Fed Allows Cannabis Legalization, Police Unhappy


Eric Holder, head of the Department of Justice, recently announced that the DOJ will allow the legalization of cannabis in Washington and Colorado.  While cannabis remains illegal at the federal level, it has been legalized for recreational use in both states.  Recreational users and those using cannabis as a medicine have been rejoicing since the beginning of the year, but had remained nervous due to potential federal crackdowns. It appears the smoke has been cleared; Washington and Colorado are completely free to ingest cannabis without interference at the federal level, well almost completely.

Related Article: Portugal Decriminalizes All Drugs, 10 Years Later the Results are Mind Blowing

Although the DOJ has reserved the right to file a lawsuit against the states, they have taken a “trust but verify approach” to the new state laws. According to Deputy Attorney General James Cole,

The Department’s guidance in this memorandum rests on its expectation that states and local governments that have enacted laws authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems that will address the threat those state laws could pose to public safety, public health and other law enforcement interests. A system adequate to that task must not only contain robust controls and procedures on paper; it must also be effective in practice.

Related Article: War on Drugs Farce Continues Unabated

Despite a new level of state freedom, the DOJ will still prosecute individuals to prevent:

  • the distribution of marijuana to minors;

  • revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels;

  • the diversion of marijuana from states where it is legal under state law in some form to other states;

  • state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;

  • violence and the use of firearms in the cultivation and distribution of marijuana

  • drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;

  • growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands;

  • preventing marijuana possession or use on federal property.

Regardless of the stringent guidelines, this represents another huge step in the right direction.

Illinois, the 20th state to legalize medical marijuana, along with Washington D.C. is part of a growing list of regions in America that want an end to the fruitless War on Drugs, and free access to a totally non-toxic, highly effective medicine.


Despite former heads of the DEA warning the federal government earlier this year that allowing state legalization of cannabis would be dangerous, a growing number of Americans aren’t buying the mindless propaganda.  Ethan Nadelmann, executive director of the New York-based Drug Policy Alliance accurately states that:

The former DEA chiefs’ statement can best be seen as a self-interested plea to validate the costly and failed policies they championed but that Americans are now rejecting at the ballot box.

Some of the most outspoken individuals against the DOJ’s decision are police officers and police chiefs across the country.  Law enforcement officers have already begun protesting the decision.

Related Article: The Incredible and Diverse Medicinal Properties of Cannabis

Despite the role of police as ‘law enforcement,’ they have decided that they are better suited as political activists.

According to a letter submitted to the DOJ from police groups around the nation:

It is unacceptable that the Department of Justice did not consult our organizations — whose members will be directly impacted — for meaningful input ahead of this important decision.

Now, when the police say they will be directly impacted, they are not referring to work load or moral obligations, they are referring to the almighty dollar.  Cannabis crackdowns makes up a large portion of police funding, and without being able to destroy the lives of peaceful, pot smoking citizens, a large portion of officers may very well become unnecessary. Less criminals means less police.

Related Article: Another Casualty of the Paramilitary State

According to the police groups,

The failure of the Federal government to act in this matter is an open invitation to other states to legalize marijuana in defiance of federal law.

For once, let’s hope the police are right. Not only will the DOJ’s decision give freedom back to states and individuals, it will also allow a medley of marijuana stocks to leave their penny stock status and enter the market place, providing additional state and federal revenue and more jobs.  Who knows, maybe all the cops made redundant can get a job at a pot shop.

In the poignant words of Senate Judiciary Committee Chairman Pat Leahy (D-Vt.),

the Justice Department should focus on countering and prosecuting violent crime, while respecting the will of the states whose people have voted to legalize small amounts of marijuana for personal and medical use.













Indiana Blue Laws Exemplify Crony Capitalism

The set-up and continuation of the current economic crisis in America has numerous sources. A particularly aggravating one is best described as crony capitalism, in which a supposedly free-market system is actually undermined by blatant political favoritism. The government picks winners and losers in the economy at the expense of the market and what benefits consumers. High-profile and massively expensive examples of this type of cronyism can be seen in the Too Big To Fail bank bailouts and the federal intervention to prevent GM from floundering. Another can be seen in Obamacare, a.k.a the Patient Protection and Affordable Care Act, in which individuals are forced to purchase health care coverage from large insurance companies and face penalties if they don’t.

This type of economic intervention can also be found in smaller, though no less maddening doses. My home state of Indiana has some of the most onerous “blue laws” in the nation. While a dozen states prohibit the sale of distilled spirits on Sundays, the Hoosier State is the only one that also bans the sale of beer and wine as well. In addition, it’s the only state to regulate the sale of alcohol based on temperature—although grocery stores can sell beer, only liquor stores can sell it refrigerated.

