The incredible ability of government to lose money

Ronald Reagan once said, “If it moves, tax it, if it keeps moving, regulate it, and if it stops moving, subsidize it!”

I thought of that quote last week when I read that California is offering a cool $100 million to rescue its struggling legal marijuana industry, in Smart News.

Huh? Struggling cannabis industry in the People’s Republic of California? The land of pot and pills?

But the story (originally from the infamous LA Times) seems to explain why – at great lengthen.

Let me give you the bottom line and spoiler: it is because government is STUPID and government is CORRUPT.

Why STUPID? (And just HOW stupid?)

  1. They thought that people are basically law-abiding and only broke the law because they wanted pot so much: make it legal and they’ll happily follow the law. WRONG.
  2. They thought that all those dope dealers were really just looking for an opportunity to go legit. WRONG.
  3. They thought that the cannabis industry was yet another cash cow for the greedy, uncontrolled spenders in Sacramento. WRONG.
  4. They thought that people would be very willing to pay “a little more” for “safe, inspected, legal, and regulated” marijuana. WRONG.

So what happened? California passed laws and enacted regulations that created this enormous regulatory scheme, complete with nice juicy taxes, lots of need for bureaucrats, and all the bells and whistles that the nannies and bureaucrats and elected dictators know and love so much.

So – and no surprise – it all went wrong.

  1. California was supposed to have 6,000 legal pot shops: they actually only have a few over a thousand.
  2. California may have as many as 3,000 unlicensed pot shops – and I suspect that number is low.
  3. No one knows how many people continue to sell illegal, untaxed, unregulated pot from door to door, and where ever. Much less how many people are growing and selling illegally.


  1. High taxes on both the actual product AND the licensed businesses. The State and local governments make more money on a gram of pot than the growers and the sellers do, it seems.
  2. Bureaucratic nightmare: the burdensome regulations – including an environmental “protection” provision that requires an environmental assessment of both the shop and wherever the stuff is grown – means that even most of the “temporarily-licensed” businesses still don’t have real permits.
  3. Apparently about 3/4 of the municipalities of California do not allow cannabis retailers – LEGAL cannabis retailers – in their jurisdictions.

All this adds up to governmental stupidity on a grand scale. Is it any wonder that people will continue to get their fix from an entrepreneur? Honest or not? High quality or not? They know that the governments are neither honest NOR concerned about quality. They realize that governments are nothing but parasites.

Of course, we aren’t done with the stupidity. This $100 million won’t go as welfare payments to legal pot dealers. Oh, no! Rather, the money will go to local governments as grants, to let them hire more people to review and issue the licenses and inspect. The cities MAY be able (allowed) to use some of that money to provide “equity funding” (that is, investment) for some pot businesses. Those owned by People of Color, right? So what will really benefit from this chuck of cash? Governments, contractors for governments, and grant writers. While making it all part of a welfare system that combats “whiteness.”

Government = both elected officials and bureaucrats – clearly are too stupid (at least in groups) to learn from past lessons. Like the market for “illegal” cigarettes in NYC. (Not “untaxed” – just bought in states with LESS taxes and brought to NYC.) Like the on-going market for moonshine – regulations and taxes avoided. And so many centuries of smuggling – far more than just drugs, booze, and women – that we cannot imagine.

And never mind that the vast majority of people – even in the People’s Democracy of California – would probably have little hassle with paying just the sales tax on the pot they buy at a store. California not only continues to lose millions and millions of dollars in sales tax revenue alone from selling pot – Sacramento is now wasting this $100 million. What COULD have been a big profit center for State government (as it has been elsewhere) is now just flushing more money down the toilet.

(And yes, I recognize that it is not totally wasted money from the point of view of the legislators and bureaucrats in Sacramento. Once more, it is them and their buddies and pals that will gain all this money. And some of them are no doubt already figuring out how to sell their “reform” of this spending to use to get more money in campaign donations.

Government is a racket. The War on Some Drugs is a racket. And thanks to greed and stupidity, legalizing some drugs is also a racket.

About TPOL Nathan

Follower of Christ Jesus (a christian), Pahasapan (resident of the Black Hills), Westerner, Lover of Liberty, Free-Market Anarchist, Engineer, Army Officer, Husband, Father, Historian, Writer, Evangelist. Successor to Lady Susan (Mama Liberty) at TPOL.
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