The Right to Choose vs. The Right Choice

Whenever "reproductive rights" (read birth control and abortion) are even broached by conservatives, there is an immediate and visceral backlash to characterize us as troglodytes who wish to rewind history so that women are perpetually "barefoot and pregnant" so as to serve their chauvinists masters. Setting aside the stereotypes and hyperbolic tone, can we just step back and look at what we have as a result of this reproductive revolution? Because the evidence is contrary to every major assumption about the liberating effects of reproductive rights and their associated tents of intellectual enlightenment.  According to the Brookings Institute:

•        In 1965, 24 percent of black infants and 3.1 percent of white infants were born to single mothers.
•     By 1990 the rates had risen to 64 percent for black infants, 18 percent for whites. Every year about one million more children are born into fatherless families.

This is the direct result of the abrogation of long-held mores that have husbands and wives at the sides of their mates, and fathers at home with their children. As George A. Akerlof, Nonresident Senior Fellow at Center on Social Dynamics and Policy points out:

"We have found that this rather sudden increase in the availability of both abortion and contraception ... is deeply implicated in the increase in out-of-wedlock births. Although many observers expected liberalized abortion and contraception to lead to fewer out-of-wedlock births, in fact the opposite happened because of the erosion in the custom of "shotgun marriages."

So, instead of reproductive rights leading to improved conditions for women and lower birth rates of unwanted children, it has created the polar opposite: an absolute dissolution of the atomic family structure and a meteoric rise in out-of-wedlock births. A myriad of studies by federal government organizations, medical research institutions, and universities have uncovered the following disturbing data:

• the absence of the father in the home affects significantly the behavior of adolescents and results in the greater use of alcohol and marijuana
• the majority of sexually abused children come from single parent homes
• teens living in single-parent families are not only more likely to commit suicide but also more likely to suffer from psychological disorders, when compared to teens living in intact families
• black children in single-parent households are more likely to engage in troublesome behavior, and perform poorly in school

So while the sexual revolution and easy access to birth control may bring moments of ecstasy for hormone-driven teens and a measure of control for people who use it appropriately, it has been more of a curse than a blessing for our youth. A report by the University of Maryland's School of Public Policy points out that every year,"...there will be about 1 million (teen) pregnancies, resulting in 406,000 abortions, 134,000 miscarriages and 490,000 live births. Of the births, about 313,000, or 64 percent, will be out of wedlock. And about 3 million teen-agers will suffer from a sexually transmitted disease, including AIDS." 


But you don't have to be an economist, a psychologist, or a social worker to know what happens in staggering numbers to the unfortunate children from these situations, especially children of single mothers. Our schools are overwhelmed with their behavior problems, our streets are covered in their blood, and our prisons house their scarred and battered bodies. It is a sad, pathetic, and seeming endless procession of pain, death, and degradation of our youth, their minds, dreams, and potentials.

This is no way glorifies the concept of a shotgun wedding, nor does it mean we should not have birth control. Nobody wishes a loveless or forced relationship on a potentially mismatched couple, and contraceptives have allowed responsible couples an unprecedented measure of economic and personal control over their lives. Moreover, as people with individual liberties guaranteed by the Constitution, we have the right to choose whom we marry, and how many children we bring into the world. However, it begs a bigger question: What do we do about it?

One seemingly reasonable response might be sex education. It seems only logical to assume that equipping kids with appropriate knowledge and behaviors would lead to better decisions about when to have sex and how to avoid an unwanted pregnancy. Yet, the data seems to be cloudy at best. A recent report by the University of Washington in Seattle indicated that comprehensive sex education seemed to "lead to less teen pregnancy" as measured by self-reports of sexual behaviors by teens. The study indicated "teens who received comprehensive sex education were 60 percent less likely to report becoming pregnant or impregnating someone than those who received no sex education." And, according to lead author of the study, Pamela Kohler , “It is not harmful to teach teens about birth control in addition to abstinence." 


