Sunday, November 04, 2012

What a Friend We Have in...Mexico?

I had a hunch, and usually my hunches are right.  So off into the Cappy Cap Mobile I went and started doing some research and, shucks howdy, what do you know, I was right (again)!

The Mexican economy is doing much better than the US economy!

How interesting.

It has a better current account balance:

Less government debt (and this does not include 2011 where, of course, your beloved Affirmative Action president jacked it up with yet another 8% GDP deficit)

Economic growth that has consistently trounced US economic growth by margins in excess of 1.5+% per year.

Resulting in unemployment rates that are a fraction of the US'

Now you might be saying, "Well that's horrible!  MEXICO is beating us!?" but you are not thinking correctly.

If you are a hard working individual, looking for opportunity chances are you won't find it here.  But just to the south of our border is an economy that has not only proven resilient to the dire global economy, but is actually booming with old school 1940's style US growth of 4% RGDP growth.  Furthermore, Mexico is starting to look like a nice place to not just retire to, but maybe a place to move to before you retire.  Set up a company, do something on the internet all while enjoying warmer climes and better economic prospects.  In other words, Mexico is a decent back up plan.

This puts Mexico in a very advantageous position relative to the US.  Specifically, it could be a destination for capital flight.  It has lower corporate taxes, a better economy, better public fiances (who thought we'd see the day!) and again, a nicer climate.  So, in an ironic sense, while the illegal alien element of Mexico is moving to the US resulting in labor flight out of Mexico, US investors, rich folk, corporations and entrepreneurs could be heading the other way.  And while the US would benefit from lower prices in terms of agriculture, roofing and janitorial services, something tells me trillions of dollars in wealth, capital and investment out of the US and into Mexico might override those benefits.

Calderon (or whoever succeeds him in the future) would be wise to start to woo some of the more productive members of US society.


Laguna Beach Fogey said...

This shouldn't be news to anyone who has been paying attention, or has recently visited Mexico.

Baja Sur, in particular, for me, would be ideal. Great weather, peaceful, beautiful scenery, great fishing/boating, and pretty women (many of whom are strikingly European-looking).

I was last there about 2 years ago. When some friends and I visited a bar/nightclub in La Paz, we became the centre of attention of groups of pretty young Euro-Mexican girls.

Sshhh! Don't tell anyone.

Anonymous said...

"better public fiances (who thought we'd see the day!)"

Indeed. Is this a scheme that Mexican women have dreamed up to to overcome the man shortage?

Cogitans Iuvenis said...

Mexicos rapid economic growth could make it a potential regional rival to the US far in the future. This could spell major trouble for the south western portion of the united states.

Now I am some what hesitant to agree fully with Mexické long term prospects because the nation has historically has had to deal with maor corruption,which still exist, regional unrest, the drug wars are the latest iteration just look up poncho villa, and lacks the resources the US does.

Still, Mexico has access to two major oceans and recently they have been dping far better than the US economically and its hard to see how that will change in the short term. It makes one wonder about what will happen with the continent in the coming decades

Anonymous said...

Or maybe a recovering Mexico will entice Mexicans to move back thereby educing the unemployment rate in the US and giving moth groups better opportunity in there home countries.

One of my fears for the future of the world is where we are going in terms of labour and employment. A hundred odd years ago the vast majority of the worlds labour was involved in agriculture. Then we invented the tractor and combine harvistor, now hardly anyone was involved in agriculture, but they moved into the tractor factories, then we invented robots. Now its not only that a lot of manufacturing has gone overseas, but the fact that productivity has increased to the point where we don't need that many people working in factories either.

Western governments think that the next wave will be service industries, but most service industries don't create wealth, all they do is redistribute it. If we get to the point where the only employment is looking after each others children, cooking each others food, and doing each others laundry we will all starve. In the future the only employment will be for highly intelloigent, highly motivated people, where in reality most humans are only fit to do hard labour in the fields or robotic labour in the factories. I hate to say it but we might end up with a system where a few creators supply the world with all they need, the government takes most of their wealth and uses it to pay clerks at DMV offices. I'm not advocating this, but I see it as the outcome of our industrial evolution.

A bit off topic, but maybe someone of the captains SAEG could put some thought into it. - minuteman

Anonymous said...

The fact that they're using the US as a toilet doesn't hurt their case, either.

They send their Mestizo (and, increasingly, their Amerindian minorities) over. That means they're getting rid of vast swathes of the left hand of the bell curve. They're no longer the responsibility of the Mexican govt. You could have pure Socialism, and that alone would improve any country's finances.

Imagine what would happen if the US did the same thing with Canada.

The corporatist gangsterism of the US doesn't help matters. But one must never forget the question of "who, whom?"

