March 5, 2011

PROFESSOR BAINBRIDGE on insider trading at the Department of Education. “We know bureaucrats leak information to reporters all the time in an effort to influence policy. But leaking information to short sellers is a new one on me.” I suspect that there’s a lot more of this going on, given the incentives and the low level of scrutiny involved — though, to be fair, the initiative on for-profit education was unusually politicized and shady to begin with.

Plus a link to his piece on Insider Trading Inside The Beltway.

UPDATE: Reader David McCune emails:

I don’t think the point can be emphasized too much:

The preferred solution to this is not tighter regulation, it is less power in the hands of government.

Absolutely. Power corrupts. They’re more corrupt now because they’re more powerful.

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