American intelligence agencies have long had more information than other investors. Although the U.S. government claims not to use information gathered by Echelon and other tools to aid American corporations, the Europeans say otherwise.

Now, there's "Magic Lantern", a new FBI keylogger. With the aura of 9/11 damping accusations of unconstitutionality, this program presents the FBI with its biggest-ever moneymaking opportunity.

It's naive to think that Our Government will limit Magic Lantern to protecting us from terrorist attacks on our soil. As the economy gets worse, more government agents will dip their hands into the cookie jar.

By setting up a nationally owned investment house that trades using government info, the U.S. can harness the profit of insider trading for the public interest.

Let's look at insider trading in the hands of private corporations.

It was one thing when insider information existed largely in the heads of business-persons, their associated contractors, concubines, and toadies, and on pieces of dead tree.

Today, though, it's accessible to thousands of computer hackers. These criminals, available to the highest bidder, justify their activity through unfortunate notions about the nature of information.

Yes, the Internet lets any corporation to spy effectively on its competitors, allowing more and more investors insider trading opportunities. And, with the incredible popularity of the stock market among ordinary Americans, this insider trading affects more people than ever.

As we have seen with Enron, giving corporations control over what information they can disclose can hurt all of the investors -- and damage the public interest.

In fact, a market based on a faulty flow of information is likely to crash. After the 1929 market crash, the government set up the Securities and Exchange Commission (SEC) to force businesses to disclose honest information about performance. Unfortunately, there's no way that a government agency can enforce disclosure after-the-fact in an Internet age.

That's why we should legalize -- and nationalize -- the government's own insider trading.

How it could work

Taking a page from the anti-terrorism book, the SEC should announce that it will use all government-obtained data to openly spy on all publicly traded corporations, at all times.

Aided by appropriate legislation, the SEC can use this information to launch a sort of "federal investment house." It won't be typical Wall Street - National Security Administration data miners will work alongside intelligence operatives and regular stockbrokers. Some of these people will use the huge wealth of government info to invest in major world stock markets. As federal employees, they'll work without commission, trying to use their insider information to make as much revenue as possible for the Federal Government.

Others will use the data to isolate cases of illegal trading by corporate insiders. In fact, any time a corporation's executives try to hide its real earnings, this "SEC investment house" will be prepared to catch them.

The SEC may also hire agents, informants, and spies in the world of business, giving them financial rewards or limited access to government market data as a reward.

In these ways, the government will dominate the "market" of insider information, making a previously illegal practice that benefitted the richest 2 percent of Americans exclusively work for us all.

Some Possible Problems - and Answers

Some people claim that it's unethical for the government to invest taxpayer dollars in the stock market.

In my view, though, it's crazy not to do so. As the arguments in favor of privatizing Social Security show, the stock market, which continually increases over the long term, is a better investment than government bonds. Any tax-revenue that the government intends to save should be invested in high-growth securities.

Won't the government invest too aggressively when it wants to spend money?

It's important to keep political arguments away from this nonpolitical, agency-based initiative. The money the government invests in this way should be kept in trust for Social Security, Medicare, and other long-term plans, or it should be kept out of the regular budget for at least ten years.

What about the use of clandestinely gathered information and operatives?

If we ever get around to privatizing Social Security, we will have to address this issue anyway. The government can't be expected to invest any amount of money in the market without being tempted to use its information. It's better to have spy-influenced "independent" government traders than to contract with a particular private firm to do the government's trading.

There are other good reasons for using this information. SEC chair Harvey Pitt has called for "reform of the accounting profession" in order to prevent another Enron debacle.

"The present system, which has been in effect for 67 years, doesn't provide for 'current disclosure.' Financial disclosures are dense, impenetrable," claims Pitt.

An SEC database of insider information about corporations would certainly help keep accountants and corporate leaders honest.

Finally, there is the argument that the government should stay out of private enterprise.

Sorry to burst your bubble, folks, but the government spends more on corporations than on all direct public assistance programs combined. With such a huge portion of our annual budget going to corporations, the government can justify "taxing" them by using their advantages to play the market.

Do you like this idea? Write your representatives and ask them to draft a bill on this issue! While the Enron scandal is still fresh in everyone's mind, these proposals have a chance.