Adventures in Hackitude

For some reason, Google flagged this as a TOS violation.  I've rewritten slightly.

Donald J. Boudreaux writing in (where else) The Wall Street Journal, suggests that insider trading is actually a good thing:

Time to stop telling horror stories. Federal agents are wasting their time slapping handcuffs on hedge fund traders like Raj Rajaratnam, the financier charged last week with trading on nonpublic information involving IBM, Google and other big companies. The reassuring truth: Insider trading is impossible to police and helpful to markets and investors. Parsing the difference between legal and illegal insider trading is futile—and a disservice to all investors. Far from being so injurious to the economy that its practice must be criminalized, insiders buying and selling stocks based on their knowledge play a critical role in keeping asset prices honest—in keeping prices from lying to the public about corporate realities. Prohibitions on insider trading prevent the market from adjusting as quickly as possible to changes in the demand for, and supply of, corporate assets. The result is prices that lie.

Do you get it? It facilitates price discovery to allow people to make a profit with information that allows them to know which way the price is going. This is much like the arguments for naked Credit Default Swap (CDS) contracts, where people are getting insurance for items in which they have no interest in its continued existence, and so give people a reason to burn down your house, or at least your bond, and it is just as vacuous. A look at the Wiki reveals that this guy is a card carrying Randoid puke through and through. H/t Jeff Matthews Is Not Making This Up, who does a much better job of demolishing this crap than I do, so just go and read his. For your amusement, here are his last 2 'graphs:

Communism didn’t work for the simple reason that those who were first in line stole the means of production from the poor shlubs with whom they were supposed to share those means of production. And unfettered insider information won’t work, for precisely the same reason.