Our Congressmen aren’t making a million dollars a year at their jobs, but many of them are extremely wealthy. Today, Emma and Brittany dive into why this is.
Here’s a transcript of our conversation:
Emma: Hi, Brittany.
Brittany: Hi, Emma.
Emma: So throughout, I feel like a lot of people have started paying way closer attention to what the government is actually doing, and that’s whether it’s on a school board basis, what people are teaching in schools or you know, what sort of laws exist from state to state all the way up to Congress and what our federal government is doing. And one of the things that really, I think, woke a lot of people up to our government and some of the corruption that exists in our government is looking at, you know, which people in Congress sold a bunch of stocks right before COVID happened. Because in case you don’t remember, or in case you weren’t quite aware at the time, there were a lot of, people in Congress. So, congressmen and senators who basically got briefed on COVID, which means they get some information that the government has, they’re being briefed because it’s an important current event thing. And there’s all different sorts of councils that, you know, pay attention to different issues. And so a lot of people in Congress were getting really, up-to-date information about COVID before anyone in America even knew what it was really before the public knew what it was. And a lot of those people turned around and sold a bunch of stocks. And if you’re unfamiliar with the stock market, a big reason why you would wanna do that is because when some sort of crazy disaster happens in the country, whether it’s war or whether it’s, you know, like a hurricane or something crazy, like I’m trying to think of other stuff that affects the stock market quite like COVID would. But when something catastrophic happens, it can basically cause the market, the stock market to crash like crazy where all of your stocks that you’re holding become way less valuable. It can sometimes even happen overnight. So a bunch of senators were briefed before COVID happened and a bunch of them sold off stocks and avoided losing a lot of money. And I think that got a lot of people paying attention to what’s going on in Congress and you know, how do these people make so much money when they’re being paid, you know, $200,000 a year. It’s not a small amount of money, but it’s definitely not enough to make you a millionaire in a few years. So something that’s interesting about this to me is that the average member of Congress beats the stock market by 6%, which is pretty good. That’s a pretty good advantage. And the average senator beats the stock market by 11%.
Brittany: So what does that mean? Cause that confuses me even. Yeah. Stock market to me has always been, I understand crypto more than I understand stocks and I hardly understand crypto, so.
Emma: I hear that because I think the stock market is being manipulated by a lot of really corrupt people, but maybe that’s a conversation for another day. basically what this means is like the average person who is investing in the market, you know, the average member of conver Congress is doing way better than the average person.
Brittany: So, to beat. So by you, when you say beats the stock market by 6% Yeah. Does that mean like they’re doing 6% better than other people? Yes. Okay, got it. That makes, okay, that makes sense,
Emma: They’re doing 6% better than kind of the overall average of everyone else in a given day.
Brittany: Got it. Okay.
Emma: So it’s enough to kind of make you raise an eyebrow. Maybe you could look at that and say, well, I don’t know, maybe they’re just really good. Maybe they’re really smart. Who knows? Maybe they are.
Brittany: Yeah, I don’t think so.
Emma: I don’t quite think that that’s the case. So there are a few actually, examples of this that I wanna read for us. So Nancy Pelosi bought this, these are all over the last couple of years. Nancy Pelosi bought 3 million in Microsoft stock, and then 12 days later Microsoft announced a 22 billion project with the US military. And now she has earned 160% on that purchase, which means all of the money that she put into Microsoft, she got 160% of that money back. So you can kind of crunch the numbers there mentally. Yeah. But that’s, if you first put in 3 million, that’s a heck of a lot of money. So, and when you kind of think about it, if you’re not familiar with stock market stuff or with Congress and how all of that works, basically she knew ahead of time that the military would be getting those contracts and that they would be making this huge purchase from Microsoft. So what you would think that she probably did, again, we’re not a hundred percent certain this could be a chance, but I don’t think it was. She probably turned around and said, all right, I’m going to invest in Microsoft and make a bunch of money off of it. And there’s a few other examples of this. Kathy Manning is.
Brittany: Real, quick. I can’t remember. I was with Nancy Pelosi. I feel like her husband was involved in some way like he works for. Yes. And he like had inside knowledge, which makes it even creepier. Yes. But she was actually called out the other day in a press conference about that cause they were like, yeah, but your husband had information. And it was so funny how she played it off like it became for such an elite who usually thinks she gets special favors. Cause she was in Congress, she pulled it like, well we’re people too, we should be able to invest. And it’s like, pick one. Yeah, that’s, you’re either better than everyone or you’re one of the people.
Emma: I was gonna read a quote from her, I’ll just do it now actually since you brought that up. So in December, she was asked about, it cuz this has been sort of reaching a fever pitch for a while of people getting really, you know, riled up. Why is Congress allowed to do this on both sides of the aisle, by the way, people with completely different political opinions? And in December she was asked about it at a press conference and she said that Congress should be able to participate in the free market economy. Yes. Which just cracks me up.
