Are Legislators Beating The Market With Insider Information?

Not Another Politics Podcast

There might not be a more controversial political hack than members of Congress being legally allowed to trade stocks. Infamously, House Speaker Nancy Pelosi, one of the wealthiest members of Congress, has been regularly accused of insider trading. Recently the House of Representatives has introduced a bill that would prohibit members of Congress, their spouses, and children, from trading stocks. Although the bill has stalled, it's renewed a really important lingering question: are members of Congress actually advanced investors, and how much are they benefiting from inside information? In a 2014 paper by University of Chicago's Andy Eggers and Stanford University's Jens Hainmueller titled, Political Capital: Corporate Connections and Stock Investments in the U.S. Congress, they look at a wide data set of investments made by hundreds of members of Congress between 2004 and 2008, to see whether or not they're getting an unfair advantage. The results may surprise you.