Captain Capitalism: December 2019

Our good friend Alexi has written an article I believe will help many of our economists, Agents in the Field, and Cappy Cappites find a good Plan B when it comes to leaving the US. He tried Mexico, which I have kicked around in my own mind, but he has decided to settle on Portugal and elsewhere. A good entertaining read if you wish to educate yourself at the same time as well.

By Aleksey Bashtavenko (http://randommeanderings123.blogspot.com/)

Academic Composition (www.academiccomposition.com)

I have arrived in Mexico last March, at a time when I had previously lived in Denver. The state of Colorado is known for its brutal cold and a mercurial weather, where the climate may change nearly a half a dozen times per day. I was paying $1700 per month for a 500 square foot apartment in the center of the city. The majority of my acquaintances and neighbors were hardened Politically Correct Ideologues and radical leftists. As it happens, my former boxing instructor from Colorado Springs has recently been found guilty of a sexual assault that he almost certainly did not commit.

Mexico is famous for its picturesque beaches, tropical climate and a hospitable culture. For good reasons, it is the seventh most visited country in the world, just behind France, Spain, the United States, China and Italy (https://www.worldatlas.com/articles/10-most-visited-countries-in-the-world.html). All of these aforementioned countries boast a highly developed economy and a significant percentage of visitors arrive for professional rather than recreational purposes. However, the overwhelming majority of the visitors in Mexico are tourists and that much is obvious: few foreigners find Mexico to be enticing place to conduct their business.

Mexico is attractive to tourists for obvious reasons: the prices are low, it’s close to the United States and the weather is ideal in the winter, just as when the snowbirds seek to escape the brutal cold that characterizes this season in most of North America. Yet, in recent years, Mexico witnessed a new phenomenon: a different type of a “gringo” emerged in this land. Not only are North Americans visiting Mexico on a short-term basis, many are becoming increasingly likely to live here for an extended period of time. The status of permanent residency is easy to acquire here and at one point, I encountered a crooked government official who was willing to sell that privilege to me for merely 80,000 Mexican Pesos, which is a little more than four thousand U.S dollars. For many compelling reasons, I have politely declined, yet in my place, many would have gladly jumped on that opportunity.

The question of why this poverty-stricken nation is flooded by residents from its affluent neighbor to the north appears counter-intuitive at first sight, yet, it is only a little interesting and it can be explained in terms of basic economics. It is evident that the Baby Boomer generation are approaching their retirement years and in contrast to their next-elders, the Silent generation, the Boomers are not known for their ability to accumulate wealth. As the eminent modern demographers, Neil Howe and William Strauss have concluded (https://www.amazon.com/Generations-History-Americas-Future-1584/dp/0688119123/ref=sr_1_2?keywords=Generations&qid=1575710455&sr=8-2), the Silent generation have reputed themselves as decent, prosperous and morally upstanding people. While they had their flaws such as indecision, meekness and a tendency to engage in hands off parenting which led Gen-Xers to become the “latchkey kids” in youth and enterprising free agents as adults, the Silent generation are generally remembered for their deep sense of decency. As such, they had tended to have their affairs in order, they earned respect from their children (even if they didn’t approve of their hands off parenting style) and they had taken care of their financial circumstances.

With the Baby Boomers, the story is quite different and they have emerged as the first generation in American history to be worse off than their parents at retirement age. The financial insecurity of today’s senior citizens is hardly the most distinctive point in the glaring contrast between the Boomers and their next-elders. The difference becomes the most apparent in light of how the elderly have been represented in movies and popular culture since approximately 2005. Since then, no-one thought of old-timers as respectable, discreet and upstanding senior citizens. Instead, a clip from the “Dirty Grandpa” or the “Bad Grandpa” paints the whole picture of what America’s seniors have degenerated into. To be sure, prior to this generational shift, the Silent Generation senior citizens had retired in Mexico, yet this phenomenon had been less common and less corrosive to the well-being of their host country.

