Archive for the 'Economics' Category

Fish of the Day is Banker’s Bass

High Times

A portrait of the President as a young man.

So this is a really big one:

The Obama administration will soon announce regulations to make it easier for banks to do business with legal marijuana sellers, Attorney General Eric Holder said Thursday.

“You don’t want just huge amounts of cash in these places. They want to be able to use the banking system,” Holder said during an appearance at the University of Virginia’s Miller Center. “There’s a public safety component to this. Huge amounts of cash—substantial amounts of cash just kind of lying around with no place for it to be appropriately deposited is something that would worry me, just from a law enforcement perspective.”

I linked two pieces yesterday discussing the arrant hypocrisy of allowing every major international bank to launder billions in cartel money while also permitting every bank in Colorado to turn away legal, legitimate, cannabis businesses. Well, the effects of legalisation are already being felt; the sheer turn-over of the first two weeks has forced Holder to move much more quickly on the banking issue than anyone saw coming.

“We’re in the process now of working with our colleagues at the Treasury Department to come up with regulations that will deal with this issue,” Holder said. He added that the new rules were likely to emerge “very soon” and were not intended to amount to a blessing of marijuana by the federal government. “It is an attempt to deal with a reality that exists in these states,” he said.

My emphasis. This is why legalisation from below is such a good idea in a Madisonian democracy.

Hat tipped to the good folks of /r/timetolegalize once again: Good catch!


Roll Up, Roll Up! (part 1)

It’s been a week or so since I’ve had the keyboard time to work on the blog, and a great deal has been happening. So it’s time for an analysis of the headline news, followed in a second post by an epic link-dump.

Obama Cares?

This is a smart guy, even when I disagree with him.

Mr. President

President Obama may not be the liberal I and many others hoped he was, but I am increasingly convinced that he’s a very smart guy, and sneaky enough to impress Thomas Cromwell. Given the unprecedented (literally, by the numbers) obstructionism he’s faced on the Hill, the fact that he’s got anything done at all in the last five years is impressive. Everyone’s been watching him like a hawk throughout his second term to see what signals he’d send about federal response to Colorado and Washington passing ballot-legalisation measures for cannabis. Until after the Colorado regulation regime went into effect on 1st January, he said very little and most of not overwhelmingly positive, allowing the Beltway Bandits to fulminate on behalf of the Executive Branch. Then recently he said something very different:

“As has been well documented, I smoked pot as a kid, and I view it as a bad habit and a vice, not very different from the cigarettes that I smoked as a young person up through a big chunk of my adult life. I don’t think it is more dangerous than alcohol.”
    – Interview by David Remnick of the New Yorker

Continue reading ‘Roll Up, Roll Up! (part 1)’


“This … is an economic land grab. It is the process of taking a criminal industry away from criminals.”        – Hugo Riffkind

In between the investigatory series on the War on Drugs it’s time for another Ball, Rolling round-up of interesting things that have happened in the last few days. So in no particular order:

When the levee breaks…
"We can't stop here..."I commented before that one of the really noticeable effects on journalists of the ballot legalisations in Colorado and Washington is that lots and lots of people are suddenly writing articles they’d never have dared write before, and getting them published in places that would never have offered them a platform prior to 2011. Apparently this kind of combination of a trail-blazer with a tipping-point in popular politlal cover applies to states and nations:

But Mujica reminded that Yans did not say a word about the US states of Colorado and Washington, which also legalized marijuana.

“Does he have different rules: one for Uruguay and other for the world’s strong countries?”

The Torygraph continues to take an interest, doing a brief survey of the state of play in the US of A. And it’s not all bad news in the UK press, either: there’s an attempt at a cannabis cafe in Manchester. We’ve got an interesting review of changing attitudes around the world, and an update on the polling numbers in the US. Big Pharma is interested in Uruguay, and China wants to play. The celebrity chefs have joined the brave new world: even the Swiss are catching up.

And from the world of Science…
cannabis-caduceusIt’s been a good week for real data. We have a better idea of why cannabis does not in fact cause insanity, criminality and death. We already knew that cannabis helps kill cancer but this is useful confirmation. Mainly, though, I wanted to draw people’s attention to one aspect of the medical science on cannabis, which also interacts with the social science and with the enormous, lucrative and vigorous corporate opposition to ending the War on Drugs. You see, cannabis may repair the brain damage already done by alcohol. This is one of many reasons that scientific authors since the 70s have been arguing, successfully, that legalising pot would reduce alcohol use by up to 25%, and problem alcohol use by potentially a great deal more than that. I’ll address why this causes big alcohol conglomerates to fund prohibition later on in my ongoing Prohibition series.

In more detail…
A couple of particular entrants into the debate in the UK press have caught my eye for closer investigation. I did wonder about writing a rebuttal to John Rentoul’s rather bumbling Indy piece, but I didn’t feel I needed to. This will be read by a lot more people than my hypothetical piece anyway, and is quite good. But it does perpetuate one mistake made Rentoul and many others:

I think there is quite a lot of evidence suggesting a link between heavy cannabis use among teenagers and mental health problems, particularly schizophrenia. I remember being convinced of this even before much of the recent evidence emerged – one of my best friends from school, a heavy cannabis user, was Sectioned at 17 and has been in and out of ‘sheltered’ accommodation ever since.

