollar donations ar much more dangerous as they tend to come from the most engaged & partisan members of society and encourage pols to be much more extreme in their rhetoric
It's time to repeal the First Amendment. It's probably time to repeal the entire Bill of Rights, and replace it with a framework that allows the government to restrict the exercise of rights when and as much as required to protect public safety or the mechanism of democracy.
All functioning democracies (which the USA is not) have such a framework in place. In Canada it's famously called the Notwithstanding Clause.
Well, maybe not all. We can keep the Third Amendment as a souvenir.
It's not just money, it's also ideology. Rule of law is increasingly looked at with distain in favor of rule by arbitrary authority. At some point deontological liberalism has been overtaken by utilitarian pragmatism. The thing is that deontological rule of law is the exception throughout human history, and utilitarian pragmatism is the norm among unremarkable populations. It's not exactly easy to reclaim.
When I hear people around me thinking it's a good thing when a judge rules in a way that nets the outcome they want, regardless of whether or not it was done so in accordance with the law, it hurts. Somehow, people fail to realize that rule of law is the single greatest defense against tyranny that we have. Short sighted pragmatism.
> people fail to realize that rule of law is the single greatest defense against tyranny that we have.
This purist view ignores the fact that not all laws are good. Many laws are in fact bad, and it’s important for them to be challenged.
As an example, many here would agree that the DMCA is a bad law. It’s a law that is generally only enforceable by wealthy players.
There are many bad laws on the books. Those laws do not get equally applied to everyone in society. The fact that we have bad laws, implies that applying them will lead to bad outcomes. This is partly why having an unbiased appellate court to review the laws and throw out the bad ones is so important. Sadly much of the appellate court has also become corrupted, but at least the system is there to ideally correct bad laws and allow for blind application of justice.
Laws are imperfect and often there are situations when applying the law as written / by precedent will ruin person's life in very humanely unjust way. In this case if I was a juror I would say fuck the law and go with the nullification. Unfortunately it does not happen often enough.
Also I think if every law was strictly enforced the functioning of society would stop. This tells something about the whole system. Some fixing is required.
The real problem is you have a culture where people think the law is the edge of what is acceptable. Whether it is legal or not, I would not be punting on stocks that I was a judge for, it simply stinks and shouldn't be done.
There's probably a lot of things that are formally legal but corrosive to society.
> There's probably a lot of things that are formally legal but corrosive to society.
Plus the process of corruption is slow and creeping. A generation doesn't know whats it like growing up a generation or two before, so the current state of affairs is taken for granted. At some point, the idea of a high-trust society where people don't need to lock their doors and children can just roam the neighbourhood freely becomes a faint memory and unreal utopia. Starting a family in their twenties, the prospect of home ownership, and being able to do so on a single income has already become unimaginable.
It's nice to be able to blame something on a culture, but the reality is that some percentage of people are somewhere on the spectrum of morality where they are prone to doing this. I don't imagine judges are a particularly amoral group, despite being lawyers, but politicians certainly are. I'm always dumbfounded when people want to give politicians more power.
>> think the law is the edge of what is acceptable.
> particularly amoral group,
> but politicians certainly are.
To be fair, if all politicians were always morally rooted in the center of the law, nothing would ever change. No marijuana, no gay marriage.
Or more appropriate: There’s a certain overlap of laws (and constitutional rights) that blur the edge of law (here: pursuit of happiness for the judge’s vs. corruption of justice).
They do this whole ritual about Jury Selection, you can't be a Juror if you've got family in law enforcement, etc etc.
Could we have a Jury, once assembled, apply those same rules tot he rest of the Court? "Your Honor have you ever held ownership in the companies involved in this case? Ever been married or intimate with any of the parties in this case?"
There are ethics laws for lawyers and judges. The problem is: the enforcer of those ethics laws are partially the judges themselves. It’s the same issue with cops breaking the law; cops don’t rat on/arrest other cops.
It seems like we have a lot of social problems like that; we have laws about them, but the enforcement became spotty somehow... Some people can start an online bank, or have a "taxi app"; and it's OK; but everyone else has the laws against it enforced.
Perhaps some of the conspiracy theorists talking about the undermining of the prosecutor and court systems since the 90's have been onto something.
Surely superior judges make the decisions relating to inferior judges? It’s hard to believe judges at the same level in the hierarchy are making those decisions for themselves in any capacity.
