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Friday, May 13

Mexico-US-War on Terror: The bridge ahead and the bridge here now

"Dear Pundita:
I have read your series on Mexico and it made me think. The emigration in search of credit was an aspect I was not aware of, but it makes quite a bit of sense to me, as did the logic of your argument for an "external" approach to the illegal immigrant problem.

Scarcity is the key assumption--the sine qua non--of economics, and the scarcity of major global credit leading to a reallocation as Mr. Wolfowitz assumes his new post is more food for my thought.

Re the external vs. internal approach to our [southern] border: perhaps it's useful, in terms of lowering the emotional level of the argument, to consider the parallels of the War on Drugs. There, too, we have a domestic demand for an illicit product and a foreign supply of same. In both cases, the foreign supply is driven, at least in part, by poor alternatives for the suppliers (no other crop is as remunerative as coca or poppies, not to mention...coercion on the growers by the drug organizations to supply or die). And in both cases, the domestic demand's immoral character has been weakened over time to the point where its existence is accepted as part of the norm of life.

There are alternatives on the demand side, and we [Americans], as a society, have more direct control over that. With respect to drugs, there are alternative means of gratification; with immigrants there are alternative means of getting the work done.

But economics teaches that price matters, too--and as long as there is plenty of supply, the price will not be "too expensive" for many consumers. To change things, we need to change both demand and supply.

Another thing I used to teach my students was that incentives matter. If you change the rules of the game, the players' behaviors will change (sports always makes good examples, but so do Enron, MCI, et al). Change the suppliers' incentives and the quantity supplied at a given price will adjust; the same principle applies to demand. But here we get into another of your recent topics--systems analysis and modeling of projected successful outcomes of a solution. I think this is another one of those areas where we need to think carefully, like a chess player, three or four steps down the line.

If Mexico's banking and regulatory structures change with the effect of increasing the economic opportunities within Mexico, what are the ripple effects? Mexico becomes richer; how will that change its behavior vis a vis the US?

If Mexico doesn't need us as a social safety valve, might one of their responses to their newfound economic independence be a closer relationship with the Castro/Chavez party?

What sort of border problem does that raise, given the existence of many coyotes [smugglers of illegals] with their known routes across the border?

Note that I do not mention these examples as a reason to maintain our current Faustian bargain, but only as a cautionary note to look before we leap.

If Mexico becomes richer, and the economic migrants here head home, what happens to our economy? If labor prices have been artificially reduced, then what's the inflationary impact (until substitution of alternatives kicks in, and it's unlikely to be complete, meaning some amount of price changes will persist)?

If two-income families, managing by hiring out lawn care and housework, no longer have those options, what are the social as well as economic impacts? How many families don't know how to take care of a lawn, how to keep a house clean beyond running the vacuum? I kid you not, there are families in some neighborhoods of my suburb where the kids have never done chores, and I'm not sure their parents ever did, either.

And what happens if Mexico goes halfway then stalls, or regresses, after having excited in the bosoms of its patriots the possibility of change? Are we prepared to relive the first two decades of the last century along the border? Ask the residents of Columbus, NM.

I have no answers -- but I think (with a reasonable amount of conviction but little to no proof) that we will be better off with a prosperous and stable border, north as well as south. But getting there from here, assuming those countries make the changes, will not be pretty.
Signed "Liz" in USA

Dear Liz:
Pundita is very happy with your observations because they address and integrate several themes I've pounded away at. And I think your observations are sound. However, they are made outside the context of war.

Over the course of my arguments for an external solution to the illegals problem, I've brought up so many issues that admittedly it can be hard to keep hold of the thread of my rationale for discussing the problem. But all my discussion is grounded in my best guess as to what will happen to the southern border if a major terrorist strike happens again in this country.

The border will be locked down--all the legal entry points. That's just for starters. A likely scenario will be that trenches will be dug or bombed along the entire stretch of border to make it virtually impossible to circumnavigate the check points.

By the time the legal checkpoints would be reopened, you wouldn't want to think about what happened to millions of innocents on both sides of the border, and to US businesses that depended on legal Mexican workers--not to mention the hardship for the small businesses that depended on illegal employees.