Moreover, the study found the effects of abstinence education was statistically insignificant. This seems to be a slam dunk for sex education proponents. However,looking into the details of the study raises some important concerns. 

First of all, the study relies on self reports from teenagers. This type of statistical analysis is fraught with issues of validity. In a 2009 report from the Archives of Pediatric Medicine found there was a significant degree of discordance between self-reports of consistent condom use and empirical data.  Why such a discrepancy between what teens state and reality? The researchers offered the following  plausible explanations: 1) teens and young adults inaccurately reported condom use; 2) teens used and young adults used condoms consistently but incorrectly; 3) teens and young adults responded with socially desirable answers.


Should anyone be shocked that young people are out of touch with reality and make mistakes? But the third reason offered, that teens responded in ways that conform to expected social norms, is at once disturbing, yet promising. It is disturbing (though not shocking) that teens are likely to lie in order to make them look better in the eyes of adult society. However, it offers a potential insight into the mindset of our youth. For if teens feel compelled to lie in oder to be held in esteem by their adult counterparts, isn't it then rational to suppose they actually wish to conform to the moral framework which prevented such reckless behaviors because they inherently know it is beneficial for them in the long run? Is it possible that adolescents are asking us to restore, at least to some degree, the healthy respect for for sexual boundaries and delayed gratification that constrained generations prior to the cultural revolution of the 1960s? Is it possible that sex education, as well as abstinence education (which also typically relies on self reporting of sexual behaviors) both fail because they are not framed by a larger moral dimension?

For years, conservatives have advocated that a consistent moral code, while far from perfect, and often fallible, was the best overall deterrent to reckless behaviors because it provides a strong ethical imperative that prioritizes a stable family structure over individual fulfillment.  Though it may be easy for progressives to dismiss such as system as antiquated, naive and unrealistic for contemporary youth, they are at a loss to explain what should replace it.


I am in no way dismissing sex education, nor advocating for a return to suffocating Puritanistic  values. What I am saying is that in the absence of cohesive, stable family unit, amidst the milieu of a permissive view of sexuality and the elevation of individual wants over what is best for children, we will continue to get minimal results from our interventions, be they sex education, access to contraceptives and abortion, or even abstinence education. 


In the end analysis this is not about curtailing choice or individual freedom. Though the argument has been framed as the right to choose, this does not mean that people, especially young people, always make the right choice. 

Gary 

The Glass Darkly: A Glimpse into a Possible Prufrock Future

Many Americans are beset by images of a dark future. Even the most dispassionate and grounded of us cannot help but wonder if we will ever pay down our enormous national debt, much less reinvigorate our economy and standard of living.

Others, however, see an even starker image through the glass darkly, an Orwelian future in which every aspect of our lives is dictated by a central apparatus that uses the police state to maintain authority and control. They see a future bereft of civil liberties, in which human rights become tortuously compromised with unfeeling functionaries.

This is an unlikely, if not impossible scenario in the United States, however. We may be sheepish, but we are not devoid of all life. We have a storied history of standing up to this type of oppression and tyranny. I don't believe a brutal, totalitarian government will take root here.

However, this does not mean the future is sunlight and rainbows, for a threat is surely looming, one more subtle in form and scope, yet pernicious nonetheless. For as or government grows in size and power, it becomes a bureaucratic juggernaut, an inscrutable machine that surreptitiously spins a labyrinth of rules, regulations, and restrictions that become oppressive in their totality. Over time, this web of fiats, much like a tool of Shakespear's Iago, ensnares us all in its pettiness and complications.

Over time, people fear an American citizenry weighted down by procedural excesses as they create a collective drag on our very being, warping our individualism with group-think, consuming our time with trivial tasks and meaningless motions. It is not the gulags we fear, but rather the tiresomeness of a contrived and unthinking artifice.

