Mexico’s Coming Collapse

The National Anxiety Center ^ | June 2005 | By Alan Caruba

[Nasty McPhilthy]

I received an email recently from a 55-year-old, unemployed American who had been to 14 States looking for work. He couldn’t find any, he said, because "I am not a Mexican."

Despite a desire to work, he could not compete with the cheap wages Mexican illegals will take. They do so because wages in Mexico continue to leave a vast portion of that nation’s population in poverty, forced to live on $3 to $4 dollars per person a day.

According to data from the CIA, 40% of the Mexican population lives below the poverty line. The current population is estimated to be 106,202,900 people and the labor force is estimated to be 34.73 million. Despite being rich in natural resources, the Mexican economy is highly dependent on the US economy. We buy 84% of all Mexican exports, compared to Canada that buys a mere 1.8%. "Per capita income is one-fourth that of the US; income distribution remains highly unequal." That’s a diplomatic way of saying a handful of Mexican elites own most of everything.

There are a lot of reasons advanced to explain why the Bush administration will do nothing to stop the flow of illegals across our southern border, the vast bulk of whom are Mexicans, but the one I had not heard until I received the email was that Mexico would collapse without the money sent back by the Mexicans, legal and illegal, among us. When you look at the economic data, it is the one explanation that begins to make sense.

Ignoring the financial and social impact that millions of illegal Mexican workers are having on America may well be the US government’s way of avoiding a tsunami of even more Mexicans crossing over in the wake of an economic disaster, the collapse of the Mexican economy.

The most dramatic change that the 1994 North American Free Trade Agreement has had is the way it has emptied out whole sections of Mexico as its former citizens head north. People don’t do this because they have a choice. Mexico is not creating new jobs. It is, instead, sending its people here to take over all kinds of jobs that unemployed Americans no longer can get.

The World Bank confirms the CIA data that nearly half of the Mexican population is just as poor today as they were in the 1960s. That’s not slow growth. That’s no growth.

According to Bloomberg.com, "Mexico’s economy grew at the slowest pace in a year in the first quarter as US demand for the nation’s autos, textiles, and appliances declined."

Surpassing oil and tourism, the estimated $20 billion in US dollars that Mexicans sent home last year is the mainstay of Mexico’s economy. When your main export is your citizens, your nation is in big trouble.

Moreover, Mexico has found a new competitor when it comes to exports. China has surpassed our southern neighbor as the top supplier to the US of a vast array of assembled goods, as well as textiles, office computers, metal parts, and prefabricated construction parts.

Mexico’s problems have become America’s problems despite all the hoopla about NAFTA. The failure to stem illegal immigration and all the problems that go with it will become a major political issue in the 2006 elections and beyond. It simply cannot be ignored, though the Bush administration is doing its best to do just that.

My correspondent is probably just one of thousands of able-bodied Americans who cannot get work because illegal Mexicans will take any job available, but even worse news for Americans is the growing trend of out-sourcing white-collar jobs. Though it is hard to determine due to reporting procedures, there is no debate regarding the loss of hundreds of thousands of jobs that will leave many Americans unemployed in the years directly ahead as their jobs migrate to India, China and other nations.

So while the potential of economic collapse of Mexico looms to the south of us, internally jobs are disappearing into cybersphere as workers in developing nations, receiving far less than American workers, are the beneficiaries of the way technology speeds aspects of globalization. Here again, the US government is taking no steps to address this looming crisis. If the US economy begins to falter, Mexico’s will tank.

Is anyone paying any attention to this? Well, I am and so is my out-of-work correspondent. Maybe you should, too?

Alan Caruba writes a weekly column, "Warning Signs", posted on the Internet site of The National Anxiety Center, www.anxietycenter.com.

[american spirit]

Wonder how much welfare fraud is involved in that $ 20 billion going to Mexico.......my guess is just about any Mexican can get multiple matricula cards under various aliases to get a good chunk of cash. How else can they afford SUV's and shopping at Walmart during the wookday with several kids in tow? This is one issue that should addressed above all else.........if we could stop the fraud and reduce the $ to these people they'll deport themselves.

