By Caden Bonoffski
As the COVID-19 pandemic took its toll on every community across the United States, small businesses were disproportionately hurt. According to a survey conducted by both Harvard and Brown University, “estimates (accessed on January 20) point to 29.7 percent of small businesses closing from January 2020 to the end of December 2020 (SBE Council).” It is fairly agreed upon, that the wealthiest people in America were able to grow their wealth at a substantial rate throughout the pandemic. Estimates range all the way up to an additional 1.2 billion dollars made by elites throughout this past year (Forbes). Many proponents of closing the wealth gap within the United States advocate for raising the minimum wage, increasing taxes within wealthier communities, etc; and those continue to be ongoing conversations. In my personal opinion, we must look at those who represent our communities, specifically congress, and wonder if they truly have the average American’s best interest in mind.
While small businesses all across the country were struggling to make ends meet for the past eighteen months, lawmakers were increasing their stock portfolios and profiting off of monopolies; including big tech. This issue is seen on both sides of the aisle and is present regardless of political affiliation. Republican senator, Richard Burr, reportedly sold up to 1.7 million dollars worth of stock (ProPublica). One week later, the S&P 500 crashed and was down around thirty percent. On the other side of the aisle, the speaker of the house, Nancy Pelosi profited around 5.3 million dollars from exercising Google call options (Forbes).
Though making millions off of call options happens more often than people think, we must look at the context and circumstances regarding these trades. According to journalist , Glenn Greenwald, “The sector in which the Pelosis most frequently buy and sell stocks is, by far, the Silicon Valley tech industry. Close to 75% of the Pelosis’ stock trading over the last two years has been in Big Tech: more than $33 million worth of trading. That has happened as major legislation is pending before the House, controlled by the Committees Pelosi oversees, which could radically reshape the industry and laws that govern the very companies in which she and her husband most aggressively trade.” Nancy Pelosi’s husband, Paul Pelosi, was reported buying call options on Amazon, NVIDIA, and Apple throughout this time.
Stock trading while being an active member of congress is still legal via the STOCK Act which “prohibits the use of non-public information for private profit, including insider trading by members of Congress and other government employees. It confirms changes to the Commodity Exchange Act, specifies reporting intervals for financial transactions (Wikipedia).” Though members of congress are protected via this act to still engage in trade on the New York Stock Exchange (NYSE), we must observe the context of these situations. At the end of the day, the majority of small businesses across the U.S. were breaking even at best when these trades were placed, while the people who represent those constituents were making millions.
Questioning the ethics behind active members of congress trading stocks has become more and more popular in recent age. This practice has been going on for a very long time, and the pandemic exposed this questionable practice. We must ask ourselves, is it ethical for those in charge of regulating companies in our country, to be profiting off of those same exact companies?
The author, Caden Bonoffski, is a junior Communication Studies major at Davidson College. He resides in Huntersville, North Carolina.