Thus, government becomes a wet blanket that smothers our aspirations and entrepreneurial spriit. Much like a small fire in a light, yet persistent mist starts to smolder, our inner drives and passions becomes mere aspirational embers. Our zeal and fierceness that defined the American landscape for more than 150 years will be swapped for endlessly long lines, pointless and redundant paperwork, and undue delays in the ordinary civil processes of life, much like the inhuman mundanity imposed in the former Soviet Union.

And so we will half-heartedly stagger through life with careful measured steps> In an intimation of T.S. Eliot's protagonist in The Love Song of J. Alfred Prufrock, we become:

Deferential, glad to be of use,
Politic, cautious, and meticulous;
Full of high sentence, but a bit obtuse;
At times, indeed, almost ridiculous—
Almost, at times, the Fool.


But even fools have choices. How ridiculous is it to choose such a path?

Externalities and The Folly of Liberalism

Liberal theory, at least the modern brand of it practiced today, is mired in its own statist substrate. Its societal prescriptions are impractical, its ethics suspicious, and its economic policies would be laughable if the consequences were not so dire. Behind all of these dynamics lays an over-generalized, if not fallacious, assumption about the very nature of consequences, and the costs policy decisions have on the market and the individual’s quality of life. These assumptions are based on an economic tenet known as “externalities.” According to Paul M. Johnson, professor of political science at Auburn University, an externality exists “whenever one individual's actions affect the well-being of another individual -- whether for the better or for the worse -- in ways that need not be paid for according to the existing definition of property rights in the society.”

For example, global warming has led to onerous regulations of the oil, natural gas, and coal industries. The argument behind these regulations is based on the concept of an externality. In this case, logic dictates that each time we choose to keep our house cool, drive cross country in our SUV, or, God forbid, drill for oil, we are in due course, via carbon emissions, melting the polar ice caps, flooding an island, causing wide-spread drought, or the latest prevarication, that we are “killing children” with toxic emissions.

Okay, even if for the sake of argument we dispense with any rational thought and buy wholesale this spate of potential externalities, we are still left with a host of other government-induced externalities that are not only very real, but also very immediate and impactful. To illustrate, when we don’t build coal factories, the cost of electricity, by way of supply and demand, goes up. This means the consumers feel a direct impact in not only in their energy bills, but also indirectly at the grocery store, at restaurants, and any place that consumes energy, because these businesses pass their energy costs on to consumers in the form of higher prices. This means families struggling to make ends meet suffer, whether it be in delaying a medical procedure or a major appliance purchase, or simply being able to adequately feed and clothe their children. These decisions in turn lead to a plunge in aggregate demand, thus forcing business owners to cut back, leading to layoffs, delays in investments for the future, and ultimately, in a decrease in the standard of living for themselves and their families. And because they have less disposable income, they further suppress overall demand, consequently furthering the vicious economic cycle. The bottom line is that these are very real externalities that directly impact our health, well being, and our sense of security and happiness. They are not potential and futuristic; they are ever present and need to be a factor in any reasonable policy formulation.

Of course, those who regulate are typically immune to these externalities because they are congressmen or congresswomen who are, ironically, part of the evil and contemptuous “1%,” or have well-paying jobs in the bureaucracies that enforce these regulations. And this becomes overwhelmingly hypocritical when you consider the recent debacle about extending the payroll tax reduction. President Obama recently held a press conference, astride with handpicked representatives of the “common man,” in order to spin a series of narratives to illustrate the crushing externalities these individuals will pay without the continued tax break. From foregoing a night of pizza with the family, to a reduction of visits to grandma in the nursing home, to an inability of a family to buy oil to heat a chilly house, the President painted a grim procession of personal sacrifices, of impinging externalities that needed the power of the bully pulpit to be brought to light lest we fail to extend the tax breaks. And the President is correct in his assertions. These are the consequences, the hidden externalities, of inaction. Yet, if you can manage to get past the obvious rhetorical manipulation of emotions without choking on the saccharine sentimentality, you still run into a mountain of hypocrisy piled high with externalities created by the President and, until recently, a congress controlled by Democrats.