This NPR piece details the current struggle in Indiana between convenience stores and liquor stores. Predictably, the dispute is about money and market share, a battle too often fought through cronyism. Convenience stores and gas stations, represented by the Indiana Petroleum Marketers & Convenience Store Association, have filed a federal lawsuit for the right to sell cold beer. Liquor stores are lobbying to preserve the blue laws in order to maintain their monopoly.

Dave Bridgers, vice president of Thorntons, an Indiana chain of gas stations and convenience stores, says that the laws reduce choice for customers and eliminates competition, leading to changes in how his company will do business. Bridgers states:

Not having the ability to sell what our customers want impacts our bottom line. We will continue to invest in other states, where laws are more business friendly to our company, and where it makes the most economic sense.

Following through on his promise, Thorntons hasn’t opened a new store in Indiana since 2006. The company has instead decided to expand into Ohio and Kentucky, with many stores located near the border in or around Louisville. Many Hoosiers, and I happily include myself as one of their number, frequently cross state lines to circumvent Indiana’s blue laws.

John Livengood, president of the Indiana Association for Beverage Retailers, argues that eliminating the blue laws would be ruinous for the liquor store industry. He estimates between 25-50% of stores would be shuttered were it not for their existence. He argues that since Sunday is a popular day to go grocery shopping, allowing consumers to purchase groceries and alcohol in one stop would render the liquor stores obsolete. By lobbying the government to preserve the blue laws, he thinks he can keep these stores in business.

This is the crux and curse of crony capitalism: Rather than competing for customers by providing superior products and services, two rival industries are instead lobbying to curry government favor—one to repeal a law and the other to maintain it.

Both sides feel a very real need to divert valuable resources into politics. They are both aware of the government’s formidable power to pick winners and losers in the market. With Washington’s blessing and intervention, even shoddy business models can—perhaps briefly—be successful in the market. For examples of this in one industry alone, look at Solyndra and at least 18 other green companies that went bust despite receiving substantial financial assistance from the Fed.

As tempting as it is to blame businesses and K Street for the problems of political favoritism, the blame truly lies with the government itself. Lobbyists ask Washington for special treatment that would help their industries because they know the government has the power to grant those favors. If the government were truly restricted in its power, say—if they actually followed the Constitution,  businesses would cease to lobby because they would know that it would be unprofitable to continue to do so.

Ginning up government favor with promises of both votes and money, lobbyists can be viewed as a teenage kid with a heroin problem. The kid goes to his parents—Washington in this analogy—and asks them for cash to help him out, with the promise that he’ll go to rehab and clean up next week. The kid doesn’t ask his neighbors because he knows that they have no reason to give it to him and that it would almost assuredly be a waste of time. The parents end up forking the money over. They are encouraging their kid’s behavior and will likely see him again with his hand held out wearing a fake-sorry frown.

This “Gimme! Gimme!” behavior needs to be punished if we are to see less of it, however, it is unfair to punish the special interests groups, as they are only asking for favors. Politicians are the ones actually granting them in return for campaign donations and loyal votes. Just like the kid with the smack problem, why shouldn’t lobbyists ask for special favors? The gravy train is certainly flowing, as Congress spent $16.5 billion on special pork projects in 2010 alone. For this behavior to stop, the politicians need to be punished for doling out unconstitutional favors.

Blue laws are written by state and local legislatures (famously, Jack Daniel’s is distilled in dry-as-a-bone Moore County, TN) and they operate under a different set of rules than policies dictated by Washington. However, the current struggle in Indiana is indicative of the larger problem of crony capitalism in the nation. More and more industries are fighting for market share and favorable treatment by lobbying legislatures rather than competing for customers by lowering prices, increasing quality or providing additional services.

However, when the government gives out billions of dollars of special favors each year, it’s awfully hard not to put your hand out, with a wink and a smile, and shout “Gimme!”
















Smoking: A Pre-existing Condition Under Obamacare

I have written about the perils and predictable pitfalls of Obamacare before, and yet another example of the law’s asinine and unworkable structure has been revealed. One of the act’s most hyped lauded features is that it forbids insurance providers from charging more for people with pre-existing medical conditions. Stretching language to absurd, Joycean lengths, the medical exchange boards of Washington DC, California and Connecticut have decided that being a smoker is such a condition, and that smokers cannot by law be discriminated against. To cover the losses, non-smokers will be forced to make up the difference.

Mohammad N. Akhter, chair of the DC Health Benefit Exchange, stated that tobacco use is a “pre-existing medical condition” and that charging smokers more for their insurance would be “in direct conflict with our efforts to help people quit smoking.”

