Latest posts by David Applegate (see all)
- The Presidential Election Was Hacked, All Right – By the Truth - December 18, 2016
- The Court Cops Out - May 20, 2016
- The Progressive War on Free Speech – Part Three - April 20, 2016
Remember Martha Stewart? She’s the doyenne of fashionable living who went to jail in 2005 for having lied to the FBI while the Department of Justice was investigating whether she had engaged in insider trading, thereby avoiding a market loss of $45,673.
As a result of her indictment and conviction, the share price of Stewart’s company, Martha Stewart Living Omnimedia, tanked and people lost their jobs, destroying much more than $45,000 in wealth. Ironically, the government’s initial charges were based on Stewart’s suspicious December 2001 sale of shares of ImClone the day before its stock price dropped because the federal Food and Drug Administration failed to approve its drug Erbitux as expected. But by 2004, before Stewart went to prison, the FDA had indeed approved Erbitux for use in treating colon cancer.
Some years later, you may remember, the government charged Chicago-based Arthur Andersen LLP, founded in 1914, with criminal conduct in connection with audits of Enron, the Texas-based energy company that filed for bankruptcy in 2001. The charges and conviction of Andersen destroyed the company and scattered its employees, again doing huge damage to the economy. The U. S. Supreme Court later overturned the verdict, but too late to save the firm or its reputation.
Now the government has done it yet again. After the government sued rating agency Standard & Poor’s over a housing crisis that the government itself created it, S&P owner McGraw-Hill Cos. has found its own credit rating now down-graded, in this case to near junk-bond status Baa2. And more wealth is being destroyed.