Lawmakers’ Stock Trades and Other Virus Outrages
(Bloomberg Opinion) -- Of the many things taking place in Washington that make your blood boil, the — how should I put this? — timely stock trades by senators during the coronavirus outbreak has to go right to the top of the list. Two of them have tried to explain them away, but the details are just so … suspicious.
At least three Republicans and one Democrat sold stock before the country got serious about Covid-19, but let’s focus on one: Kelly Loeffler. A Republican from Georgia, Loeffler has been in the Senate for less than three months; she was appointed to fill the seat of Senator Johnny Isakson, who retired early for health reasons. She has a Wall Street background — she was in investor relations at the New York Stock Exchange, where she married the boss, Jeffrey Sprecher, the chief executive officer of Intercontinental Exchange Inc., which owns NYSE
On Jan. 24, Loeffler attended a Senate briefing on the coronavirus, which she tweeted about. That same day, she and her husband began selling stock. By the time they were finished, they had dumped 27 companies, including Exxon Mobil and AutoZone, saving millions of dollars when the market later tanked. (Senate financial disclosure forms don’t give exact numbers.)
A month later, she sent out this tweet:
In other words, Loeffler sold stock after learning about the virus in a private briefing — and then played it down a month later to score political points. In 2012, Congress passed a law explicitly making it a crime for legislators to trade on information they were privy to as a result of their position.
For her part, Loeffler returned to Twitter to defend the stock sales:
If we still had a real Justice Department, it would have already opened an investigation into the stock trades of Loeffler, Senator Richard Burr of North Carolina and other lawmakers who appear to have put their personal interests before everyone else’s.
Here’s outrage No. 2: Mitch McConnell’s new $1 trillion emergency stimulus bill. Without question it is great that it will put money directly into the hands of Americans — $1,200 for most people who report less than $75,000 on their 2018 income tax (plus $500 for each child). There is hardly anything more important right now. But his bill has two huge flaws.
First, anyone who made more than $75,000 in 2018 receives a reduced amount, and anyone who made more than $90,000 gets nothing. This is incredibly shortsighted. Consider a barber. He or she might have made a good living two years ago but have no business now and won’t be able to get back to work until the crisis passes. There are lots of people in that kind of situation: contractors, architects, restaurateurs, really just about anyone who doesn’t work for a big corporation. This one time, the government should forget about means testing and just hand out money to everybody. It’s the only thing that makes sense.
The second flaw isn’t so much dumb as it’s offensive. McConnell is proposing that poor people get half of what the middle class gets. Why? Apparently it’s because they pay little or no income tax, and therefore don’t “deserve” the same federal help as the rest of the country. But it is hard to think of people who need the money more than the poor. It’s just another way for the Republicans to display their contempt for the less fortunate.
In an earlier column, I argued that companies looking for a federal bailout should have to give equity stakes to the government and agree to ban stock buybacks. In the case of the cruise-ship industry, I would add another condition. If they want money from the U.S. government, they should be required to give up their flags of convenience and agree to sail under a U.S. flag. That would require them to pay U.S. taxes and abide by U.S. regulations. Flying under the flag of, say, Liberia is a scam the cruise industry has deployed for decades, and this is the perfect time to put an end to it.
Can we talk about basketball? At a time when coronavirus tests are so scarce, how is it that at least 25% of the players in the National Basketball Association — and many team officials — have been tested? So far, 13 players have tested positive, but most of them are asymptomatic — and let’s face it, most people who are showing no signs of illness have no hope of being tested for the virus.
This has aroused a fair amount of anger, with people like New York Mayor Bill de Blasio complaining that their wealth and status allowed them to move to the head of the line. Even President Donald Trump noticed. When asked whether asymptomatic athletes should be tested, he said, “I wouldn’t say so, but perhaps that’s been the story of life.”
That’s not the only story of life, though. When you look into it more closely you soon realize that it wasn’t just their fame and wealth that caused so many players to be tested. Unlike the federal government, the NBA has been preparing for a pandemic for years.
According to ESPN, NBA Commissioner Adam Silver began closely monitoring the virus in January, when it was largely confined to China. This makes sense because the NBA has 200 employees there. But it also turns out that the NBA has long had pandemic protocols in place. In 2016, the league even brought in a former surgeon general, Vivek Murthy, to speak to the NBA board of governors about the possibility of a pandemic. When the virus hit U.S. shores, the NBA was ready.
Would things be different now if the Trump administration had taken the pandemic as seriously as Adam Silver? It is a question definitely worth asking.
I’d like to close on a happier note.
The New York City school system closed down on Monday, but that doesn’t mean school is over. For three days this week, teachers went to their schools, where they were given instruction on how to teach virtual classes. That’s going to begin next week.
On Thursday, my son’s school, P.S. 187 in the Washington Heights neighborhood, held a webinar for parents so that we would know how to get our children online not just for the instruction itself but also for homework, projects and the like. Hundreds of us took part in the webinar, and it was something to see. When someone bumped up against a problem, someone else more tech-savvy would jump in with an answer. Although the webinar took a long time — because so many of us had questions — there was none of that New York rudeness we’re so famous for. Everyone was patient and polite — and grateful that our teachers had pulled this all together so quickly.
It was one of those moments when you realize that while we may be socially isolated physically, it’s been a long time since we’ve been so socially together as a country.
Senator Dianne Feinstein of California. The sale, of a biotech company, appears to be her husband’s trade. He’s Dick Blum, the president of Blum Capital, a private equity firm. The senator tweeted that her assets are in a blind trust.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."
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