Take for example The Patient Protection and Affordable Care Act (PPACA), otherwise known as Obamacare. Although the PPACA is designed to “bend the cost curve” (something impossible without broadening competition) it has pushed the cost up from an average 7% yearly increase to a 9% increase. Leftist pundits decry this is only a 2% increase due to the legislation. But that is fuzzy math at best. A 2% increase is really a 22% rise in the cost. You don’t have to be an accountant, much less an economist, to see how this causes economic hardship even greater than reverting to the previous payroll tax, simply because the payroll tax break will eventually disappear, while the PPACA, like all other government revenue and taxations schemes, will escalate due to fraud and bureaucratic inefficiencies; witness the U.S. Post Office, Amtrak, Medicare and Medicaid as proof positive. Then, there is the 3.8% Medicare tax assessed on house sales that starts on 2013. True, this only applies to those with AGIs of $200,000 (individual) and $250,000 (married), but is there any sane argument for adding another stressor in a very stressed housing market? What if the gain from a sale was seed money for a business? What if that business would have employed five currently unemployed people? What is the total cost when you consider the company will not pay taxes, because it does not exist, and the would-be-employed, instead of contributing to the economy, continue to instead rely on unemployment funds, and that those funds are being financed with borrowed or printed money that causes price inflation, dollar deflation, and debt overhang? The externalities are incalculable, yet staggering in totality.   And when you consider that the phrase “the secretary shall” occurs more than seven hundred times in the 2,700 page PPACA, can anyone really deny there will not be a host of negative externalities for the consumer beyond economic burdens? Such vagueness invites corruption, manipulation, and a myriad of unforeseen problems, more than offsetting any gains.

Which brings us to the greatest and most pernicious of externalities: the unprecedented size and scope of government itself. Logic dictates the bigger any system is, the more (un)intended externalities will beset it. We have reached the tipping point at which the expansion of the power of the federal government impinges on the freedoms of the individual. As the government rapaciously consumes resources, land, people, and money through taxation and inflation, the ability of the individual shrinks in response. Currently, national debt now stands at an astonishing 100% of GDP. We have faced this before after WW II. But that was arguably a price worth paying. However, destroying the Nazi regime, saving Europe from tyranny and brutality, and providing the support our soldiers needed to be integrated back into society and the American economy were well worth it. What do we have to show for two wars, 4,000 dead soldiers, and 16 trillion in debt? Has the Middle East really changed, and have we achieved economic revival anywhere close to what is needed to stop the suffering?  We have more people on food stamps than any other time in history, and according to the Bureau of Labor Statistics, real unemployment, is 15.2%. What types of externalities face families whose parents are unemployed?  Policy matters, and these people are paying a price that is painful and real. Talk about hurting children!

Ultimately, the true cost of this path of behavior will not be merely economic. We will eventually pay for our trespasses by sacrificing our liberties, by surrendering our gift of self-determination, by forfeiting our pursuit of happiness guaranteed by the Constitution. This is an intangible we cannot finance with time or credit; we cannot “bail out” the loss of autonomy or individualism. Ultimately, it is an externality that will be felt at our very core.

Gary 

  

The Fallacy Snapshot and the Top 1%

There has been a great deal of press lately about the terrors and travesties of The 1%. We have been reminded repeatedly by the Occupy Wall Street (OW) movement , via the mainstream media, how our  degenerate and out–of-control capitalistic system has systematically moved large piles of cash into the coffers of the ultra rich, all at the expense of the remaining, somehow monolithic, and ultimately disenfranchised 99%. And while the OW message that our economic system has become corrupted by cronyism, is correct, their insistence that the vast swath of America is licking the boots of modern-day robber barons whilst wallowing in poverty, or at the very least, material stagnation, is an absolute falsehood, one that is perpetuated by a weak economic analysis known as the “snapshot fallacy.”

