A straight cut and paste here folks.
This addresses exactly what I was talking about in my Post: Drugs Theoretically
The Market Ticker ®
~ Karl Denninger Yet Another Idiotic “Policy” Crumbles: Drugs
. It’s time to “man up” the headline reads….
With the exception of, perhaps, Texas governor Rick Perry, no public official wants to publicly admit an obvious fact: The United States of America will likely be forced to invade Mexico. It’s not a matter of if, it’s a matter of when. The question then becomes: What to do with Mexico after we invade it and wipe out the drug cartels (as much as can be). Does the United States merely return Mexico to a nation state of corrupt politicians, failed economic policies, and lawlessness, or do we annex Mexico and turn it into the 51st state?
The rest of the article chronicles facts. They’re facts all right. But nowhere is the obvious question asked:
Why is it that there is a monstrous black market for these substances, thereby creating billion-dollar industries that would otherwise not exist with profit margins in the thousands of percent from one end of the supply chain to the other?
That’s easy: We refuse to face the fact that drug prohibition has failed.
We faced it with alcohol. Bereft of common sense our government actually passed a Constitutional Amendmentto ban the importation or interstate transport and sale of alcohol. That was “Prohibition”, and unlike the current drug war which is entirely unconstitutional, this was “done right.”
Well, ok, “done legally.”
It created an overnight billion-dollar industry – at a time when a billion dollars really meant something. It provided the money for Tommy Guns, ammunition, and “protection rackets” for the “speakeasy” and its patrons – and more importantly, its suppliers.
Eventually, needing the tax revenue, the government gave up and repealed Prohibition – the same way it enacted it, via the lawful process of Constitutional Amendment.
But no such process was followed with drug prohibition. There we simply had “titans of industry”, including the Hearsts who were very concerned about the patenting of a “de-corticating machine” for hemp (marijuana.) See, hemp makes really high-quality paper, and a de-corticating machine was the necessary element to get the pulp out of the stem of the hemp plant – very difficult compared to trees, which are quite a bit larger and easy to extract the pulp of the wood from.
The Hearsts had a vertical monopoly. They owned a majority of not only the big newspaper publishing houses, but also the means of production – the forest lands and paper mills. The development of a machine that would make possible production of paper at a fraction of their overall cost threatened to destroy that empire.
The nascent pharmaceutical industry loved this angle and jumped in as well.
So now we’ve been at this in one form or another for close to 100 years, and we’ve utterly failed. The policies trace their roots to 1914 with the Harrison Narcotics Tax Act.
But it was in 1937, when The Marijuana Transfer Tax Act was passed, that things really got out of control. DuPont, manufacturer of (among other things) synthetic fibers, was threatened by hemp as well, and the Secretary of the Treasury, Andrew Mellon, was heavily invested in these synthetics – nylon in particular. (Ed: Gee, where have we seen that sort of conflict of interest recently? The more things change the more they stay the same, no?)
Nixon ramped it up even further, and then George HW Bush (Bush I) got the CIA and military involved inforeign interdiction (there’s nothing like forcing our policies on the world via covert, classified operations, right?) Bush I also created the ONDCP (and the “Drug Czar”) which Clinton (sorry, all you so-called “progressives”) elevated to a cabinet-level position.
As a percentage of the population those incarcerated in America remained more-or-less constant from 1929 until 1980. However, since that time, when George Bush I decided to “escalate” this “war”, our incarceration rate has quadrupled.
More than half of all federal prisoners are there for drug offenses, and about a quarter of state prisons. The majority of the rest in state prisons are there for economic and violent crimes related to the acquisition of drugswhich could be panhandled for were they not illegal. The victims of these property and violent crimes number in the millions and virtually each and every one of those victims were in fact victimized as a direct and proximate consequence of the war on drugs – not the drug use or abuse itself.
Some “success” you have had there eh Mr. Government Man?
In the mean time we’ve destabilized multiple nations with our nonsense policies. Mexico is not the first – but it’s the closest. We’ve had multiple “endeavors” with El Salvador, Colombia, Nicaragua and of course Afghanistan, where we are today. Much of Afghanistan’s insurgency and the Taliban are funded by – surprise-surprise – opium poppy cultivation.
Cut off the drug money, cut off the insurgencies and violence at the knees – not by bombing, spraying or shooting – but by destruction of the profit margin in the business.
Economics is a short suit among our policy makers. Or is it?
This much is certain – it was only a matter of time before the problem got close enough to us that we would be forced to do something here, lest our people get shot and ultimately invaded.
That day has now arrived with the Mexican drug gangs pressing northward just as they press throughout the Mexican nation. We cannot solve this problem with gunships and war, just as nobody has managed to cut it off in Columbia or Afghanistan.
It can only be stopped via the destruction of operating profit margins in the narcotics business, and that can only happen via legalization and taxation, which in turn causes an immediate price collapse at the production and wholesale level and effective de-funds the thugs and gangs.
Wake up America. [ends]
We can’t ever hammer this theme too hard, or too often.
It is insane that we even need to have this conversation, but as long as the status quo prevails, we need to keep shouting this simple truth from the rooftops.
Until the laws are changed, we are only involved in an act of self immolation.
Btw – if the US thinks it has some problems in Afghanistan, you ain’t seen nothing compared to invading Mexico. The blowback on an idea that stupid is entirely capable of destroying the United States.
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