The amazingly ineffective 40-year war

norml_remember_prohibition_The dubious policies of overcriminalization and drug prohibition are two frequent topics on this blog, so this excellent Ethan Nadelmann essay on the utter failure of America’s 40-year War on Drugs caught my eye. The entire piece is worth reading, but his final point is particularly illuminating:

Legalization has to be on the table. Not because it is necessarily the best solution. Not because it is the obvious alternative to the evident failures of drug prohibition. But for three important reasons:

First, because it is the best way to reduce dramatically the crime, violence, corruption and other extraordinary costs and harmful consequences of prohibition;

Second, because there are as many options — indeed more — for legally regulating drugs as there are options for prohibiting them; and

Third, because putting legalization on the table involves asking fundamental questions about why drug prohibitions first emerged, and whether they were or are truly essential to protect human societies from their own vulnerabilities. Insisting that legalization be on the table — in legislative hearings, public forums and internal government discussions — is not the same as advocating that all drugs be treated the same as alcohol and tobacco. It is, rather, a demand that prohibitionist precepts and policies be treated not as gospel but as political choices that merit critical assessment, including objective comparison with non-prohibitionist approaches.

My question is whether the elaborate law enforcement infrastructure that has been constructed to deal with drug prohibition policy become such a powerful political force that it effectively prevents Congress from changing this disastrous policy for the better good of the majority?

 

Narcotic maintenance vs. Addiction

drug prohibitionThis recent WaPo article highlights one of the senseless incongruities of the U.S.’s dubious policy of drug prohibition:

Twice, the patient, a man in his mid-30s, said he lost his prescriptions for Valium and Percocet. Once, he said he was in a car accident that scattered his pills on the road. Another time, he said the medicine he was first prescribed was no good, so he “returned the pills.” Another time, his wife called and said their house had been “searched by authorities” and the medicine had gone missing.

Each time, no matter the story, Peter S. Trent or Hampton J. Jackson Jr., doctors at the same orthopedic practice in Oxon Hill, refilled the prescription, according to the Maryland Board of Physicians. Over the course of 21/2 years, the doctors gave the patient 275 prescriptions, mostly for Percocet, a powerful, highly addictive painkiller.

Sometimes they wrote the patient more than one prescription for the drug on the same day. In a single month, they wrote him 11 prescriptions for Percocet, totaling 734 pills.

On one hand, maybe the patients had a “legitimate” need for large amounts of narcotics, but most doctors wouldn’t write prescriptions for the drugs because they fear prosecution if they did so.

On the other hand, the patients may be addicts without a “legitimate” need for the drugs, but they seek to obtain the narcotics through prescription because it is safer and probably cheaper than buying them illegally.

Current U.S. drug policy mandates that the patients who have a “legitimate” need for the narcotics can buy them legally, but the addicts cannot.

What valid public policy purpose is served by that distinction? Such a distinction only leads to arbitrary and capricious enforcement of criminal laws that terrorizes citizens who desperately need treatment regardless of the cause of that need.

Irrespective of whether a patient has a “legitimate” need for narcotics or is simply an addict, the patient should be able to obtain the drugs legally through prescription. Such a policy would allow the patient to obtain a known product at a reasonable price without risking expensive incarceration. A reduction of the mass incarceration problem and the expensive and brutal black market for drugs would be two fringe benefits of such a change in policy.

The federal government already funds methadone clinics for heroin addicts. Why not extend such a policy to narcotic maintenance?

A truly civil society would find a way.

The Persistant Financial Losses of U.S. Airlines

Could this have anything to do with security theater? Check out the synopsis from Severin Borenstein’s new working paper:

U.S. airlines have lost nearly $60 billion (2009 dollars) in domestic markets since deregulation, most of it in the last decade.

More than 30 years after domestic airline markets were deregulated, the dismal financial record is a puzzle that challenges the economics of deregulation. I examine some of the most common explanations among industry participants, analysts, and researchers — including high taxes and fuel costs, weak demand, and competition from lower-cost airlines. Descriptive statistics suggest that high taxes have been at most a minor factor and fuel costs shocks played a role only in the last few years.

Major drivers seem to be the severe demand downturn after 9/11 — demand remained much weaker in 2009 than it was in 2000 — and the large cost differential between legacy airlines and the low-cost carriers, which has persisted even as their price differentials have greatly declined.

A low-cost concierge medicine model

conciergeThe innovation of concierge medical practice has been a frequent topic here, so this recent NY Times article on the development of a low-cost concierge medical practice model caught my eye:

With 31 physicians in San Francisco and New York, [One Medical Group] offers most of the same services provided by personalized “concierge” medical practices, but at a much lower price: $150 to $200 a year.

One Medical Group doctors see at most 16 patients a day; the nationwide average for primary-care physicians is 25. They welcome e-mail communication with patients, for no extra charge. Same-day appointments are routine. And unlike most concierge practices, One Medical accepts a variety of insurance plans, including Medicare. [.  .  .]

.  .  . One Medical is the first to try to carry out such a model on a large scale. It now has several thousand patients and a growth rate of 50 percent a year, fueled largely by word of mouth. Dr. Lee said he planned to open a third office in Manhattan next month and expand to a third large city next year.

It will be interesting to see if this model still works on a larger scale, particularly if less healthy patients use a highly disproportionate amount of doctor time and resources.

However, as this latest disclosure regarding Obamacare reinforces, truly beneficial health care finance reform is more likely to come through innovations such as One Medical Group, not through government-managed overhauls.