The premise of this fallacy is that it is illogical and unreliable to take a still picture of any phenomenon (any large system), and then extrapolate truths used to make policy decisions that project into the future.  This is precisely what occurred when pundits interpreted recent U.S. Census data. It was not that the data itself was erroneous. However, because census data is taken every ten years, it does not capture the movement of people through the economic system over time. Hence, interpretations of this snapshot are misleading at best, and likely deceptive.

This is because all events, whether economic or social, are dynamic, meaning they take place over time and are therefore subject to significant changes.  Much like listening to only to a single contentious conversation between a husband and a wife might lead one to believe that the entire relationship is on the rocks, taking a snapshot of the economy at one point in time and then drawing conclusions about categories can be misleading.  This is because, as the systems philosopher and author of The Rational Optimist: How Prosperity Evolves Matt Ridley points out, attempting to understand complex adaptive systems with our limited, temporal-bound perceptions distorts reality and reduces the world to zero-sum terms. 1

Then again, we are a society obsessed with categorization: we are white, black, Hispanic, Asian, blonde, brunette, fat, skinny, young, old. However, the ultimate dichotomy is classism, an ongoing conflict that cleaves Americans into rich and poor camps, into oppressors and oppressed.  

A better, more accurate, and realistic way of judging the economy (and people for that matter) is to look at data and behavior over time. This economic data is available from the U. S. Treasury Department data. By following specific individuals over time from their tax returns to the Internal Revenue Service, the data reveals that the incomes of those particular taxpayers who were in the bottom 20 percent in income rose 91 percent by 2005, while the income of those particular taxpayers who were in the top 20 percent in 1996 rose only 10 percent by 2005 -- and those in the top 5 percent and top one percent actually declined. Moreover, 86 percent of those in the lowest 20 percent of income earners in 1979 had moved to a higher income category by 1988; 66 percent reaching the middle range or above, while 15 percent ascended to the top fifth of income earners.2

In fact , according to the economists Bruce D. Meyer of  the University of Chicago and James X. Sullivan University of Notre Dame, by accounting for inflation, taxes, and

noncash benefits (welfare), something conveniently left out of U.S. Census, the median income rose by more than 50 percent over the past three decades. 3

Other data also support this overall rise in prosperity for all Americans. According to a University of Michigan longitudinal study tracking more than fifty thousand Americans from 1968-1991:4

• Only 5 percent of the families in the bottom fifth of income distribution in 1975 were still there in 1991. More than three-fourths of them had made their way up to the two highest income quintiles.
• The poorest families made the largest gains. Those who started in the bottom 20 percent in 1975 had an inflation-adjusted gain in annual income of $27,745 by 1991; those who started in the top 20 percent in 1975 also improved, but only by $4,354.
• Less than 1 percent of the sample population remained in the bottom 20 percent during the entire time period under study.
• Among the second poorest quintile in 1975, more than 70 percent had moved to a higher quintile by 1991, and one-fourth reached the top 20 percent bracket.
• With education and training the rise up the income brackets was even swifter: more than half of the families who were in the bottom 20 percent in 1975 made it to a higher bracket within four years.

This economic progress is known as income mobility. Rather than a static snapshot of where people are at a given point in time, this data paints a picture of robust economic progress over time, something that has been a constant narrative in America since the first major waves of immigration in the early 19^th century.

But you have to be willing to look beyond the here and now. Consider the following graph:

This looks as though income disparity has indeed been on the march for some time. Until that is, you look at it longitudinally, across time. When you do this, a vastly different set of data materializes:

You can see that over time, income mobility is at play, and has moved people up the economic ladder. In other words, when you compare where specific people were and how they progressed and changed, rather than using fixed snapshots and categories, a more realistic, accurate and complete picture emerges.  

