In an article entitled “Candidate of Doom and Gloom,” Barron’s describes presidential candidate Ron Paul’s investment portfolio as a “super bearish bet against the U.S. economy.” It also notes, in connection with Paul’s vote against raising the debt ceiling, that “[i]f the country had defaulted on its debt earlier this month, he likely would have made a bundle.” Paul has invested heavily in gold-mining stocks, presumably a reflection of his fear of the onset of inflation, and mutual funds that bet against major stock indices.

What are investing rules for members of Congress? Are Paul’s investments a conflict of interest — or the sign of a principled policymaker? To the extent that the rules protect against conflicts of interest, do (can) they apply broadly enough to ensure that members do not have a financial interest in the general decline of the U.S. economy? A related issue is the oft-reported prevalence of Congressional staff trading on nonpublic information. What are the rules governing this activity and what should they be?

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