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.

Owning individual stocks (even temporarily or unvested) is a substantial fraction of compensation of many people that I want to be able to participate in local politics.

Owning individual stocks is the same expected value than owning ETFs for almost all retail investors who are non-corrupt. Studies have looked at this and shown that regular investors in single stocks consistently underperform. So there's no real financial reason (in expectation terms) to do so unless they have corrupt intent. Of course someone that just got rich off NIO or GME probably differs but that doesn't speak to expected value which is all that matters for decision making.

Many FAANG(-N) employees receive more in compensation in the form of shares of an individual company than they do in cash. I don’t want to force them to quit their job (or cut their comp by more than 50%) if they want to contribute in local politics.

If this were broadly adopted, companies would be forced to switch to all-cash offers, to create long-term incentive plans that don’t use something the legislation defines as shares, or just be content to exclude politically active people from being employees. Some might be happy with that last outcome.

The original phrasing wasn't "contribute in local politics" but "take public office". Presumably if you take public office you give up your FAANG employment. I don't think anyone is saying you can't vote or petition government for the redress of grievances if you own individual stocks.

Unless it’s been edited in the meantime*, the text above is “precludes any publicly elected official or appointee at any level from directly owning individual stocks”.

Many publicly elected or appointed roles are part-time (school board/committee, city council, etc.) Even MA state legislators make only $70.5K/yr and MA is one of the highest-paying states for that job. Many of them maintain another full-time job.

https://ballotpedia.org/Comparison_of_state_legislative_sala...

* https://news.ycombinator.com/item?id=28966192 (edit window is 2 hours)

Yeah, you make a good point. I'd be pretty happy if they just implemented it for full time office holders only (senate, congress, judges) which aren't going to be having jobs on the side that pay equity.

I own my own company. That is a very specific stock and you are saying I can't own my business and run for office? Stocks aren't just for trading on the nyse.

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.

>If you force people to divest their portfolios before taking public office you will reduce the pool of people willing to serve.

Dissuading the wealthy from seeking office sounds like a feature, not a bug to me.

> Dissuading the wealthy from seeking office sounds like a feature, not a bug to me.

Around 55% of Americans own stock.

"The wealthiest 10% of Americans own a record 89% of all U.S. stocks" — CNBC

https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...

If you aren't one of that "wealthiest 10%" it would not be difficult to divest your stock holdings in exchange for an index fund.

I would presume that almost everyone qualified to be a federal judge to be among the wealthiest 10% - the median lawyer income is approximately 90-th percentile, and I would presume that the seniority and skills needed for such a position would disqualify most of the less experienced and/or weaker lawyers.

Income is not the same as wealth. They are correlated, but you're blurring lines. The wealthiest individuals accrue a negligible amount of their wealth from income. And the power law relationship between wealth and stock ownership doesn't end when you cross the 90th percentile either.

That includes things like index funds. The vast majority of people do not own individual equities.

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.

Well...

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 husband of the person you mentioned was already well off before she was in politics.

Better yet, it was because her husband success that she worked for 20 years for free for the party.

He's much better off now. A genius grade trader. It's a goddamn miracle. Warren Buffet doesn't even come close to such prowess. What's funny is everyone knows these are pretty damning facts that are not good for the country in the long term. And yet my posts will be flagged anyway.

Waren Buffet doesn't even invest in tech.

Something her husband did before she was speaker and he already had much success before.

He does. Berkshire owns a ton of Apple (114 billion dollars worth) and some other tech/pharma companies. But hey, if you think insider trading is so wonderful and ethical, let's make it "fine" for everyone and abolish stock trading windows at major corporations, as well as restrictions on execs. Why should only congresspeople be able to partake?

Oh, come on. 1 tech stock in his portfolio... ( more a hardware company though)

He likes bank way more. .

Not only unhinged, but whiney too. A true Renaissance man!

> How could anyone possibly argue against that?

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.

If we just get the people who write and enforce the laws to pass a law that stops them from being corrupt the corruption will end.

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.

Have you even seen the kind of people who become public “servants”? Who exactly would you classify as talented?

Both my bosses. They each head a public art academy. Both are incredibly talented, motivated people. They serve the public as best as they can. The same goes for several of my colleagues.

My father, my grandfather, my brother, many of my friends...

Uh, Trump is a father, grandfather, brother, friend (?), to people. That doesn’t really prove that someone is talented.

I didn't say "a father or brother or whatever". I identified specific people.

> How could anyone possibly argue against that?

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.

> 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?

As others have said, a blanket stocks prohibition might make the public sector uncompetitive.

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 need the local dog catcher to be blocked from owning shares in Apple if they want to.

I don’t want my local Google employees to be prohibited from running for city council or school committee.

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.

Just as soon as we prohibit homeowners from serving in local governments.

Why make it so confined? Do not allow them to profit from their position.