Dear Ms. Stewart,

I am an occasional columnist over here at strike-the-root.com.  Although it seems that you are very close to THE household name, I must confess that before this insider trading "scandal," I had only a vague notion of who you were.  But it looks like you have been quite industrious.  From what I now gather, you have TV spots, book deals, big-time licensing contracts and your own publicly traded company.  And while I do have a vague pre-scandal notion of recognizing your name, my guess is that you have never heard of Strike The Root, and that is really too bad.

You see, we here at Strike The Root are always warning about the dangers of government intrusion into people's lives.  In particular, I often like to note, we are not just having theoretical discussions here, as the evil reach of government is very real and can occur at any time. I'm sure you can fully appreciate my warning on this point now.

Maybe, just maybe, if you had wandered over to this site, you would have been more careful about how you conducted your business. Now, please, don't misunderstand me. Even if you did sell your stock because of an "inside" tip, I don't think you did anything wrong. There is a strong theoretical argument that what you did, if you did sell on a tip, is actually an important way to signal to other investors, through price action, developments at the company--but more on this later. Right now, I'm focusing on our daily attacks on the government's smothering of individual rights and the government's love of coercion and a good headline at the expense of productive business people.

What were you thinking? You are a high profile businessperson and a woman at that! The last enterprising woman of wealth that the government got in its crosshairs was Leona Helmsley. As a hotel owner, she used to run ads that were famous in the New York City area proclaiming herself Queen of the Helmsley hotels. Of course, every libertarian alive knew she was just using a figure of speech relating to her belief in spotless, efficient hotels fit for a king or queen. We knew she had none of the real power of a reigning king, queen, president or attorney general. No libertarian and no New Yorker went to sleep at night, in or out of her hotels, fearing that they were going to be arrested for insider trading or jaywalking or anything else for that matter, by "Queen" Leona.

But she had a very high profile, and that's always a big time target for the government. They charged her with tax evasion. Something about deducting curtains she actually used at her home instead of at her hotel. Anyway, as you may know, Leona got jail time.

The point I am making here is that, as I am sure you are well aware, like Leona, you are a big time target. Every SEC agent and prosecutor working on this case will have a story for the rest of their lives about working on the "Martha Stewart case." I once met an undercover cop who busted Abbie Hoffman for drug possession. Decades later, this meatball still tells the story as the highlight of his life.

Martha, it may be a little too late for you, but there is a lesson here that I hope you can pass on to your family and friends, and that we here at Strike The Root need to always keep in mind: The government wants to rule your life. There are hordes of laws on the books, and the government is adding new ones every day. And if they don't have the law on the books, they will just make something up when it suits their purposes. All this stuff about protecting the little guy and doing "good" is a big scam power-grab by the ruling elite. We know that here at Strike The Root.

We know that the true benefactors of society are people like you. We know that you gained your wealth by providing goods and services to people voluntarily. People who willingly paid for the many goods and services you offered. You aren't running a Social Security scam, like the government, and forcing people into this bankrupt Ponzi scheme. People buy things from you because they like your product. People buy things you license because they trust your judgment. You don't have to force people at gunpoint to accept your officially licensed products in the way the FDA forces all suppliers and consumers to bow to its demands. No, you simply enter the marketplace, offer your services and many consumers respond. Ludwig von Mises, one of the greatest free market economists of all time, wrote a book decades ago called The Anti-Capitalistic Mentality. In it he explained the envy the intellectual elite have for those like yourself who or are successful in a free market economy. As unfair as it is, you must now bear that cross. The propaganda machine of the government and the intellectual elite are coming after you big time. They will leave no stone unturned. If they can find a maid you might have yelled at once, you can be sure it will be headline news.

As I said, it's probably much too late for you now, but what you should have done when you sold your stock is just give the order to sell without an explanation to your broker. Sadly, in this age of growing big government, just like in the old Soviet Union, the fewer who know what you are doing and why, the better. The government machine is a very powerful tank bearing down on anyone in its way.  It can even flip, as witnesses against you, many of your closest friends, just like in the old Soviet Union.

Secondly, when news of the government investigation broke, you shouldn't have talked to the government or the press about it at all. You should have basically told the government "F**k you." In fact, that's what all freedom-loving citizens should do whenever the government asks any questions. You seem too polite to use such a harsh phrase, though, and the polite way to phrase this to the government is to say, "I take the Fifth."

The government has been chipping away at many of our freedoms, but they haven't quite found the angle yet to get around the Fifth Amendment, so it makes sense to oblige the government with this answer whenever you can.

I know in the heat of the moment, it was very tempting to try an escape from the government's getting their neck around you, by trying to lie and "obstruct justice." But the government outrageously tries to take the moral high ground here. You see, it's okay for them to lie whenever it suits their needs. And it's okay for them to obstruct justice when it results in the slaughter of thousands of innocents (see "Revisiting the War on Yugoslavia"), but for you, in a moment of panic, to attempt to wring yourself free of government's evil grasp, they are going to throw the book at you.

As for "insider trading," there is another famous economist who must be spinning in his grave at this supposed evil. The economist, Friedrich von Hayek, a Nobel Laureate, taught us that information in an economy is too vast for any one person to have all the information and to analyze it all. It is prices that really teach us what is going on in an economy. By selling your stock after hearing negative news about the company, if this is indeed why you sold, then you were actually doing a heroic thing. By your selling what stock you had and telling your friends to sell also, you were putting DOWNWARD pressure on the stock price. If there was negative news coming out in the future, it is a good thing to put downward pressure on the stock.

You didn't force anyone to buy the stock. Whoever bought the stock was most likely going to buy the stock that day, whether you were a seller or not. You actually helped that person out, because your selling pressure (along with anyone else you told), enabled some buyers that day to spend less money than they otherwise would have! And for some, the downside trading action in the stock would have signaled for them to stay away from buying the stock. You did nothing morally wrong here. You saved people money!

Now the government has this absurd notion that all investors should have all information at the same time and that you shouldn't benefit from information you have that others don't. Of course, if you had not been able to sell your stock at that time, you wouldn't have called your friend Dr. Waksal, who appears to have tipped you off. And if you didn't call, you wouldn't have sold, and you would have lost money. And others buying that day wouldn't have faced your selling pressure, so prices would have been higher, costing others more money. This would have been the government's ideal outcome!

The moral implications of insider trading get a little more complex for officers of a company and those who are acting as some type of advisor to the company, but that wasn't your position. You sought out information to help yourself and your friends, and in turn, your selling pressure sent an important signal to the market. For the government to consider this evil is outrageous. By their action against you, they are snuffing out others who might seek out, find, and act on "insider information," thus costing others money and making the markets less efficient.