Stop and think
Reader responses

Collected "Stop and think" installments.



On "No special features; no alternate ending" (June 2004).

Mr. Strakon —

I enjoyed Mr. Neff's peace about the Regan funeral very much, but please tell me where I can find out what "coleacal" means.

Its very nice that you and him like to show off your alitist, Buckeyite vocabluaries, but, if you really want to communicate shouldn't you use, like, English instead of all those Hindue words?

—A. Friend
June 16, 2004

To Mr. Neff's original observation.

On "We heard an awful lot about the stockholders ..." (March 2004).

Why is the value of stock determined by the preferential knowledge of the person who holds it, rather than the economic performance of the issuing corporation? Fr. Bayne's The Philosophy of Corporate Control touches on this, but little other material that I encounter even pretends to give an answer that is both morally and economically satisfying. As regards Miss Stewart, she had been "in the trade" and Had to Know that what she was doing was against the rules, dumb though the rules may be. Her cupidity about a few hundred thousand dollars cost her shareholders and company a vastly larger sum, so where was her good stewardship as CEO? Dishonors apply generally here, not just with the Feds, stinkers though they be.

Jerry Jewett
March 17, 2004

Ronn Neff replies

Mr. Jewett seems to think that Martha Stewart was prosecuted for violating some SEC law. She was not. She was prosecuted for lying to federal authorities during a sit-down in which she was "cooperating." Since she was not herself an officer of ImClone she was not an insider and was not charged with insider-trading violations.

Whether she should have known that it was against federal law to lie to bureaucrats — even when she was not the one under investigation — is a little hard to say. I'm not sure just how one would go about demonstrating that she "Had to Know" that not telling the truth when she was not under oath was against the law.

It is also difficult to say in just what way she lied. The jury's instructions were to indicate what statements of hers they did not believe, and the "sell-below-60" part of her story was not one of the ones they checked off. As regards another "lie," I myself have never understood why first falsifying an e-mail header and then correcting it constitutes a lie.

Miss Stewart's selling her ImClone shares might have been an act of cupidity, but in that case I wonder whether Mr. Jewett would be willing to say that other sales consummated that day were likewise motivated by cupidity. (There were some 7.7 million shares traded.) In any case, it was not Miss Stewart's sale of an unrelated stock that caused her own company's stocks to tumble: clearly, in the absence of prosecution her company would have been completely unaffected by the sale.

"Dishonors apply generally," says Mr. Jewett. I would like to know just what Martha Stewart did that was dishonorable.

To address Mr. Jewett's first point, we are not talking about the value of a stock, but the price of a stock. The price — like the price of everything else — is determined by what people are willing to pay for it and what others are willing to sell it for. Why one is willing to buy and another is willing to sell is really no third party's business. But it sometimes does come down to the knowledge one might have as buyer or seller. As we are so often told these days, knowledge is a valuable thing. And the price system is the primary means for knowledge to be dispersed throughout a complex economy.

Finally, I wish to say something about Mr. Jewett's comment "dumb though the rules may be." They are not dumb. They are wicked. They are tyrannical. And a people who loved liberty would rise up — with pitchforks and hoes, if need be — in rebellion against them, against those who pass them, and against those who enforce them.

March 17, 2004

To Mr. Neff's original observation.

On "Heroes are destiny" (December 2003).

I had always thought that the reason the Right considered Herbert Hoover a hero in the sixties was because of the myth that he opposed federal intervention in the economy, a myth that served the interests of both Left and Right. The Left claimed that FDR rescued the country (and capitalism) from the heartless Republicans of Hoover, while the Right held up Hoover as a model of conservative leadership who bravely tried to stand against the rising tide of New Deal socialism.

According to what I have read about the history of the Right, Murray Rothbard's Hoover revisionism was quite controversial among conservatives and did not become mainstream among conservatives until Paul Johnson, in writing Modern Times, used Rothbard's America's Great Depression as a source on Hoover's policies.

Norman Kirk Singleton
Legislative Director
for Congressman Ron Paul
December 15, 2003


Ronn Neff replies

Mr. Singleton's remarks do indeed go part of the way toward explaining why the Right held up Herbert Hoover as a hero. And he is correct that it was Murray Rothbard's detailed expositions (not only in America's Great Depression but also in an important article that appeared in The New Individualist Review [Winter 1966] and another that appeared in Studies on the Left [July/August 1966]) that finally broke the back of that myth.

Without disparaging the research of Dr. Rothbard, I insist that the following facts about Herbert Hoover were so commonly known that they could have been found in an almanac:

• He was the secretary of commerce under Warren G. Harding and Calvin Coolidge.

• During the First World War, he was the U.S. Food Administrator.

• Afterward, he was the American Relief Administrator (1918-23).

• He held similar positions of distributing "relief" in China (during the Boxer Rebellion), England (1914-15), Belgium (1915-19), and Russia (1918-23).

In short, he seems never to have held an honest job in his life. These just aren't the sorts of positions one finds being held by an opponent of federal intervention in the economy. Detailed historical analysis is unnecessary to show that it would just be foolishness to expect free-market domestic policies from such a man.

Moreover, anyone in the 1960s who had voted in 1932 might remember that in that election the free-market candidate was Franklin Roosevelt, not Hoover. (That Roosevelt was a liar does not overthrow the fact that Hoover was himself unable to campaign on a free-market platform.)

Being an opponent of Franklin Roosevelt just is not credential enough for a man to be honestly mistaken for a champion of the free market. One might just as well mistake J. Edgar Hoover for a champion of liberty because he was an anti-Communist.

Oddly enough, I would say that Mr. Singleton's comments undergird my initial point: essentially, he is telling us that American conservatives were so unfamiliar with what a free market would look like and so unfamiliar with how it would work that they could mistake Herbert Hoover for an advocate of it.

And that is precisely the problem with the conservatives of the 1950s, 1960s, and 1970s: they never understood the role of principles. So they were never governed by them. And in the end, the consistency of their choice of heroes overwhelmed the inconsistency of their rhetoric.

Years hence, alas, someone may write a similar "Stop and think" about libertarians who worked for Ronald Reagan or who lionized Milton Friedman.

December 16, 2003

To Mr. Neff's observation
about the two Hoovers.