In November California voters will decide whether to legalize marijuana. The proponents have cannily, cannibisly labeled the proposition the "Tax Cannabis Initiative," which plays into the state's general paranoia about its massive budget shortfalls. $20 billion in the current fiscal year and, according to the highly stressed-out State Treasurer, John Chiang, $20 billion for each of the next five years. I believe this is what is known as a "structural deficit:" it's there to stay. Taxing cannabis would raise, by some estimates, $2 billion per year. But, of course, that's just the start. A large fraction of the prison population resides in the state's jails because of pot dealing, cops and the courts have to deal with possession and sale cases, and the illegality of marijuana gives rise to "complementary" criminal problems, such as severed heads rolling down the dusty streets of Tijuana.
April 01, 2010
March 31, 2010
I finished Michael Lewis's latest last night, one of those books I was sorry to see end. Lewis is a great storyteller, maybe the best around. It isn't easy to be entertaining when you're writing about something as intrinsically dull as mortgage-backed securities, but he managed. As with his other books, Lewis concentrates on personalities and weaves the technical stuff into an emotional matrix. He described the often harrowing journey of those gutsy investors who saw the craziness of the subprime market and found a way to short it, particularly a small group of three one-time dilettantes operating out of Berkeley who parlayed about $110,000 in a Schwab account into $80 million; a hedge fund manager in Cupertino with one eye and Asperger's syndrome (and at one time a neurology resident at Stanford Hospital); and a group in New York centered around the iconoclastic and acerbic Steve Eisman, who delighted in telling all the big bankers on Wall Street who bet on the enduring quality of a rising housing market that they were completely full of shit.
March 28, 2010
One cannot libel the dead, and for this Senator Lindsey Graham (Supercilious, S.C.) should be grateful. Ponzi, in an act of magnificent chutzpah, once sued one of his earlier detractors, who wrote that he was running a, well, Ponzi scheme. Ponzi won in court, a $500,000 judgment for the impertinence of smearing his bad name. In those days tort law required the defendant to prove the truth of his charge (as the English system still does), and Ponzi's detractor, while exactly right, couldn't prove it.