Legendary Federal Judge Richard Posner Endorses Marijuana Legalization

Friday, September 7th, 2012

The entire speech is worth listening to, but for those interested in Posner’s statement on marijuana you could start listening at about the 54th minute:

 

-Eapen Thampy

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11 Responses to “Legendary Federal Judge Richard Posner Endorses Marijuana Legalization”

  1. #1 |  Kevin | 

    I got to the point where he started dissing deflation and I got irritated. I’m not a “fan” of deflation, but his comment that it’s bad because people will wait to buy is a bit absurd. Computers get more powerful and cheaper all the time. It’s an essentially deflationary industry. You’d think computer sales would have never taken off. We’d all be outside, or knitting, or having real sex instead of being on the internet, because we’d still be waiting for prices to drop. Some people will wait if they think a new model is just around the corner, but they won’t wait too long.

    In comparison to inflation, deflation sounds like a picnic. At least there’d be a reason for people to save money.

  2. #2 |  Jess | 

    When the marginal value of your opportunity cost for delaying a purchase is less than the marginal savings you expect to gain by delay, you delay. When it isn’t, you don’t. When prices are denominated in a fairly stable currency, there is a fairly stable relationship between the marginal cost and the marginal savings. (In this case we might observe that people with stable incomes upgrade on a fairly regular basis.) With a deflating currency, there isn’t. Technological progress in any particular industry isn’t some magical refutation of the dangers of deflation. Historically, deflation has been bad for economies.

    Of course the Fed has numerous tools at its disposal to combat deflation, so the danger is probably still exaggerated.

  3. #3 |  Danny | 

    I save, I like deflation. Consumer decisions I make are not based on the weak dollar (aka inflated currency). Large investments like a home or anything with high dollar commodoties involved would be based on currency valuation and the local market (assuming deflation). Consumers are both smart and dumb, I don’t worry about those that do not understand purchase price parity. My take.

  4. #4 |  el coronado | 

    If Posner really thinks deflation is going to be a serious problem, the boys at ZeroHedge say he’s wrong wrong wrong. There are dozens of examples there – because after all they’re literally creating trillions of $$ out of thin air – but my fave is the recent post noting there have been 56 (count ‘em!) instances of hyper INflation in the 20th & 21st centuries. Starting with the infamous Weimar Republic money crisis of 1921-23. And exactly *zero* instances of [hyper]deflation. Hmmmm….who to believe on this….some lawyer turned judge, or the guys at the best money/finance blog on Earth?

    http://www.zerohedge.com/news/monetary-endgame-score-date-hyperinflations-56-hyperdeflations-0

  5. #5 |  Peter H | 

    coronado, care to define hyperdeflation for me? Deflation, unlike inflation, has a zero bound, so that the standard definition of hyper-inflation, if reversed, would mean that there was only one dollar in existence.

    1929-1933 was an instance of massive deflation. In the US deflation was roughly 40%. That’s hyper-deflation in my book. And 1929-1933 was pretty bad, as in the worst economic downturn in the post-industrial period.

  6. #6 |  el coronado | 

    Hey, Peter –

    You’re right, ’29-33 was the golden age of deflation. Of course, what makes this NOT an apples-to-apples comparison is that during that time, the 4 largest economies on Earth weren’t pumping _tens of trillions_ of dollars/euros/yen/yuan – not one of which is backed by gold, BTW – into a world economy narrowly defined as “just our friends and donors at Goldman & Morgan & Dexia & Sumitomo & them.”

    Yes, Hoover *did* try to inject liquidity into the economy, but on a much smaller scale (That’s why it’s ‘Hoover Dam’); and those were real dollars, backed by real gold. As opposed to just today’s _always_ trustworthy ‘full faith and credit of the US Government’ dollaz. (LOL) Then too, his efforts were made largely pointless by Smoot-Hawley, which gummed up world trade enough to essentially freeze the velocity of $$ worldwide, IIRC. *That’s* not an issue today either. Lastly, the above-linked ZeroHedge chart in re hyperinflation has an inflation range of 55% a _month_ to 4 trillion % a _month_(!). (sucked to be Hungarian in 1946.) A 40% drop in 4 years, while still very very significant, is hardly “hyper”. Vegas & Phoenix & SoCal Inland Empire homes & Miami condo prices have dropped 65% or so in the last 4 years, and nowhere do we see the word deflationary, much less ‘hyperD’.

    Just can’t see it: a world where food prices are skyrocketing with more on the way due to massive drought-induced crop losses; a world where Starbucks drivethrus are packed with idiots waiting for their $5 cuppa coffee; a world where the price of gas has doubled in the 3.5 year term of our Dear Leader; a world where the price of oil is gonna double again instantly at the *first* report of the upcoming Iran-Israel war kicking off….yoked to the awesome destructive power of gazillions of fresh new “dollars” being printed every day….those forces aren’t gonna be overcome by extreme couponers or Posner’s clerk waiting to get an ‘even better deal’ on his new suit.

  7. #7 |  cthulhu | 

    Getting past the economic theory stuff that was not the point of the post: I’m glad that Posner has decided to join people like Milton Friedman and William F. Buckley on this, if much later than they.

    Also noted that Republican VP candidate Paul Ryan said yesterday that marijuana laws should be up to the states (can’t find a link, but it was widely reported). A shocker that Republicans are out in front of Democrats on drug policy…

  8. #8 |  Kevin | 

    I was not defending runaway or catastrophic deflation. My point is that modest levels of deflation are probably much better than the constant inflation the US experiences. Americans have long been called to task on their unwillingness to save. Why should they? Their government makes their savings worthless through inflation. This of course, forces them into the stock market, which is tilted in the favor of major investors.

  9. #9 |  KrisWV | 

    @cthulhu
    Here are votes Rep. Paul Ryan (WI) has taken in congress:

    May 8 2012: On the Rohrbacher Amendment to House Resolution 5326 which would have prohibited the government from spending money to attack production and sales of medical marijuana in states where it legal
    RYAN VOTES NO. Allowing funding to continue.
    http://clerk.house.gov/evs/2012/roll238.xml

    Not an isolated vote — he voted the same way when the amendment came up in 2007 and 2005:
    http://votesmart.org/bill/4589/14547/26344/state-and-federal-medical-marijuana-law-enforcement-and-implementation
    http://votesmart.org/bill/4589/14547/26344/state-and-federal-medical-marijuana-law-enforcement-and-implementation
    http://votesmart.org/bill/3670/8946/26344/medical-marijuana-use-amendment

    His votes are exactly the opposite of what he said. Draw your own conclusions.

  10. #10 |  Doc Merlin | 

    Can anyone actually point to a catastrophic deflationary episode?

  11. #11 |  theCL Report: Heil Barack! | 

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