It’s Good to Be King… Or a Member of Congress
by Chris Matthai, Investment U Research
Friday, November 18, 2011
“It’s good to be king.”
I’m not sure who coined the phrase, but I think it was King Louis XIV. However, I can’t help but associate it with the great actor/director, Mel Brooks.
Brooks voiced those words in his comedy, “The History of the World Part I,” as he – the king – used some of his subjects for target practice. Brooks was standing out in a field with a shotgun (don’t ask) and yells “pull,” whereby one of his subjects goes flying – and screaming – across the air in front of Mel, who starts firing away.
The whole movie was a tongue-in-cheek focus on how the kings of medieval times lived like virtual gods, enjoying unimaginable wealth and power that was virtually limitless.
That’s all fine and dandy when it’s a fictional, light-hearted spoof about a long-ago period in history. But if you saw this past Sunday’s “60 Minutes” episode about Congress’ current abuse of power, privilege and authority… it wasn’t so funny.
Modern Day Kings
“60 Minutes” did a segment about how members of Congress have exempted themselves from insider trading laws and policies concerning a conflict of interest. It explained how they and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate.
In addition, aaccording to former Washington state congressman, Brian Baird, the situation is getting worse… not better. In the past few years, a whole new, totally unregulated $100-million industry has grown up in Washington called “political intelligence.” It employs former congressmen and former staffers to scour the halls of the Capitol, gathering valuable non-public information and then selling it to hedge funds and traders on Wall Street who can trade on it.
Baird says it’s taken what would be a criminal enterprise anywhere else in the country and turned it into a profitable business model.
Needless to say, the “60 Minutes” piece was a real eye-opener to many and spoke volumes about the abuse of power in government. (Let’s not forget that Congress has previously exempted itself from Social Security payments and healthcare reform, plus created its own congressional retirement fund and healthcare system. Members of Congress can retire at full pay after one term, as well as vote on their own pay increases… all funded at taxpayers’ expense.)
Green With Rage
Investment U’s Chief Investment Strategist, Alexander Green, was so incensed about the latest transgressions that he fired off this missive to his Insider Alert subscribers:
“Just when you thought your opinion of Congress couldn’t go any lower, Peter Schweitzer of the Hoover Institution has come out with a new book. It’s called Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Jail. It reveals how members of Congress have exempted themselves from insider trading laws and made millions of dollars for themselves with special deals and trades based on material, non-public information. And because they had knowledge that was virtually guaranteed to move the market – making their trades essentially riskless – they didn’t just buy common stocks, they even cashed in big on options!
“When ‘public servants’ rake in millions for themselves doing the same thing that would send the rest of us to the hoosegow, something is seriously wrong.
“You may not have time to read Schweitzer’s book, but you owe it to yourself to watch a brief segment on this subject that recently aired on “60 Minutes,” indicting self-serving Republicans and Democrats alike.
“This should boil the blood of even the most cynical observer of Washington politics. In fact, it reminds me of something Mark Twain wrote:
‘There is no distinctly American criminal class… except Congress.’”
You can view the “60 Minutes” segment below:
Although we might wish this was another light-hearted spoof on circumstances from thousands of years ago… unfortunately, it isn’t. Use the last vestige of power you have and “pull” the voting lever.
Good investing,
Chris Matthai
Article by Investment U