Cogitans Iuvenis said...

This concept has cropt up all over the place on the web. The biggest issue is that there are few jobs our there that robots, or programs for service industries, concievably couldn't do as well, or better, than humans. And that creates a huge problem. What do we do with people that are suited for little more than manual labor and services, but no ways to gainfully employ them?

beta_plus said...

Weird. A friend of mine just moved to Mexico to do exactly what you described.

It also doesn't hurt that for men of 1st world means women are not as fat.

Jane the Grad Student said...

Ha, so much for the "failed state" theory of why the US doesn't prosecute illegal immigration more severely. The theory goes that these immigrants work here and send resources back to Mexico, which helps keep the Mexican economy afloat. Illegal immigration is supposedly much less of a threat than is having a "failed state" on our southern border. If the Mexican economy is really doing that well, the "failed state" theory is outdated, at the very least.

mts1 said...

Then again Mexico is known for its terrible crime rate, its kidnappings, etc. Travelers know not to go off the "reservation" of their mega-resorts, not to get into any jitney taxi cab but only pre-order one from a reputable firm, not to drive late model American cars near the border on this side in places like Laredo, etc.

Look at failed cities with high crime in the US, and also see the dearth of business. The auto plants did a good job of moving factories out of Detroit proper into Windsor ONT and other cities. Gary Indiana has a combo of water, land, and air transport that everyone else envies, but except for US Steel which is off on its own enclave north of the city and not integrated into the city proper (look it up on Terraserver and see how hard the line is), Gary can't get a rail yard or air traffic (passenger or cargo) to stay in the airport. Who wants to be where death and theft are a continuous threat?

turtle said...

Another statistic that is very telling is personal debt. A majority of Mexicans OWN their home outright, with no mortgage.

The violence and corruption in Mexico continues to be concentrated in specific areas. Someone mentioned Baja California Sur above, where I own property. There were more murders in the Chicago public school system than in the entire state of BCS last year.

The news media aren't telling you this, they make all of MX sound like a war zone.

Justin said...

I'm writing my thesis on Mexico, and I've been impressed by the turnaround. Since 2000, both major political parties - PRI and PAN - have taken big steps towards free market policies.

Perhaps most telling, the state oil company PEMEX, might be considered for partial privatization under the new president - Neita. PEMEX has been a poorly run mess for a generation, as state ownership of oil and gas is enshrined in the constitution. The fact that the PRI is even considering privatization and allowing joint ventures with foreign companies is astonishing.

Unknown said...

Good news, Cappy! I got one of my friends in college to read your book Worthless. He's currently studying psychology, but wants to be a pediatrician and is contemplating on changing his major to biochemistry or just chemistry. I'm hoping The University of Georgia will find out and have your book banned. One small victory for true capitalism over socialism and stopping destructive leftist mentality in its tracks that has been taking advantage of the minorities.

Captain Capitalism said...


Doc Merlin said...

"Or maybe a recovering Mexico will entice Mexicans to move back thereby educing the unemployment rate in the US and giving moth groups better opportunity in there home countries."

Mexicans are in fact moving back to Mexico in huge numbers. However, this actually hurts the US. Remember, jobs are not the scarce resource, people are the scarce resource. If unemployment is high, this usually means there is something preventing people from working or paying them not to work.

sth_txs said...

Regarding the border and even some deeper parts, even American Mexicans in South Texas are not crossing to see relatives. Too dangerous for them! Some stopped going even 5 years ago.

Another small bright light is there is a retired businessman that wants to remonetize silver in Mexico.

Anonymous said...

I live in the heart of Mexico, and have done so for some years since retiring in 1997. Over time, I have gone back and forth but now only return to Hell one month a year.

A bit over a month ago, we drove to the border. Nine days ago, we drove back. Saturday my wife took the bus back.

Mexico is actually one of the safest countries in Central America, as long as you don't hang around strange places that sell drugs. Murder rate is a fraction of countries such as El Salvador and Colombia, plus others.

In general the cartels tend to avoid attacking North Americans. Two Canadian guys were killed not long ago. Turns out they were trying to establish a drug business of their own.

A year or two ago, a NA was shot on the lake along the border. He was mistaken for a spy. The man who did the shooting was found dead the same week, believed to be shot by order of his own chief for being stupid.

What scares me is driving across the US. US cops are openly stopping out of state cars, and trying to find a reason to steal them. I have been stopped twice like that with no probable cause at all. So has my son. Google Tenaha and see what their cops were doing.

The main highways are heavily patrolled by military type police units. Federal police in blue uniforms, but full military vehicles. And, there are several points where all cars are x-rayed or gamma rayed looking for weapons.

Anonymous age 70