Let's say Joe Broker manages your money on a discretionary basis... Meaning you've signed over all of your investment decision-making to him... And Joe just bought shares in Loogie, a fledgling internet search engine, for his personal account... He then proceeds to take all of your (and his other clients') capital and buys you Loogie, forcing up the price...Joe hocks his Loogie the next day, for a handsome (albeit slimy) profit...
Risky, blatantly unethical and entirely illegal (not to mention gross)!! In short, Joe'd be toast... But what if he hadn't started out in the investment business? What if, with his gift of gab and lack of conscience, he ended up in DC instead... Where he could spend your money, to his profit, and remain in a nice two-piece suit, as opposed to an orange jumpsuit...
In the investment business it's called stock manipulation, in Washington they use a more benign term; Earmarking... It works like this:
The Majority Whip teeters at the very edge of one of two plush leather guest chairs in Joe's office, pleading for a yes vote on the $400 million bridge to Neverland - a project that'll create union jobs galore - and one the Whip and his fellow appropriators need badly (and Joe knows it)... Joe's at his desk, tapping his fingers, slowly moving his head back and forth horizontally while staring at the ceiling and humming Iz's version of Somewhere Over the Rainbow... Twenty minutes later commitments are exchanged and everybody's happy... The taxpayer forks over $395 million to the union, and $5 million to fix up the beach that hosts Joe's vacation cottage...
I'm with you; fire all the earmarkers! Here's a few dozen to start with... Washington Post Investigation...
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