Trading stocks while in office severely erodes public trust, UCSD study shows

Money File photo by Alexander Nguyen Trading stocks while in office may be beneficial to Congress pocketbooks but it severely erodes the trust of the American people regardless of political affiliation reported a analysis published Tuesday by UC San Diego researchers The scrutiny published in Tuesday s Proceedings of the National Academy of Sciences journal was conducted by researchers at UCSD s Rady School of Management It used an online sample of more than people to come to its conclusions In the review participants were shown a nonpartisan analysis with real-world content from watchdog organization Uncommon Whales detailing how certain members of Congress consistently outperformed the stock domain Compared to a control group that did not see the assessment those who saw it were significantly more likely to view Congress as corrupt self- serving and less legitimate and were less willing to follow laws passed by Congress as a development a announcement from the university noted We determined that exclusively learning about this kind of trading was enough to erode trust mentioned first author Raihan Alam a doctoral apprentice in management at the Rady School In a follow-up investigation researchers located that whether members of Congress won or lost money on the stock territory the fact that they may have insider information and are using it to their advantage caused trust to plummet This described us something essential declared coauthor Tage Rai an assistant professor of management at the Rady School of Management It s not just the money It s the perception that lawmakers are using their power for personal gain Even if they fail at it just the attempt is enough to undermine legitimacy According to a Gallup poll in trust in Congress had dropped to with the researchers believing it is even lower now High profile cases of members of Congress trading stocks to their benefit didn t help perceptions While President Donald Trump put in place and removed tariffs on countless countries around the world several elected leaders played the region Georgia Republican Marjorie Taylor Greene purchased up to in stocks minutes before Trump informed he was pausing tariffs on greater part of the U S s trading partners after which the stock markets soared Actions such as these could have a devastating blow on the trust Americans place in their institutions the authors say For years political scientists have required why chosen countries function well and others don t Rai noted One key difference is general trust in institutions America used to be the poster child for that people maintained if they played by the rules the system would work Interestingly both the majority of the American constituents and elected leaders appear to agree on the issue More than of Democrats and Republicans alike assistance banning stock trading in Congress Alam noted This is a rare issue where both the community and bipartisan lawmakers are aligned The TRUST in Congress Act a proposed bill introduced into the House of Representatives in January received wide bipartisan aid It would require a member of Congress as well as any spouse or dependent child of a member to place specified investments into a qualified blind trust i e an arrangement in which certain financial holdings are placed in someone else s control to avoid a workable conflict of interest until days after the end of their tenure as a member of Congress according to the bill summary The UCSD researchers declared reforms such as the TRUST Act could serve as powerful credibility-enhancing displays signals that lawmakers are committed to acting in the population interest The paper ends with a warning People less likely to trust lawmakers could become people less likely to follow the law When people no longer believe their leaders are acting fairly it becomes harder for them to justify following the rules commented Rai That s not just a political obstacle It s a democratic dilemma