How about treating judges and legislators as if they were insiders of every public company and applying Section 16 of the Securities Exchange Act of 1934 to them?
Section 16 currently applies to officers, directors, and anyone who holds 10% of the stock of a company.
These people have to disclose all of their trades, and they are not allowed to make any profitable "short-swing" trades in the stock. A trade is a short-swing trade if it occurs within 6 months of a trade in the opposite direction.
Section 16 is brilliant in how it is enforced. It allows any shareholder to sue the short-swing trader. The plaintiff does not have to have been a shareholder at the time of the trade. They only have to be a shareholder at the time of the suit.
If the plaintiff wins the trader has to return all short-swing profits to the company and pay the plaintiff's attorney fees. Because the people covered by Section 16 have to report their trades, and because there isn't really a defense for short-swing trading, it is an open and shut case.
The data is available from the SEC in electronic form, and there are lawyers who get it and do automated checks to find short-swing trades. Then it is an easy matter for them to buy a share if they don't already have one, sue the short-swing trader, trivially win the open and shut case, and collect attorney fees.
If that wasn't enough to discourage insiders from short-swing trading, Section 16 provides more discouragement by being brutal in how it defines profit from a short-swing trade. Consider this sequence of trades by a Section 16 insider:
Jan 1: buy N shares at $100/share
Feb 1: sell N shares at $90/share
Mar 1: buy N shares at $80/share
Apr 1: sell N shares at $70/share
The person is clearly a terrible trader. That sequence of trades has lost them $20/share.
But Section 16 doesn't look at the overall results. It just looks it individual trades and tries to match them with individual trades going the other way within 6 months (before or after) and if the sell is higher than the buy that is short-swing profit.
Section 16 sees the above trades as a short-swing profit of $10 x N from the purchase on Mar 1 and the sale on Feb 1.
The net result then for the insider who made those ill conceived trades is that they lose $20/share on the trades themselves, and they end up having to pay an additional $10/share to the company, and pay the attorney fees of whoever managed to file first to sue them.
Technically these judges should have recused themselves, but is it really a big deal that the judges (or their families) had financial advisors or stock brokers held shares in companies they were probably not even aware of was a defendant? The real question would be how much did these judges make by buying or selling those stocks during the cases compared to rest of their portfolio. I would imagine it’d be negligible
The US needs a blanket federal law, perhaps even a constitutional amendment, that precludes any publicly elected official or appointee at any level from directly owning individual stocks. How could anyone possibly argue against that?
I can think of at least three plausible counter-arguments:
1. That's overly restrictive. Why not let them own individual stocks in, say, a blind trust?
2. It's a free country. It's up to the voters to decide if they want to elect someone who profits from their position. What is needed is a law requiring public disclosure, not prohibition.
3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve.
This is not to say that I disagree with the policy position, only that it's not the slam-dunk you seem to think it is.
2. Think of it like term limits. We don't let people sit in office forever just because it's a free country. No, these are constraints implemented democratically by voters to protect against bad outcomes that aren't well addressed by future direct voting.
3. You would reduce the pool of people who have corrupt intent. Owning individual stocks isn't more profitable than owning ETFs.
1. There is no way for a fairly normal person working a fairly normal job (probably service industry) to verify any of the blind trust stuff and past politicians have helped make a mockery of the whole thing. To be fair, though, there are other ways. You can reform things so that there are minimum holding times for stocks alongside rules that make selling stocks take more time. If you need to hold onto the stocks for 6 weeks after you say you want to sell, you are going to have a harder time selling. You can also restrict times officials can sell.
2. Again, how is a normal person - say, a retail employee - ever going to find out about this? Even with public disclosure, all folks need to do to hide their doings is to make the language in the disclosure full of technical jargon instead of everyday language.
3. That's a bonus, not a feature. Maybe it'll encourage normal folks to take office more often - but of course, we'd have to do other changes to make that happen.
A lot of high-powered jobs come with strong restrictions and controls around stock ownership/trading. Does not seem to dissuade people from pursuing careers in banking or strategy consulting, for example.
They are not blanket total bans in most cases, but single name stuff is often very restricted, broad market less so. Also does come with transparency requirements.
1. Too bad. There are plenty of other good investments out there.
2. Too bad. The removal of incentives to do slimy things like the ones that are subject of this article is the greater good here.
3. Too bad. Maybe those people who choose to serve will be those who aren't in it to fleece the system of every dollar they can.
