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Strategies & Market Trends : World Outlook

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To: Les H who wrote (10476)4/13/2009 2:29:17 PM
From: Skywatcher2 Recommendations  Read Replies (1) of 48868
 
WE TRIED A WAR LIKE THIS ONCE BEFORE

By Mike Gray

In 1932, Alphonse Capone, an influential businessman then living in Chicago,
used to drive through the city in a caravan of armor-plated limos built to his
specifications by General Motors.

Submachine-gun-toting associates led the motorcade and brought up the rear.
It is a measure of how thoroughly the mob mentality had permeated everyday life
that this was considered normal.

Capone and his boys were agents of misguided policy. Ninety years ago, the
United States tried to cure the national thirst for alcohol, and it led to an
explosion of violence unlike anything we'd ever seen. Today, it's hard to
ignore the echoes of Prohibition in the drug-related mayhem along our southern
border. Over the past 15 months, there have been 7,200 drug-war deaths in
Mexico alone, as the government there battles an army of killers that would
scare the pants off Al Capone.

Now U.S. officials are warning that the vandals may be headed in this
direction. Too late: They're already here. And they're in a good position to
take over organized crime in this country as well.

After decades of trying to stem the influx of illegal narcotics into the United
States, it's clear that the drug war, like Prohibition, has led us into a
gruesome blind alley. Drugs are cheaper than ever before and you can buy them
anywhere. As Mexico's cash-starved government struggles to keep up the good
fight, the drug barons rake in more than enough to buy political protection and
military power while still maintaining profit margins beyond imagining. And
what's driving this desperate struggle may be the ubiquitous weed:

Southwestern lawmen say that marijuana accounts for two-thirds of the cartels'
income.

At last, the spectacular violence in Mexico has captured everybody's attention,
and in an eerie replay of the end of alcohol prohibition, we may at last be
witnessing the final act in the war on drugs.

One hint of a shifting wind came in February, when a state legislator from San
Francisco introduced a bill to tax, regulate and legalize adult use of
cannabis. This sort of grandstanding is always met with derision, and this was
no exception. But then something strange

happened: California's chief tax collector said that the measure would bring in
$1.3 billion a year and save another $1 billion on enforcement and
incarceration. In a state facing an $18 billion deficit, suddenly nobody was
laughing.

Four days later Arizona Attorney General Terry Goddard, who's no legalizer,
said that he, too, thinks we should take another look at marijuana prohibition.
"The most effective way to establish a virtual barrier against the criminal
activities is to take the profit out of it," he told a U.S.
Senate subcommittee.

The next day, U.S. Attorney General Eric H. Holder Jr. announced a minor policy
shift with enormous implications: The federal government would no longer go
after groups that supply medical marijuana in the

13 states where it is legal. The Drug Enforcement Administration had been
raiding dispensaries routinely, and dozens of patients and growers are behind
bars today despite their legal status in California's eyes. Now that threat has
vanished for those who comply with state law. For California, this amounts to
de facto legalization.

At his recent cyberspace town hall meeting, President Obama fielded a question
about whether legalizing marijuana would improve the economy. "No,"
he replied as the audience giggled. But that answer sheds no light on his
actual thinking. Obama has already called the drug war an "utter failure."
And since he himself is an admitted ex-toker, it's hard to believe that he'd
cancel some kid's college education over a crime he got away with.

Of course, resistance to marijuana legalization remains rock solid in
Washington among those who can't face the failure of prohibition. But that has
more to do with politics than science. The Department of Health and Human
Services says that there are 32 million drug abusers in the country, but that
includes 25 million marijuana smokers. If you strike them from the list, how do
you justify spending $60 billion a year in this economy trying to stop 2
percent of the population from being self-destructive? It would be dramatically
cheaper to follow the Swiss example: Provide treatment for all who want it, and
supply the rest with pure drugs under medical supervision.

When we erected an artificial barrier between alcohol producers and consumers
in 1920, we created a bonanza more lucrative than the Gold Rush.
The staggering profits from illegal booze gave mobsters the financial power to
take over legitimate businesses and expand into casinos, loan sharking, labor
racketeering and extortion. Thus we created the major crime syndicates
-- and the U.S. murder rate jumped tenfold.

Fortunately, the Roaring '20s were interrupted by the Crash of '29, and when
the money ran out, the battle against booze was a luxury we could no longer
afford. Prohibition was repealed in 1933, and over the next decade the U.S.
murder rate was cut in half.

