The cohort is so small that there's a fair chance that the (vast, even) majority of Congressmen are really bad at trading, just due to random variation. Who's to say that without that insider information, the politicians wouldn't be homeless? The control group - say, all the people who can but have no chance at entering politics ever - tends to be very, very bad at investing and does worse than the market.

Homeless people don't generally make it to Senator. Most of these people have wealth from the beginning, which is unfortunately required to invest so much time and money to attain the office.

You have to show that they used insider information to make trades. Most senators have immense wealth and make trading decisions based on circumstances. For instance, if they have a large tax bill or need money for an investment or money to send their children to college, they may sell some stock.

I just don't buy the narrative that someone worth tens of millions is trading a few thousand here and there to make some small return relative to their wealth. It just doesn't make sense.

You can decide that senators shouldn't be allowed to trade stocks, but again that's impractical for anyone of means. You have to actively buy and sell stocks to meet personal liquidity needs or rebalance your portfolio. I think it would make more sense to limit them to ETF purchases, much like most employees at US banks have to do.

That was a bit of cheeky hyperbole that got in the way of my actual point. People in power have been recorded using insider information in a general sense for profit since at least the early Romans so at this point it's pretty much baked into society and any extant political/upper class structures. Without resetting the world to zero, we have no idea whether the selective pressures on that class structure "converge" with the rest of the population. For all we know, the advantages of intergenerational wealth and power instill beliefs and habits that over generations makes them worse investors on average, propped up by access to easy capital and inside info. Intuitively it would make them better investors on average, but even then random variations mean that the probability of a long streak of incompetent and immoral politicians isn't astronomical. Maybe people from the political class are predisposed to successful investing thanks to better education, or that might not be a factor at all and their success could be predicated on access to existing family connections and wealth to bootstrap into a position with access to insider information. None of that precludes a natural turnover where, whether by luck or meritocracy, outsiders become wealthy enough to enter the political class before returning to the mean (or worse), now propped up by new access to insider information. Question is whats the balance between the groups?

At the end of the day, this is a bunch of vague generalizations (what is the "political class?") and there are a lot of selective pressure of unknown strength. The sample size is so small it's probably random anyway but I enjoy the speculation :) Thank you for reading my off topic rant

> I just don't buy the narrative that someone worth tens of millions is trading a few thousand here and there to make some small return relative to their wealth. It just doesn't make sense.

Regardless of the accuracy of my speculation, I don't buy that having X amount of money fundamentally changes human nature, especially when the characteristic in question (greed) provides a significant competitive advantage for suppressing one's conscience and attaining that X. I don't believe it changes people's knack for obsessing over matters that are trivial in the grand scheme of things, nor reduce envy or competitiveness. I'm sure there are many exceptions to these generalizations, but I don't believe many of them want to (or can) be politicians. Humans are humans so hope for the best and expect the worst but don't project motives or perspectives.

Using information gained through their political office to inform their personal trading is improper, even if they lose money.

Just because many of these trades are bad or useless in retrospect doesn't mean that didn't try to profit from insider information.

EDIT: And I don't buy the argument that the small size of the trades relative to wealth implies that they're not using insider information. Martha Stewart went to jail over a $230,000 trade [0] at a point when her net worth was likely hundreds of times that amount.

[0] https://en.wikipedia.org/wiki/ImClone_stock_trading_case - interestingly the loss she avoided was only $45,673

it'd be impossible to detect inaction as a result of insider info. For example, if someone were originally planning on selling, but based on some insider info, changed their mind to not do anything.

So - the point i'm trying to make is that if they _profited_ from insider info, rather than just merely utilizing it, then it should be prosecuted. But if they are stupid and did the "wrong" thing with insider info, i don't see why there needs to be any effort trying to prosecute. They got their just punishment by losing money already.

Martha Stewart went to jail for lying to an FBI agent. The trade was irrelevant. Never talk to the FBI.

In any case, the rally Purdue missed on wasn't related to information that he had special access to. The crash was. Beyond that, you can't attribute any given trade to any specific reasoning without an admission.

You don't have to know everything, for insider trading to work. For the most part, it's about frontrunning news/reports/announcements with fairly predictable day 1 impacts.

That said, speculation is all you got. Like conflict of interest, insider trading has to be dealt with "upstream" or not at all.

>> If she was trading on insider info, I would imagine she wouldn't buy Discover, a stock that's highly sensitive to consumer loans immediately before a spike in unemployment.

Insider trading is not about knowing what the prices will be in advance and trading on everything... counterexamples don't mean much. Travel related trades, in advance of travel restrictions and such are more typical. Even so, not doing a trade means even less then the speculative implications I sorta make.