I'm not sure you'd find my "counterarguments" any more persuasive than I find yours. I'm more interested in what the systemic consequences of such a policy would be, and, it seems to me that they tip in a direction that removes incentives to be corrupt, which sounds pretty darn good to me. I care a lot less about the effects on people who are currently in the position to exploit the system.
Guess who writes the laws? People who are neck deep in insider trading to the point where the speaker of the House outperforms some of the best performing hedge funds. Don't hold your breath on this one. And the law would need to be signed by a dude whose son "sells art" for $75K apiece and takes jobs he himself admits are only offered to him because he has the right last name. And finally, if by miracle such a law were to be passed and signed, to enforce it you'd need to go to a judge who's also corrupt as fuck and trading stocks from the bench, and whose mortgage on his third beach home would be jeopardized if he was to agree with you. It's rotten all the way through now.
The very basis of self government (citizens being in charge) is allowing people to run for office who are every day people. This idea would require anyone who is even a part owner af a tiny business to divest in order to run. Additionally, a lot of common small businesses have no real value if the owner doesn't come with the business (a solo law practice is an example)... oh, and trusts are corporations... so this idea sounds wonderful but is very exclusionary.
No business owner could be in office? Like someone who owned stock for 20 years with no plans to sell couldn't run? Seems harsh. I think limited trading is what you mean (buying and selling).
Insiders at companies have limited windows to trade. Makes more sense.
One argument that I can think of is talented people will instead gravitate towards private industry and are disincentivzed to become public servants. Not owning invidual stock can be common shares is pretty broad. Or otherwise we would have to define what class of investment instrument should be banned. Do we also prevent buying private company shares? What about other financial derivates such as options and futures where you technically don't own the underlying stock? Do we limit real estate investments as well? If they earn a salary, where could they invest their savings? If we allow real estate investment, then public servants (1.8M US Citizens) would blow up the real estate market. There are so many secondary and tertiary effects, that would have major consequences to the economy and the functioning of the government. Not allowing any investment opportunity means they would sucuumb to the inflation rate and cannot retire.
The elite have so many better ways to profit from their positions that outlawing stock ownership is laughably naïve. Trading stocks against knowledge you obtained from your government position is an easy way to get busted, so you may assume the people caught up in this represent merely the profoundly stupid; the smart elites don't get nabbed in such simple minded schemes. Yes, there are very stupid federal judges; their appointments are a product a political haymaking that has their actual competence way down the list of priorities.
So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. If you're serious about meaningful efforts to hinder corruption think in terms of transparency. Give the electorate the means to know who is bought and paid for by whom. Without that you're wasting your time.
> So the best reason I can think of to oppose your plan is simply that it's a futile waste of time.
Time is a pretty small consideration here.
One can and should apply many means to lessen corruption. Transparency is certainly important, but no means is going to cover all cases or be 100% effective. Reduce the possibility of conflict of interest and increase transparency.
The problem with transparency, if you're relying on democracy to do the rest, is that any sufficiently clever corruption scheme is simply not going to be understood by the public you're relying on to oppose it. If you give them an explanation in detail they mostly see simply that it's detailed. It looks no different from a conspiracy theory to most people, who will barely be following the issue anyway. Most voters are low information voters. The information they need is which party backs which position. They in effect vote as they're told, not because they're stupid but because none of this interests them.
Naive question: If you preclude a politician from owning stocks, can't they execute such trades via an off-the-radar friend? And receive profits via "gifts".
I imagine this is already illegal? But isn't it harder to prove if done right?
Ban trades while they have the position, not ownership. If they had it long before they got the position they shouldn't have to sell it just for the sake of serving the country.
Readit News
And if by some miracle you're tried and found guilty, you can even buy your way out of serving any time and you can even buy a presidential pardon and have your crime expunged.
If you're rich, vast majority of laws simply don't apply to you. Yet there's so many laws on books and many of those laws are so vague that an average person commits several felonies every day. [1]
[1] https://www.wsj.com/articles/SB10001424052748704471504574438...
(I think you are misunderstanding this metaphor, as Justice being blind is actually supposed to be good: it means Justice makes decisions without bias or regard for who the parties are, only able to analyze the facts. A corrupt court that benefits some people over others based on connections or group affiliation would imply Justice not being blind.)
