Australian economist Justin Wolfers came down on Congressional stock trading, calling it “absurd” and a “weird flaw” that needs to be addressed.
What Happened: On Wednesday, Wolfers, a professor of economics and public policy at the University of Michigan shared a short snippet on X from his recent appearance on MSNBC, where he criticized the questionable ethics of Congressional Representatives actively trading in stocks.
“Most [business] journalists have to divest themselves of any stock [holdings],” he explains, to avoid the risk of “front-running” their own reporting.
Wolfers points out that Presidential advisors, and even Presidents, have to follow the same rules. Yet, somehow, “there's this weird thing where Congressional Representatives are allowed to trade stocks,” even while receiving “top secret briefings,” which he calls “simply absurd.”
The Professor said that it is “absolutely clear they’re using their inside knowledge to get better returns.”
Wolfers said in the video that this is not “how we want to pay our Congressmen.” The economist said this makes trust in representatives “crumble.” He ended by saying this was an “obvious flaw” that needed to be addressed and this “shouldn’t be partisan.”
Why It Matters: In his post, Wolfers refers to President Donald Trump’s tweet on the 9th of April where he told his followers “This is a great time to buy,” referring to the stock market, following several days of selloffs, and just hours before he would announce a pause on the tariffs, leading to a record rally in the S&P 500.
This tweet by the President is now at the center of the storm, with several analysts and observers pointing out that the Nasdaq call volume spiked just minutes before the tariffs were paused. Rep. Marjorie Taylor Greene (R-Ga.) has also come under fire for making large stock purchases ahead of the 90-day pause on tariffs.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) has since called for a disclosure of trading activities by Congress Members after observing the same. Her colleagues, Rep. Adam Schiff (D-Calif.) and Sen. Elizabeth Warren (D-Mass.) have accused the President of market manipulation to benefit his “Wall Street donors” and “inner circle.”
Former House Speaker Nancy Pelosi’s portfolio gained 65% in 2023 and 54% in 2024, leaving several leading hedge fund performances in the dust. Several other active traders in Congress have seen next-level returns, with gains ranging from 70% to 149%, amid growing calls for a ban.
Photo Courtesy: Framalicious on Shutterstock.com
Read More: Trump Administration Imposes Up To 245% Tariff On Chinese Imports Amid Intensifying Trade Battle
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