Take the Handcuffs Off the Economic Recovery

A month ago, who would have thought that the Bush Administration would order the partial nationalization of the nation's banks to fix credit markets and support the economy? Maybe other innovative, even "radical," ideas are in order. Unless we come up with new ideas to sell cars and durable goods to fire up the economy, collapsing domestic auto sales threaten tens of thousands of jobs.

In addition, the recession will cause shrinking government revenue at every level. Even last spring 18 states were predicting reduced budgets in FY 2009. Unless new revenues are found, we will soon see the furloughs and wholesale firing of teachers, nurses, and emergency first responders; closed schools, libraries and hospitals; crumbling roads unfixed; and broken bridges closed to traffic.

Cliches about the auto industry's problems blame workers' and retirees' health care costs and management for making the wrong kinds of cars. But to sell cars we need to abandon cliches, old myths, and the blame game.

Consider these facts. Last year we had 2.3 million Americans in prison and jail. How many American cars did these men and women buy last year? That's right, none. That 2.3 million is about ten times greater than the 250,000 prisoners in America during the auto industry's glory days of the 1960s and 1970s. There are another 8 million Americans who got a felony conviction for possessing or selling drugs in the last twenty years. With their convictions, these people rarely have jobs. They don't have a legal income and they don't have credit.

The economic effect of more than ten million American adults who can't buy cars, houses, furniture, appliances, or other durable goods is like 9-11, Katrina, and every other hurricane combined. Even with a job, many are without a credit card and are shut out of the marketplace. From Ticketmaster to Amazon.com to the local shore store, American businesses are losing sales. Economically, our criminal justice policies are cutting our throat.

Aside from the economic cost, is imprisonment of all of these 2.3 million Americans good anti-crime policy? Not according to the research. Effective crime fighting uses smart police strategies, adequate mental health care, good schools, recreation for youth, jobs and focused rehabilitation. The criminological consensus is that imprisonment has been responsible for about one-quarter of the crime decline in the past 15 years. Most of those in prison are there for non-violent offenses like drugs or theft, or because they violated probation by committing a "technical" violation like drinking or using drugs. Most of those in prison are there much longer than they need to deter crime, to justly punish them, or to protect society from future crime.

We certainly need to imprison dangerous offenders - to protect us and to punish them. But we need to get a lot smarter about why we imprison and who we imprison. Remarkably, in the last thirty years, the largest increase in imprisonment has been due to prohibition drug policy.

Even though drug enforcement leaders have warned for more than twenty years that "we can't arrest our way out of the drug problem," every year we arrest more people for drug offenses than the year before. Last year we arrested over 1.8 million Americans, more than three times the number arrested for all violent crimes combined. Now about one-quarter of those in prison are serving drug sentences. As the centerpiece of our anti-drug strategy, arrests and imprisonment have failed: high school seniors report that drugs are easier for them to get now than in the 1970s and 1980s.

Scientists and drug treatment specialists - even police chiefs, judges and prosecutors - agree that drug addiction is a disease. But in almost every city it is hard for people to get good treatment for their addictions. Waiting lists - often very long ones - to enter programs are the rule. According to the White House, about 20 million Americans need substance abuse treatment but don't get it. Why put drug addicts in prison for using drugs when what they need, and deserve, is good drug treatment? Why do we tolerate the police arresting drug addicts for using drugs? Isn't the definition of the disease of addiction that you can't stop using drugs? When you think about it, isn't it wrong to prosecute a person because of their disease?

But in fact, most drug users are not addicts, they are adult marijuana smokers. Why do we arrest them? To tell them that marijuana is harmful? To "send a message" to children that they should not use drugs or that drugs are dangerous? Isn't that the job of parents, schools, and public health authorities?

Drowning is the second-leading cause of unintentional injury-related death for children ages 1 to 14 years. The rate of drowning has declined, but we not because we jail swimmers, or swimming pool contractors and operators, to warn children about the hazards of swimming. Of course, in most parts of the country the government hires life guards at beaches and pools to save swimmers in the face of the ever-present danger.

