Friday, May 21, 2010

Mexico: Aztecs vs Latins

Following up on my previous article on Mexico, I want to add something else I've been thinking on for the last few days: the cultural landscape of Mexico. Specifically, the mixing of Aztec and Latin culture.

As I've mentioned Prof Carroll Quigley several times, his theory of civilization re-generations have changed my view of events. Spain's colonial period has layered a Latin veneer over Latin America. The Latin-Mediterranean-Spanish culture meshes fairly well with Hispanic sensibilities, so it may sometimes be difficult to detect any leftover signs from the native civilizations like Maya or Aztec. There have been Indian revolts throughout Latin American history, reflecting the continuing undercurrent of native alienation. [Recent examples include FARC, Shining Path, basically all of the land-reform movements.]

Communism had co-opted native discontent during the 20th century, but the ending of the Cold War and the narco economy has fueled an alternative model. The narco economy is serving as the instrument of the society, and the vestiges of the native culture serving as the glues of the society.

The narco death cult, Santa Muerte, may be a synthesis of Aztec death cults and Catholicism. Its veneration of death hearkens back to Aztec times. The narco industry promotes this alternative religion to increase cohesion. This definitely merits a deeper look into the cultural mixing and gestation in Mexico and the rest of Latin America.

One more note on Mexican culture: The Mexican elites (Spanish descendants) have been afraid of the Indian peasants throughout history. The current gun ban (only people with connection or bribes can get a gun permit, to buy guns of NON-military caliber like .380acp) is a symptom of that. The lack of economic reform and exporting of economic refugees into the US is another. [Holding up the status quo for the elites and send the suffering poor to the US.] The on-going Indian revolts in southern Mexico constantly reminds the elites of this problem.

One reason why the drug cartels in Mexico have gotten so powerful is because of elite snobbishness. The drug cartels arose from the Indian peasantry and gray economy. The elites saw the cartels as country bumpkins with more money than they know what to do with. The elites ignored the cartels because they're a Yankee problem, but also because they didn't expect these rednecks to start making trouble in the upper class neighborhoods. Thus they were surprised by the scale of the cartel problem today.

Thursday, May 20, 2010

Mexican Blame Game Re-Run

Now that Mexican President Calderon is here in the US, the anti-gun lobby and Mexican government are re-newing their calls for American gun prohibition. [I've previously covered the Mexican narco guns blame game here.]

They talk about explosive bullets and full-auto machine guns, implied to be US-origin, deployed by the Mexican narcos. Well, I'd like to have explosive bullets, too. Wish I can buy it from my neighborhood gunshop here in the states.

The Newsweek article mentioned, at the very end, that the narcos likely got the grenades and machine guns from Mexican military and police inventory, in addition to supplies from China, Europe, and Brazil. Well, great, then why are we talking about the US? And if the Mexican army is a prime weapon supplier of the narco-cartels, then it's intuitively obvious we should limit what we give to them, lest it ending up with the narcos.

Admittedly, the Mexican narcos are probably buying pistols through American dealers, in small quantities. Pistols have always been a prestige weapon worldwide, and their concealability make them both desirable and more smuggle-able. American truck screening on the border would help limit the flow. If Mexican smugglers can still get people and drugs into the US, though, we have little hope of stopping the flow of pistols into Mexico.

Therefore, a border fence is an eminently sensible idea in limiting the flow of weapons. If Mexico is serious about choking off the narco-cartels. That Calderone has not advocated a border fence shows that he cares more about sending people north than stopping drug violence.

PS: Edited for links and tags.

