THE NEW GLOBAL ECONOMIC REALITY
This insightful article was written by Charles Simpson and is reprinted here with his permission.
He can be reached firstname.lastname@example.org
First: A reality check on Mexico
Mexico is in a unique position to reap many of the benefits of the
decline of the US economy. In order to not violate NAFTA andother agreements the U.S.A. cannot
use direct protectionism, soit is content to allow the media to play this protectionist role. The
U.S. media – over the last year – has portrayed Mexico asbeing on the brink of economic collapse
and civil war. The Mexican people are either beheaded, kidnapped, poor, corrupt, ornarco-
traffickers. The American news media was particularly aggressive in the weeks leading up to
spring break. The main reason for this is money. During that two-week period, over 120,000 young
American citizens poured into Mexico and leftbehind hundreds of millions of dollars.
Let’s look at the reality of the massive drug and corruption problem, kidnappings, murders and money. The U.S. Secretary of State Clinton was clear in her honest assessment of the problem. “Our insatiable demand for illegal drugs fuels the drug trade.Our inability to prevent the weapons from being illegallysmuggled across the border to arm these criminals causes thedeaths of police officers, soldiers and civilians,” Clinton said. The other large illegal business that is smuggled into the U.S.A. that no one likes to talk about is Human Traffic for prostitution. This “business” is globally now competing withdrugs in terms of profits.
It is critical to understand, however that the horrific violencein Mexico is over 95% confined to the three transshipping citiesfor these two businesses, Tijuana, Nogales, and Juarez. The Mexican government is so serious about fighting this, that they have committed over 30,000 soldiers to these borders towns. There was a thoughtful article written by a professor at the Universityof Juarez. He was reminded of the Prohibition years in the U.S.A.and compared Juarez to Chicago when Al Capone was conducting hisreign of terror capped off with The Saint Valentine’s DayMassacre. During these years, just like Juarez today, 99% of thecitizens went about their daily lives and attended classes, wentto the movies, restaurants, and parks.
Is there corruption in Mexico? YES !!! Is there an equal amountof corruption related to this business in the U.S.A.? YES !!!.When you have a pair of illegal businesses that generate over$300,000,000,000 in sales you will find massive corruption. Makeno mistake about the Mexican Drug Cartel; these “businessmen” are100 times more sophisticated than the bumbling bootleggers during Prohibition. They form profitable alliances all over the U.S.A. They do cost benefit analysis of their business much better thanthe US automobile industry. They have found over the years thatthe cost of bribing U.S. and Mexican Border Guards and thetransportation costs of moving marijuana from Sinaloa to California have cut significantly into profits. That is why overthe past 5-7 years they have been growing marijuana in State andFederal Parks and BLM land all across America. From a business standpoint, this is a tremendous cost savings on several levels. Let’s look at California as an example as one of the largestconsumers. When you have $14.2 billion of Marijuana grown andconsumed in one state, there is savings on transportation, lessloss of product due to confiscation and an overall reduction costof bribery with law enforcement and parks service people. Anothergreat savings is the benefit to their employees. The penalties in Mexico for growing range from 5-15 years. The penalties inCalifornia, on average are 18 months, and out in 8 months. Thesame economic principles are now being applied to themethamphetamine factories.
FOX News continues to scare people with its focus on kidnapping.There are kidnappings in Mexico. The concentration ofkidnappings has been in Mexico City, among the very rich and thethree aforementioned border Cities. With the exception of MexicoCity, the number one city for kidnappings among NAFTA countriesis Phoenix, Arizona with over 359 in 2008. The Phoenix Policeestimate that twice that number of kidnappings goes unreported,because like Mexico 99% of these crimes were directly related todrug and human traffic. Phoenix, unfortunately, is geographicallyprofitable transshipping location. Mexicans, just like 99% of U.S. Citizens during prohibition, go about their daily lives allover the country. They get up, go to school or work and livetheir lives untouched by the border town violence.
These same protectionist news sources have misled the public asto the real danger from the swine flu in Mexico and temporarydevastated the tourism business. As of May 27 2009 there havebeen 87 deaths in Mexico from the swine flu. During those samefive months there have been 36 murdered school children in Chicago. By their logic, if 87 deaths from the swine flu inMexico warrants canceling flights and cruise ships to Mexico, then close all roads and highways in the
USA because of record 43,359 automobile related deaths in the USA in 2008.
What is just getting underway is what many are calling the“Largest southern migration to Mexico of people and real estateassets since the Civil War” A significant percentage of the BabyBoomers have been doing the research and are making the lifechanging decision to move out of the U.S.A. The number oneretirement destination in the world is Mexico. There are already over 2,000,000 US and Canadian property owners in Mexico. The most conservative number of American and Canadian Baby Boomers who are on their way to owning property in Mexico for full orpart time living in the next 15 years is over 6,000,000. Do the math on 6,000,000 people buying a $300,000 house or condo and you will understand why the U.S. Government is trying to tax this massive shift of money to Mexico through H.R. 3056. The U.S. government calls this “The Tax Collection Responsibility Act of2007”. Those who will have to pay it are calling this the EXIT TAX.