Menckens Ghost

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Closing the deficit by legalizing and taxing pot: the lessons of Prohibition from the book Last Call

By Mencken’s Ghost

August 7, 2011


On December 5, 1933, Utah became the thirty-sixth state to ratify the repeal of the Eighteenth Amendment.  Prohibition was dead.


In the first year after repeal, the federal government collected over $258 million in taxes on alcohol, or nearly 9% of total federal revenue, although several states had elected to stay dry or nearly dry.


The new revenue resulted in a cut of about 20% in the income taxes paid by the working class.  Unfortunately, the Roosevelt administration did not cut the taxes on the wealth-producing class and went on a spending spree to fund a plethora of new programs and bureaucracies, resulting in a protraction of the Great Depression.


Prohibition had wrought hell on society during the 13 years, 10 months, and 19 days it had been in effect.  Drinking increased, crime and corruption became entrenched, law enforcement and the judicial system became overwhelmed in spite of sizable increases in funding and staffing, the rule of law became a mockery, government became a laughing stock, most citizens became lawbreakers, young people started drinking because booze became cool, hundreds of people died from drinking adulterated moonshine, and a double standard developed in which the rich and powerful drank with impunity while the lower classes were harassed by the police at the encouragement of do-gooders and bluenoses.


Prohibition also resulted in plummeting tax revenue; in tens of thousands of workers in the beer, wine and liquor industries losing their jobs; in hundreds of billions of dollars of capital investments (adjusted for inflation) in those industries becoming suddenly worthless; and in revenue being shifted from the U.S. government to the pockets of bootleggers and to the government of Canada, where alcohol was legal, taxed, and smuggled into the U.S.


Since colonial times, America had relied on alcohol taxes to fund much of government.  The progressives who led the temperance movement of the early twentieth century understood that prohibition could never be enacted unless another source of revenue could be found to replace alcohol taxes.  (Today’s liberals are essentially the political offspring of those progressives.)  As a result, they fought for the passage of the Sixteenth Amendment, which established the income tax and progressive taxation.


Today the nation is bankrupt, due, in my opinion, to the fact that nearly 50% of Americans pay no income taxes and thus get a free ride and have little incentive to rein in government spending or to cut taxes on the wealth-producing class.  At root, Prohibition was the cause of this predicament, because it wouldn’t have been enacted without the progressive income tax. 


These and other fascinating facts about Prohibition are detailed in Last Call, by Daniel Okrent, an outstanding scholarly work and the best history book I’ve read in months.  Given the fact that Okrent had held senior editor posts at The New York Times, Life magazine, and Time, Inc., I thought that the book would be full of left-liberal canards and biases.  I was wrong.  The only hint of a bias in the book’s 468 pages is Okrent’s criticism of President Calvin Coolidge, who, in my estimation, ranks near the top of great presidents, because he thought that the best government was a government that left people alone.


Okrent doesn’t pull any punches about the despicable nature of progressives, who, to restate, were the forebears of today’s left-liberals.  For example, he describes how white Anglo-Saxon-Protestant progressives had joined forces with the Ku Klux Klan to attack Catholics, Jews and immigrants for their drinking customs and their home production of alcohol.


According to a source quoted in Last Call, “The Klan of the 1920s enrolled more members in Connecticut than in Mississippi, more in Oregon than in Louisiana, and more in New Jersey than in Alabama.”


One case of Klan terrorism is particularly horrifying and of special interest to me, for it crossed paths with my grandparents.  In 1923 and 1924, law enforcement in Williamson County in southern Illinois had been taken over by more than 1,000 Klansmen.  They raided the homes of Italian coalminers and hauled the occupants to jail if any wine was found, although homemade wine was allowed under the Volstead Act, which was the enabling act of the Eighteenth Amendment.  Twenty people were killed in riots that ensued between locals and the Klan.


Before moving to St. Louis, my immigrant Italian grandfather worked as a coalminer in the county, and my dad was born there in 1919.  Remarkably, progressives are still after my family, although their tactics have become more civilized.  My son has to endure diversity indoctrination as a student at the University of Arizona--indoctrination that lumps all whites together as a monolithic privileged group but treats all Hispanics and Asians as oppressed groups deserving of fawning, affirmative action, and victim status.  It’s difficult to decide what is worse:  the indoctrination or the ignorance of history at its core.