It is no secret that the overwhelming majority of American expatriates in Mexico are Boomer retirees. The reason for this is simple: they had not saved nearly enough money to afford a proper retirement and their social security pension allows them to enjoy a decent living in a third world country from which they can frequently visit their family. As innocuous as this explanation may seem, when it comes to the Boomer generation, things are never as they appear to be. Behind the façade of the convivial senior citizens enjoying their drinks at a bar on a Puerto Vallarta boardwalk, there lies a much grimmer, more sinister reality. “Gringo raboverde” is an expression I’ve heard more than just on a few occasions and literally, it translates from Spanish as “green tail”. Yet, it actually refers to a lecherous White man who is obsessed with teenage girls, many of whom are under-age.

Of course, nothing is wrong with consensual intercourse between adults, yet many of these “gringo raboverde” stories border on pedophilia. It’s not at all uncommon for a 70-year old man who has been divorced five times to exploit a 13-year old prostitute who has been shipped to a touristy community from a backward, mafia-infested Mexican state like Michoacan or Guerrero. Human trafficking and sex slavery are a burgeoning industry in Mexico and no-one can be surprised that the victims of such crimes are taken to work in the lively night-life scene that panders to the appetites of the hypersexual Baby Boomer foreigners.

The other day, I’ve had the pleasure of interacting with an elderly Canadian manager of a restaurant by a popular beach in Puerto Vallarta “Playa de Los Muertos”. He let me on his personal story of how he came to PV in order to retire, but rapidly discovered that his life spun out of control. “I was having too much fun”, he remarked dejectedly. “So, I went through the trouble of getting a work visa so I can get my life together again and continue to live in paradise”. By all accounts, he appeared decent and forthright, I would have never suspected him of behaving in an ignominious manner that mars the reputation of Americans in Mexico. Fortunately, I am yet to discover a reason to think otherwise, but he then showed a picture of his much younger girlfriend who was certainly old enough to be considered an adult. Yet, the story had taken a darker twist when he disclosed that she lives in Guadalajara and works as a personal trainer. She narrowly managed to avoid being captured by criminals who almost certainly intended for her to work in the sex-slave industry. The story-teller was convinced that had she not been in her peak physical condition, she would have been much less fortunate.

Just four months earlier, my girlfriend and I had been robbed at gunpoint in the same city, just two blocks away from the U.S embassy in Guadalajara. We never bothered reporting the crime to the police because it is a simple waste of time (https://www.insightcrime.org/news/brief/mexico-impunity-levels-reach-99-study/). It is a well-documented fact that only a tiny fraction of crimes committed in Mexico result in a conviction. The exact number as to this country’s exact impunity rate varies between 93 and 99 percent, but no serious analyst believes that it could be lower than 90 percent. Only about seven percent of all crimes are reported because it is an extraordinarily arduous and an exceedingly time-consuming process. On average, the victims report having to visit between three to five offices in order to report even a relatively insignificant crime such as petty theft and the entire ordeal often takes an entire work-day, roughly between 9am and 4pm. Yet, many of such offices close between noon and 1:30, which means that if the petitioners have the resolve to continue, they must plan on turning this endeavor into a two or a three-day affair.

Even in the best case scenario where the police opt to investigate the reported crime, there is very little to hope for. Only 4.46 percent of all reported crimes result in convictions, which means that regardless of how damning the evidence may be, the overwhelming majority of crimes will be left completely unaddressed. In other words, no reasonable Mexican criminal is deterred by a fear of punishment, which is an essential reason why this country is home to a myriad of highly sophisticated organized crime syndicates that are among the most powerful in the entire world.

As for the white collar criminals and politicians who have bled their country dry, the chances of a conviction are close to zero. Michoacan is widely regarded as one of the most corrupt and crime ridden states in all of Mexico, it also holds the distinction of being the state of origin to the majority of underage strumpets in Mexico. The incident that is now known as the “Michoacanazo” is a clear case in point is to why Mexico is an immitigable failed state. In 2009, a substantial number of high-profile political figures in Michoacan were arrested on charged of corruption, abuse of office and collusion with organized crime. Yet, less than a year later, every single one of the defendants had been released, despite the mounting evidence attesting to their guilt.