For one thing, and I quote Jason Schiffman [1]:”The onset of schizotypal symptoms generally precedes the onset of cannabis use. The findings do not support a causal link between cannabis use and schizotypal traits.” To go on with, findings of schizotypal symptoms associated with heavy cannabis use in non-schizophrenic teenagers are temporary, not permanent, and cannabis does not erode your brain: “They concluded that the heaviest users may have a decrease in their ability to learn and remember information, but that this effect was so small as to be ‘acceptable’.”

By contrast, Hugo Riffkind’s piece in the Spectator is pretty good throughout. My niggles are small (why do several journalists seem to think Uruguay started this ball rolling, when the whole point is that Mujica needed the political cover provided by Colorado and Washington to act?) I mostly wanted to highlight a couple of priceless quotes:

Our media, for obvious reasons, often seems to give the impression that the great evil of the criminal drugs trade is the way that it makes some middle-class kids do unexpectedly poorly in their A-levels. […] a worse evil is the way it makes into criminals people who would otherwise not be.

Well, indeed. And I’ll finish with this one:

If you want to end the war on drugs, the only real solution is to find a way to stop fighting it without surrendering to the bad guys. The triumph here is that people have finally made a more sensible assessment of just who the bad guys are.

[1] In “Symptoms of Schizotypy Precede Cannabis Use,” published Mar. 30, 2005 in Psychiatric Research.

Give Peace a Chance

This is mostly a meta-post about what is about to happen on the blog from tomorrow, but here’s a quick trawl around the net first:

News in Brief

Meanwhile, up in the tokey mountains...


Michael Gove is being an idiot. My degree was in history and I work in TIE at a Tudor museum, so I’m not even going to start on how much of an idiot he’s being; that would get ranty. Mike Konczal at WonkBlog wants us to know that economists agree on raising the minimum wage being effective at diminishing poverty. This is newsworthy not so much for that conclusion as for the phrase, ‘economists agree’. Wren-Lewis continues to illustrate self-interested errors among city economists. And Business Insider has a delightful and satirical response to the Brooks-Marcus-Brown axis of reefer madness (while we’re on that note, this ball just keeps on rolling).

Orwell’s War
Around this time last year, as I was trying to launch this blogging effort, I began a research series on the War on Drugs. The series came in three sections: the two I had mostly completed that time round were Us & Them, which covered the origins of the modern Drug War, and Perverse Incentives, which dealt with how the Drug War is maintained in the present era. That series was still incomplete when I dropped off the internet last year and was unable to continue writing here.

A sufficient number of the existing articles have needed reworking to reflect new developments that I decided I should run the whole series again, with the updates and continuing on through the last two Perverse Incentives essays to Orwell’s War, which will talk about the final days of the War and look forward to a possible peace. I should be able to publish an article every second day or so until the series is complete. Watch this space. If you have time, watch this video.

Daily Trawl

Missed my Friday Giant due to off-line commitments, but I have read a few things I found interesting over the last couple of days, so here they are.

1. Balls still rolling.

And yet civilisation has failed to grind to a halt.

Good Morning, Denver

It is hard not to notice that two issues which have been daydreams for the left for a very long time have both suddenly gained popular traction and started moving towards resolutions. I’m not the first to draw parallels between marriage equality and cannabis prohibition. One of the things that was remarked on during the process of moving marriage equality from a fringe view to a majority one was that the great post-AIDS growth in activism aimed particularly at living out of the closet had made an enormous difference. The more important people suddenly realised they had a gay relative or friend, the more people who had for years supported the idea but been prevented from speaking out by expediency kept coming out of the woodwork and writing articles.

Something very similar has happened with the growing cracks in the international consensus on cannabis prohibition, and it can be seen easily in the coverage by the FT. After the GCDP report in 2011 in which 149 major world dignitaries outed themselves as in favour of ending cannabis prohibition, the FT published a careful and guardedly positive article pointing out the economic benefits of ending the War on Drugs. There have been several more positive blog posts and op-eds since. But in the last two days they alone have published no less than three different articles [1] on the subject. The Torygraph (oddly) have generally been supportive (they were the main vehicle for Richard Branson’s press campaign in 2011 and 2012) but since ballot legalisation in Colorado took effect several of their authors have come out openly cheerleading for the project. The Independent is not immune. Add in the Nutt-Sack affair, Sanjay Gupta’s informative mea culpa, Uruguay’s current confrontation with the INCB and all the other things that have happened and you can see why this time feels a bit different than last.