So there you have it. A risky and voluntary behavior—directly associated with the death of nearly a half million Americans a year—is now a medical condition. Americans should be prepared for more of this topsy-turvy nonsense as the Patient Protection Act is an absolute bureaucratic nightmare. As Nancy Pelosi famously said, Congress has “to pass the bill so [people] can find out what’s in it.” That prediction has has largely come true, though not in the way the former Speaker of the House intended. People don’t seem to be thrilled with Obamacare now that they see what a mess it will be. Three years after passing the controversial legislation, only 37% of Americans support the bill and 67% of the uninsured, the very people it was supposed to help, are unaware of how it will affect them.

This financial consideration from the government should come as a complete shock to smokers everywhere, as cigarette taxes have skyrocketed in recent years. The average state and federal tobacco excise taxes increased by 290% between 1995-2009, from $0.57 to $2.21 a pack. Obama is currently cheerleading for a further 94-cent increase.

So charging smokers more for medical insurance isn’t conducive to helping people quit, but charging them more than $3 a pack in taxes alone somehow is. Huh.

Bureaucratic weaseling like this is fraught with eminently foreseeable consequences. Kevin D. Williamson has a pretty stellar takedown at National Review:

Obamacare is designed to destroy the insurance market. Markets do not function without prices, and Obamacare ensures that prices will not be allowed to emerge. There is a medical price associated with smoking, but the District of Columbia has decided to suppress that price by law. Pretending that smoking has no relationship with health-care costs does not make it so — it is only a way to push costs around in a way that is agreeable to the likes of Barack Obama, converting a system that prices risk into a system of entitlements.

That leaves us with a system that is private in name only — which is the point.

It is meaningless to say that we have a private system in which private consumers buy insurance from private insurers when the insurers have been forbidden to price their products, and have instead been converted into something somewhere between a public utility company and a government contractor. Sure, you are free to buy any insurance you want — but if what you want is a lower rate for being a non-smoker, the point is moot, because it would be a crime for anybody to sell it to you.

Another unpleasant reality in this whole debate is how meaningless it actually is. The common conception is that smoking drives up the cost of medical care and that minimizing tobacco use would save millions or billions of dollars every year. The government is clearly torn between enacting sin taxes to punish smokers and giving them victimhood status by declaring their habit a pre-existing condition. However, it turns out that non-smokers actually cost health systems more than both smokers and the obese. Turns out that living longer and healthier is actually much more costly than dying younger.

One of the biggest problems with Obamacare is that it creates incredibly perverse incentives to interfere with the lives of adults. When people are forced to pay for others, they feel entitled to control behavior that may affect their tab. The rationale goes like this: Smoking is dangerous and seemingly costs money; therefore it’s an activity that needs to be controlled. The same reasoning justifies paternalistic efforts to curb obesity, leading to bans on sodas over 16 ounces and trans fats in Michael Bloomberg’s New York. Everyone should be terrified of following this rabbit hole towards its logical conclusion, where politicians can arbitrarily create laws to control seemingly any activity.

As dysfunctional as our current health care system is, Obamacare is the wrong prescription for change. It doubles down on bureaucracy and further diminishes individual choice. Barring repeal and a true injection of market forces, Americans should brace themselves for more schizophrenic and intrusive measures like this, where the government wants to both subsidize and tax the same activity, and the healthy are forced to pay for the lifestyles of the reckless.














The Folly of High Speed Rail in America


This transit layout, put together by California Rail Map and Alfred Twu, envisions a future America thoroughly connected via high speed rail. After repeatedly popping up on my Facebook feed like a freakish case of shingles, I decided that I couldn’t allow this quixotic dream and the fevered intentions behind it go unchallenged. The love affair for high speed rail in the US is nothing more than noxious propaganda, seeping fumes that mute rationality in favor of misplaced adoration for antiquated, 19th century technology.

Don’t get me wrong: I love trains. I’ve been living in South Korea for over three years and am fully enamored with its spectacular rail service. I also lived in Germany and was equally impressed with the efficiency of their inter-city mass transit system. The problem with Alfred Twu’s map is simple and profound: America was not designed to be like Europe or Korea. What works for them simply cannot function Stateside, no matter how much people wish it would.

There is one area in America where high speed rail  makes sense: The megalopolis between Boston and Washington D.C., a relatively small stretch of land that supports almost one-sixth of the US population. With the possible exception of a route between San Diego and San Francisco, that is the only place where extensive passenger lines are sensible. It is a hyper population-dense region with a string of cities that enjoy adequate access to public transportation. Every other route on Twu’s map is expensive folly. I should actually say more expensive folly, because in 2011 Amtrak somehow managed to lose about $1.2 billion, despite having better than expected ridership.

