COVID’s Impact on the drug trade
The ridiculous worldwide shutdown of everything has at least provided one interesting piece of research material: COVID-19’s impact on the drug war.
Per the AP:
Associated Press interviews with nearly two dozen law enforcement officials and trafficking experts found Mexican and Colombian cartels are still plying their trade as evidenced by recent drug seizures but the lockdowns that have turned cities into ghost towns are disrupting everything from production to transport to sales.
Along the 2,000-mile U.S.-Mexico border through which the vast majority of illegal drugs cross, the normally bustling vehicle traffic that smugglers use for cover has slowed to a trickle. Bars, nightclubs and motels across the country that are ordinarily fertile marketplaces for drug dealers have shuttered. And prices for drugs in short supply have soared to gouging levels.
“They are facing a supply problem and a demand problem,” said Alejandro Hope, a security analyst and former official with CISEN, the Mexican intelligence agency. “Once you get them to the market, who are you going to sell to?”
Virtually every illicit drug has been impacted, with supply chain disruptions at both the wholesale and retail level. Traffickers are stockpiling narcotics and cash along the border, and the U.S. Drug Enforcement Administration even reports a decrease in money laundering and online drug sales on the so-called dark web. This March 2020 photo provided by the U.S. Border Patrol shows drugs seized from a tunnel under the Otay Mesa area of San Diego, Calif. Federal authorities seized a panoply of narcotics inside the newly discovered underground passage connecting a warehouse in Tijuana with south San Diego. The bust of $30 million worth of street drugs was also notable for its low amount of fentanyl – about 2 pounds. (U.S. Border Patrol via AP)
“The godfathers of the cartels are scrambling,” said Phil Jordan, a former director of the DEA’s El Paso Intelligence Center.
The same is true for drug prices.
Cocaine prices are up 20 percent or more in some cities. Heroin has become harder to find in Denver and Chicago, while supplies of fentanyl are falling in Houston and Philadelphia. In Los Angeles, the price of methamphetamine has more than doubled in recent weeks to $1,800 per pound.
The outbreak of COVID-19 has sent the price of heroin, methamphetamines and fentanyl soaring, as the likes of the Sinaloa cartel – and its main rival, the Jalisco “New Generation” – struggle to obtain the necessary chemicals to make the synthetic drugs, which typically come from China and are now in minimal supply.
“The cartels have suffered from COVID-19 due to the inability to get the regular shipments of synthetic opioids and precursor chemicals for the massive production of meth from China,” Derek Maltz, a former special agent in charge of the Drug Enforcement Administration (DEA) Special Operations Division in New York, told Fox News.
Good guy COVID? It reduced the supply of drugs, reduced the amount of drugs being trafficked, and caused an increase in drug prices.
COVID-19 And The Economics Of The Drug War
We can see an interesting economic lesson here. The importance on who holds the power of supply. When the Chinese stop supplying drug cartels with precursor drugs, miraculously the price increases. When price increases, demand goes down. When demand goes down, usage goes down. This simply means less people get addicted and die from drug use.
But the economic cycle of the drug war itself is interesting as well. A communist country that hates us creates precursor drugs. They then profit by knowingly selling these precursor drugs to drug cartels. The drug cartels then use them to make even worse drugs. The drug cartels then import these into the US. American citizens then provide money for these drugs which further fuels the drug cartels and communist China. Drug users continue to financially support Chinese communism, horrific drug cartels, and the weakening of the American citizenry.
Allowing this cycle to repeatedly unfold only continues to put the power in the hands of everyone non-American. The Chinese profit. The drug cartels profit. The gangs that distribute at the local level profit. All of the bad guys continue to wield the power. The American government and citizenry continue to spend money to buy drugs thereby supporting these groups and likewise spend tax money to finance law enforcement action to stop them.
It’s a vicious cycle. We’re abetting the bad guys.
The goal should be the removal of power from these groups. We could do this through one of two methods: 1) full governmental regulation and legalization or 2) much harsher drug punishments.
Under 1) if we authorized a government producer and supplier we would effectively hand the power of supply from China, gangs, and the cartels to our own government. We would keep it out of private industry to ensure there is not a profit or other financial incentive to addict users. Additionally, we could then regulate, track, and tax all users. This tax could be used to offset the cost of free drug rehab and other programs to aid in recovery/monitoring. We could still drug test and discourage use much the same as we do with cigarettes and alcohol. LEO could focus solely on the law breaking drug users instead of their current focus on the cartels, dealers, gangs, and still the law breaking drug users. Cartels, gangs, and evil countries would lose the drug war financial advantage. Granted, the side effect is state involvement with drugs. Yet, this seems much better than the current situation or the other alternative:
Under 2) we could institute a law enforcement response on the drug war on the level of the Khmer Rogue which would completely annihilate supply, thereby making demand a worthless metric. Granted, this would also require an almost complete police state, absolute financial black hole in terms of cost, and full-scale destruction of any reasonable semblance of liberty. We would give up almost everything positive in exchange for a slight amount of safety from these negative elements.
The war on drugs has failed and continues to fail. COVID-19 presents even more evidence on the importance of the supply over demand in regards to drugs. Whoever holds the supply, holds the power. We should take helm of that supply to limit their power.
Banning drugs is identical in failure to banning alcohol or guns. It’s just not going to work. All of our policy options are non-ideal, but one is clearly better than the others.
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