Of course, this is rather dry, academic stuff. Terms like “longitudinal,” “snapshot fallacy,“ and “income mobility” pale in comparison to emotionally charged terms such as “inequality,” “oppression,” and “greed.” Such incendiary language and meteoric rhetoric, while stoking the fires of class warfare, do little to provide accurate data, much less grow our economy or propel the poor to a better place.

These divisive efforts have always failed, and always will, because this approach suffers from the same shortsightedness of other approaches based on snapshots: people are not static, statistical categories to be judged, manipulated and adjusted at the whim of supposedly benign and omnipotent central force. We’re individuals with unique ambitions, talents, and dreams. And we don’t need government, or protestors to classify us, categorize us, or move us form one data point to another via income redistribution schemes. What we need is economic freedom, something that is fading swiftly from our horizon and threatens to undermine our republic. If there is one important message we can glean form the OW crowd, it is that we have lost our perspective in regard to the role that money should play in our lives. When we prize materialism above people and then expect government to redress this wrong, we simultaneously abdicate personal responsibility and autonomy, moving us further down the road to serfdom. That will be the topic of my next blog.

Gary

1.     http://www.amazon.com/Rational-Optimist-How-Prosperity-Evolves/dp/006145205X

2.     http://www.treasury.gov/resource-center/taxpolicy/Documents/incomemobilitystudy03-08revise.pdf

3.     http://bpub.wharton.upenn.edu/PDF%20files/AE-F11-Meyer.pdf

4.     http://dallasfed.org/fed/annual/1999p/ar95.cfm

•  

Shame on America

Those of you who know me well understand who I am and my political point-of-view as an independent conservative. I have not shied away from criticizing President Obama specifically, and the Democratic party in general. I do not say these things with racist sentiments. I firmly believe that Obama is horribly misguided and that his policies are ruinous to the U.S. economy. I also find more and more evidence of, if not duplicity, at least a lack of the directness and transparency proffered by then candidate Obama in the run up to his election in 2008. Of course, a lack of honesty is hardly a new political crime, as evidenced by the numerous previous occupants of the White House, most recently President Bush.

However, when I found out recently that my friend received a phone call from her school asking if she wanted her son to "opt out" of seeing President Obama's televised speech, I was suddenly filled with a sense of shame and disgust I have never felt. The hypocrisy is overwhelming! How can we as a nation claim we have matured when we allow things like this to occur? To be sure, there has been plenty of race baiting by the Left, a shameful and repugnant behavior that has been used repeatedly to demonize opposition. But by even giving such an "opt out" alternative to parents, we have ushered in an era of incivility laced with racist undertones that threatens to tear us apart as a people and a nation. No president before has received such outrageous and indecorous treatment. Such behavior is illustrative of something dark and disturbing about the nature of certain elements of society; it is a pox upon our body politic. Let's be real after all. Are parents so insecure with the value system they have taught their children that they cannot weather a short speech? Are children of conservatives hapless drones unable to withstand a perceived rhetorical onslaught? Americans are better than that, and conservative are better than that.

Any conservative claiming integrity and intellectual honesty should robustly reject such a dynamic. Let's be clear and transparent: All presidents should be treated with the same accord. Part of teaching civics to our children is to model appropriate respect and decorum for official occasions and the officers of the occasions. Even if you vehemently and passionately disagree, even if the other side mocks, berates, and condescends, a true conservative, any person of substance for that matter, will stick to his principles and show the respect both the President and the office deserve. While it's okay to criticize policy and point out hypocrisy, it never okay to have double standards. That's a value system we should all honor when it comes to our children, one that goes beyond the partisanship and racial tensions that grip our nation. Superintendents and school board members should take a solemn oath that they will never play the race card, even when the have the winning hand. By doing so, we all lose our soul.

Gary

Monetary Madness + Governmental Goading = Financial Frankenstein + Taxpayer Trickery

In possibly the most absurd move yet, the Fed is playing political populism as they sue investment banks for their fiduciary chicanery in “duping” the mortgage giants Fannie Mae and Freddie Mac into buying their toxic assets.