[defenderSD]

Do you think we should invade Mexico, force a regime change, and install a democratic government down there? That might cost less than paying for their welfare and health care benefits up here.

[carl in alaska]

I've said it before and I'll say it again: the California state government is in very bad shape financially. I'd say that state is just one recession away from a severe financial crisis. Governor Arnold has managed to prop up CA's finances through a series of tactics like a tax amnesty program and reduced funding for public hospitals. But spending is still out of control in CA, especially in two areas: Medicaid and public education. The Medicaid program is riddled with fraud that may account for as much as 40% of total spending, while public education has bloated bureaucracies that consume more than half of all funding on administration and other overhead costs. The bloated education budget is further increased by the large numbers of children of illegal immigrants who CA must pay to educate by federal court order.

The legislature is so crazy in CA, they may vote to increase taxes on high-income people who are already among the most heavily taxed people in America. If Arnold is not reelected and a Democrat wins, this tax increase may not be vetoed, which would result in even more productive business people leaving CA for states with lower taxes. If CA raises income taxes, after 10-12 months the tax increase will result in less revenue (as high income people leave) and then a severe cash-flow crisis will hit the state, especially if we also have a recession. That could send California into a long-term downward spiral of reduced police & fire protection, increased crime, and a declining business climate. Ultimately the state could end up being a series of gated enclaves for high-income people along the coast surrounded by low-income areas with high crime rates. If a Democrat is elected governor in the next election, watch out for a fiscal crisis in the once golden state where I grew up in a different era of responsible state government and judicial sanity. All in all, I'm happy to be residing now in Alaska and Arizona.

[WatchingInAmazement]

Perhaps the best place to put the millions of Mexicans would be 1) the president's ranch in Crawford 2) the offices of the Wall Street Journal 3) the Washington offices of the US Chamber of Commerce, the National Restaurant Association and the General Contractors of America and 4) the private homes of Grover Norquist, Steve Moore, Tamara Jacoby, Paul Gigot.

Nice list. He is also a member of the NRA Board of Directors. Re-elected in 2003 for another 3 year term...http://www.freerepublic.com/focus/f-news/1399502/posts

[american spirit]

Judging by the info you provided you've made a wise choice and by what I see happening in Tx. we may not be too far behind. It's mind-boggling that so many folks are totally oblivious to this growing cancer within our borders that is negatively impacting our communities, schools, hospital system, etc. We have to collectively be the absolute biggest bunch of arrogant/ignorant fools that ever walked this planet.

[Paperdoll]

Oh dear! I smell another bail-out coming on.

[Political Junkie Too]

Maybe we should let Mexico collapse and then buy it cheap. Seriously, there are a lot of interesting possibilities to annexing Mexico into the United States.

• We should follow the model for adding new states. Hawaii and Alaska were the last states added. What was the process? Mexico would have to be absorbed via USA federal rules, with the resulting country following existing constitutional law.
• Mexico currently has 32 states. This would have to be realigned into fewer larger states. A population density map of the 100 million people shows them all radiating out from around Mexico City. How many states would be necessary? Remember, with each new state, you add two senators to congress. Also, the number of representatives will have to be increased from the current 435.
• It would be possible to realign Mexico into fewer states by merging some states together, and even adding territory to existing American states. For instance, add Baja to California and turn it into a resort location. In exchange, split off the northern or eastern part of California into its own state (which would likely become a Red State).
• All current Mexican federal and state elected positions will have to be abolished. I would probably add a one-time stipulation allowing all current citizens of both countries at the time of ratification to eligible to be president, similar to the language in the constitution for residents of the colonies in 1789. This would also take care of Orrin Hatch's plan for allowing Arnold Schwarzenegger to be eligible (the Democrats would benefit, too, for Jennifer Granholm). This would a one-time grandfathering clause to also allow Vincente Fox and others to be president if they can get the votes, but future immigrants will have to be natural born.
• This will take care of the illegal alien problem, as all illegal Mexican citizens in the USA will automatically become USA citizens, as will all Mexicans in Mexico. Then, our current immigration laws can be rigorously enforced on those who remain.
• Mexico is 89% Roman Catholic. That is good for the political Right, and makes a good buffer against Islam incursion.
• Mexico has abundant natural resources, especially oil.
• How about a huge public works project: The Mexico Canal. It might be worth investigating a project to build a new canal across Mexico in the low-lands in the Salina Cruz region to the Coatzacoalcoas region in the Oaxaca and Veracruz states. This would be a new commercial boon for the United States, and will reduce the impact of Chinese control of the Panama Canal. It would also make a nice southern boundary.

