The joke about Martha
Stewart is that she's supposedly a snob--because she knows how to improve home life
and communicates that knowledge articulately, even to the extent of clearly
pronouncing her words. She is a homemaker and hard-headed businessman who has achieved phenomenal success. This is great fodder for
"Saturday Night Live." To be "funny," what you do is you juxtapose
the lady's patrician (or matrician) sophistication with gags that undercut all that, making her look silly. It only comes off 15 percent of the time; but SNL rarely
does better than 15 percent in any case.
Many people like Martha
Stewart, hence her popularity. Others envy her, as they envy all persons who
have made their mark and make money. These envious ones have a new opportunity
to gang up on her now. She's on the chopping block because--crikey--she
might have heard that some stock she was holding was about to crumple in value, and perhaps
sold the stock before it could do so. She unloaded a couple hundred thousand
dollars worth of holdings in ImClone Systems shortly before
the Food and Drug Administration rejected ImClone's
application for a cancer drug. When the news was announced, the stock price
plummeted. (Stewart claims she had already been planning to sell.) Now that the
FDA has dealt a body blow to ImClone, the Securities
and Exchange Commission is moving in for the kill, accusing a former CEO there of
"insider trading." The sequence is typical. First the government
aims for your groin, then it "investigates"
you for trying to get out of the way instead of just standing there like a
zombie.
Trading on "inside
information" is the crime of acting on information that you happen to get before
other people. Since information of any kind is never distributed such that all people receive it simultaneously
and in equal communistic portions, the very notion of "inside
information" is bogus to begin with--mere rank epistemological egalitarianism.
And like any egalitarian doctrine, it can be "implemented" only by a
boot in the face.
If all knowledge were
treated the way the SEC treats knowledge of impending stock value, the
government would have to arrest people whenever they did anything. All actions are guided by a plethora of local,
"inside" information and context of knowledge that, in total, is
available only to the individual actor and to few, if any, others. So while it
may be illegal for a CEO to whisper, "Yikes, Martha, my firm is about to
get groin-kicked by the government," it shouldn't be. The only relevant desideratum
is whether a company has an agreement (a voluntary agreement) with its
shareholders that its officers shall never sell shares upon hearing bad news
without first sharing the bad news with the shareholders.
The brokers who handled
Stewart's stock transaction have been suspended. The SEC has brought charges
against Samuel Waksal, ImClone's
former CEO, for breaking their little rules. Martha Stewart has not yet been charged
with anything, but the vultures are circling. Some of them are positively
drooling. Not over any neatly laced pie or powdered scones, either.
"Blondenfreude,
the glee felt when a rich, powerful, and fair-haired business woman stumbles,
is the guilty pleasure of the age," say Alessandra
Stanley and Constance L. Hays of the New York Times, presumably just
reporting.
Editor/journalist/columnist Michael
Kelley, lumping Stewart with whatever other putative corporate scoundrels he
can dredge up, is one of the most gleeful of the vultures. "Our titans of
industry are the best darned titans of industry in the world, and they deserve
anything they can get, with both hands," says
this expert in ironical slicing, dicing, and marinating. "It is not their fault
that they turned out to be the greediest bunch of no-talent morons the world
has seen since the Harding administration. It could have happened to anyone.
Let them have their money--oh, sorry, I meant our money."
By contrast, Larry Kudlow, who unlike Kelley seems to actually know something
about the financial world, and also is not a creep, is not
happy at all with the tabloid trashing of Ms. Stewart. "Too many
reporters and commentators are too quick to express their contempt for a true,
American-made success story," notes Kudlow.
"They're jealous, and Stewart's an easy target. Attempts to place her in
the recent wave of corporate corruption are about as accurate as nominating
John Gotti for a Purple Heart."
I am not a fan of Martha
Stewart qua homemaker because I am not a fan of homemaking, just of industry and
excellence. But I am a) tired of envy-ridden louts who mob together to lynch their
betters whenever they see a drop of blood on the carpet; and b) feeling a
little guilty about never having gotten around to doing a "hero"
profile of Martha Stewart when I was editing The Daily Objectivist,
as had been requested by TDO publisher Chris Johnson.
So here's my two cents now,
finally: Martha Stewart is okay, and her critics are cruds.
