Earlier this month, a 60 Minutes investigation showed that House Financial Services Chairman Spencer Bachus (R-AL) made stock trades based on information he received in private briefings during the 2008 financial crisis, earning nearly $30,000. Since then, Congress has discovered a deep desire to prevent this sort of insider trading, with nearly 100 representatives signing on to the Stop Trading on Congressional Knowledge (STOCK) Act in the House and Sen. Scott Brown (R-MA) introducing companion legislation in the Senate.
2012 GOP presidential hopeful Newt Gingrich, who has previously said that insider trading laws should “absolutely” apply to information lawmakers receive in private briefings, predicted last night during an event in South Carolina that lawmakers will eventually have to place their investments in a blind trust during their terms in office:
What we will migrate to, my prediction is, that members of Congress, on winning office will have to end up putting their money in blind trusts, managed by other people with no communication, because it is so clear that they have so much power that there’s no way to build trust in an environment where they can make money out of what they’re doing. And I think that’ll be the culmination of this whole series of things, is it will create a new pattern that says if you go into Congress and you have any significant amount of resources they go into a blind trust and are managed for you by somebody who does not talk to you, doesn’t have any insider knowledge about what’s going on in Congress. It’s unfortunate, but I think that’s going to become, something like that will be almost inevitable.
On this particular issue, Gingrich is doing a good job seizing the populist position. However, he has made clear that he doesn’t have much more than contempt for the wider concerns of the population when it comes to fairness in financial markets. Just yesterday, he called on President Obama to “repudiate the concept of the 99 and the 1,” a direct shot at the Occupy Wall Street movement’s call for an economy that works for everybody.