Today it's back up where it was at the peak of Prohibition -- 10 per 100,000
-- a jump clearly connected to the war on drugs. And anyone who's watching
what's going on south of the border can see that we're headed for an era of
mayhem that would make Meyer Lansky and Frank Costello weak in the knees.

Profits from the Mexican drug trade are estimated at about $35 billion a year.
And since the cartels spend half to two-thirds of their income on bribery, that
would be around $20 billion going into the pockets of police officers, army
generals, judges, prosecutors and politicians. Last fall, Mexico's attorney
general announced that his former top drug enforcer, chief prosecutor Noe
Ramirez Mandujano, was getting $450,000 a month under the table from the
Sinaloa cartel.

The cartel can of course afford to be generous -- Sinaloa chief Joaquin Guzman
recently made the Forbes List of Billionaires.

The depth of Guzman's penetration into the United States was revealed a few
weeks ago, when the DEA proudly announced hundreds of arrests all over the
country in a major operation against the "dangerously powerful" Sinaloa cartel.
One jarring detail was the admission that Mexican cartels are now operating in
230 cities inside the United States.

This disaster has been slowly unfolding since the early 1980s, when Vice
President George H.W. Bush shut down the Caribbean cocaine pipeline between
Colombia and Miami. The Colombians switched to the land route and began hiring
Mexicans to deliver the goods across the U.S. border. But when the Mexicans got
a glimpse of the truckloads of cash headed south, they decided that they didn't
need the Colombians at all. Today the Mexican cartels are full-service
commercial organizations with their own suppliers, refineries and a
distribution network that covers all of North America.

As we awaken to the threat spilling over our southern border, the reactions are
predictable. In addition to walling off the border, Congress wants to send
helicopters, military hardware and unmanned reconnaissance drones into the fray
-- and it wants the Pentagon to train Mexican troops in counterinsurgency
tactics.

Our anti-drug warriors have apparently learned nothing from the past two
decades. A few years ago we trained several units of the Mexican army in
counterinsurgency warfare. They studied their lessons, then promptly deserted
to form the Zetas, a thoroughly professional narco hit squad for the Gulf
cartel, which offered considerably better pay.

Over the past eight years, the Mexican army has had more than 100,000
deserters.

The president of Mexico rightly points out that U.S. policy is at the root of
this nightmare. Not only did we invent the war on drugs, but we are the primary
consumers.

The obvious solution is cutting the demand for drugs in the United States.
Clearly, it would be the death of the cartels if we could simply dry up the
market. Unfortunately, every effort to do this has met with resounding failure.
But now that the Roaring '00s have hit the Crash of '09, the money has vanished
once again, and we can no longer ignore the collateral damage of Prohibition
II.

Writing last month in the Wall Street Journal, three former Latin American
presidents -- Fernando Henrique Cardoso of Brazil, Cesar Gaviria of Colombia
and Ernesto Zedillo of Mexico -- declared the war on drugs a failure.
Responding to a situation they say is "urgent in light of the rising levels of
violence and corruption," they are demanding a reexamination of U.S.-inspired
drug policies.

Two weeks ago, a conservative former superior court judge in Orange County told
the Los Angeles Times that legalization was the only answer, and of 4,400
readers who responded immediately, the Times reported that "a staggering 94
percent" agreed with him.

This is another pivotal moment in U.S. history, strangely resonant with 1933.
The war on drugs has been a riveting drama: It has given us great television,
filled our prisons and employed hundreds of thousands as guards, police,
prosecutors and probation officers. But the party's over.

Here is a glimpse of what lies ahead if we fail to end our second attempt to
control the personal habits of private citizens. Listen to Enrique Gomez
Hurtado, a former high court judge from Colombia who still has shrapnel in his
leg from a bomb sent to kill him by the infamous drug lord Pablo Escobar. In
1993, his country was a free-fire zone not unlike Mexico today, and Gomez
issued this chilling -- and prescient -- warning to an international drug
policy conference in Baltimore:

"The income of the drug barons is greater than the American defense budget.
With this financial power they can suborn the institutions of the State, and if
the State resists . . . they can purchase the firepower to outgun it. We are
threatened with a return to the Dark Ages."

Ending prohibition won't solve our drug problem. But it will save us from
something far worse. And it will put drug addiction back in the hands of the
medical profession, where it was being dealt with successfully -- until we
called in the cops.

Mike Gray, the chairman of Common Sense for Drug Policy, is the author of "Drug
Crazy: How We Got Into This Mess and How We Can Get Out."
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