New York State: Why Weed Is the Other Side of Wall Street
The parallels between prohibition and cannabis legalization.
We used to play for silver, now we play for life.
-- Grateful Dead
There was an article in yesterday's New York Post about how NYC comptroller and mayoral candidate John Liu has a plan to legalize and tax marijuana in New York. I found the topic particularly interesting -- and not because I've been to 60-odd Grateful Dead shows in my day.
When I spoke about My Single Best Investment Idea of the Next Decade last year, I offered that the legalization of cannabis would achieve several meaningful objectives: It would lower the crime rate, add jobs, alleviate the overcrowded prison population, and perhaps most importantly, drive much-needed tax revenue.
Given the state of our union -- which is entirely different than the all-time high in the stock market (pun intended) -- it's been my long-held view that we will need a healthy dose of austerity measures and higher taxation to bridge the chasm between perception and reality.
Nobody wants higher taxation, but if it's an unavoidable reality, why not tax things folks "want" rather than what they "need"? I've been a proponent of a sugar tax, for instance, as it would tackle two issues: increase tax revenue and lower long-term health-care costs.
As a registered independent -- socially liberal and fiscally conservative -- these policies make sense to me, particularly in a time when so many political decisions don't.
Unfortunately, as has been the case throughout history, tangible shifts in public policy -- such as the repeal of prohibition coming out of the Great Depression -- tend to happen as a function of need rather than want. Nothing like a good old-fashioned crisis to change the way people feel about hot-button issues.
Of course, you know it don't come easy. I was speaking with one of the world's leading authorities on cannabis this week, and when I asked her if cannabis will be legalized in New York, her reply was an almost too quick "No shot." Indeed, despite some 61% of New Yorkers favoring the use of medical marijuana, the NY State Legislature seems set in their old school ways.
Yesterday, we talked about how some analysts are predicting that upward of 100,000 Wall Street jobs may soon be cut. Citigroup (NYSE:C) and Morgan Stanley (NYSE:MS) have both announced plans for job cuts in the first three months of next year; in total, 21,000 positions will be eliminated.
It would be terrific if politicians and policymakers had the foresight to identify a budgetary gap-fill prior to the next crisis rather than scrambling for a solution after the damage is done.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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