If the border checkpoints are locked down for many weeks or months, it would be akin to the disaster situation after the worst hurricane on US shores in recent memory.

And if the attack is catastrophic, the American local governments directly impacted by the sudden loss of Mexican employees might have to stand at the back of a very long federal funds relief line.

Is there a way to avoid the secondary effects I've sketched? I would say the answer is no. I think the checkpoints would be shut down; no way around that. However, the severity of the hardship generated by the lockdown would depend on factors that we can address now.

There is a way to greatly minimize the secondary effects. That's if the crowds at the border are thinned out previous to the attack. Thinner crowds would allow border police to routinely make the kind of close surveillance that would go with a heightened security alert.

From the above, clearly I'm assuming a terrorist(s) could get through even the best surveillance, as happens in Israel. However, if the best surveillance is already in effect at the time of the attack, then--as with Israel--the US airports and other border checkpoints can be reopened sooner after the attack.

On the other hand, if the surveillance at the southern border is at the current level, it could take a long time before the checkpoints reopen after the attack. In that event you're looking at widescale secondary effects.

So, all of my arguments and suggestions are built on asking how to get the crowds thinned out quickly and permanently at this time, and without locking down the border. I'm saying in effect, "Do it now (thin the crowds now) while there is time to adjust, while the changes brought about by thinning the crowds are not sudden and uniform; i.e., all at once."

"Doing it now" means putting a lot of pressure on the Mexican government to push through reforms that the IMF has called for.

"Doing it now" means extending the pressure to countries that feed many illegal immigrants into Mexico.

"Doing it now" means that the US and the aid institutions and development banks have the time and wherewithal to nurse Mexico and Central American countries through the shock of the changes brought about by reforms.

So I've factored in the cautions you mentioned. I'm saying the cautions should not have weight against catastrophic secondary effects from an act of war.

Again, that observation does not overturn your points. Yes, there is going to be pain, no matter how you stack the situation. But during war one must think in terms of triage. At all costs, at #1 priority, you want to avoid the double whammy of effects from an attack and catastrophic secondary effects from the attack.

I assume the same principle applies for disaster planning of all kinds including hurricane disaster. Frankly, Pundita doesn't understand why few American commentators think along those lines while discussing the illegals problem at the southern border.

Given that we are at war the disaster planning mindset should dominate all discussion about the illegals. Instead there are the Buckleyites, who argue that Americans must simply get used to illegals coming across the border. There are what I suppose could be called the Johnsonites, who look at the problem as a kind of Great Society challenge. There are the Technocrats, who think that if we put enough laws on the books and create enough new forms for US employers to fill out, this will solve the problem.

We've got the hounds of hell after us but Americans wrangle about a universal ID and forms in triplicate, which a crack enemy military unit can counterfeit. The rickety bastards are trying every which way to get past the southern border. The pain and suffering of American teenagers who never learned how to work a lawnmower must be viewed in that context. Yes, there will be pain and suffering for many Americans if Mexicans in droves find happy employment and good banking practices back home. But we're talking about losing a pinkie versus an arm. The pain and suffering will be as nothing, if those crowds at the border are not already thinned out prior to an attack.

Mexico is rolling in dough. It's just that the government, at every level, is crooked and scared and playing ostrich. They've been getting away with putting off changes. This is because the poor and illiterate Mexicans are just like poor illiterate Americans: they don't have a clue about what their government is actually up to.

And also because literate Americans don't follow Mexican news enough to get steamed about the doings of the Mexican government. This means the US government can futz around when it comes to leaning on Mexico's government to make changes.

With regard to having a very unfriendly neighbor--if Lopez Obrador is as described by the US Department of State, and if he's elected in 2006, we're getting another Hugo Chavez no matter what we do with regard to the border situation. All the more reason to act now to thin out the border crowds--a point not lost on Vicente Fox.

I think the proper response to such concerns is that we'll have to cross that bridge when we come to it. The bridge here now has "fortifications" written on it.

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