Wednesday, May 19, 2010

More Signs of Housing Glut

The New York Times had an interesting article on the state of the housing market. In Nevada, [and some in California, Arizona, and Florida], home builders are doing a great business selling new houses, even as inventory of already-built houses loom large in the local markets. This is bad, because it means that the real estate market has yet to hit the bottom.
Generally, new houses cost more than already-built houses. New houses are new, and has not depreciated. Everything works and has the "new" premium [supposedly]. The owner has a whiter canvas to play with. Only a good school district can keep up the value of already-built houses.
The article offered a couple of reasons why new houses are selling like hotcakes. 1. the recession has decreased the cost of both labor and material, giving the builders a much bigger margin to discount prices. 2. the existing homes are stuck in the foreclosure limbo: underwater owners cannot sell at a loss without bank agreement, and banks are not eager to realize their losses. So the existing inventory end up priced higher than the new inventory. In addition [not mentioned in the article], business credit lines are flowing again, following the credit freeze of 2009. The construction business greatly depend upon lines of credit to finance their operations. The re-opened taps allowed the builders to meet the pent-up demands for new construction.
Overall, this is bad on two levels:
1. Obviously, we still have lots of room at the bottom. Obama [and American people generally] are playing a dangerous game, trying to out-wait the recession. The mortgage modification program is only succeeding at buying time. We have not solved the fundamental problem of excess supply.
2. In addition, with so much inventory in the foreclosure pipeline, we will have an increasing problem of sub-urban blight, with the attendant law-enforcement problems. The housing problem is primarily a suburban issue, and the suburbs have less revenue to patrol their current areas.
So although the economic signs are still good, it is still a time for hedging your investments. And that will include guns and ammo for the suburban homeowners.

Friday, May 14, 2010

Unintended Consequences of Arizona SB 1070

There has been plenty of inks spilled on SB 1070. However, there is a negative consequent scenario that few have talked of: the flight of working illegal immigrants.

There is plenty of evidence that illegal immigrants have been fleeing Arizona in the wake of SB 1070. MSNBC reported that a hotel on the Mexican border, catering as a immigration way-station, has seen a plunge in customers. Media is abuzz with anecdotes of people looking to move out of Arizona. The ones with family certainly do not want the daily hassle and disruption from police scrutiny. The gray market trade (day laboring, hospitality industry, general service industries) will see a big plunge as these working immigrants flee the area for more permissive environments.

Therefore, the ones who stay are likely those working in the black market trade (trafficking in general). They were already operating in a non-premissive environment facing police scrutiny. This law will not substantially change their economics. They may lose some cover as their compatriots thin out, but they will still have a market to serve. SB 1070 does not improve the security of the border itself, so traffickers still have their routes open.

With the flight of the working immigrants, the illegal community will appear more violent. By taking away the peaceful people and activities, the violence ratio per illegal immigrant will rise drastically. More of the arrests will be gang and violence related.

It is likely that the short-term flare up in violence will burn out shortly afterwards. Gangs will consolidate their control and drive out competitors, bringing order to the streets. Violent activities will bring in additional police scrutiny, which will also remove the offenders. Violence is bad for business, afterall.

So be prepared for more headlines on traffickers in Arizona over this next year.

Thursday, May 6, 2010

Gates Re-ignites Interservice Rivalry

The milblogs have been abuzz over Sec Gates' negative remarks to the Navy League on May 3, 2010. The navy and marine boosters naturally are up in arms over Gates' future intentions to control budget growth. While seapower, indeed, has been the US's primary tool in military diplomacy, I think Gates' actions will do the navy a world of good.

Everyone has been concerned with the budgetary outlook of the near future. We know that Congress cannot keep growing the defense budget, and the services have been making plans in a budget-neutral fashion. However, no one on the policy side has ever come out with a clear statement on the budget direction. It is as if people are afraid that, by saying it, they will make the future self-fulfilling; that they could undercut themselves bureaucratically by making the first move, policy-wise. Therefore, we have a divergence between policy and budget, with policy clinging to the Long War, while the "base budget" quietly follows the steady state.

So basically, Gates is saying what everyone knows but fears to say. He is telling the services that they need to alter their policies to fit the budget. The services have three choices: 1. go along with the status quo budget plans that will put them on a gliding path downward; 2. innovate and get more for the same dollars; or 3. toss out the inter-service congeniality and start fighting for budget shares again. By first attacking the F-35, and then Navy carriers and Marine EFV, Gates is throwing the door open and putting everything under review.

This will be good for the US military and for the American people. The inter-service congeniality fostered by Goldwater-Nichols Act has kept contentious defense issues out of the public eye. The services stick with their given shares of the defense budget, and do not fight for a bigger slice. Taking their dominant procurement position as a given, the USAF, and the USN to some extent, have allowed themselves to get intellectually lazy and default to the status quo. The US Army and USMC similarly have not looked for fundamental innovations in operational concepts nor procurement. Now that the budget crunch is upon us, we have to face the budgetary monster we've created over the past 60 years.