The rail system in Korea works so well because of its unique geography and population density. South Korea is home to about 50 million people, all living in an area roughly the size of a mountainous Indiana. Because of its condensed urban nature and high public demand, every city has an orderly and efficient public transit system. This makes it possible to travel to every city, and also within every city without the need for a car. Another simplifying factor is that a trip between Korea’s two largest cities, Seoul and Busan, which are on totally opposite sides of the country, can be made in about two and a half hours.

Most cities in Germany and other European countries are also similarly compressed and friendly to high speed rail. Their narrow, bicycle-spoked street layouts are based on their medieval roots, when expanding city streets were cobbled together for immediate convenience and with an understanding that space was at a premium. This makes the modern cities more conducive to light rail systems than the spacious grids of most American cities. This in turn helps ensure that once a tourist or visitor arrives to a city by train, they can fairly easily travel to wherever they want to go by public transport.

Other than the notable exceptions I mentioned earlier, America simply doesn’t have the population density required to sustain high speed rail. One of the glaringly obvious and defining characteristics of the US is its size, and this geographical reality has helped to fundamentally shape American culture and the design of our cities. Once Americans migrated west of the Appalachian Mountains, they built cities that reflected the new-found abundance of land. They eschewed the congested, radial street plans of Boston and Washington DC in favor of the sprawling grids of cities like St. Louis, Phoenix and Los Angeles. The farther west people traveled  and as railroad and eventually automobile technology advanced, this effect was magnified. For a simplistic example, the Greater Los Angeles Area covers just under 34,000 square miles, compared to just 5,617 sq miles for the Paris aire urbaine.

One area of the country that could theoretically support high speed rail is—at second glance—utterly incapable of doing so: The Midwest triangle between Chicago, St. Louis and Indianapolis. Chicago is a large metropolis with a good transit system, and the cities are all economically and culturally intertwined, with a high volume of traffic between the three. However, St. Louis and Indy are decidedly built around the automobile. St. Louis does have two light rail lines, but they largely overlap and aren’t very popular. From personal experience, Indianapolis might as well not have any public transport. It has no light rail and its bus system is notoriously byzantine and tortuously slow. It would be virtually impossible for a businessman to pop into these cities by train and promptly get to where he needed to go. It simply isn’t feasible without a car. And these are major cities; can you imagine how these problems will compound in small towns like Quincy, IL (pop. 40,633) or Cheyenne, WY (pop. 59,466), which are also covered in Twu’s fantasy map?

With the size of the US, any proposed high speed rail lines are going to be prohibitively expensive, especially considering that the country is $16 trillion in the hole. The California High Speed Rail project from San Diego to Sacramento was approved by voters in 2008 and financing for the first leg was signed by Gov. Jerry Brown in July, 2012. The project has already become a massive boondoggle, with the expected cost having greatly expanded from an estimated $45 billion to between $68 and $98 billion. The completion date has also been delayed 13 years to 2033. Incredibly, this is in a region that—on paper—looks like a perfect place to implement high speed rail. How farcically will the process further degrade on a proposed route between Tulsa, OK and Corpus Christi, TX?

Without a car, there is simply no reasonable way to navigate the vast majority of American cities. The infrastructure to travel on mass transit simply isn’t there. And in most respects it shouldn’t be: There just isn’t a big enough demand to justify it. The US system depends on cars and airplanes. The routes can be largely customized by the user and they provide a level of freedom wanting from high speed rail that is expected by the American traveler. They are also cheaper and more efficient in our country of suburbs and interstate travel.

There is no rational reason to support a mass increase in high speed rail projects in the US. America is not structured like South Korea or European countries that make rail a viable and dependable mode of transportation for the majority of inhabitants. They have a system that works, and so do we. We don’t need to abandon organically-driven functionality in a vain and expensive effort to be “more European.” Cars, from the ’67 Ford Mustang to Marty McFly’s DeLorean, are a part of America’s DNA; they symbolize and help grant the liberty that the nation was founded on. It would be a shame to throw that all away on a futile wish that “If we build it, they will ride.”



Business Insider: Here’s What an American High Speed Rail Network Could Look Like

AMTRAK National Facts

Visit Korea


Princeton.edu- Greate Los Angeles Area

Metro St Louis.org

St. Louis Park Patch

US Census Bureau

US Debt Clock.org

California High Speed Rail Authority

LA Times: Bullet Train’s $98-billion Cost Could Be Its Biggest Obstacle

Huffington Post: California High Speed Rail Still Faces a Lot of Obstacles

The Economist- An age of transformation