Saturday, August 22, 2015

Drug testing for government benefits in all the wrong places

Drug testing for welfare recipients has been a perennial charmer for conservatives in elective office. I've been hearing conservative demands for drug testing for the poor, poor beneficiaries of welfare for 3 decades now. In the last decade, they finally got their wish at the state level and it hasn't worked out quite like they planned.

USA Today ran an op-ed in 2012 on that very issue. Arizona tested more than 87,000 welfare recipients and found just one drug user, saving the state at least some money:
Arizona was the first state to impose a testing program. In 2009, it began testing new welfare recipients when there was a "reasonable cause" to suspect illicit drug use. So how many of the 87,000 people subjected to the program have tested positive since then?
Just one.
One? The program disburses more than $200 million in aid. How much was saved by drug testing? $560.

Florida went through a similar adventure until the federal courts stopped them. Florida also charged welfare recipients $30-40 for the test upfront, money that would be refunded if the test was passed. 2.7% failed the test.

There are more examples we could peruse, but that is not the point of this article. The point is this: at the bottom of the housing bubble collapse were the biggest banks in America, getting emergency assistance to "save the economy" - more like "please save my sorry ass from bankruptcy!" assistance.

The bailouts consisted of approximately $16 trillion in emergency assistance, some might call this "liquidity", so that the biggest banks in America would not have to declare bankruptcy. $16 trillion? Isn't that about the size of the entire American economy for a year, you know, GDP?

Bernie Sanders was one of the men and women in Congress seeking an audit of the Fed. The purpose was to find out who got all that assistance that was so badly needed. What did we learn from that audit? We learned that many of the biggest banks got huge bailouts, despite their mistakes. Yet, no one, as far as I know, was ever tested for drugs before getting the money.

A search for drug addiction on Wall Street can yield a plethora of results like this one from The Fix website:
While popular culture teems with images of the coke-snorting Wall Street hot shot, the reality these days is as grim as a Florida pill mill. Like millions in society’s addicted class, hedgies are hooked on prescription pain killers.
If drug use on Wall Street is so pervasive, why were there no drug tests of the beneficiaries of all that largesse in 2008? If there were drug testing for bailout bank executives, there would be howls of protests from conservatives pundits and legislators alike. But at least we'd know the state of mind of the people who were running the biggest banks when they failed.

Remember, these Wall Street guys are "running the economy". They manage trillions in other people's money and they share the revolving door from the street to the Fed and the Treasury.

Somehow, I think testing for drugs at the welfare office is the wrong place to start. I think we should start at the Fed's emergency loan programs and the Discount Window. Welfare recipients don't tank the economy. High finance executives do.
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