UNCLE SAM BANKROLLS TERRORISM

With the war on terror expanding beyond the reaches of the Middle East,
attention is now extending to South America.

Michael Catanzaro, writing for the June 2002 American Enterprise,
highlights the increasing terrorist activity in Colombia, including not
only the domestic FARC forces, but also Hamas, Hezbollah and even the IRA.

"Colombia is the most abundant source of cocaine and heroin in North
America. FARC, along with other paramilitary groups fighting for control of
Colombia, provides protection to farmers who grow coca and poppies, and
finances its revolutionary operations through drug sales," writes Catanzaro.

According to Rep. Cass Ballenger, R-N.C., drug profits "are sent directly
to the Middle East to support the operation of terrorist organizations,
possibly even the planning of terrorist acts. . Americans must recognize
that every time they buy cocaine or heroin, they are directly funding
terrorists."

OK, sure. But try this: The American government must recognize that every
time it enforces narcotics laws, it is directly funding terrorists.

Terrorists aren't interested in opium itself, except perhaps to relax after
a hard and hectic day of murder and mayhem. What terrorists are interested
in is money to fund said murder and mayhem. Sept. 11s don't come cheap,
after all.

The most important factor - and strangely the most ignored factor - in
connecting the war on terror to the war on drugs is the failure to connect
the profits to prohibition.

Drugs are valuable. But why? Coca is just a bush. Opium from which heroin
is made is simply the resin of a flower. It's the laws against the drugs
that create the economic environment for high prices. Dope is lucrative
because of the drug war.

Think about this: Marijuana can grow almost anywhere. It's a ubiquitous
plant. Any time a plant grows easily in a number of environments, is easily
cultivated, harvested and readied for sale, it has a hard time pulling the
big bucks. When's the last time you heard of a farmer getting $3,000 to
$5,000 for a kilo (a little more than two pounds) of wheat?

Because of laws against cannabis, the risks for growing it go up. Thus, to
satisfy their demand, consumers must be willing to pay prices which make it
worth the while of producers, distributors and sellers to take the risks.
The legal crimp jacks the cost.

How much? Morocco's biggest crop is cannabis, which it processes mainly
into hashish. While the trade is illegal, according to the June 17 St.
Petersburg Times, it rakes in an estimated $3 billion a year for the little
country. "So much Moroccan hashish is exported - 1,500 tons a year - that
the country gets most of its hard currency from the illegal hash trade."

But the hitch with marijuana is that it's bulky. In the late 1970s, savvy
South Americans sniffed out cocaine as the big cash crop. Then, marijuana
was going for less than $200 a kilo in the U.S. For the same weight,
cocaine fetched between $50,000 and $60,000. With profits like that, it
didn't take long before cocaine crashed down the doors. Trouble is, with
supply hiked relative to demand, the price crashed too; as Daniel K.
Benjamin noted in a 1992 paper for the Independent Institute, it fell by as
much as 50 to 90 percent in just 10 years.

Ah, but hope springs eternal, thanks to prohibition.

"The South American drug cartels have discovered that growing opium poppies
and refining their gum into heroin yields 10 to 20 times more profit per
unit shipped than cocaine," explained Benjamin. "Peasants can annually earn
$500 for one hectare of subsistence crop, $1,500 for coca, and $4,500 for
opium poppies. Distributors can sell cocaine for perhaps $15,000 per kilo,
but heroin brings $150,000 or more. Consequently, shipments of South
American heroin to the United States are increasing at an alarming rate."

And as we all know, thanks to Drug Czar John Walters and his Super Bowl
commercials, this money goes to fund terrorists. Every heroin fix is a
guaranteed deposit in First Terrorist Trust.

Currently, the rhetoric about terrorism and drugs comes down to fighting
two wars: One on bad people, the other on bad plants. Few are apparently
ready to admit that by ceasing the war on the bad plants, the bad people
won't be able to fund their bad operations.

The flip side, of course, is that because of prohibition they can, and
every attempt to crack down just sends the prices up - making the war on
drugs and our government instrumental in funding terrorists.