Notes Book

When will the economy improve?

To know when economy will improve, we need to know what is causing it to falter. In my opinion, the chief causes are the drug war, overseas military operations, and high taxes. To get out of a hole the first step is to stop digging. To get out of a economic difficulties, the first step is to get rid of the bad policies that put us there. The drug war and the overseas military presence play havoc with our foreign exchange balance. High taxes waste resources that could be put to productive use.

The drug war, the excessive prison population, ever rising tax rates, excessive spending on the military, and black budgets are all aspects of the same basic problem. Too many of us would rather fight than work. We can't expand our economy by stealing from each other, or the world.

The situation we face now is remarkably similar to the one we faced after the crash of 1929, but it may be worse. In 1929, the major problem we faced was prohibition. Our army was small and our taxes were low, compared to the present. Today, drug prohibition is a worldwide institution, not just found in the USA as it was in the early thirties. On the other hand, we are in the midst of remarkable technological developments that may insulate us from some of he effects of our political folly.

The economy will improve after the drug war ends, the troops come home, and a lot of lawyers, cops, soldiers, bureaucrats, and other criminals reform and learn to become productive citizens. That's probably going to take several years and a considerable amount of pain.

When prohibition starts, a lot of people make a lot of money, but they are engaging in a game that drains money from the mainstream economy into a non-productive pyramid scheme. Since they are criminals, some out of government, and some in, they don't care that they are lining their own pockets at the expense of the rest of us. The price of drugs keeps rising, and the share of the economy devoted to the prohibition game increases.

But the prohibitionists are chasing two logically inconsistent goals. On the one hand, they need to keep increasing the number of people who use the “illegal” products in order to maximize their profits. On the other hand, they need to keep stigmatizing the people who use their illegal products so they can keep their kidnap, ransom, and rob racket going and maximize those profits.

If a large portion of the population starts using the “illegal” products, then the products will no longer be illegal. If the prohibition succeeds, and the population stops using the “illegal” products, then the prohibition ceases to become a profitable enterprise. The prohibitionist establishment doesn't want either of these outcomes, but certainly can't admit that publicly. They have the tiger of deception by the tail, and it will eventually turn around and bite them.

As the illegal products become more popular, it becomes more and more difficult to get judges and juries to convict for what seems to be a trivial crime because a great many people do it. The price of the illegal product starts to fall. We are at that stage now in the drug war.

Eventually, the drug market saturates. The price of drugs can only go so high. The percentage of the economy subsumed in the black market can only reach a certain level. Instead of an expanding market, drug lords become sellers of a commodity with decreasing prices chasing a market that is shrinking in dollar value. Deflation sets in, the party's over, and the hangover begins.

That's the way it will work unless we decide to go for the whole nine yards and let an authoritarian ideology turn our country into a poverty-stricken wasteland. I hope that won't happen, and I don't think it will, but it could if we continue to fight with each other and the rest of the world instead of just getting along and tending to business.

While economists argue with a straight face over changes of one or two percent in the legislated tax rates, governors, presidents and bureaucrats introduce wild swings in the real tax rates on different segments of the population through deals made in smokeless, alcohol-filled, back rooms. Because of black budgets and the underground economy, no one has much of an idea where our economy has really been, or where it's really going. It's not easy to form such conclusions even if the data are not clouded by massive amounts of deception.

To enforce international drug prohibition requires a massive empire. The power elite are operating this world-spanning empire for their own benefit at the expense of the rest of us, and that expense keeps rising as the “host countries” of our many overseas military bases become more and more expert at making it ever more expensive for the rest of us to maintain the authoritarian visions of the privileged few.

Since drug prohibition is not actually enforced everywhere, we can see the effects. I believe that states that don't have “zero tolerance” drug policies tend to be more prosperous. California and the Netherlands are two examples. Is it an accident that the last states to eliminate alcohol prohibition in the Deep South are also some of the poorest states in the USA? This effect tends to hasten the end of prohibition because people who want to minimize coercion in their lives flock to places where they can do that, and people who want to minimize coercion in their lives are much better at teamwork than authoritarians.

To make yourself, your family, and your neighborhood prosperous, resist authoritarianism. Resist it in yourself first of all. If you aren't trying to tell others what to do, it is a lot harder for them to try to tell you what to do.

It does no good to vote the scoundrels out of office. We need to vote the office out of existence. There is a nearly infinite supply of scoundrels to replace any that are expelled, and an honest person has the proverbial snowballs chance of making a difference, even if she could be voted into office. I have some sympathy for the pathologically deluded statists that occupy these offices, but I have no respect at all for the offices.