Last year, a left-wing candidate, Andres Manuel Lopez Obrador was elected president of Mexico and consistently with his left-wing platform, he advocated for eradicating cartel violence by investing in education and granting immunity from prosecution to low-level cartel operatives and farmers who partake in the manufacturing of narcotics. To be certain, it has never crossed his mind that police officers who earn less than 10,000 pesos ($500 USD) per month have absolutely no incentive to do their job when the local cartel will eagerly quintuple that amount to persuade them to do just the opposite. “Abrazos, no balazos!” , the Mexican president chanted. “Hugs, not bullets”, is what AMLO had to say when the military arrested the son of El Chapo Guzman in Culiacian, Sinaloa, but the cartel decimated the entire city in order to set him free (https://www.theguardian.com/world/2019/oct/30/mexico-el-chapo-son-ovidio-guzman-lopez-operation).

Foreign journalists continue to inquire as to how the Mexican government could have executed such a poorly planned operation and to be certain, no-one is willing to take any responsibility for that. Even more certainly, virtually nobody even began to entertain the obvious hypothesis that the Sinaloa cartel paid the AMLO administration in order to stage such an ill-conceived operation that resulted in windfall profits for the cartels and an unmitigated disaster for everyone else. In so doing, the Sinaloa cartel have demonstrated their military might and put pressure on other cartels to concede territory. However, they have also set a powerful precedent that this government is entirely ineffectual and it will never stop any criminal organization, no matter how weak or how small from simply doing as they please, provided only that they are not stopped by a superior organized crime unit.

Less than a month after the infamous Culiacan disaster, it has become clear that a criminal organization does not need to be as powerful as the Sinaloa cartel in order to begin making waves (https://www.bloomberg.com/news/articles/2019-12-03/is-it-safe-to-travel-to-san-miguel-mexico-2019). A much smaller organization made inroads into San Miguel de Allende recently, which is a small colonial town that has long been known to be home to various retirement communities for seniors from the United States and Canada. They have made their presence known simply by dropping a large amount of narcotics off at local business and insisting that they will be collecting the sales revenue in less than a month. Predictably, the businesses in question have simply shut down and resumed operations elsewhere.

The majority of liberal commentators in the U.S and Mexico would say that this is a fluke, a short-term setback on a long road to success in the president’s “hugs not bullets” strategy. Yet, the reality is that Thomas Hobbes had it right. “Life in the state of nature is solitary, brutish and short” and “Even the worst despot is preferable to complete anarchy”. For all his flaws, Saddam Hussein maintained a quasi-coherent regime in Iraq because he crushed the violent Islamist sects with an iron fist. Yet, when the United States deposed him, the state of nature broke out, the hardships of which drastically outweighed the worst abuses of Hussein’s tyranny.

Numerous Mexican left-wingers would insist that the aggressive interventionist policy of Felipe Calderon who took office in 2006 and started the notorious “Mexico’s war on drugs” was a complete disaster. In many respects, they are correct: Calderon may pride himself on his capture of the El Chapo and a decisive offensive on various cartels in his home state of Michoacan, but his exploits have left Mexico even worse off before he had gained presidency. By undermining the most powerful criminal organizations in Mexico, the Calderon administration unwittingly created a mini state of nature in various parts of Mexico. That is to say that in the absence of the nearly omnipotent cartels that governed each part of the country, there was virtually no government presence at all: that’s why there was a demand for cartels to create order in the first place. In other words, in an apparent effort to establish the Hobbesian Leviathan, Calderon inadvertently deprived those regions of the only hope of having any Leviathan at all in the guise of organized crime syndicates.

Under this pretext, AMLO rationalizes his policy of nearly total surrender to the onslaught of the cartels’ self-righteous sovereignty. The obvious solution to the problem is that the Mexican government needs to reclaim the legitimate authority of the state and the sovereignty over its territory. This can only be done if the state has the monopoly on violence and that is the only manner in which a genuine Leviathan can be established, which is the cornerstone of a civilized society. Mexico will not be able to achieve this objective on its own: this country is in desperate need of aid from the international community, especially the United States. Regrettably, the AMLO administration has absolutely no interest of receiving any foreign from any nation, the least of all the invidious Trump administration (https://mexiconewsdaily.com/news/amlo-declines-trump-offer-to-help/). Nonetheless, there are enough decent political and community leaders with a whiff of common-sense who are more than happy to consider Trump’s offer, which is desperately needed in this God forsaken land.

