The Nationalization of Insider Trading. Reuters reports that the SEC
is “investigating whether people may have illegally profited from trading on nonpublic information at BP Plc in the weeks and months following” the Deepwater Horzion oil spill.” Interestingly, the same story reports: “The U.S. Securities and Exchange Commission is also investigating whether BP properly disclosed information on risks related to its deepwater oil operations in the Gulf of Mexico.” So, the U.S. wants business employees to disclose all information relating to corporate risks. Indeed, it has shown a willingness to use multimillion-dollar payoffs to so-called whistleblowers
. But the greatest collator of knowledge ever devised, the free market, is to be crippled by strict rules that prevent people who have secret information from profiting by it. Think of it as the nationalization of insider trading.
Don’t Outlaw Hustling.
This story by Caitlin Nish of the WSJ
(“GAO Finds Deceptive Practices at For-Profits
says that for-profit schools are about to come under legal scrutiny, even though “the schools weren't accused of fraud, but rather of misleading marketing.” This attempt to banish “misleading marketing” that does not amount to fraud brings up one of my hobby-horses: the central role of the hustler in America’s capitalist society. To quote myself:
“Hustler” is one of those peculiar words--like “cleave,” “husked,” and “impregnable”--that can mean both one thing and something very nearly its opposite. A hustler is, on the one hand, a worker who exhibits a lot of hustle—an extremely active, energetic, productive worker. On the other hand, a hustler is a fraud who produces nothing of value. The dual meaning of the word may well have its roots in the phenomenon of the entrepreneur. In a free-market culture, the entrepreneur is a leader—a trailblazer, an innovator, a man who pushes things forward. Economically speaking, however, the entrepreneur must be an outsider, because he must be someone who dissents from the market’s present valuation of goods and services. For both reasons, the entrepreneur tends to be a bit of an enthusiast, a visionary, and a dreamer. When his dreams come true, he is honored as a productive genius; when they do not, he is all too frequently damned as a fraud--and all too often he ends up in prison.
The Rine in Spine.
To parody one of my least-favorite columnists: The story: Post-adolescent capitalism-basher notes downside to Progressivism
. “Zach” Goldfarb has declared the Maxine Waters case to be ‘another illustration of the risks of politicization when the government gets involved in investing in the private sector.’” Who:
Why none other than the deeply unlearned Goldfarb himself: Princeton ’05 and author of the WaPo
column “Market Cop: Corporate Crime, Wall Street Excess, and Government Watchdogs.” The takeaway
: The rine in Spine sties minely in the pline. There is always hope.