- Hedge fund investors and other key Wall Street insiders get tipped off by Congress and staffers on legislative direction. From the WSJ: When Senate Democrats finally brokered a compromise over the proposed health-care law, a group of hedge funds were let in on the deal, learning details hours before a public announcement on Dec. 8, 2009.
- As Mead notes. Fabulous profits are there to be made, perfectly legally; legislators do Wall Street a favor by giving the hedgies an early head’s up, the hedgies reciprocate by making large campaign contributions. Everybody wins except for the pathetic losers not part of the magic inner ring, and nobody breaks any laws.
- Congresscritters in turn, personally benefit from being brought in on deals that you or I can only dream about. Nancy Pelosi and her husband were parties to a dozen or so IPOs, many of which were effectively off limits to all but the biggest institutional investors and their favored clients. One of those was a 2008 investment of between $1 million and $5 million in Visa. . .
- OWS got it wrong, the problem isn't Wall Street, but the coziness between Wall Street and Washington, which the Tea Party better understands. The paternalistic and benevolent government envisioned by the architects of the blue social model has morphed into a corrupt insider state that can no longer regulate or protect. The answer can’t be to give more power to people like Chris Dodd; that is what the Tea Party understands and the OWS folks too often miss.
Considering all of the advantages that Congress has, we find studies that show that members of the House of Representatives stock market returns beat the market by 6.8%. To quote Dean:
These guys write the legislation, they make the rules... and they're completely immune from taking advantage of gaming the situation in any manner they feel... and they still can't make out any better than 6 and 12 percent above the market average?
U.S. Congress: where corruption meets complete incompetence.
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