Congress trades like ordinary people who watch Reddit, not like people with insider knowledge
What happened
A dataset of congressional stock trades from 2012 to 2023 shows that legislators' investment returns match or underperform the overall market. Their trades follow public signals—what retail investors post on social media, financial advisors recommend—rather than exploiting information only they would know.
Why it matters
For decades, people assumed members of Congress beat the market because they had access to nonpublic information. This paper shows they don't. Instead, they behave like ordinary retail traders copying what they see online or what popular financial personalities suggest. The structural implication is clear: if Congress members can't consistently profit from their informational position, then whatever informational advantage they hold either doesn't exist, isn't being used, or has been flattened by the speed of public information.
The signal
Watch whether critics use this finding to argue the STOCK Act (which restricts congressional trading) is unnecessary because Congress members aren't beating the market anyway, or whether it gets used to argue the opposite—that the rules are too weak to prevent what little advantage remains.