“Insider” Scoop on Congress

 

 

The book’s subtitle says it all: “How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals and Cronyism That Would Send the Rest of Us to Prison.” This year’s best-selling “political thriller” is found, unfortunately for our democracy, on the nonfiction shelf. Throw Them All Out pulls no punches in its exposé of so-called “insider trading” by prominent elected US representatives and senators. Some of the names named have responded with criticisms of the author’s work, and Congress is now considering legislation to reform its rules on what members can or cannot do when it comes to business deals and conflict of interest. Author Peter Schweizer, a scholar with the Hoover Institution, deserves some credit for this renewed attention by lawmakers.

The term “crony capitalism” comes up a lot in discussions about such “insider” dealings. The American Heritage Dictionary defines cronyism as “favoritism shown to old friends without regard for their qualifications”—add the opportunity to earn a profit, and you have “crony capitalism.” Schweizer examines how some lawmakers, because of their position, were given the special opportunity to buy shares in companies about to “go public” on the stock market. An initial public offering (IPO) occurs when a new company launches the sale of stock to any investor, beginning at a certain base price. When an IPO goes well, the shares are bought up quickly, and the stock’s price is sure to rise in the process. It pays to be first in line. Another situation that Throw Them All Out reveals concerns lawmakers buying or selling significant portions of their personal investment portfolios based on information they received in closed hearings, or at times closely related to pending legislation. Some members of Congress apparently enriched themselves—all legally, it should be said—by using sensitive information about the likely effects of laws being passed.

In the past, such practices have been called “honest graft”—essentially, “if it’s not forbidden, then it’s allowed.” Schweizer’s book recommends reforms to congressional practices that would end the double standard that has allowed members of Congress to profit from their possession of knowledge not available to the general investing public.

Image Credit: © Christopher Zacharow/Getty Images

Related Links

  • The Hottest Book in Washington Sparks Congress to Act
    Read Houghton Mifflin Harcourt’s endorsement of the book that has Capitol Hill in a tizzy—this recent political expose focuses on the need for reforms to congressional “insider trading.”
    (Source: Houghton Mifflin Harcourt; December 6, 2011)
  • Power to the People: Outrage over Insider Trading Puts STOCK Act on Fast Track
    Check out this video interview with the author of Throw Them All Out; he defends the accuracy of his book’s allegations of congressional “insider trading” and discusses how it may prompt reforms.
    (Source: The Daily Ticker, December 6, 2011)
  • The Wonk Who Slays Washington
    An early review of Throw Them All Out by Peter Boyer for Newsweek Magazine.
    (Source: thedailybeast.com, November 13, 2011)
  • Throw ’Em All Out…and Good Riddance!
    A review of Peter Schweizer’s book from The American Thinker, a conservative journal of opinion and news.
    (Source: The American Thinker, December 28, 2011)
  • The Get-Rich Congress
    This piece from TheDailyBeast.com highlights a handful of powerful US representatives and senators whose wheelings and dealings are covered in Throw Them All Out.
    (Source: thedailybeast.com, November 13, 2011)

4 Comments

  1. ashley says:

    thats cool! :)

  2. corey says: says:

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  3. dude stop says:

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  4. Booby says:

    Hello please dont laugh at my name but the artical is true

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