This example isn’t a demonstration of dishonesty, and it isn’t unique to this administration.

Market-sensitive information vitally important to health-insurance companies has once again reached Wall Street before the public, and this time it appears to have come from the government itself.

On Dec 3, an official with the agency in charge of Medicare spending held a conference call for industry officials.  During the call, he provided data suggesting that federal funding for private Medicare plans would likely fall more than expected.

Word soon reached Wall Street, prompting a selloff in insurance shares.  In the subsequent 10 trading days, shares of several major health insurance firms lost between 3% and 9% of their value.  Over that same period, the S&P 500 was down 0.5%.

There’s this to color that failure:

Government departments are struggling with a fundamental tension between their duty to keep the public informed and a need to keep market-moving information from reaching investors.  The tendency toward openness has helped fuel a burgeoning business of government insiders who mine Washington for information that could affect stock prices.

There’s no need for the tension to exist, though, especially in a 21^st century of online investing and trading, discount brokering, and Common Man doing much of that.  There’s also no need for the tension to exist given the falseness of the premise that market-moving information should be prevented from reaching investors.

Keep us informed.  Release all the data, to all of us simultaneously.  How to do so isn’t rocket science.  It isn’t even Internet science.  And it would eliminate a class of government insiders.