20 Minute Sprint Post

OK, I've got 20 minutes before my next meeting and I just want to get something down before it becomes approximately 4 ice ages since I last posted.

I'm too lazy to think of new topics, so I will take the suggestions made in the comments of my previous post.

First, the Economist had a big article discussing different countries' drug policies. Though just about everything has been tried, the result is almost always the same: varying degrees of failure. The most successful seem to be the most liberal policies (where success is defined as the least users of "hard" drugs). The end recommendation of the article was basically one for legalization. I think it will come as no surprise to anyone that knows me that I am in support of that. If not outright legalization, then at least decriminalization where drug use is treated as a health problem rather than a criminal offense. This is not to say that I believe that drug users are victims (they're not) but just that the choice to pollute your own body is a personal decision that shouldn't be legislated. "My body, my choice" may be the rallying cry for pro-choice activists but it could just as easily be one for advocates of decriminalization. Of course, outright legalization would have the added benefits of giving the government something new to tax while at the same time dealing a big blow to the profits of organized crime and cartels. I also think it would be quite a bit better if you allowed ordinary citizens to grow a weed plant in their backyard and harvest it themselves for personal use instead of forcing them to go deal with shady individuals in shady areas (and yes I know they're not really "forcing" them to do that). Beyond anything though, the number one reason to change the drug policies in this country is that they don't work. People aren't being deterred; people continue to be locked-up (and supported by taxpayer money) for non-violent crimes, and the occasional joint-smoker is made to feel like he's a social degenerate while the occasional drinker gets "This Bud's for you!" 20 times an hour every time they turn on a sports broadcast.

Now for the Madoff question that Weir brought up. Obviously the idea of people giving back their profits is ridiculous. They obtained their money by legal means even if Madoff didn't (kind of similar to the Pam Anderson sex tape where the video distributor got to keep his profits because he legally bought the rights from a guy who had stolen it). I also think that getting your money back is just as ridiculous. Enron and Worldcom investors didn't get their money (or even their 401(k)s) back when they were defrauded; this is no different. The tax question, however, is a little more interesting, but in the end I think it's just as bunk. Much like when you're sitting at a blackjack table, you don't really have profits until you take all the chips up to the cashier and cash out. Until then it's all just prospective profit. As an investor you are always entitled to recover what you put in (your basis) tax-free. Anything above and beyond that is rightfully taxed, regardless of how much else you think you still have in your stack.