Over the Atlantic, where the Americans struggle with their own financial crisis, we have a real case of money laundering:
LAREDO — The high walls of Alexander Estates, an affluent development nestled near this border city’s country club and golf course, were supposed to keep the narcotics world at bay. But when federal agents raided the stately home of a downtown perfume salesman in January, it reinforced a notion that is feared by Texas leaders: the drug war spillover from Mexico is much broader than shootouts and kidnappings — it is cloaked in the seemingly routine business transactions of the border economy.
In this case, the alleged crime was the back-wash of dollars from drugs sales, laundered through a perfume dealer.
The Black Market Peso Exchange has been on the federal government’s radar for years. The system was perfected by Colombian drug lords and later adopted by Mexican drug cartels: When drugs are sold in the United States, the proceeds, in American dollars, are smuggled back into Mexico or Colombia, where they are exchanged for pesos at a discounted rate.The peso-exchange businesses then use the dollars to buy products in the United States — in Mr. Datta’s case, millions of dollars worth of perfume — and have them shipped to purchasers in Mexico or Colombia.
Yeah. Of course, they have the money to corrupt any business (see Lynn's comments about drugs money and CDOs) and now that times are tight, they can find plenty of incentive.
I've previously written of the process of mexicanization. It begins with an aggressive prosecution by police of drug business; then the value of the illicit business rises, creating profits for the "businessmen" which leads them to fight the authorities. Pretty soon they realise the best way is to corrupt them.
This starts with the police. But pretty quickly spreads. In Mexico, bringing in the soldiers to police the police was a monumental step, and a mistake. Now the Mexican Army is criminalised. With the loss of the judiciary, civil society moves to collapse.
Think it can't happen here? Think again:
The FBI has released a new gang assessment announcing that there are 1.4 million gang members in the US, a 40 percent increase since 2009, and that many of these members are getting inside the military (via Stars and Stripes).The report says the military has seen members from 53 gangs and 100 regions in the U.S. enlist in every branch of the armed forces. Members of every major street gang, some prison gangs, and outlaw motorcycle gangs (OMGs) have been reported on both U.S. and international military installations. ...
The report notes that while gang members have been reported in every branch of service, they are concentrated in the U.S. Army, Army Reserves, and the Army National Guard.
Many street gang members join the military to escape the gang lifestyle or as an alternative to incarceration, but often revert back to their gang associations once they encounter other gang members in the military. Other gangs target the U.S. military and defense systems to expand their territory, facilitate criminal activity such as weapons and drug trafficking, or to receive weapons and combat training that they may transfer back to their gang. Incidents of weapons theft and trafficking may have a negative impact on public safety or pose a threat to law enforcement officials.
Make no mistake: the mexicanization of the USA is happening, and will keep happening. What's it about?
US-based gangs have established strong working relationships with Central American and MDTOs to perpetrate illicit cross-border activity, as well as with some organized crime groups in some regions of the United States. US-based gangs and MDTOs are establishing wide-reaching drug networks; assisting in the smuggling of drugs, weapons, and illegal immigrants along the Southwest Border; and serving as enforcers for MDTO interests on the US side of the border.
One word: Drugs. One acronym: MDTO stands for Mexican Drugs Trafficking Organization.
Violence in Mexico—particularly in its northern border states—has escalated with over 34,000 murders committed in Mexico over the past four years.
One policy: the war on drugs. For brutal comparison with real wars, USA lost 53,402 combat deaths in WWI and 47,424 in Vietnam.
The USA no longer has an option of exporting its miserable war on people south of the border. They're sending it back.
Posted by iang at November 15, 2011 10:55 AM | TrackBack@ iang,
With regards the US "option on exporting misery" south of the border one could simply say "What goes around comes around".
However it is an object lesson in why "bullying is bad" and "might is not right" and to a lesser extent why all empires fall.
A notable economic theorist once noted that there were two ways to solve the drugs problem the Indian way or the Chinese way. That is in India they used to just except that a certain percentage of their people would become unproductive and live comparativly short lives due to the use of non medicaly prescribed drugs, the solution was to minimise their cost to the state and society. The Chinese solution was to immediatly drag anybody involved in any way in drugs users, suppliers or even those who might be innocent (ie somebody else grows plants on their land) into the town square and execute them, then charge their family for the bullet.
Both the Indian and Chinese solutions can be seen as at either end of the line of solutions, and as with most extream solutions they fail when ever circumstances change even slightly (in both cases improved economic development).
What most people don't realise is that the number of drug addicts compared to users is generaly very small and is often much much smaller than the number of muggers or house breakers of which the addicts often form a minority membership. But the addicts have a very disproportianate effect often commiting several crimes a day without any kind of caution to "feed the habit" or more correctly "feed the drug dealers profits". But although their reward per crime is usually pitiful, the damage they cause due to their lack of caution has high costs to the victims. In fact it is quite extrodinarily high both in financial and mental terms. This has given rise to a second set of individuals who's profits the drug addict feeds and that is the industries built up around repairing the damage. Usually the cost is spread throughout society via insurance of one kind or another.
I suspect that the solution to the drugs problem is not in attacking either the addicts or the suppliers with endless wars but to remove the profit for both the dealers and the associated industries that repair the damage they do.
The simplest way to do this is to reduce the price of drugs below a point where the associated criminal activity and consiquent damage occurs. The easiest way to do this is to create an "open market" that is regulated only by the likes of (bier) "purity laws". Oh and of course this market being essentialy legal would be taxable like any other.
It would also help reduce terrorism, it is no secret that the likes of the Taliban in Afghanistan and similar organisations world wide including back in it's time PIRA gain the finances to buy weapons and recruits through the control and selling of drugs and it's associated criminal activities [there is also in addition the aspect of "political inclusion" in any removal of a terrorist threat which I don't propose to go into here other than to say it is equally as important].
However although "remove the profit" will mainly remove the crime and damage aspects and help curtail organised crime and terrorism it will in all probability create other social problems the same as is see with alcohol, tobacco and caffeine.
The solution to those problems are again in part market forces, most of us require medical or social care / benifit in one kind or another throughout our lives. We are already talking about "taxing the obese" and limiting access to medical and social care for those who use alcohol or tobacco to excess. Likewise some insurance companies give discount to those who can show they lead "healthy lifestyles". Various studies have suggested that such measures actually work quite well but have (politicaly inconveniant) long ramp up times.
Thus there are established "carrot and stick" market solutions that work compared to "bombs and bullets" military solutions that always end up failing in the long term.
For a society to exist and flourish it needs to be dynamic, and this means we need to continuously re-evaluate our thinking and position on current societal norms even at quite fundemental levels. If we don't then society decohears and starts to fracture, civil protest starts and if oppressed it will eventuall turn into civil war if those responsable for the oppression do not fall first by other more peacfull means (such as the ballot box).
Overall "society cannot afford illegal drugs" the cost is to high, relife via extreme solutions are at best temporary and don't work long term. Military action never works long term, it's purpose is to deter aggression by others and act as a brief draconian "game changer" or political fulcrum where the normal rules of society are suspended (ie the likes of "though shalt not kill" etc)
Posted by: Clive Robinson at November 19, 2011 05:13 AM