Also, TFA is a radically left-wing organization that promotes "progressive education" and other liberal causes. One of the exercises required that we get in a circle and talk about our "privileges." Members regularly proclaimed that we need to revolt against the racist, imperialist, patriarchal capitalist system. In fact, this was a part of our mission as teachers.
I resigned after my first year.
Name withheld by request
Miami, FL
St. Martha
Michael McMenamin's article, "St. Martha" (October), displayed a level of bias and a lack of perspective rare for this magazine. While I don't relish Martha Stewart's trials and tribulations, it's a stretch to paint her as a saint martyred at the hands of the evil government.
McMenamin does a decent job exposing some of the improprieties and inequities practiced by the Department of Justice and the Securities and Exchange Commission. Based on that alone, I would say the case against Stewart should be dropped. But McMenamin's quest to make Stewart a saint seems to be a subterfuge for an anti-government agenda. Throughout the article, McMenamin ascribes innocent motivations to Stewart while ascribing evil motivations to the government. McMenamin can't imagine any economic harm resulting from insider trading; he even questions the validity of insider trading laws, a subject that could be interesting and provocative if written by a less biased person.
Prior to selling her ImClone shares, Stewart received material, nonpublic information from her broker, and then she tried to speak with Sam Waksal for the purpose of receiving additional information. McMenamin tries to mitigate this by referring to the SEC's "long discredited fairness theory." McMenamin gladly accepts unfairness in business but bitterly decries unfairness in the judicial system. Both topics are worthy of a more balanced, reasonable approach.
Steven Mason
San Leandro, CA
One for the "throw the baby out with bathwater" file is Michael McMenamin's "St. Martha." Citing the hypocrisy and machinations at the SEC and Justice Department in pursuing "insider trading" violations, McMenamin acknowledges that trading on material, nonpublic information "should be regulated by existing criminal laws" or "left to the public companies and the stock exchanges." Agreed. But to promote Stewart as a "saint" strains credibility at best. As an executive at a public company and a former stockbroker, she should have known better.
As a former investor relations professional, I assure you that misrepresentation (and probably fraud) are pandemic on Wall Street and among public companies. Sam Waksal at ImClone could not have been acting in good conscience when he traded on inside information, and then shared this information with family.
Gordon Gekko was right in Wall Street: "Greed, for lack of a better term, is good." However, sneaky, self-dealing avarice is not. Its existence should not be condoned -- and cer-tainly not lionized -- by a magazine committed to "free minds and free markets."
Robert Capozzi
Alexandria, VA
I forced myself to read "St. Martha," despite not caring a tinker's dam about Martha Stewart, because attorney McMenamin challenges the SEC. His thesis that "government lawyers want to enhance their own power and prestige" is valid but is unfortunately buried at the end of the article. McMenamin's grasp of economics leaves something to be desired, and his policy prescription is somewhat glib. I give him the benefit of the doubt since he is an attorney and not an economist or accountant. But Reason readers deserve better, and we libertarians can offer better regulatory policy for that market. In the aftermath of Enron, this is really important.
McMenamin's economic argument is weak when he quotes Henry Manne (whom I have not read), perhaps out of context: "When insiders trade on their knowledge, that information is immediately reflected in stock prices." Well, no, not immediately; these very traders are the mediators. They enjoy an opportunity to sell before anyone else knows why. Smart money moves first, but who should take the loss?
A simple example: My house is infested with termites, but I sell it to you as if it were fine. You buy and discover the deficiency, so now the "market" knows. Caveat emptor. You eat the loss and I get away scott-free -- unless, of course, you file a civil complaint for restitution, which keeps me awake at night and may cost me all the expense that I tried to avoid by dumping it on you. You win. I suffer the loss anyway, along with the punishment of court costs to boot. Isn't this economic justice?
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