The Case for Legalization

Reason:

It is understandable why politicians have convinced themselves that drugs are a third rail of public policy and that they therefore don't have to seriously address legalization. The media—the very institution charged by the First Amendment with facilitating intelligent discourse—colludes with the government's drug war rather than challenging politicians to engage a real debate. The Washington Post and The New York Times both require drug-tests from college students seeking summer internships. And both have given the federal government free advertising space to promote First Amendment-infringing drug policy, when the president's Office of Drug Control Policy acquires space for drug war propaganda. Would the Times and the Post ever alcohol-test an aging copy editor, or offer the Department of Defense free space to promote an elective war in the Middle East in return for a full-page ad touting "Mission Accomplished?"

In this time of national economic crisis, we keep looking in our collective rear view mirror for lessons from the 1930s for what we should do, and what we should avoid, in order to restore confidence in ourselves and create hope for our future.

While fiscal and monetary actions taken in that era offer mixed and muddled messages for today's policymakers, another action by a transformational leader in that far-off decade sends a clarion call to us at the beginning of the 21st Century.

Franklin Roosevelt supported the 21st Amendment to end the madness of the 18th, and in so doing halted the devastating social, economic, and cultural costs of Prohibition. That's a lesson Barack Obama needs to heed.

Grab Your Pitchfork, Senator

Wonderful op-ed from Steve Chapman (HT: Roberts). Here's the best line:

These days, every politician assumes that because he has a driver's license and an ATM card, he must have all the necessary skills to run an automaker and operate a bank.

And:

AIG could have refused to make the payments, but only by violating contracts it had made with employees. Officials at the Federal Reserve Bank of New York entertained this option, reports The Washington Post, only to realize that the spurned staffers would have sued and gotten not only the payments but "punitive damages that would make the ultimate cost perhaps two or three times as high as the bonuses themselves."

Refusing to pay would also have driven away any top employees with alternatives—which would tend to be the better people, who might just be useful in restoring the company to health. Congress' approach brings to mind the sardonic workplace sign: "The floggings will continue until morale improves."

Expropriating property from people who did nothing more than accept money they were legally due sounds uncannily like a bill of attainder—a legislative measure declaring someone guilty of a crime, and imposing punishment, without trial. This weapon was expressly forbidden by the framers of the Constitution because it is fundamentally unfair, at odds with the rule of law and driven by mass hysteria rather than dispassionate fact-finding.

Once upon a time, those were considered bad things.

Bonuses and Mob Rule

David Harsanyi knocks it out of the park in this Denver Post op-ed:

Here's an idea: If you stop nationalizing banks, there will be no need to engage in phony-baloney indignation over bonus payments anymore.

This cockamamie populism in Washington really hit its stride when Iowa Republican Sen. Charles Grassley suggested that AIG execs who earned bonuses should "follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."

C'mon. If suicide were a proper penalty for piddling away taxpayer dollars, the National Mall would look just like Jonestown after refreshments.

These same senators who voted to nationalize banks with nary a pre-condition are also, apparently, stupendously talented actors. After all, most of these senators voted for a bill that contained a provision that specifically protected bonuses that were agreed upon before Feb 11. in the bank bailout legislation.

Harsanyi's last point is an especially good one: this Congressional "outrage," to be very polite, is disingenuous.

He continues:

How is it that all those who cast votes on this provision — because, we imagine, no trustworthy lawmaker would vote for legislation they hadn't vigorously examined — are now threatening a "special" tax to snag AIG bonuses? Not only is it dishonest, it also means they, in a breathtaking abuse of power, believe using punitive taxation to appropriate someone's salary is a legitimate function of government.

President Barack Obama, meanwhile, has asked Treasury Secretary Timothy Geithner "to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole," claiming it was all about "fundamental values."

You know what's a super useful value? A guarantee that contracts entered into by individuals or parties are respected. Or is the state ready to throw that fundamental value out and bend to the will of the angry mob?

Unbelievable

Good advice, from Benedict in Africa:

But the Vatican's refusal to let Catholics use condoms remains controversial on a continent where AIDS has killed more than 25 million people since the early 1980s.

While medical workers advocate the use of condoms to help prevent the spread of AIDS, the Church insists on fidelity within heterosexual marriage, chastity and abstinence.

"The problem cannot be overcome by distributing condoms. It only increases the problem," the pontiff said on Tuesday.

More on the Bonuses

Andrew Ross Sorkin of the NYT gets it right on the AIG bonuses:

[T]he “fundamental value” in question here is the sanctity of contracts.

That may strike many people as a bit of convenient legalese, but maybe there is something to it. If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

If government officials were to break the contracts, they would be “breaking a bond,” Ms. Meyer says. “They are raising a whole new question about the trust and commitment organizations have to their employees.” (The auto industry unions are facing a similar issue — but the big difference is that there is a negotiation; no one is unilaterally tearing up contracts.)

This Makes Me Very Happy

It drops April 28.

A Whiff of Fascism

NYT:

President Obama vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to avert a populist backlash against banks and Wall Street that could complicate Mr. Obama’s economic recovery agenda.
....

White House officials said that the administration is not looking to take A.I.G. to court to stop the company from paying out the bonuses. But they said the Treasury Department would be trying to figure out what they can do to block A.I.G. from making the payments within the legal confines of A.I.G.’s contractual obligations to the executives.

I agree with Russ Roberts: AIG should not be rewarding the people who destroyed the company. Unfortunately, the price of Obama's "populist" posturing is the rule of law. This set's a chilling precedent.

UPDATE: From Business Week:

At least on Wall Street, the honeymoon is over for President Barack Obama.

Polls still show the President has strong popularity among the general U.S. population, and Obama continues to command power in Congress. But among investors, fairly or unfairly, there is griping that the new Obama Administration is at least partly to blame for the recent slide in stocks. Since Nov. 4, Election Day, the broad Standard & Poor's 500-stock index is off about 25%, and since Jan. 20, when Obama took office, the "500" is down 15%.

....

A lack of details from Geithner disturbed investors, says Quincy Krosby, chief investment strategist at the Hartford (HIG). "Markets need certainty," she says. "The market has been sitting here waiting, waiting, waiting. That allows rumors and conspiracy theories to dominate."

Does anyone else see a connection here?

[HT: Micah]