Not surprisingly, the indoctrination is silent about what Stanford University chancellor David Starr said about Italian-Americans during the temperance movement.  He said that although San Mateo County was 90% Anglo-Saxon, “about one-half the arrests for speeding, hit-and-run driving, or worse, are all men with Italian names, mostly from Naples and Sicily.”


The University of Arizona is home to the new National Institute for Civil Discourse, an institute that was founded because of the canard spread by the left that conservative talk radio had precipitated the mass shooting in Tucson by the non-ideological madman, Jarrett Loughner.  One wonders if the institute will tell students about the hate speech of progressives during the First World War and the temperance movement. 


The hate speech was provoked in part by the progressive extraordinaire, President Woodrow Wilson, who, in his campaign of “anti-hyphenism,” demonized some of the Americans “who were born under other flags.”  Much of the resultant hate speech was directed at German-Americans, not only because Germany was the enemy but also because German-Americans controlled most of the American brewing industry.  In a speech at the Union League Club in New York, Elihu Root, referring to German-Americans, said that “There are men walking about the streets of this city who ought to be taken out at sunrise and shot for treason.”  Root was a former secretary of state, secretary of war, a retired U.S. Senator, and a Nobel Peace Prize winner.


One German-American was in fact lynched in 1918 outside of St. Louis.  A mob of 500 “patriots” seized Robert Prager, stripped him, wrapped him in an American flag, dragged him through the streets, and hanged him while they cheered.


Such discouraging stories in Last Call about human nature are counterbalanced by funny anecdotes about the creativity and ingenuity employed to get around Prohibition.  To wit:


Another source of liquid refreshment popped up around this time--the Vino Sano Grape Brick, a solid, dehydrated block of grape juice concentrate mixed with stems, skins, and pulp.  The size of a pound of butter, it came in a printed wrapper instructing the purchaser to add water to make grape juice, but to be sure not to add yeast or sugar, or leave it in a dark place, or let it sit too long before drinking it because “it might ferment and become wine.”  For those a little slow on the uptake, newspaper ads indicated the choice of flavors:  port, sherry, Tokay, burgundy, and so on.  The gangster Jack “Legs” Diamond told the New York Times, “It sounds like a good racket to me.”


As an Arizonan, I also found it funny that former senator Barry Goldwater’s father, Baron M. Goldwater, had the bar, back bar, and brass rail of his favorite saloon installed in the basement of his house, “where his son Barry, ten years old at the advent of Prohibition, would soon be making beer.”


Then there are two amusing quotes from Lord Dewar of Homestall, the Scotch whiskey lord:  “Of two evils, chose the more interesting.”  And this: “If we are here to help others, I often wonder what the others are here for.”


Last Call doesn’t explicitly draw parallels between Prohibition and today’s War on Drugs, probably because readers would have to be denser than a block of grapes to not see the parallels for themselves. 


The arguments used by the prohibitionists in support of the Eighteenth Amendment are almost identical to the arguments used today against the legalization of pot by social conservatives, who have replaced progressives as the social nags and busybodies in this regard.  The prohibitionists greatly exaggerated the negative health affects of drinking, falsely claimed that the legality of alcohol was responsible for family disintegration and social decay, and stupidly believed that laws could stop people from doing what tens of millions of people had been doing and wanted to continue doing.


Granted, excessive drinking and drunkenness had been serious problems in America since its founding, problems that worsened with the Industrial Revolution and mass immigration to cities.  But as with most social problems, the problems had begun to wane on their own before the government intervened, due to drinking in excess becoming socially unacceptable.  Prohibition not only failed to stop drinking but it created unintended consequences that were worse than the original problems that it tried to solve. 


Likewise, the criminalization of soft drugs has not only failed to stop their use but has also filled prisons, increased street violence, strained law enforcement resources, spawned the proliferation of black-suited Special Weapons and Tactics (SWAT) forces, caused carnage in Mexico and other countries, made drug use seem cool and hip to the nation’s youth, and deprived the country of a lot of needed tax revenue.


To paraphrase Santayana, those who don’t read Last Call will continue to repeat the mistakes of the progressive prohibitionists of yesteryear.

2 Comments in Response to

Comment by Joe Tittiger
Entered on:

The hell with tax. If they can tax or limit the pot plants in  my back yard they can taxc and limit the radishes in my back yard.

Comment by Jack Lemonade
Entered on:

I prefer freedom, actual relegalization, without the government regulating and taxing pot.  Screw the deficit.  It's not mine.  Can't wait for the government to go down the crapper where it belongs.   

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