Paul Ryan's Bank Stock Trading

A blog about business and economics.
Aug. 13 2012 10:12 AM

Paul Ryan's Bank Stock Trading

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Republican vice presidential candidate Rep. Paul Ryan, left, wipes away tears as he and presidential candidate Mitt Romney greet supporters during a campaign event on Sunday in Waukesha, Wis.

Photo by Darren Hauck/Getty Images.

Let me apologize. I originally had a too-credulous item here linking to a piece at The Richmonder alleging that Paul Ryan has sold bank shares after a closed door meeting with Henry Paulson and Ben Bernanke on the financial crisis in 2008. As Eric Platt explains he certainly seems to have sold the shares on the same day as the meeting, but the meeting happened in the evening by which time the markets would have been closed. One can perhaps construct a scenario by which the Richmonder's theory of the case holds up, but they don't have the goods and I shouldn't have passed their analysis on with no qualification and so little scrutiny of my own.

As Brad DeLong writes, for one reason or another Ryan did quite a lot of trading of individual bank stocks in 2008 so the timing of this particularly transaction isn't particularly noteworthy when put in that context. For posterity's sake the original item is below now in strikethrough.

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Original post:

Let's put this in the "the real scandal is what's legal" file:

Ryan attended a closed meeting with congressional leaders, Bush's Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke on September 18, 2008. The purpose of the meeting was to disclose the coming economic meltdown and beg Congress to pass legislation to help collapsing banks. Instead of doing anything to help, Ryan left the meeting and on that very same day Paul Ryan sold shares of stock he owned in several troubled banks and reinvested the proceeds in Goldman Sachs, a bank that the meeting had disclosed was not in trouble.

This kind of trading might be illegal now but was definitely kosher back then when insider trading rules didn't apply to Congress at all. My guess is that it's probably fine even under today's rules, since even though it fits the ordinary language meaning of "insider information," it doesn't actually make Ryan an insider to the companies in question in a legal sense. But it's about as clear an example of a public official trying to use his office to obtain personal benefits as you're likely to find.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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