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Editorial: America's Disconnected Political Class

As working-class North Carolinians scrimp and save their way through the coronavirus-fueled economic crisis, they can rest assured knowing that their United States senator -- Richard Burr -- relieved himself of our nation's collective struggle.

U.S. Senator Richard Burr (Quartz)

Burr, a Republican who chairs the Senate Intelligence Committee and sits on the Senate Health Committee, has been briefed extensively on the Wuhan coronavirus. The New York Times' David Leonhardt observes, "On January 24th, attended a private Senate briefing from senior government scientists about the seriousness of the coronavirus."

Burr was so personally shaken by what he heard that he sold off his stocks in hotel conglomerates. The Wall Street Journal reports,

Mr. Burr ... made 33 stock trades on Feb. 13 worth between $628,000 and $1.7 million, according to the filings. Congressional rules require that trades be reported in ranges, not precise figures. ...
Three of Mr. Burr’s sales were in hotel company stocks—Park Hotels and Resorts Inc., Wyndham Hotels & Resorts Inc. and Extended Stay America Inc. —which have seen their value drop 74%, 63% and 50%, respectively, since Mr. Burr made the sales.
Mr. Burr and his wife also sold between $96,000 and $265,000 in stock between Jan. 31 and Feb. 4, the filings show, including additional shares of Extended Stay.

The Journal finds that Burr's trades saved himself a minimum of $250,000: "[T]he shares sold by the Burrs were worth—at minimum—$250,000 less at the close of trading on March 19 than they were when the senator and his wife sold them."

The appearances are not good. It looks like Burr used Senate briefings, i.e. insider information, to save himself a quarter of a million dollars. This is not a victimless crime, as the buyers of Burr's shares -- potentially pension funds, individual investors, or financial advisors representing a North Carolinian ten years away from retirement -- did not have Burr's privileged information. They are now in the red.

Meanwhile, Burr -- who saw enough danger in the coronavirus that he divested himself from affected industries -- penned an editorial downplaying the seriousness of the virus. The piece reads,

The public health preparedness and response framework that Congress has put in place and that the Trump Administration is actively implementing today is helping to protect Americans. Over the years, this framework has been designed to be flexible and innovative so that we are not only ready to face the coronavirus today but new public health threats in the future.

If Burr was so confident that America is "ready to face the coronavirus," why did he bet against industries that would be affected by a pandemic? Assuming that Burr puts his money where his mouth is, he probably fibbed in the editorial but told the truth when he sold his stocks: He was scared of what was to come but he did not want it to hurt his bottom line.

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Burr does not appear to be alone in his chicanery. At least one other senator, Kelly Loeffler of Georgia, traded stocks after the January 24th briefing on the coronavirus. She has defended herself by saying that her financial advisor made the transactions, but even so, how can we be sure that the advisor did not act on information passed along by Loeffler?

There have also been accusations of impropriety leveled against Senators Dianne Feinstein, Jim Inhofe, and Ron Johnson. However, the New York Times editorial I cited above downplays these incidents, and David Leonhardt makes a convincing argument:

[N]one of their trades look particularly suspicious. ... Feinstein has said that she did not attend the Jan. 24 briefing; her stock was in a blind trust, which means she didn’t make the decision to sell; and the transaction lost her money, because the trust was selling shares of a biotechnology stock, the value of which has since risen. Inhofe’s transactions were part of a systematic selling of stocks that he started after he became chairman of the Armed Services Committee. Johnson sold stock in his family’s plastic business, as part of a process that has been occurring for months; his sale also occurred well after stock market began falling.

Burr self-referred himself to the Senate Ethics Committee, which is a bipartisan tribunal committed to truth and justice. The committee should probe Burr in addition to Loeffler, Feinstein, Inhofe, and Johnson, even though the accusations against the latter three do not appear particularly incriminating. It is better to have a preponderance of information than an absence of the truth, and I am sure that all those involved would agree.

An admonishment from the Ethics Committee would, unfortunately, cement the average American's view that our political class is disconnected from their interests. It does not help that Congress can spend the nation into trillions of dollars of debt when three missed mortgage payments can lead the average homeowner into foreclosure.

It is also unseemly that members of Congress enjoy a lifelong pension of as much as $139,200enjoy taxpayer-subsidized healthcare benefits foreign to most Americans, receive paychecks during government shutdowns (which are incurred by their incompetence), and are practically immune to insider-trading suits when the privileged information comes from official duties.

There is a reason that President Donald Trump's "drain the swamp" mantra resonated, but not much has been done in way of cleaning up Washington, D.C.

America needs concrete measures to make the political class less corrupt, self-serving, and disconnected from the public interest. Let us start by passing a constitutional amendment to impose term limits, ban stock-trading by sitting members of Congress, and mandate a balanced budget in times of peace.

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