There is no such thing as a corruption-free government because it is made of human beings but I think that the US Govt has definitely trended in the right direction over time. I hope the trend continues, more transparency is a good thing.
Shkreli's case shows the partiality, politics and bias embedded in our justice system. He was unable to even serve the remainder of his sentence under house arrest as very reasonable covid safety precautions despite his crime being entirely nonviolent.
The justice system is in many ways the government's instrument of vengeance. You can clearly see this with O.J. Simpson's 33 year sentence in 2008 for armed robbery. Essentially, a new fluff case was used to dole out an improportionate sentence. as retribution for the murder of Nicole Brown and Ron Goldman. [4,5]
The truth is that Shrkeli pissed off a lot of people in powerful places. None of the investors wanted him tried because he ended up making them all a lot of money.
[1] https://youtu.be/L-U1MMa0SHw
[2] https://youtu.be/2PCb9mnrU1g
[3] https://youtu.be/hjAQOWSP3Cc
[4] https://youtu.be/BB4ss7q5X08
[5] https://en.wikipedia.org/wiki/O._J._Simpson_robbery_case
https://www.ineteconomics.org/perspectives/blog/chanos-is-a-...
Worse, money is protected speech, and using it to buy influence is protected by the law!
All functioning democracies (which the USA is not) have such a framework in place. In Canada it's famously called the Notwithstanding Clause.
Well, maybe not all. We can keep the Third Amendment as a souvenir.
When I hear people around me thinking it's a good thing when a judge rules in a way that nets the outcome they want, regardless of whether or not it was done so in accordance with the law, it hurts. Somehow, people fail to realize that rule of law is the single greatest defense against tyranny that we have. Short sighted pragmatism.
This purist view ignores the fact that not all laws are good. Many laws are in fact bad, and it’s important for them to be challenged.
As an example, many here would agree that the DMCA is a bad law. It’s a law that is generally only enforceable by wealthy players.
There are many bad laws on the books. Those laws do not get equally applied to everyone in society. The fact that we have bad laws, implies that applying them will lead to bad outcomes. This is partly why having an unbiased appellate court to review the laws and throw out the bad ones is so important. Sadly much of the appellate court has also become corrupted, but at least the system is there to ideally correct bad laws and allow for blind application of justice.
Also I think if every law was strictly enforced the functioning of society would stop. This tells something about the whole system. Some fixing is required.
This happens right here on HN. It seems that nobody here wants trials for Snowden or Assange for instance.
"Three Felonies a Day"
https://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp...
There's probably a lot of things that are formally legal but corrosive to society.
Plus the process of corruption is slow and creeping. A generation doesn't know whats it like growing up a generation or two before, so the current state of affairs is taken for granted. At some point, the idea of a high-trust society where people don't need to lock their doors and children can just roam the neighbourhood freely becomes a faint memory and unreal utopia. Starting a family in their twenties, the prospect of home ownership, and being able to do so on a single income has already become unimaginable.
To be fair, if all politicians were always morally rooted in the center of the law, nothing would ever change. No marijuana, no gay marriage.
Or more appropriate: There’s a certain overlap of laws (and constitutional rights) that blur the edge of law (here: pursuit of happiness for the judge’s vs. corruption of justice).
Could we have a Jury, once assembled, apply those same rules tot he rest of the Court? "Your Honor have you ever held ownership in the companies involved in this case? Ever been married or intimate with any of the parties in this case?"
Perhaps some of the conspiracy theorists talking about the undermining of the prosecutor and court systems since the 90's have been onto something.
Section 16 currently applies to officers, directors, and anyone who holds 10% of the stock of a company.
These people have to disclose all of their trades, and they are not allowed to make any profitable "short-swing" trades in the stock. A trade is a short-swing trade if it occurs within 6 months of a trade in the opposite direction.
Section 16 is brilliant in how it is enforced. It allows any shareholder to sue the short-swing trader. The plaintiff does not have to have been a shareholder at the time of the trade. They only have to be a shareholder at the time of the suit.
If the plaintiff wins the trader has to return all short-swing profits to the company and pay the plaintiff's attorney fees. Because the people covered by Section 16 have to report their trades, and because there isn't really a defense for short-swing trading, it is an open and shut case.
The data is available from the SEC in electronic form, and there are lawyers who get it and do automated checks to find short-swing trades. Then it is an easy matter for them to buy a share if they don't already have one, sue the short-swing trader, trivially win the open and shut case, and collect attorney fees.