It is high-time that we set aside the vociferous partisan rhetoric characterizing our polity in the modern times across the world. No, the Donald Trump phenomenon is not unique to the United States. The zeitgeist of the modern era demands urgent solutions in response to the ongoing problems that have been neglected for decades. The Trump administration represents a neo-populist movement which embodies the citizenry’s ire at decades of institutional abuse, corruption and the government’s utter disregard for the public good. Victor Orban of Hungary, Rodrigo Duterte of the Philippines, Vladimir Putin of Russia and even the Kirchners of Argentina are also similar cases in point. In his own way, AMLO is this type of a populist, but he is a misguided idealist, in the vein of the Old Major in George Orwell’s Animal Farm, which portrays the irresolvable failures of the archetypal leftist.

The practical solutions to Mexico’s ongoing crisis are as follows.

-Welcome all foreign aid and military intervention that serves the purpose of affirming the authority of the Mexican state and destroying the pseudo-Leviathans that the cartels intend to establish.

-Collaborate with the organized crime syndicates who are willing to align themselves with the Mexican state and their foreign allies. For example, if the Nuevo Generacion de Jalisco cartel that controls the Puerto Vallarta area intends to cooperate with the government in order to keep the piece in the tourist-centered areas of Mexico, they should be given preferential treatment over other organized crime syndicates.

-Instead of investing an exorbitant sum of money in Mexico’s education system when only 40% of the citizenry have a bank account, it makes much more sense to invest in law enforcement. Maslow’s hierarchy is predicated on a simple truism that before one can pursue lofty goals such as self-actualization that manifests in the guise of intellectual achievement, creative pursuits or spiritual enlightenment, one must first secure the most basic needs with regard to personal safety and creation of a community where talent may flourish. There is no way around it: it’s impossible to have security in a state where police officers depend on the criminals’ “tips” in order to survive.

-Legalize all narcotics. As controversial as this decision may be, it works: it is as simple as that. When the government legalizes narcotics, these dangerous substances are provided to the public by reputable business rather than the organized crime elements. Even if this course of action does not ameliorate Mexico’s problems with regard to drug addiction, it will certainly lead to a marked reduction in violent crime. Moreover, it is evident that this approach helped Portugal to not only reduce the incidence of drug-related violence, but also to empower their drug addicts to diminish their dependency on narcotics (https://transformdrugs.org/drug-decriminalisation-in-portugal-setting-the-record-straight/)

As for Americans who may be considering relocating to Mexico, I have the following advice.

-There are just two safe communities in Mexico: that’s the Vallarta area (including a few villages south of Puerto Vallarta and Rivera Nayarit, several small towns north of Vallarta in the neighboring state of Nayarit) and the Cancun area (That is Merida in the Yucatan Peninsula, Playa del Carmen and the smaller towns that are known to profit from tourism from the United States).

-When you arrive in Mexico, you will enjoy a much lower cost of living, but also a lower standard of living. Just imagine when you need to pay your electricity bill, you need to scour the entire city for what’s called the “CFE” office. There, you will find a machine that is almost certainly defunct and even if you get one to work, it will not accept a 500 peso bill, which is worth roughly $25 USD. Most Mexicans in your area will earn less than 5000 pesos per month (less than $250 dollars), so why on earth would they have a 500 peso bill and who in their right mind would install a machine that accepts such bills? If you want to exchange your 500 peso bill at a local business, good luck with that. Nobody carries that kind of change and even if they do, they won’t take your 500 peso bill because they know it will be a colossal pain in the ass to try to buy something with that. Just imagine someone coming to a small town in Wisconsin and asking local mom and pop shop operatives if they have change for a $1000 dollar bill. You will be frowned upon as if you were from another planet, I can guarantee you that. You should also get used to walking into a popular bank, which may even be from Spain (such as Santander or BBVA) where not a single ATM machine works. If one of them works, count yourself lucky to stand in line for 20 minutes in order to be able to withdraw just five dollars of your hard-earned money.

