The Only Economy

We’re in the middle of a government shutdown over funds that would start but not complete a border wall that almost no one thinks will solve the problem it is intended to solve. So, families including people who risk their lives every day in the Coast Guard are without a pay check, meanwhile the drugs that the Coast Guard usually seizes are coming into the country a little easier, right? That’s not my idea of responsbile government.


I wouldn’t be against building a border wall per se, even though I am aware of ladders and tunnels and that some of that money will end up back in politicians pockets, like every other governmeant project, under certwin circumstances.

So if the border wall isn’t the answer, what is?

Behavioral Economics.

Regular economics is a good tool and lays the groundwork for why people buy and sell things, but it’s fatal flaw is actually the only reason it really works at all. I mean the assumption that people are rational actors and always will do what maximizes their ‘utility,’ a fancy word for economic situation. Essentially, the assumptoon is that people always do what puts the most money in their pocket. It’s patently false and always has been, but simplifying assumptions like this are common in the sciences. Even Einstein’s theory of special relativity left out gravity for this purpose and he later reconciled relativity with gravity in the general theory.

Anyway, there is no wall that will keep out a motivated person if they want to get on the other side. None. The most important question, one that behavioral economics can help us answer is: what motivates people to cross the border illegally to start with, whether by foot, car, train or aircraft? If we can understand that, we can generate conditions that will motivate people to cross the border legally, making a wall an obscene waste of governemnt resources, as if there was another way to use tax dollars.

So why do people cross the border? This time, I mean the CandIan border. We have two geographic neighbors. One, we‘d like to have over to tea. The other we want to wall off like a cask of Amontillado. Canadians basically come here for legitimate business and for vacation. We like that. We make money either way. You don’t hear about Canadians, though there may be some, who are abusing our welfare system and particularly not Medicare. Strange.

The point is that we have a good relationship with them. Canada is a great nation with a strong economy and standard of living Much like the US. They don’t need to come here, eh?

So why do Central Americans apparently assault out borders like a college student at a seafood buffet? The answer is that they are under pressure to do so from the conditions in Central America.

This is where behavioral economics comes in. I have a friend who came here from El Salvador as a child as a result of political unrest. His father was leader of a political party that fell out of favor with the government that had come into power and all of a sudden, they were not welcome there any more. Now he’s almost a citizen after working on that for at least 5 years. Another blob.

That‘s an interesting story, but not everyone is in that situation. But, and let’s focus on Mexico for a minute, Mexico has some fucking problems. The cartels run the government, largely because it is corrupt, largely because the cartels murder the families of anyone who doesn’t take their bribe money and let the drugs flow. It’s bad there. Law enforcement people are murdered daily.

This unrest and the fact that their economy just is not as developed as their northern neighbors drives people to want to come the United States. Some do it legally others not so much, but if the cartel was looking for your kids because your brother who was a sheriff wouldn’t take drug money to look the other way because he loves his country, you would do whatever it took. Let us not judge, said a fellow in sandals and a beard.

So, behavioral economics would say, ’remove the motivation to cross the border illegally and people will stop doing it.’ I agree.

Mexico doesn’t need a wall. What it needs is a good neighbor. It needs a good trade partner that pays a fair price for Mexican made goods. And Mexico is already serving as America’s number one choice for super cheap labor in the US at home, right? Try getting an omlette in Indy without a Hispanic person. That’s not going to stop until the cartel decides it should stop.

Manufacturing is gone from the US and it’s not coming back. No company wants to pay $30/hr to build their widgets when they can pay $3. That’s capitalism for you and to be fair, the unions played their part in it too. You are only employed if you are the cheapest of the substitutable options. That’s regular economics. When robots are cheaper than Mexicans, they‘ll start building automated robot plants down there. This is not something we can tax and tariff our way out of. We need to move on and find a new living. Being uneducared will get real tough. Learn to code or something. Shit‘s getting real.

What should we do to be a better neighbor?

Here’s a short list. I won’t elaborate much. Should be pretty obvious.

1) We need free trade with all our global trade partners. Nobody wins a trade war. Don’t believe me? Moody’s is in the business of not playing politics.

3) Help Mexico improve their economy but by doing business with them whenever we can and making deals with them where both sides make money. We are a wealthy country. We can cut them a good deal and still make a buck. I think microlending would work well in Mexico as it has in Africa and should become US policy as a substitute to subsidies for dictators that we would hunt down and kill if we got nervous about oil and stuff because it is demonstrated to be effective.

2) We must destroy the black market for drugs.

The reason that Mexico’s Government is goddam shitshow is the cartels. They drive 90% of the instability. The cartels do that because it is profitable. The cartels pay their people well because it’s dangerous work. You can do much better hustling in Mexico than anywhere else. And it’s true that gangs like MS-13 have sent some rough dudes up here but that is because America is where the money gets collected. They need loyal and brutal soldiers here to make sure those American dollars get back to the home office.

That said, we must realize that we are the epicenter of this earthquake. Columbian coffee growers have not turned to coca plants because they like the flowers. Coffee price today was about $1 USD/kilogram(2.2lbs) to the farmer.

What do you think they get for a kilo of coke?

It’s not online anywhere I’m willing to go.

We need to stop being the end destination for a product that is killing an entire nation and causing the biggest part of the high school to prison superhighway in urban areas.

Or...legalize, tax, regulate, educate. Everyone wins.

You might think that legalizing cannibus is a radical idea. I don‘t. I do happen to think that legalizing cocaine, methamphetamine and heroine is a pretty radical idea. LSD, mushrooms etc? Meh. But we must realize that the war on drugs was lost not long after Nancy Reagan said ‘Just day no.’ How many people have to die before we legalize, tax, regulate, and educate. I used to take a drug called Seroquel on my doctor’s advice. Made me sleep 18 hours a day. I told my doctor and he said it would be fine. It would get better. I eventually changed doctors. The point is that legal drug almost cost me my job and marriage. Sure people will always take things too far and we’ll still have problems. We’ll help those people and they won’t have to fear prosecution.

In today’s world, there is only one economy. It’s not US economy, or China, or Russia. Its the global economy. A more stable Mexico leads to a better situation for everyone. Or, you build a wall and invest in ladders and shovels in Mexico. You’ll make out like a bandit.


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