Wall Street Journal opinion writer Holman W. Jenkins, Jr. has cavalierly dismissed the explosive congressional insider trading scandal uncovered this week by Breitbart editor Peter Schweizer and 60 Minutes.
Jenkins calls the fact that members of Congress are abusing their political power and knowledge to make millions trading on Wall Street a “non-scandal”–and then concedes the point:
What’s right about the furor over congressional “insider trading” is the sense that congressmen let themselves behave in ways they wouldn’t permit for the rest of us, indeed would denounce as greedy.
Jenkins goes on to argue, in elitist tones, that “CBS and Mr. Schweizer are taking advantage of the audience’s naivete” and that he is “nonplussed” and “mildly contemptuous over the newest fuss” about the nation’s outrage.
Yet Jenkins’s response should come as no surprise; he is a well-known opponent of insider trading laws, and apparently has a soft spot for those accused of the crime.
In a November 24, 2010, Wall Street Journal column, Jenkins made clear his disdain for insider trading statutes:
Beating a dead horse in argument is frowned upon, but sometimes it takes a good thrashing to reveal the absurdity beneath the surface of reasonability. So it has been with the evolution of insider trading law…Insane is what happened to insider trading law over the past generation…Insane is treating the information as the offender. Insane is seeking serially to expand the circle of people who can be criminalized for trading on it, as if it were desirable to keep accurate information out of stock prices.
At times, Jenkins’s skepticism of insider trading law reaches near-alarmist proportions:
The day is coming when a plumber will be prosecuted for trading on what another plumber heard through the wall when fixing the pipe in an apartment neighboring the apartment of somebody who knows somebody who works at an investment bank.
During the insider trading trial of Galleon hedge fund group founder Raj Rajaratnam, Jenkins wrote an April 2011 piece that was dismissive of the prosecution’s case. The next month, Mr. Rajaratnam was found guilty on all 14 counts of conspiracy and securities fraud.
Jenkins also took up the cause of defending Mr. Rajaratnam’s tipster, former director of Goldman Sachs and Proctor & Gamble Rajat Gupta. In April 2011, Jenkins opined that Mr. Gupta should avoid punishment:
“Though Mr. Gupta’s reputation will never recover from what’s already on the record, a decent legal system probably would not find enough here to punish him further.”
Today, Gupta is being prosecuted for insider trading. But Jenkins, displaying a consistent sympathy for insider trading defendants, recently penned a column explaining that Mr. Gupta “appears to have been a thoroughly admirable character” and that he was involved in numerous charities. “Strange but true, people of Mr. Gupta’s stature are more often done in by naivete and optimism than by the cynicism that many would attribute to them,” Jenkins wrote.
The reason Jenkins opposes insider trading laws is because, in his view, they lead to a “crazed pursuit of a ‘level playing field’–the weird idea that the stock market should be some kind of informational potato-sack race in which all boys and girls have an equal chance to win.”
The problem with such thinking, the Wall Street Journal writer graciously explains, is that “there is no level playing field. Nor does there need to be one for the stock market to be an acceptable place for the public to park its savings.”
To many, Mr. Jenkins’s opposition to fair play and level playing fields may seem unusually out of touch and elitist, even for an editorial page that just months ago labeled Tea Party members “Hobbits.”
But it is Mr. Jenkins’s most attack on the independent investigations by Schweizer and 60 Minutes that may prove the most errant of all.
On the very day that Jenkins expressed his disgust at the nation’s bipartisan furor over the breaking congressional trading scandal, Senators Scott Brown (R-MA) and Kirsten Gillibran (D-NY) introduced anti-insider trading legislation, and Gov. Rick Perry called for the imprisonment of any member of Congress who trades on insider information.
Much to Holman Jenkins’s chagrin, the Hobbits, it seems, are on the march for transparency in markets, and equality before the law.
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