Four U.S. senators swear they didn't use insider knowledge when selling off stocks ahead of the coronavirus-induced market crash. Americans are outraged, but what if so-called insider trading is a mere gimmick of the greater political establishment?
If only insider trading had a legal definition. Instead, its elusive meaning is largely left up to the U.S. Securities and Exchange Commission, a creature of Congress that like so many other federal agencies wields legislative, executive and judicial power.
The self-serving senators may or may not be shielded from some technical breach of bureaucratic law.
What's more important, for the sake of citizen sovereignty, is to understand the consequences of criminalizing so-called insider trading.
The idea rests on the principle that information is a human right, that all market players have a right to the same information at the same time. It's a utopian, communist notion that can't work.
However, it's no wonder so many Americans feel indignant over the accused senators Richard Burr, R-N.C., Diane Feinstein, D-Calif., Jim Inhofe, R-Okla., and Kelly Loeffler, R-Ga. All sold stock after being privy to information they chose to shield from their constituents, or worse, lie about.
Still, were constitutional rights deprived? Was property damaged? Money stolen? For evidence of those crimes, one would have to actually consider their voting records!
Loeffler is the only one without much of a record. She sold over $1 million worth of stocks following a January 24 meeting of the Senate Health Committee covering the coronavirus.
Fox News' Tucker Carlson did a solid job holding her to account. She evaded his question about her March 10 video assuring Georgians that "the economy is strong," long after her trades were made.
Next is Burr, the chairman of the Senate Intelligence Committee. His record includes supporting the 2008 bank bailouts, withholding the 6,700-page Senate report on CIA torture, and blaming future terrorist attacks on senators who don't rubber stamp the most extreme mass surveillance powers.
It's been reported that Burr sold between $628,000 and $1.72 million in stock as he was being updated daily on the imminent coronavirus impact. Meanwhile, he co-wrote an op-ed that said, "the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus."
Burr, nevertheless, follows the Hillary Clinton mantra: "You need both a public and a private position."
"There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," he told wealthy donors in leaked audio, adding, "It is probably more akin to the 1918 pandemic."
Finally, there's Feinstein and Inhofe. Feinstein, with her husband, sold up to $6 million in stocks. Inhofe sold as much as $400,000. On opposite sides of the political aisle, they unite on the issue of war.
Feinstein notoriously supervised appropriations for military contracts that benefited corporations her husband Richard Blum had strong financial interests in. Much poorer is Inhofe, who is a big war hawk anyway, promoting intervention in Venezuela, North Korea, Yemen, and Ukraine to name a few examples.
Do Americans actually believe they're getting screwed over harder with insider trading than by these policies or general ineptitude and dereliction of duty?
No one could be blamed for reveling in some probably crooked politicians being punished, but, there is a big catch that comes with this crusade against insider trading.
In practice, insider trading laws are simply the ruling bureaucratic elite's means toward total power.
When someone with inside knowledge buys or sells stocks, the other trader who sells to or buys from the insider would have made the exchange anyway. There's no victim.
In fact, the inside trader's buy or sell implicitly disseminates his hidden knowledge into the market, a real service for the keen observer. Millions of dollars' worth of stock being dumped did indeed signal to others that they should do the same. Not many, but a few did get out of the stock market before the crash, thanks to insider trading.
The root of the attack on insider trading is envy, no different than condemnation of "obscene profits." Through envy, the state can move mobs in its preferred direction and easily imprison its targets.
These senators, like most politicians, keep up appearances of caring and having things under control. When they inevitably lose control, because the world can't be controlled, they overreact and overreach.
Such is the story of coronavirus in America, where dependence on bureaucracy at home and abroad left millions vulnerable to disease, economic turmoil, and restricted liberty.
The loss of public trust in institutions can be healthy when there is a moral foundation from which to rebuild.
However, the reaction against these four senators also reflects declining social trust. Just look at what the coronavirus scare is doing in major population centers, where there are scrimmages over toilet paper.
These senators reveal deep fault lines in the political system and possibly society as a whole. The fix won't be as simple as criminalizing insider trading.
Gavin Wax is president of The New York Young Republican Club, an Associate Fellow at the London Center for Policy Research, and publisher of The Schpiel. His work has appeared in Townhall, The Daily Caller, The Hill, The Washington Examiner, The Federalist, and Newsmax. He is a frequent guest on Fox News. You can follow him on Twitter @GavinWax. Read more of his reports — Click Here Now.
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