Should members of the U.S. Congress be permitted to trade securities based on inside information learned as part of their jobs in the "halls of Congress?"

The Law Blog notes in this post that, according to this article in the WSJ,

Two Democrat lawmakers plan to introduce today a bill that would block trading on such inside information. Current securities law and congressional ethics rules don't prohibit lawmakers or their staff members from buying and selling securities based on information learned in the halls of Congress.

The article further states:

Rep. Louise Slaughter, the New York Democrat who wrote the bill, said: "Top leadership aides know what is happening before anyone else. The potential for abuse there is incredible."

Notably, the article does not mention a 2004 academic study that indicated that there appears to be much more than just "potential" for abuse going on already.  As discussed in this November 2004 post on SLW and an earlier post by Professor Bainbridge,

a recent study by Alan J. Ziobrowski of Georgia State University and colleagues at three other schools showed that during the 1990s, senators' stock picks (which must be publicly disclosed periodically) beat the market by 12 percentage points a year on average.  By comparison, corporate insiders only beat the market by about six percentage points a year, and U.S. households underperformed the market by 1.4 percentage points a year on average.

As reported in this article in Sunday's Philadelphia Inquirer, the authors of the study conclude that these results "suggest that senators are trading stock based on information that is unavailable to the public, thereby using their unique position to increase their personal wealth...." The study adds that it is as if "senators knew appropriate times to both buy and sell their common stock."  The article quotes Ziobrowski  as stating in a recent interview that "there is cheating going on, at a 99 percent level of confidence."