While I certainly have no sympathy for investment bankers and their unbridled avarice in using out-of-control-binging of credit default swaps to line their pockets, one should not lose sight of some very basic historical facts:

1. It was the United States Federal government, under the auspices of the Community Reinvestment Act, which goaded banks into unrealistically relaxing their lending standards, using Fannie and Freddie to underwrite this dubious activity.
2. It was the Federal Reserve, first under Alan Greenspan, then under Hank Paulsen that kept interest rates artificially low and a loose and ready supply of cash for the taking, creating the liquidity that led to the misuse of these very funds.
3. It was congressman Barney Frank (D-CA) and members of the Congressional Black Caucus, the same group that pushed banks to relax their standards to begin with, that blocked multiple efforts by the Bush Administration to audit the books of Fannie and Freddie.
4. It was Fannie Mae’s CEO Franklin Raines, President Clinton’s director of the Office of Management and Budget, who collected $90 million in compensation from 1998 through 2004, and is now in legal trouble himself.
5. It was the government, first under Bush and then Obama that used fear tactics to sell its bailout of the banking industry, putting the American taxpayers on the hook.

One cannot help but choke on this entree of hypocrisy served up with a side order of demagoguery.

Moreover, from a rational and empirical perspective, one has to ask, “How precisely is this going to help the already beleaguered real estate market, much less the general economy? Answer—it won’t. As Mike Mayo, an analyst with Crédit Agricole points out: “Banks should pay for what they did wrong, but at the same time they shouldn’t be treated as a big piñata that has the effect of delaying the housing recovery. If banks have to pay for loans they made five years ago, are they going to make new ones?” 1

If this is starting to sound more than a little like the 1994 Mexican pesos crisis, the 1997 Asian bond crises, the 1998 Russian ruble crisis and debt default, the 1998 collapse of the hedge fund Long-Term Capital Management, and the dot.com bust of 2000, that’s because underlying dynamics are the same. Wild speculation, plus unfiltered access to capital via rate cuts by the Federal Reserve led to the inevitable bubble, and all bubbles must eventually burst. As Matt Welch of Reason Magazine states: “The Federal Reserve responded to the 2000 contraction by using the main mechanism at its disposal: repeatedly slashing interest rates (a move, many say, that helped inflate the next bubble).”2

If you step back and look the bigger picture, it is painfully evident our government not only sets up these bubbles, but then bails out the very entities that played fast and loose with suspect financial instruments, thereby creating a self-perpetuating moral hazard. It is akin to a drug dealer who whose clients become addicted to his product, and then is angered as they engage in inappropriate and risky behaviors as a result. In his rage he lays down new rules, while simultaneously providing them more amore access to product they crave.

All of this leads the average American to scratch his head and wonder if D.C. and Wall Street have collectively lost both their minds and their souls, along with any modicum of common sense. Or perhaps politicians have become addicted to their own drugs and need to be cut off, placed in rehab, and monitored closely for further signs of abuse. Dr. Drew where are you?



1.http://www.nytimes.com/2011/09/0 3/business/bank-suits-over-mortgages-are-filed.html

2. http://reason.com/people/matt-welch/all

Drug Legalization: A Possible Way Forward

If we are going to take a step in a new direction, we have to do it thoughtfully and carefully. The legalization of drugs is no small matter, and an evenhanded approach must try to anticipate unintended consequences, no easy task to be sure. To this end, here are some practical guidelines:

1. Start small, with the legalization of marijuana. Even amongst a fair amount of conservatives, there is recognition that marijuna is, at the very least, a moderately harmful substance. It is not associated with aggression, violence, suicide, or behaviors that lead to legal trouble, save for possession or use in itself. Certainly, in comparison to alcohol, it has a better track record. More importantly, marijuana is the lifeblood of Mexican drug cartels, financing their violence and importation of more nefarious substances. According to officials Kevin L. Perkins, Assistant Director, Criminal Investigative Division, FBI, and Anthony P. Placido, Assistant Administrator for Intelligence, DEA:

