New year, new mailbag

Stock trading, Nolan's Odyssey, and the Pete Buttigieg Era

It was our last mailbag of the year, and we had some good questions, including a special appearance by my dad!

Ben: In addition to reading Slow Boring, I also play online video games and interact with a large number of dis-affected Biden-Trump voters. Whenever politics comes up, they generally don't know that much about policy but always seem to bring up the issue of congresspeople owning individual stocks.

I don't really care much about this issue personally, but why don't democrats actually try and run on ending congressional stock trading? It seems like this would actually help a lot to raise the salience of the issue, and it has the added benefit of being a good idea rather than being against pay raises.

I think a lot of Democrats do in fact run against this, which seems fine to me as a populist sop. But I do want to point out that the populist enthusiasm for this issue seems somewhat misguided to me on the merits.

I don’t really think it’s true that members of Congress have lots of material inside information about legislative or regulatory policy. As a result of the STOCK Act, which was passed as an early response to these claims, we can now track members’ portfolios with great detail. Eggers & Hainmueller find that on average, members have no trading advantage and Belmont et. al. find that, “Even at the 95th and 99th percentiles of ex-post stock returns, House and Senator stock returns are consistent with random stock picking.” Of course, there are over 500 members, so if they are all trading at random then in any given year, you’ll be able to find several whose moves look suspiciously prescient. But on average, it’s just not true that members are using their position for a trading advantage.

On the other hand, precisely for that reason, there’d be no harm to them from being made to stick to index funds. But I think the Slow Boring readers, not being candidates for office, should have the courage to share with less political friends and associates the news that politics is less corrupt than they think.

Rafael Yglesias: Given that the poor attendance economics of movie going to theaters has led to a catastrophic inflation of running times (they no longer care if they lose a showing or two by going over 2 hours) should Congress pass legislation, that I assume an old man like Trump would sign, forbidding theatrically released film over 120 minutes in order to preserve bladders and proper story-telling structure?

Yes.

Nick Magrino: I'm curious if you have any thoughts about how Buttigieg has done as Secretary of Transportation over the past four years. His name still comes up a lot (it sounds like he does a good job going on Fox News or something?) but I haven't heard much about his performance at his actual job. You'd think it's one of those positions where you could make a huge difference in a very high-profile way by not doing or even just calling attention to things that are bad, and instead doing or encouraging things that are good, but last I heard, transit planning in America is still kind of a mess. Was there a missed opportunity there?

Level-setting: There’s a Yale economist named Zachary Liscow who specializes in, among other things, infrastructure construction costs.