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A Tale of Two Insiders. Jeffrey Toobin profiles Martha Stewart in The New Yorker, focusing on the ImClone insider trading scandal that has engulfed her life over the last year.

To refresh your memory, here is Toobin's overview:

On December 26, 2001, Stewart's old friend Samuel Waksal, the chief executive of ImClone, learned that the Food and Drug Administration was going to reject the company's highly touted cancer drug, Erbitux. Knowing that the stock would plunge when this news became public, Waksal immediately tried to sell tens of thousands of shares of ImClone and encouraged his father and daughter to sell, too. For these actions, Waksal has pleaded guilty to insider trading, among other crimes, and faces as much as twelve years in prison when he is sentenced, in March. On December 27th, Stewart sold all of her stock in ImClone—3,928 shares, at fifty-eight dollars a share—grossing about two hundred and twenty-eight thousand dollars. The claim is that Stewart did so because she had an illegal tip.

Given her celebrity status as a purveyor of classy lifestyle porn, she was an easy mark and even her talk show host friends couldn't resist ripping into her during their monologues. But through the thicket of endless Martha-in-prison jokes, rays of light did shine:

Stewart looked cheerier when she recalled the support she's received—from Hillary Clinton, for one. "Look at her ups and downs," she said. "And she was one of the first people to call me after the article"—announcing the investigation—"and very nicely say, 'You know, you just have to hang in there. It's the process.' " Stewart continued, "First Lady, knocked to death and now senator. You know, a very important person, still. Because she's smart, she's worthy, she's great. You know, that's what I hope I'll be thought of as."

It's no secret that Stewart is a Democrat. It's also no secret, as Toobin writes, that the scandal has cost her in the vicinity of $400 million in stock losses as well as legal fees and lost business opportunities — the actual transaction cost of her $228,000 ImClone "insider" trade. (That she tried to sell her entire ImClone stake to Bristol-Myers two months earlier is rarely mentioned, although Toobin does.)

On the other hand, we have Thomas White, Secretary of the Army. This former Enron officer has a much clearer-cut case of insider trading than, well, just about anybody. If you want a summary of White's errors of judgment, here's a page courtesy of Sen. Barbara Boxer (D-CA). Be sure to view the highly revealing chart.

With all this information floating free of useful context, we decided to look at Martha Stewart's and Thomas White's alleged insider trades side by side, to see what we could infer about the treatment each case is receiving with respect to public discourse:

Insider Trades: US Military Leader vs. Ex-Caterer

	Thomas White	Martha Stewart
Position	Secretary of the Army	CEO Martha Stewart Omnimedia
Former Position	Vice Chair Enron Energy Services	Caterer
Insider Affiliation	Enron	Imclone (via friend/CEO Waksal)
Insider Trades (Alleged)	405,710 shares	3,928 shares
Transaction Value	$12,120,827	$228,000
Number of Insider Phone Calls and Meetings	81	3
Party Affiliation	Republican	Democrat
Google Search String	"thomas white" enron	"martha stewart" imclone
Total Google Hits (1/27/03)	4,660	11,200
Smoke & Mirrors Index*	$2,601	$20

*The Smoke & Mirrors Index is Skimble's measure of ill-gotten money divided by Google hits.

If I stole $1,000 and got 10 Google hits, my Smoke & Mirrors Index would be 100, equal to $100 per Google hit. If you stole $100 and got 20 Google hits, your Smoke & Mirrors Index would be 5, or $5 per Google hit. I stole more money than you but fewer people are talking about it, so the smoke and mirrors are in my favor — distracting the world from my self-enriching crime.

Bad guys score high; (relatively) good guys score low.

In other words, the higher someone's Smoke & Mirrors Index, the more they are getting away with. The less scrutiny there is about great financial crimes, the higher the S&M Index. The more scrutiny there is about smaller crimes, the lower the S&M index.


Using the Google-based logic of the S&M Index, we see that discourse about Martha Stewart is weighted more than one hundred and thirty times over discourse about Thomas White, relative to the financial value of their alleged insider trades. Once again, disproportionate treatment of administration insiders rules the day.

Could this have anything to do with media support for an American military leader at the advent of a propagandistic war?

Could this have anything to do with keeping the stink of Enron off the administration?

Could this have anything to do with wanting to take down a strong Democratic woman?

Could this have anything to do with the general bias and/or cluelessness of the American mainstream press?

Yes. Yes. Yes. Yes.

{ 10:31 AM }

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