In fact, we don't arrest anyone to warn about most dangerous behaviors. To teach the safer use of dangerous behaviors involving firearms, alcohol, tobacco, automobiles, motor cycles, private airplanes, or ski resorts, we use education, insurance, regulation and taxation to reduce injuries and save lives. With most activities, we recognize that doing dangerous things is not "wrongful" and does not deserve punishment. Why is arresting people a good way to send a message about health and public safety when it comes to drug use?

Almost everyone agrees that our "convict-the-users" anti-drug strategy is a costly failure. According to the government's studies of drug use attitudes and trends, millions of criminal convictions have had little to do with the decline in drug use.

Naturally, a compassionate society has "to do something" about drug abuse, but a century ago we got misled that drug abuse is a crime problem. As we have seen repeatedly in our history, by adopting the prohibition approach we have made it more of a crime problem. Sadly, the idea that the danger in drug use is "bad" and "wrongful," and is therefore fundamentally different from the sometimes lethal dangers of skiing, sky diving, auto racing, hunting or many other activities remains a deeply embedded and very expensive myth. Can we justify why we punish drug users on any terms other than it is against the law? This law is unjustifiable and only survives on the myth that drug use is "bad" as opposed to risky.

It is now time to think about the opportunity cost of this myth. Even in the smallest town or county, drug arrests generate thousands of dollars in police overtime pay. In a big jurisdiction, it costs taxpayers hundreds of thousands or millions of dollars to arrest drug users. About one-third of the time of prosecutors, judges and court personnel is spent handling drug cases. Housing, guarding and feeding 500,000 drug prisoners pays prison employees and contractors. These folks benefit, but for the rest of us, these millions of drug cases mean unemployed workers and lost customers that bleeds our jobs out of the economy.

Police need to focus on violent offenders, child molesters, DUI cases, and the white collar frauds who steal millions. Prison needs to be reserved for the dangerous.

Non-violent drug offenders need to be let out of prison. Those who are addicted need treatment, which is much less expensive than prison. Their drug-related criminal records need to be sealed so they can get jobs. Thieves and burglars who are drug addicts need abstinence-based supervision to prevent re-offending.

Seventy-five years ago, on Dec. 5, 1933, in the depths of the Great Depression, we amended the Constitution to abandon alcohol prohibition to generate jobs and to tax alcohol to fund the government. It's time to end the marijuana prohibition. Non-commercial, home growing of marijuana should be regulated like hunting. Hunters are killed accidentally every year, including minors, but licences are easily obtained, not terribly expensive, and largely self-enforcing. Non-commercial marijuana growing license ought to be sold at garden centers, with prohibitions on commercial sale and distribution to minors. Commercial marijuana growing and selling should be licensed and taxed like alcohol, with its panoply of local regulatory varieties, and evolving cultural controls.

In 2005, federal, state and local taxes collected on tobacco and alcohol totaled $35.1 billion. America's 20 million marijuana smokers paid no taxes on their marijuana. Depending on rates, $5 to $15 billion could be raised from marijuana taxes. America's illegal marijuana sellers are the beneficiaries of both a government subsidy (no taxes) and a government price support mechanism. That's absurd! We need to tax the underground marijuana commerce. As we study state and local budgets that will fire teachers, police and firefighters, reduce care to the ill, the blind, and the handicapped, and shutter hospitals, recreation centers and schools, we can ask if we want to keep throwing away the potential marijuana taxes.

One way we could sell a million American cars is to get drug users out of prison, freed of their crippling criminal records, and back into the economy.

How hard are these choices: Lay off school teachers or stop subsidizing the illegal marijuana business with a billions of dollars in tax breaks? Lay off workers and close factories or let non-violent offenders out of prison and provide treatment to drug addicts?

Eric E. Sterling, president of the non-profit Criminal Justice Policy Foundation in Silver Spring, MD, was counsel to the U.S. House Judiciary Committee, principally responsible for anti-drug legislation, from 1979 to 1989.

Comments

[Malkavian]

More about Opportunity Cost:

Let's say we're faced with two investment opportunities. Analysis shows that both will yield positive profits. Here many just pick the investment they like best thinking both to be rational investments, which is wrong!

Investing in the target that yields LESS profit means we miss the opportunity offered by the more profitable target. If target 1 yields 10 profits and target 2 yields 30 profits, the Opportunity Cost of choosing target 1 is 20 profits.