So Game On, I say. A public thrashing over roles and missions of the services, and the associated strategic debate over employment of force, is good for the nation. The status quo has few incentives to innovate, and we're ending up in the procurement death spiral of less capability and less platforms for more unit cost. I've found personally that I think a bit faster in the middle of a debate. I hope that proves true for the brass as well. Without a fire under their pants, the military brass have no incentives to do things better for the good of the nation. As Prof Quigley would agree, an imminent threat to the bureaucratic institution is the best incentive for reform. A bureaucratic institution is on a calcifying trajectory unless disturbed by outside forces.

Tuesday, May 4, 2010

UAE's Mirage 2000s and Strategic Balance

Arabian Aerospace reports that, as a condition to purchase the Rafale fighter, UAE will require Dassault to buy back its 62 Mirage 2000-9s. The question then becomes, who will buy these 62 Mirages? These 62 Mirages may end up altering a strategic balance in the world.

This question is a tough one for Dassault because it no longer markets Mirage 2000s. It has staked its future on the Rafale, and its sales efforts focus on that. This batch of Mirages can interfere with Rafale prospects.

Wiki shows that the current operators of Mirage 2000s are: France, India, UAE, Taiwan, and Greece. Egypt, Qatar, Peru, and Brazil each operates less than a squadron of Mirage 2000s. We can knock off India and Brazil off the list right away, as they both have a current fighter competition in which Rafale is a contender. Greece is having economic difficulties and cannot spend its EU bailout on surplus aircrafts. We can probably say the same [economic difficulties] about potential new prospects such as Argentina, who currently operate older Mirages. Qatar Air Force and Peruvian Air Force are too small to absorb any significant quantities.

Egypt and Pakistan are good prospects. However, Egypt has been buying F-16s, and is talking with Pakistan to jointly manufacture the Sino-Pakistani JF-17. A Mirage sale to Pakistan may also upset India, whose Air Force got Rafale back into MRCA.

So the remaining customer, however improbable, is emerging as the most likely prospect: Taiwan. Taiwan already operates 60 2005s, and wants to retire the last 33 of its F-5s. Dassault is unlikely to sell Rafales to Taiwan anytime soon. Taiwan is shopping for more F-16s from Lockheed, but Obama has not been warm to a sale. The stars are lining up for Taiwan, so to speak. It has the money, the will, and the capacity to pick up as many 2000s as it can get. A direct sale from UAE to Taiwan is unlikely to draw major diplomatic heat from China, due to UAE's status as a petroleum exporter. Another 60 2000s would address the growing cross-strait military imbalance nicely.

If Obama continues to drag feet on F-16 sales, Taiwan may end up a Mirage 2000 country. France still has 300+ 2000s it would like to replace with Rafales at some point. India has 51 2000s that were supposed to be placeholders for the MRCA, and it could unload those to Taiwan to help balance against China. As the F-16 line closes down, these surplus 2000s will be Taiwan's only choice.

PS: Edited for links and labels 1JUN2010.

Monday, May 3, 2010

Yglesias and Labor Economics

Matthew Yglesias showed an economic fallacy today in his comments on "Border Security and Economic Migration". Yglesias repeats the common belief that, if we were to allow more legal migrant workers, the illegal (and mostly Mexican) migration would slowly dry up. Therefore, a "secure border" means we need immigration reform.

Well, most likely not. The legal migrants will abide by the minimum wage rules, whereas the illegal immigrant workers have been willing to work below minimum wage. Therefore, the candidates for illegal immigration will not be swayed by the opportunity to come working legally. The ones willing to work below minimum wage will continue to cross the unsecured border to work the illegal jobs.

Immigration reform will not stop people from crossing the dangerous desert. Being a true compassionate humanitarian means stepping up to the plate and accepting the responsibility: By abrogating our responsibility to build a wall across the American Southwest, we have consigned millions of Mexicans to death and deprivation in the desert while they search for a new beginning.