So, the DEA and other agencies create the incentives for the criminal drug milieu by creating artificial scarcity, i.e. high prices... which in turns leads to more criminal activity and violence and subsequently to more funding for these agencies.
They certainly think so. That leaves out the part where politicians won't shut down those agencies (or parts of agencies) because of the power base they represent.
As Rand observed through Dr. Ferris, "There's no way to rule innocent men... when there aren’t enough criminals, one makes them." They can make criminals by passing more laws or by detecting more people breaking already existing laws. Rand was referring only to the first type, and they do have some different effects, but they both serve to increase control.
First the courts allowed searches (except they're called officer safety frisks) based on "reasonable suspicion" (an absurdly low and vague hurdle created by Terry vs Ohio); now intelligence collected by agencies pursuant to foreign intelligence mandates is being used to improve detection and conviction rates for domestic crimes. And there's the beginning of mass surveillance of public spaces: cameras, radios, and modern technology enabling identification and location tracking of individuals, cars, cell phones...
It's an interesting political dynamic when everyone's fearful that they've broken some law and fearful that they've been detected but not yet arrested.
The politicians, most of them, want to rule, not serve. They want to accumulate power for themselves and their friends, at the expense of everyone else who is caught between increasing surveillance, stricter laws, and increased black market related criminal activity.
Perfect.