"Marijuana is the top revenue generator for Mexican DTOs(cartels)—a cash crop that finances corruption and the carnage of violence year after year. The profits derived from marijuana trafficking—an industry with minimal overhead costs, controlled entirely by the traffickers—are used not only to finance other drug enterprises by Mexico’s poly-drug cartels, but also to pay recurring “business” expenses, purchase weapons, and bribe corrupt officials." 1

So, counterintuitive as it may seem, it is obvious that a policy perspective that seeks to reduce the use of cocaine and heroine should legalize marijuana as a means of severing the finacancial base of the drug trade pyramid.

2. Allow states to be laboratories of experimentation. The best way to find out what works is to let states set their won policies with regard to how the legalize marijuana. The last thing we need is a one-size-fits-all policy set by the federal government. States can set legal amounts and age of usage, as well as policies dealing with misuse. This will provide some flexibility for adjusting of the law as time progresses, something almost impossible at the federal level. Furthermore, data collected from the states can be analyzed to see how effective particular policies are, which will help create a diverse set of approaches, from which will emerge some common principles regarding management.

3. Consider the "Alaskan" approach. Until the mid 1980s, Alaska had a very sane policy regarding the use of marijuana because it allowed its citizens to use marijuana as long as they did not buy or sell it. This meant most people grew their own marijuana, and shared it as they saw fit. While their are implications even with this approach, it seems rational place to begin, as marijuana dealers would soon find themselves out of willing buyers. Of course, there would be a "black market" that might sell to youth, but let's be real--this is already going on. The difference would be a lot less of this behavior.

4. Keep taxes to a minimum. In our cash-strapped, deficit-driven economy, it is tempting for legislators to slap an excessive tax on the selling of marijuna. But if this tax drives the price to high, it's coceivable that a true black market with more competive prices will emerge, as has happened with cigarets. Keep the taxes low to discourage this type of enterprise. The money raided from these taxes could then be used for treatment of people addicted to harder substances.

5. Monitor vigilantly. States should monitor their approaches and modify accordingly. If laws do not lead to a reduction in violence and imprisonment, they should be jettisoned or fundamentally restructured.

6. Secure the border. The absolute best way to ensure a decrease in drug usage is to decrease its supply, especially when the sup[ply is controlled by Mexican drug cartels . More importantly, we cannot sit by idly as a country and let lawlessness reign on our borders. This is not just about national security, but about sheltering our citizens and preserving our civilization from an unprecedented level of violence. According to Perkins and Placido: "... we anticipate that the gruesome violence in Mexico may get worse before it gets better. We must recognize that we are witnessing acts of true desperation: the actions of wounded, vulnerable, and dangerous criminal organizations." 2

6.Be prepared for things to get worse. I don't advocate marijuana legalization lightly. There is some growing evidence that Europe has had some mixed results, some of which are quite negative. A recent report by the U.S. Drug Enforcement Agency indicates that such liberalized drug policies in Europe have lead to not only more usage of marijuana, but also an increase in crime, violence, and usage of more dangerous substances. 3


Still, we cannot continue to abide with locking up our youth and permitting drug cartels to reign. We have to do something different, and we need to do it in an intelligent and comprehensive manner. There surely is no panacea. What we don;t know is if this is a Pandora's box. Dare we lift the lid?


Gary


1. http://fdlaction.firedoglake.com/2010/05/05/fbi-marijuana-is-the-top-revenue-generator-for-mexican-cartels/

2.http://www.fbi.gov/news/testimony/drug-trafficking-violence-in-mexico-implications-for-the-united-states

3. http://www.justice.gov/dea/demand/speakout/09so.htm