⚕️ » The Economic Consequences of the Pandemic Meet the Drug War

If you think we live in a time different from all others, consider this description of the President of the United States, written in the middle of a pandemic:

“[I]f ever the action of a single individual matters, the collapse of The President has been one of the decisive moral events of history. … He had no plan, no scheme, no constructive ideas whatever for clothing with the flesh of life the commandments which he had thundered from the White House. … [N]ot only was he ill-informed, but his mind was slow and unadaptable … There can seldom have been a statesman of the first rank more incompetent than the President in the agilities of the council chamber…”

That was John Maynard Keynes, writing about Woodrow Wilson, following the disastrous Paris Peace Conference in 1919, in his book, The Economic Consequences of the Peace

The more things change, the more they stay the same.

It is important to note that Keynes wasn’t talking about Wilson’s handling of the Spanish Flu pandemic, which was also disastrous, but rather the peace treaty with Germany, and the economic and political consequences of the reparations imposed on Germany.

However, the war had been financed by huge deficits on all sides, while the “Gold Standard” was largely ignored. That would have been a problem even without the reparations. 

SEE: Does CBD Give You a Body High? 

Of course, a hundred years later, the United States has been running deficits for decades. We financed the Gulf War, the Great Recession of 2008 and the recovery during the Obama administration with deficits. The Trump administration’s huge tax cuts were also financed with trillion-dollar deficits, even before the pandemic. And now there will be trillions more as far as anyone can foresee.

Ironically, today Germany’s economy is one of the strongest in the world and the rest of Europe is now trying to get Germany to allow the European Central Bank to loan more to the weaker economies in the EU. Germany is reluctant to do so, because it is still traumatized by the hyperinflation that resulted from the 1919 treaty. 

In any case, today’s huge international deficits exploded without any real theoretical underpinnings. Here we are, wherever that may be, so what are we supposed to call our brave new world?

But there are further ironies. The closest description of what almost all governments (central banks) are doing was coined by Milton Friedman, the darling of the right: “Helicopter Money”. 

The hypothetical helicopter would simply drop newly printed money to the needy, without any government borrowing. In the real world, Central Banks simply issue credit to companies and/or individuals, who do not have to repay it. With real interest rates below zero, there is theoretically no carrying costs. 

The closest theoretical description of this policy is called “Modern Monetary Theory.”

Unfortunately, any economic theory runs into political reality: Politicians like to spend money to buy votes, even when they talk about “balanced budgets.” Of course, the trillions of dollars and Euros, etc, that are propping up the global economy may briefly flow through the hands or bank cards of the poor and middle class, but most of it ends up in huge pools of capital that has to find a safe place to park. 

SEE: LUXEMBOURG, ONE OF EUROPE’S SMALLEST AND RICHEST COUNTRIES, LEADS ON CANNABIS

In addition, there are trillions of dollars from kleptocracies around the world that just need to find a place to hide, and then there are the trillions in black money from the Drug Wars, and related crimes, including human trafficking, etc. 

“The United Nations Office on Drugs and Crime’s World Drug Report 2005 estimates the size of the global illicit drug market at US$321.6 billion in 2003 alone.[1] With a world GDP of US$36 trillion in the same year, the illegal drug trade may be estimated as nearly 1% of total global trade.”

Today, the global GDP is estimated at $140 trillion, so if the illegal drug trade may be estimated as nearly 1% of total global trade, it would be around $1.4 trillion per year, But no one really knows, and that is another problem. 

Whenever we are finally past the pandemic we will still not have even a theoretical framework for dealing with the economic consequences, and/or the trillions of whatever measures of value we may think are out there. What could possibly go wrong?

SEE: How Legalizing Cannabis Can Bring Back the Right Kind of Tourism

Richard Cowan

CBDSeniors.com co-founder is long-time marijuana legalization advocate, Richard Cowan. Cowan’s December 1973 cover-article in the late William F. Buckley’s National Review magazine, calling for American Conservatives to support marijuana legalization drew international attention the absurdity of marijuana prohibition and was described as opening a new front in the drug war.

In The December 6, 1986 issue of National Review, Cowan’s cover article, How the Narcs Created Crack, is credited with introducing “the Iron Law of Prohibition” and became the subject of a book on the economics of contraband, the stronger the drugs.
From August 1992 to August 1995 Cowan served as executive director of NORML. Cowan decided to help found CBDSeniors.com because the remnants of marijuana prohibition continue to block access to CBD in many areas, and prohibition makes standardized testing more difficult. He also wants to de-stigmatize the cannabis plant to senior citizens who were fed lies and misinformation throughout their entire life. Cowan now lives in Europe where he works with marijuana legalization activists.

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Richard Cowan

CBDSeniors.com co-founder is long-time marijuana legalization advocate, Richard Cowan. Cowan’s December 1973 cover-article in the late William F. Buckley’s National Review magazine, calling for American Conservatives to support marijuana legalization drew international attention the absurdity of...