Friday, November 18, 2005

War on Drugs

John Walters, head of the White House Office of National Drug Control Policy, said recently that the rising street price of cocaine in the US shows that the Bush Administration's policies in Latin America are working. Walters said the price of a gram of cocaine had risen 19% in seven months, and its purity had fallen.

The fact is that over the long term, cocaine prices have been relatively stable, and the recent increase is probably just temporary. For more details on why this increase will be temporary, take a look at Freakonomics, or at Beyond Politics and Reason. Or just take Macroeconomics 101.

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