Government intervention interferes with the free market that otherwise tends to reveal preferences well. Often government is not good at reveaing preferences. If politicians channel lots of money into drug policy enforcement they may be making investments with huge opportunity costs. And what's worse: since the bureaucracy do not directly reap the rewards and punishments of their policy, bad policy decisions tend to prevail.

Some worry that legalization may cause more crime, but we often forget that the huge investment in fighting drugs is ALREADY causing more of other types of crime. Directing resources like this decreases the chance of getting caught for other crimes, thus providing incentives to commit more of these crimes.

A high income produces a high opportunity cost of crime, because the rich has much to lose from getting caught. Prohibition raises prices of drugs and real income falls, ie. prohibition lowers the opportunity cost of crime!

Next .... diminishing returns ;o)

[Darhlene]

While purely rhetorical, I must ask: Isn't the right to vote A RIGHT so that bad laws can be changed, improved, or simply eliminated? How can we change a bad law like Marijuana Prohibition if we keep preventing people -- who break the law -- from making changes by taking away their RIGHT TO VOTE?

.

[joebhed]

Thanks for writing this timely piece of information.

Of course, the major impact of our insane drug laws is on the lives of those incarcerated for their actions, now or in the past.
And we can only hope that the sanity of your position vis-a-vis the lesser effect of the financial cost of this policy will reach those decision makers, and that they will not cower to the vacuous charges of being "soft-on-drugs".

But I do think that the fiscal benefits will be the major economic aspect of decriminalization of drugs.
Having another 2 million mostly minority men on the streets LOOKING for jobs will do little to create the jobs that they are looking for.
However, their productive "capacity" will go a long way to ever getting America back in balance between its real economic potential and reality.
Again, thanks.

We should all be carrying this message forward as a home grown economic stimulus.
STOP THE WAR ON DRUG USERS !!

[cqyates]

Wow. That might be the best drug policy article I have read to date (and I am a serious nerd who cares passionately about drug policy). I have spent so much time thinking about the issues you raised in your article. In fact I have long wanted to right a book about marijuana convictions affects on people who want to enter professions where we have a shortage of people (teaching, health care workers etc). I have always wanted to be a high school history teacher but I have marijuana convictions. Seriously we dont have enough teachers in this country and I am disqualified because I do something many high school kids do. I have to wonder how many times across this country my story repeats itself. BTW..now I am self employed and my boss has a very lenient drug policy!

[JBS]

"Unless we come up with new ideas to sell cars and durable goods to fire up the economy, collapsing domestic auto sales threaten tens of thousands of jobs."

PART 1

1. Prohibition is a dumb idea and it doesn't work. It's a costly boondoggle paid for by the taxpayers.

But it does profit certain sectors of the economy; those that provide services to the prison/industrial complex AND to the banking system that finances the illegal trade.

You're going to have a hard fight getting decriminalization past Congress, because the big money lobbyists represent those who profit from prohibition.

2. Decriminalization won't do a damn thing to rescue the domestic auto industry. Those "tens of thousands of jobs" aren't threatened by the collapsing economy. It's the loss of those "tens of thousands of jobs" and of hundreds of thousand MORE industrial jobs that has caused the economic collapse.

Yes, I understand the immediate crisis is due to a housing bubble bursting and collapsing Wall Street's debt arbitrage house of cards.

The underlying problem is that as a nation the US doesn't actually create anything of value any more. The largest apparent short term "profit" comes from cooking the books and "off shoring" manufacturing. Quite simply, a few are allowed to extract all of the wealth from our economy at the expense of "the general welfare".

[mpal]

Thank you Mr Sterling for your common sense and intellectual rigor. We're listening.

[KillTheMessenger]

The problem is most likely that each of these 2.3 million people contributes a couple hundred thousand dollars a year to a flourishing penal system and plenty of of money to lawyers, the bail bond industry etc..

Maybe these people are contributing more to the economy than you think, just not the way you think?

[Oldchef]

This makes sense, consequently the neocons will fight tooth and nail to keep prohibitions in place. They have no use for common sense.