-Gringo prices are a fact of life. If you are of Caucasian descent, almost every Mexican will assume you are Bill Gates. Those folks don’t like to read much and as deplorable as America’s system of education may be, Mexico somehow managed to provide one that is even worse. A good one-third of the folks you’ll meet here will be functionally illiterate and they will automatically assume that simply because you’re White, you must be absolutely loaded. That means they need to charge you ten times the local price and if you don’t know the language, they will get away with it. As for the police, they will exploit you for as long as they can get away with it.

-The average IQ in Mexico is about 88 (https://new-iq-test.com/iq-by-country/) and police officers across the world are known to be less intelligent than the average person. It is also worth noting that the average IQ of a criminal in the United States is 85. No-one should be surprised that in Mexico, the police are notoriously complicit in crime and are widely regarded as the mafioso’s handmaiden’s. If you happen to be driving outside of the tourist trap zone and you are pulled over for a minor traffic violation, expect to pay a “gringo price” for your bribe. Of course, you may decline to pay, in which case the officer will probably restrain himself from exercising the state of nature’s right to shoot you on sight, but he will then write a formal citation (if he happens to be functionally literate) and he will also confiscate your U.S driver’s license, along with your license plate. That’s right, the traffic cops (la policia vial) have the prerogative to confiscate the driver’s license and license plate and store them in a local police office as collateral to ensure that the offending driver pays their dues. If you’d prefer to visit five to ten different offices in God knows which municipality of Mexico instead of paying a $100-200 USD bribe, you may opt to do so.

-The majority of expatriates you will meet will be senior citizens. That’s inevitable: the younger folks visit Mexico if they are on vacation with their parents (as is the case with Millennials and the Post-Millennials) and Gen Xers tend to be too pragmatic to experiment living in a shithole country, as President Trump would describe Mexico.

-Your dating life will improve, but you will meet your fair share of gold-diggers. Make no mistake about it, there is no overblown entitlement complex in Mexico, the Dunning-Kruger effect is almost exclusively an Anglo-American phenomenon. Yes, Mexico may have been influenced by radical feminism, but not to the extent that the U.S has been. Nonetheless, there is no shortage of young women who will look at to take advantage of you because they tend to assume that since you are from the U.S, you must be stupendously wealthy and as naïve as they come.

-While Mexico is known to be a traditional and a family friendly society, single motherhood is also nearly the norm. You will be rolling your dice and if you happen to draw the short end of the stick, you will find yourself in a hopeless situation where your prospective partner simply has no concept of what purpose a man serves in a family. To her mind, a man is a little more than a violent intruder whose persona is characterized by drug lords, habitual wife beaters who are arrested weekly and released from prison a day later and an entire type of people who represent an illiterate man who is good for nothing but abusing any woman he meets in every possible way his tiny brain allows him to imagine. On the other hand, if you happen to win the lottery, your rewards will grow exponentially.

As for me, I have just about had enough. If you are looking for a golden mean between the exorbitant costs of living in the U.S, the cultural degeneration that the PC left represents and Mexico’s utter lawlessness, I’d recommend Spain. That is where I’ll be heading very shortly. With regard to climate and the costs of living, it is certainly a golden mean as well. You can live just as cheaply as you would in a prosperous Mexican expatriate community, but you will enjoy a much higher standard of living in all ways imaginable. If Spain happens to be too expensive for you, try Portugal. If you can prove that you earn just $18,000 USD per year, you will be eligible for receiving the privileges of permanent residency in Portugal and by extension, the entire European Union. The climate in the Iberian Peninsula is also quite temperate, which stands in sharp contrast to Mexico’s tropical, hot and dry climate where heavy rains induce flood-like conditions for a good five to six months of the year. The climate in the Iberian Peninsula is known as the Mediterranean climate, which is quite similar to much of southern Europe of Italy, southern France, the Balkans and Greece. Costa Del Sol of Spain (the sunny coast) enjoys 320 days of sunshine per year and even in the heat of summer, the scorch is not nearly as oppressive as it is in Mexico and the winters are fairly mild. In many respects, the Iberian climate is identical with that of Southern California, but the ocean is much warmer.