Civility in politics is short-term

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Experts at self-deception

mythsAmericans’ proclivity to embrace myths is a frequent topic on this blog, so this Will Wilkinson post regarding Paul Krugman and this engaging William Easterly post on complexity and spontaneous order (among other things) is right up our alley. As Wilkinson notes:

It’s clear by now that Paul Krugman thinks there is something seriously wrong with Republicans.  .   .  .

Though it is a challenge to accept that a man of Mr Krugman’s intelligence truly believes America’s ills flow exclusively from the intellectual and moral failures of the people who disagree with him, I don’t believe he is arguing in bad faith. He really is that self-righteously Manichean. What drives Mr Krugman absolutely nuts is that people who are wrong about everything are just as self-righteously Manichean as he is. Where do they get off? [.  .  .]

.  .  .there is something quite significant about the evidently negative rhetorical charge of "welfare" and "food stamps" among smaller-government, freer-markets types. And there is something quite significant about Mr Krugman’s evident confusion about American public opinion and his genuine alarm over libertarian "taxation-is-theft" rhetoric.

Although Americans left and right have remarkably consistent "ideologically conservative but programmatically progressive" preferences when it comes to redistributive social policy, it benefits political parties and party politicians to greatly exaggerate their differences. Partisan brand identity and distinction is achieved largely through a commitment to a certain stock of rhetorical tropes and symbolic gestures that float almost entirely free of the party’s substantive commitments. People are suckers for rhetoric, which is why merely rhetorical differentiation works at both the grocery store and the polling station. It is also why we are prone to believing crazy things about what the other "side" believes. And this leads to a rhetorical atmosphere corrosive to the trust necessary to facilitate compromises over policy that would be agreeable to most everyone.

Our problem, and Mr Krugman’s, is that we believe our own BS.

The problem that no big city mayor wants to confront

gpensionThe turmoil in the municipal bond markets over the past week got me thinking.

Bill King has done a great job (and see generally here) of explaining how Houston’s unfunded public pension obligation represents an untenable burden on the city government’s financial condition. The problem is not just Houston’s, either.

So, it was refreshing to come across this Maria D. Fitzpatrick/Stanford Institute of Economic Policy Research paper (H/T Craig Newmark) that indicates that now may be the best time for Houston and other over-stretched local governments to attempt to do something about this mess:

ÔªøÔªøÔªøÔªøThe results show that the majority of Illinois public school teachers are willing to pay just 17 cents for a dollar increase in the present value of expected retirement benefits. The findings therefore suggest substantial inefficiency in compensation as the public cost of deferred compensation exceeds its value to employees.  .   .   . [. . .]

In this context, the main finding of this paper, that the majority of IPS employees value their pension benefits at about 17 cents on the dollar, has two important implications. First, it suggests a possible Pareto-improving and politically feasible solution to the current inability of states to pay their promised pension benefits to public employees. Governments could offer to buy back pension benefits from teachers and other public sector employees. If the results here generalize, governments may be able to buy back promised employee pension benefits, or at least some of these promised benefits, for as little as twenty cents on the dollar. Doing so would draw down the pension obligations of governments both significantly and immediately, rather than waiting for a reduction in benefits to take effect years in the future.

Meanwhile, in this WSJ op-ed, Roger W. Ferguson, Jr. passes along an innovative approach that Orange County, California – the site of one of the largest municipal bankruptcies in U.S. history back in the mid-1990’s – is taking to deal with its unfunded pension obligations:

The plan is a hybrid model: It combines contributions by the county and its employees with both a traditional defined-benefit pension and individual accounts, which the worker can take with him from job to job.

Here’s how it works: New hires can choose either the old defined-benefit plan or the new hybrid plan when they sign up for benefits. The plan maintains a strong traditional pension, but it reduces the requisite contribution for both the county and its employees. It also redirects a portion of that money into the defined-contribution part of the plan where the money can grow over time.

Unlike a typical 401(k), the defined contribution part of the hybrid plan emphasizes retirement income as the primary goal. It incorporates affordable deferred annuity options during employees’ working years that can deliver income in retirement that compares favorably with what workers can expect from the traditional pension plan alone. The hybrid plan also increases workers’ take-home pay because workers’ contributions are lower than they are in the old defined-benefit plan.

This new program helps workers to think about how much monthly income they will need in retirement–as opposed to how big a nest egg they’re building. [. . .]

Sometimes real change begins with compromise. A new approach on pensions won’t close the gap between current pension promises and the public’s ability to afford them. But it points the way forward and acknowledges the reality that we have to start somewhere to address our nation’s public pension woes.

Are you listening, Mayor Parker?

I Have a Dream

No question about it, Martin Luther King could flat out give a speech.

And here is Robert F. Kennedy’s moving tribute to Reverend King immediately after his death:

Mary Anastasia O’Grady on Free Trade and Drug Prohibition in Latin America

The Mary Anastasia O‚ÄôGrady ‚Äì  longtime WSJ Americas columnist — is one of the most insightful commentators on Latin American politics and economics. In this ReasonTV interview, O‚ÄôGrady comments on the impact of free trade and drug prohibition on Latin America:

Our broken tax system

File this excellent Cato Institute video on our governments’ absurdly complicated tax system in the “why do we do this to ourselves” category of out-of-control governmental policies that include such intrusions as security theater and overcriminalization: