High Economics (Part 2)

If the first economic argument for legalization of marijuana (http://markostake.blogspot.com/2010/12/high-economics-part-1.html) didn't pursuade you, there are many more. 

Incarceration for marijuana offenses is fairly small, accounting for less than 1% of the prison population, but it does still keep about 60,000 inmates supported at taxpayer expense.  It is believed that the annual cost is on the order of $1.2 billion.  That does not include scarce court time, legal resources or police time which is allocated to enforcing an unpopular and needless code of law.

Then there is the medical aspect.  Marijuana is now used to treat nausea from chemotherapy, anxiety, pain, glaucoma and insomnia.  But is it safe?  Remarkably so.  Of all the causes of death monitored by the Food and Drug Administration, marijuana comes in DEAD LAST, with NO fatalities (http://www.economicsjunkie.com/annual-drug-related-deaths-in-the-us-marijuana-ranks-last-with-zero/).
Even aspirin, which many doctor recommend be taken daily, accounts for thousands of deaths per year.

But, despite overwhelming societal and economic benefits, Proposition 19 did NOT pass in California.  What are the arguments against?  The main objections to legalization are focused on the belief that marijuana use is addictive, a "gateway" to more serious drugs and a factor in greater crime.  There also exists the fear that once legalized, we'd become a nation of Cheech and Chongs.

The U.S. Drug Enforcement Agency (DEA) has issued this position piece outling the arguments against:  http://www.justice.gov/dea/ongoing/legalization.html. 

The addiction argument is absurd in light of legal alcohol, cigarettes, soft drinks and prescription drugs, all of which are far more injurious to the user and most importantly, can be FATAL to abusers and second-parties.  Caffeine is addictive.  And, to some, so is shopping, sex and gambling.  So is reading "Marko's Take"!

The crime argument is equally absurd.  Marijuana is a sedative.  How many stoners pull off a bank heist or hold up a 7-11?  And, should marijuana become legal, the price would certainly drop.  So, the notion that one has to go rob a gas station for a few joints becomes preposterous. 

According to federal statistics, nearly 100 million Americans, or 1/3 or the population, have, at least at one point in their lives, imbibed.  Cigarette smokers make up about 25% of the adult population, while drinkers make up more than half.  Experience with both prohibition and other countries experimenting with legalization have shown that very few NEW people will  become  users.  And, so what if they do?

Merry Christmas!

Marko's Take

High Economics (Part 1)

Few national political issues are as clear-cut as the growing movement toward legalization of Marijuana.  The reasons for supporting this NOW are numerous and quite financially substantial.  With a few more votes and the stroke of a pen, we can take a major step toward trivial matters such as balancing the budget.

According to recent article in Time Magazine, more than 500 prominent economists agree that the legalization case is a no-brainer (http://economics.about.com/od/incometaxestaxcuts/a/legalize_pot.htm).
Odd, that "Marko's Take" was not consulted.

Public sentiment is growing tired of the vestiges of persecution for those involved in minor possession.  Recently, a jury in the conservative state of Montana could not be assembled because of the virtually unanimous sense that it was an utter waste of private and public resources  (http://billingsgazette.com/news/state-and-regional/montana/article_d6b1aaca-edfc-527f-ad11-f1691fdc6e3b.html).

Marijuana is a massive industry even when compared to other substantial agricultural industries.  The largest countries growing, apart from the United States, are clustered in Central and South America  (http://edition.cnn.com/2008/WORLD/americas/11/25/paraguay.mexico.marijuana/index.html). 

In the United States, California is dominant, with nearly 50% of national production totalling a paltry $12 billion per year (http://www.drugscience.org/Archive/bcr2/domstprod.html).  Think citrus is big?  According to recent data, the total annual production of Florida's ENTIRE citrus crop is a mere $9 billion  (http://www.ehow.com/list_7344390_states-large-amounts-citrus-fruits_.html).  California is number 2 in citrus meaning that marijuana is twice as big as this state's citrus industry.

So, let me get this straight.  We have a $12 billion industry which is NOT paying taxes, hiring people who are NOT paying taxes and selling a product which has NO sales taxes.  And, we have a state budget problem which is forcing cutbacks everywhere.  And, one recalls a ballot proposition to legalize that LOST?

So, if I you ever hear someone affected by the state cutbacks complain to you, ask them how they voted on the California referendum to legalize marijuana.  If they answer that they voted no, please send them this blog so they'll shut the hell up!

But legalization doesn't just stop with selling the plants for medical or recreation use.  The fibre of the cannabis plant, known as hemp, has an amazing variety of uses from clothing, to paper, to biomass, to medical to even jewelry (http://en.wikipedia.org/wiki/Hemp).  The estimated size of the domestic market for hemp-based products is on the order of $500 million.

But, the benefits hardly stop there.  In the next part, we'll discuss more fully the medical and criminal aspects, either of which, alone, would be enough to warrant its legalization.

Marko's Take

California Crisis Deepens... Part 4

OK!  So I first thought there would only be 3 parts to this series.  However, things keep getting worse on a daily basis.  Who knows?  There might even be a Part 5 and 6!  Let's see how things develop.

In any case, California's deterioration continues.  According to a very recent article in the L.A. Times, Bill Watkins, who heads the Center for Economic Research and Forecasting at Califonia Lutheran University, released a recent report.  He urges that the State begin emergency discussions with both the Obama administration and the Federal Reserve in the increasingly likely event of a state default.  Had he read "Marko's Take" he would have realized that these discussions are already taking place!

Watkins believes that the odds now FAVOR a default.  California Treasurer Bill Lockyear sharply took exception with Mr. Watkins' assessment, accusing him of "irresponsible fear-mongering".  It makes one wonder whether Mr. Lockyear has spoken to Governor Schwarzenegger who has been saying the same thing!

The crux of the problem is centered in the budget.  Republicans are adamant in their refusal to increase taxes, while Democrats are equally determined in THEIR refusal of further budget cuts.

The only reason that California is NOT in default is that some banks still honor the IOUs already issued on 4 separate occasions.  If they should refuse to honor those IOUs AND the Obama Administration refuses to provide emergency bailout funds, then the State will have no choice.

As I've mentioned previously in the "California Crisis Deepens"  series, the State is SO important, not only to the United States, but the world.  I believe the Obama admistration will have NO choice but to provide emergency bailout funds.  Therefore, I disagree with Mr. Watkins' conclusions entirely.

California has come up with a rather interesting partial solution to the budget stalemate which will appear on the 2010 ballot:  the legalization of growing marijuana!  In so doing, the pot industry, the largest agricultural sector in the Golden State, will be subject to taxation at a variety of levels and should be able to raise revenues substantially.  Recent polls show this initiative is very likely to pass.

I hope the new initiative has left this troubling piece on a "high" note!

So, why don't you give me your "Take" in the comments section below?

Marko's Take