Continue reading ‘Daily Trawl’

Today’s Fish is Eating Crow

Nice to have a new entrant for my Catch of the Day (hat tipped as always to Jonathan Bernstein) feature. In the New York Times Paul Krugman has spotted a right-wing economist (Art Laffer himself, no less) admitting in public that the austerians, hysterians and all other stripes of anti-Keynsian are quite simply wrong. Definitely worth an honourable mention, particularly given the stature of the guy who said this:

“Usually when you find the model this far off, you’ve probably got something wrong with the model, not that the world has changed,” he said. “Inflation does not appear to be monetary base driven,” he said.
        – Business Insider

Austerians take note; that is how you respond to the world proving your politics to be mathematically flawed. And to Professor Krugman, nice catch!

Weekly Trawl

Meanwhile, up in the tokey mountains...

In a Denver hotel.

I spent most of last week away from the keyboard, between band rehearsals and the gig last night, visiting my parents and niece, jobhunting and various other shenanigans. There’s been a lot happening in the world, and a chunk of it is relevant to my long-form series that’s still on-going (hence today’s illustration). I read a lot of things but haven’t had time to do any writing, so I need to get back on track. To that end I’m going to dump a brief cull of the most interesting stuff I saw go past while I was away from the keyboard.

1. Popery
Andrew Sullivan is still keeping a very close eye on Pope Francis. I have relatively little to add to Sully’s analysis so far; certainly, what I expected from the early reports doesn’t seem to be the way this Pope is going to swing. I doubt the Vatican Rag is going to be adopted into the liturgy any time soon, but in an institution so weighed down with symbols and subtext, Pope Francis is certainly sending signals that he’s going to be interesting to watch.

2. Austerians and other plagues.
Quite a bit of interesting economic stuff, with several entries from Prof. Krugman. From column a, we start with the news that the EU is actually managing this economic crisis worse than its interwar counter-parts did. The Prof catches John Boehner lying about Lincoln. He remarks once again that trickle-down isn’t, and there’s this excellent NYT Op-ed on California. Krugman is, particularly for him, quite subtle in this one, but if you were paying attention to the 112th Congress you cannot miss implications for Washington.

In other news, the Angry Bear is speaking of inequality and Mike Konczal at WaPo is thinking about the problems with rentiers. And Vinay Gupta is back in the saddle, with this rather interesting look at how to think outside the capitalist / communist dichotomy.

3. Freedom & Liberty: one of these things is not like the other.
Matt Yglesias notes, via the Mercatus Foundation’s interesting worldview, that US libertarianism has some joined-up thinking problems. Examining the prejudices embedded in their system for analysing the comparative ‘free’-ness of various US states, Yglesias notes several points of friction:

Some of the problem here arise from arbitrary weighting of different categories in order to simultaneously preserve libertarianism as a distinct brand and also preserve libertarianism’s strong alliance with social conservatism. Consequently, a gay man’s freedom to marry the love of his life is given some weight in the rankings but less than his right to purchase a gun with minimal hassle. A woman’s right to terminate a pregnancy or a doctor’s right to offer a pregnant woman treatment she considers appropriate are given zero weight. You might think at first that abortion rights are given zero weight for metaphysical reasons rather than reasons of cultural politics, but it turns out that permissive homeschooling laws are given weight as a factor in freedom. Children, in other words, are considered fully autonomous agents whose rights the state must safeguard vis-a-vis their own parents from birth until conception at which point they lose autonomy until graduation from high school.

Texas is deemed very economically free in most respects but it’s dinged for the fact that its local governments have relatively high levels of debt. What on earth does that have to do with freedom? This is simply a policy choice. Arguably, a correct policy choice. […] no normal person’s experience of freedom tracks the conclusion that New York is less free than South Dakota. You can, obviously, do a much wider range of things in New York than in South Dakota.

4. Grand Ornery Party
Andrew Kohut of Pew has an excellent (longish!) WaPo opinion piece on epistemic closure and the numbers which suggest that the culture warriors of the TEA-Party are losing. Now, I’m not one of those who thinks the GOP is about to go away, or that the bigots and billionaires they work for are not going to find representation somehow. Ezra Klein has a succinct rebuttal of the more hysterical viewpoints. But it does look, and increasingly so, like the mortal lock the religious right has had on the GOP primary process since the Gingrich revolution may be doing the party some structural, as well cyclic, damage.

5. And Finally…
That ball does just keep on rolling. In just the last few weeks…

On the medical front, we’ve got news that’s particularly interesting to me about the cannabinol which is good for your guts, and more evidence that Big Pharma and their governmental prohibitionist allies are starting to scramble a bit.

We’ve got a law blog armed with infographics. The progressive lobby now have their own SuperPAC. Maine wants to legalize, following Washington and Colorado last year. Rhode Island’s decriminalisation takes effect today (and the choice of date indicates someone over there has a sense of humour); and Vermont are talking about following suit. And all of this is just the recent developments inside the USA.

While mindful of Jonathan Bernstein’s second-favourite caveat, this looks suspiciously like momentum. And as the activists who’ve been hammering on the Bible Belt’s brick intellects for twenty years over SSM can tell you, when momentum turns into progress it can take you by surprise.

August 2019
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Per Argument Ad Astra

Politics, history, economics and rampant speculation from a victim of the Great Recession, currently at large in the West Midlands.

"When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters."
                -- Adam Smith