[MarkEntry]

Actually drug prohibition was begun by a Democrat lead congress and President in 1914. Cannabis prohibition bagan in 1937. It was created by a Democrat lead congress feeding on the fear of southern Democrats. FDR signed the Marihuana Tax Stamp Act into law. It was these people who first invaded other people's privacy. Then we have Senator Joseph Biden who helped create our Federal paraprenalia laws, private property seizure laws, and other punitive drug laws. He also helped create the ONDCP and coined the term 'Drug Czar'. All of which he is quite proud of. Just why any Democrat would want to give a democratic country a Czar (King) for any reason is beyond my ability to comprehend. Yes, the Republicans had Nixon and he declared the 'War on Drugs'. But, it was Clinton who was the beneficiary of the first Drug Czar. Clinton had more marijuana users arrested than any President before his time. No, expecting Obama to lighten up on cannabis just because he's a Democrat is a deception. His choice of VP proves this. Remember, Democrats never shrink government jobs, power, or budgets. This means the DEA/ONDCP/NIDA complex will probably stay on just as it is today, or worse. McCain simply wants to continue the disastrous drug wars. Unfortunately, this leaves Bobb Barr. Who has a worse record in government than he does? This means cannabis uers will continue to be abused. In the meantime, let's not have any more wishful thinking about Obama/Biden.

[twofish]

In the 1960's, drug laws, especially marijuana laws, were used to punish people with alternative life styles and political views. Both sides of the cultural divide saw pot use as belonging to the young and radical. The old guard was not going to give up this stick they could use to beat their opponents with.

Now, pot use is spread across the political, generational and economic spectrum. But the puritan in us just won't let go of the need to punish. Besides, there's an industry here, and lots of money to be made imprisoning people. Who ever gives up their pot o gold willingly?

Changing this state of affairs will take a major politician to stake his/her office on decriminalization and survive politically. And who is going to do that? Still, I have some hope that with local and state governments going broke, some sanity might creep into the debate, and people will decide to stop imprisoning drug users. But I'm not holding my breath.

[ynotdivein]

Great article, Mr. Sterling! Here's hoping that this relentlessly logic and incontrovertible truth gets more and more play. If there is a silver lining to the current economic crisis, it is that it will open more minds to this radically simple solution.

Only one quibble from this California reader, though. When you say that 20 million marijuana users pay no taxes on their herb, you omit to mention the hundreds of thousands of medical marijuana patients in CA who have been paying state sales tax on their medicine since early 2007. At that time, our State Board of Equalization recognized the tax potential of this state-sanctioned program which generates an estimated 100 million yearly in tax payments for the state. Any federal raid on a tax-paying medical cannabis dispensary in the past 20 months has therefore also been a raid on our state and local tax coffers, as well as on the safe distribution model that has emerged here.

Kudos for your thoughtful analysis!

[WorkingClass]

Thank You Mr. Sterling for this excellent piece. I am hoping that Americans might come around to your point. That we cant afford the war on drugs anymore. Actually, most Americans already believe that the war on drugs is stupid and should end. But who cares what most Americans think? Our rulers have decreed that we shall have a war on drugs. Who are these rulers? How would I know. Whoever they are they will have to be persuaded that it is in their interest to take the profit out of the drug trade. Anyway - I think your perspective (end the war on drugs and save money) is timely and persuasive.

[MarkEntry]

Only 11.2% of Americans believe the 'War on Drugs' is working (Sept 2008 Zogby Poll). But, that small percentage of people are voiciferous. I would hazard to guess that in some way most of these people receive a paycheck for keeping cannabis illegal. Like cops, criminals and taxpayer supported prohibitionist organizations. These elements claim that they are protecting our kids. Yet, 85% of teens say that they can easily get cannabis within an hour. That it's actually easier to get cannabis than alcohol or tobacco. Punishment is no deterent. We must regain control over cannabis via legalization. This will drive drug cartels out of the trade. Leaving licensed merchants, who are compliant with age restrictions most of the time (90%). Our kids will have a much a harder time getting cannabis from them. The history of the prohibtion of another drug called alcohol is repeating itself with cannabis. The American public came to recognize that prohibition itself caused far more harm to our nation than drinking did. The economy was in a tailspin and New York State refused to spend any more money to enforce prohibition. This lead to repeal. This is exactly what will happen with cannabis. Cannabis use is commonplace, widespread and it's not going away. The best way we can deal with these facts is to regulate cannabis. It looks like California will be the first state to throw off the counter productive failure called prohbition and install the more workable solution of legalization.