We Don't Need More Rep. Pelosi's, We Need More Nancy Pelosi's

Without insider trading, the stock markets are blinded. Which means we need more insider trading.

What's hard to fathom is why "insider trading" ever became a pejorative in the first place. Exactly because we want market prices to reflect reality, we should logically champion more trading by insiders. By their very description, they know best what's going on inside any corporation, what is poised to affect a corporation, or both.

Of course, in the description of insiders we can see the origins of the mindless disdain for "insider trading": it's a left-wing notion that we all must be equal even when we're not. Applied to markets, those who know what's ahead have what's called an "edge," and some are free to act on it. Thank goodness for the unequal. Get it?

If those who know reveal what they know through buying and selling, those of us who don't know suddenly know more. Which means we're potentially spared purchases or sales of shares that are losers, and that are losers because an obtuse left-wing notion about "inequality" has sadly become the law.

Which brings us to Nancy Pelosi, a Congresswoman who needs no introduction. So prescient are Rep. Pelosi's stock picks, and so routinely do they collectively outperform the S&P 500, that various websites have taken to tracking Pelosi's trades as a way of helping those not Pelosi to invest as she so successfully does.

To which more than a few conservatives will yell "Halt!" They don't see Pelosi as a good investor as much as she has "edge." It's born of being a frontbencher in Congress. By extension, Pelosi has privileged information about legislation (or lack thereof) that can frequently move stocks.

Pelosi's stock-picking prowess bothers Republicans and conservatives, and they want to ban it. Just this week they tried to pass the Stop Insider Trading Act. Fortunately they failed. And that's not a defense of Rep. Nancy Pelosi.

In truth, it's a defense of information. Nancy Pelosi has information and Republicans - wrapped up in hysterical left-wing notions of equality - sadly want to ban what she knows. The shame is on them.

No doubt they'll say that Pelosi's information is ill gotten. Actually, they'll yell it. Which is conservatives yelling at the scoreboard.

They're not mad at Pelosi despite their protests, but they are unwittingly mad at a federal government that's grown so large that its actions affect stock prices. Rather than beat up on Pelosi while banning information in the process, Republicans should work on shrinking government.

It's something they've never done, at least modernly, and as evidenced by how much the size of government has grown since 1995 when Republicans first took control of Congress after decades in the minority. They've controlled it quite a lot since, but no government shrinkage. Pelosi's stock trading "skills" vivify the previous truth.

To which other conservatives will claim there will be no faith in the stock market if people like Pelosi keep enjoying outsize gains. Nonsense. How could more informed stock prices reduce trust in the markets? The more we know the better. Information protects us.

Since government has grown so big, it's necessary that we quickly know the level of warping that will take place due to its size. Through her trades that are only valuable insofar as the government is large, Pelosi is thankfully informing us of government excess and where it will be felt. Yes, we don't need Rep. Nancy Pelosi while really needing Nancy Pelosi.

Originally published on Real Clear Markets.