I probably have more thoughts on the matter, but these are enough for now.

-PJ

[Fishrrman]

hershey writes:
Mexicans love a dream of Mexico, not the reality. But they'd defend their coiuntry's independence to death, just not the US's right to independence

I fearlessly predict that any actual shooting war between the United States and Mexico would be over in about 24 hours, if not 30 minutes.

They'll drop their rifles and run faster than the French!

- John

[Czar]

"Trade CaliforniaWisconsin for Mexico and you got a deal."

Much more advantageous for the U.S., I would think.

[Revolting cat!]

The National Anxiety Center

I guess we've finally run out of respectable institution names. Heck, even The Psychic Institute is taken.

[investigateworld]

Have you spent anytime in Mexico?

[bert]

....He couldn’t find any, he said, because "I am not a Mexican."....

The man is a liar. There are lots of jobs out there. In my area jobs go begging.

The man was looking for his old job at his old salary. It is gone.

He needs to realize it is 2006 and not 1976.

[Political Junkie Too]

Not one day. Why?

-PJ

[bert]

.....Annexing Mexico would be a VERY bad thing....

The wall is a lost cause. The best option is to conquer Mexico again and treat it as a conqured territory. Abolish the existing government and imprison all the politicos for 5 years or so. Set up and maintain a military government for 10 years with local elections at 5 years.

Sell the oil business and all quasi national industry. Impose heavy taxes on workers who are illegals in the upper Estados Unitos.

Until the Aristos are exterminated as a political force there will be no peace and a wall is worthless.

[antaresequity]

Are they still skewing that statistic by excluding people who have given up looking for work?

I think they base that on the number of people getting unemployment vs those paying taxes...

When an independent contractor loses his business or client base...he is just as out of work as the next guy...but nobody ever hears about it...And he can't schlepp down to the unemployement office like joe burger flipper...

I myself have never ever filed for unemployement despite being out of 'official' work on numerous occasions...

[Redleg Duke]

I still believe that Fox is sending his poor north to prevent Hugo Chavez's minions from politicizing them and organizing an internal, communist revolt.

The Mexican upper class fat cats are still living in a dream world. Sooner or later it is going to come crashing down around their ears.

I wouldn't mind Mexicans coming north legally, learning English, and becoming American citizens and assimilating. The hispanic people are the first ones to refuse to assimilate.

[Veto!]

The answer would have been to build businesses in Mexico decades ago to give them jobs and help their economy. Many companies did for awhile but then went East when the Chinese and other Asians figured out how to produce goods of reasonable quality (if you don't mind planned obsolescence) and pay people even less than they paid Mexicans.

Certainly, they need work, they need money. Why don't they have them in Mexico? How can that be helped? Apparently, Mexican millionaires are among the most evil pronks on the planet, because they don't do much to build a middle class in that country. They're just as bad as the Saudis. Capitalism doesn't work when those at the top hog everything for themselves.

[Uncle Vlad]

Gee, Nasty, you can't do any of those things--why, that would just make sense. Can't have any of that around here. (sarcasm off)

[investigateworld]

Not one day. Why?

If you were to spend some time there you'd see that their culture is one that breeds poverty, mistrust, envy (Prolly all Seven Deadly Sins)
Nothing is done without a bribe.
Everything is needing a "moditha*" to get done.
Here's a fer instance.
Young man wants to marry a young lady ... so does he spend a months wages buying her a diamond ring?
Or does he spend a months wages on bribes at city hall and his church for a legal wedding?
Nope ....
Just a fact of live.


*Moditha= Slang for a 'small bite", the bribes needed to get through life in Mexico (and Latin America).

[PeoplesRepublicOfWashington]

Mexico: Our 51st State...

Perhaps about 15 states? I don't think our Manifest Destiny is yet complete.