If that wasn't enough to discourage insiders from short-swing trading, Section 16 provides more discouragement by being brutal in how it defines profit from a short-swing trade. Consider this sequence of trades by a Section 16 insider:
The person is clearly a terrible trader. That sequence of trades has lost them $20/share.But Section 16 doesn't look at the overall results. It just looks it individual trades and tries to match them with individual trades going the other way within 6 months (before or after) and if the sell is higher than the buy that is short-swing profit.
Section 16 sees the above trades as a short-swing profit of $10 x N from the purchase on Mar 1 and the sale on Feb 1.
The net result then for the insider who made those ill conceived trades is that they lose $20/share on the trades themselves, and they end up having to pay an additional $10/share to the company, and pay the attorney fees of whoever managed to file first to sue them.
1. That's overly restrictive. Why not let them own individual stocks in, say, a blind trust?
2. It's a free country. It's up to the voters to decide if they want to elect someone who profits from their position. What is needed is a law requiring public disclosure, not prohibition.
3. If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve.
This is not to say that I disagree with the policy position, only that it's not the slam-dunk you seem to think it is.
3. You would reduce the pool of people who have corrupt intent. Owning individual stocks isn't more profitable than owning ETFs.
2. Again, how is a normal person - say, a retail employee - ever going to find out about this? Even with public disclosure, all folks need to do to hide their doings is to make the language in the disclosure full of technical jargon instead of everyday language.
3. That's a bonus, not a feature. Maybe it'll encourage normal folks to take office more often - but of course, we'd have to do other changes to make that happen.
Dissuading the wealthy from seeking office sounds like a feature, not a bug to me.
They are not blanket total bans in most cases, but single name stuff is often very restricted, broad market less so. Also does come with transparency requirements.
1. Too bad. There are plenty of other good investments out there.
2. Too bad. The removal of incentives to do slimy things like the ones that are subject of this article is the greater good here.
3. Too bad. Maybe those people who choose to serve will be those who aren't in it to fleece the system of every dollar they can.
I'm not sure you'd find my "counterarguments" any more persuasive than I find yours. I'm more interested in what the systemic consequences of such a policy would be, and, it seems to me that they tip in a direction that removes incentives to be corrupt, which sounds pretty darn good to me. I care a lot less about the effects on people who are currently in the position to exploit the system.
Dead Comment
Better yet, it was because her husband success that she worked for 20 years for free for the party.
The very basis of self government (citizens being in charge) is allowing people to run for office who are every day people. This idea would require anyone who is even a part owner af a tiny business to divest in order to run. Additionally, a lot of common small businesses have no real value if the owner doesn't come with the business (a solo law practice is an example)... oh, and trusts are corporations... so this idea sounds wonderful but is very exclusionary.
Insiders at companies have limited windows to trade. Makes more sense.
Arguing against that is easy.
The elite have so many better ways to profit from their positions that outlawing stock ownership is laughably naïve. Trading stocks against knowledge you obtained from your government position is an easy way to get busted, so you may assume the people caught up in this represent merely the profoundly stupid; the smart elites don't get nabbed in such simple minded schemes. Yes, there are very stupid federal judges; their appointments are a product a political haymaking that has their actual competence way down the list of priorities.
So the best reason I can think of to oppose your plan is simply that it's a futile waste of time. If you're serious about meaningful efforts to hinder corruption think in terms of transparency. Give the electorate the means to know who is bought and paid for by whom. Without that you're wasting your time.
Time is a pretty small consideration here.
One can and should apply many means to lessen corruption. Transparency is certainly important, but no means is going to cover all cases or be 100% effective. Reduce the possibility of conflict of interest and increase transparency.
The problem with transparency, if you're relying on democracy to do the rest, is that any sufficiently clever corruption scheme is simply not going to be understood by the public you're relying on to oppose it. If you give them an explanation in detail they mostly see simply that it's detailed. It looks no different from a conspiracy theory to most people, who will barely be following the issue anyway. Most voters are low information voters. The information they need is which party backs which position. They in effect vote as they're told, not because they're stupid but because none of this interests them.
I imagine this is already illegal? But isn't it harder to prove if done right?
Blind trusts seem to be quite a bit too permissive to me.
Offer them the performance of a stock index fund on their stock holdings, for the duration of their public mandate.
I don’t want my local Google employees to be prohibited from running for city council or school committee.
Deleted Comment