Brittany: She’s never supported that.
Emma: No, she’s never cared about the free market economy except when it benefits her. And then in February, she was asked about it again and she said if they, meaning the other members of Congress wanted to pass that I would go along with it or I would be open to it or something along those lines. So her mind has changed. I don’t know exactly why. Again, this is a little bit of speculation that we’re doing here, but I do think it’s interesting to look at the evidence and come up with your own conclusions on what you think is happening. I think it’s pretty obvious when you read into some of this stuff. I’m gonna read a couple more examples here real quick. Kathy Manning is another one from North Carolina who bought $30,000 in Lockheed Martin stock and a few days later Lockheed announced a huge deal with the US government. Now we have talked about the military-industrial complex and these huge defense contracting companies that basically their only business is doing business with the United States military. And there’s a ton of corruption that goes on there where there’s this, they call it the revolving door and it’s these politicians that basically go between, you know, being lobbyists and politicians, and then they work in the defense industry and it’s super corrupt. but yeah, there, that was another one. Tommy Tuberville from Alabama sold $15,000 worth of Microsoft stocks. Two weeks later their Department of Defense contract was canceled and he happens to be on the Senate Armed Services Committee, which would’ve known about that contract being canceled ahead of time. And he managed to save himself quite a bit of money that he would’ve lost if he hadn’t sold it. So there’s all sorts of crazy stuff like this that goes on. And again, like while it’s super hard to prove exactly what motivated these politicians to make these decisions, it’s not very hard to see how their position gives these politicians massive benefits given all of the information that they are privy to before the rest of the public. So it’s an interesting conundrum that we’re in here where you don’t wanna necessarily limit people’s ability to earn a living, but what about when those people’s living comes mostly from the American taxpayer and they get all of this information before us? It’s kinda fascinating.
Brittany: Yeah. And this sounds like insider trading, which I don’t know that we’ve actually talked about. So just to give, you know, a brief thing. Insider trading is basically, and trading meaning like stocks. So that’s when you have information that, you know, cause the stocks are kind of guessing, right? You’re, playing a game of chance. But if you have information that gives you a clear answer and then you give that information to other people who are investing, that’s insider trading, and there’s more to it than that. But, so this does sound a lot like insider trading, right? Because these congressmen have information that actually helps them get ahead and it’s clearly working, but that doesn’t really stop it from happening, even though insider trading is technically illegal. So in 2012, a bill was passed called the Stock Act, and it’s so funny cuz they always do the acronym. So it’s like capital STOCK, but it stood for stop trading on Congressional Knowledge. And this required, congress members to disclose publicly any stock trades over a thousand dollars. And if they were late to report their only punishment was actually a fine of 200. Which, if you’re making a ton of money, really isn’t that much.
Emma: Yeah, It’s pretty wild. How it’s basically just like a slap on the wrist for them. It’s like not even, they’re not even trying to pretend like it’s a really significant thing. It basically operates on the honor system. And I think a lot of these senators are basically just choosing not to report stuff and paying the fine, which kind of brings us to where we are today where there are a few bills being proposed right now from Congress members. So props to them for being willing to limit their own, you know, financial upside from this stuff. But they’re trying to ban, Congress members from trading individual stocks, which, you know, I love the free market, so I don’t like to really crack down on anyone’s ability to make money for themselves. But I do think that this is a really unique circumstance where some sort of limitation does actually make sense because these people are being paid with our tax money. They are being paid a very good living wage, and at the same time, they’re being given all of this insider information about what’s happening in our country with all these different industries. So it makes a lot of sense to me. And I think, you know, even as a free market person, you can still look at a situation like that and say, Hey, this doesn’t make sense. You know, this is our government and I think our founders were very big on limiting our government and our government agents from doing certain stuff. So I don’t necessarily see a problem with this. And maybe Brittany, I don’t know if you agree or disagree with that. I think there’s room for a bit of disagreement here between, you know, people who even have a similar worldview. But I definitely think that you know, the more aware and awake people are on what Congress does, how they spend their money and how they choose to use their influence, the better off we’re gonna be. Because we can hold them accountable. So it’s crazy stuff what they do. this is nothing new and I think it’s just one more thing that should give us a healthy skepticism about, you know, what Congress’s interests are. It seems like these people are pretty much only serving themselves at the end of the day. So, very fascinating, little thing that we’re talking about here today. Brittany, anything you wanna add before I close it out?
Brittany: No, I think you hit it all.
Emma: Awesome. All right, well we will talk to you guys all again soon. And thank you so much for listening.
Brittany: Talk to you soon.