Mexico and the Drug War

Mexico recently arrested 10 members of a hit squad that had come to the capital, Mexico City, to make war on another gang.  As the Wall Street Journal details:

Since coming to power three years ago, Mexican President Felipe Calderon has dispatched thousands of Mexican soldiers to try to take back large swaths of territory controlled by the traffickers. But the sharp increase in violence has led some analysts to question whether Mexico is capable of defeating the traffickers.

The violence truly has been horrific, as not only the body count rises but also the brutality of the killings – it’s now almost common practice to torture victims before executing them.  Two episodes from American history come to mind as parallels:  Chicago during Prohibition and New York and the mob during some of the later decades of the previous century.

The situation in Chicago solved itself when the revenue generating substance in question was legalized; what little progress was made before then came courtesy federal involvement.  The New York mafias were relegated to obscurity only after immense amounts of pressure from the FBI, involving years of slowly tightening the screws on the mob.

Unfortunately neither of these situations brings much hope for Mexico.  First, it’s unlikely cocaine will be legalized in the United States anytime soon.  Second, in both New York and Chicago it took the presence of pooled resources from outside entities to eliminate the criminal element.  Neither NYPD nor Chicago PD were able to take on the criminal gangs – it took the FBI, representing the combined power of the entire country, to bring the situation under control.  In Mexico the entire country is under siege, so there is no greater force coming to the rescue.

Finally, it’s important to note that while the profits reaped by the mafia and the Chicago gangsters were generous, when compared to the standard of living of the populace they were not as extreme as what the gangs in Mexico currently reap.

What’s the solution?  I’m not sure.

A Profitable Investment

In 1998 Representative Grace Napolitano made a $150,000 loan to her own campaign.  This is a fairly common practice, and you may remember Hillary Clinton making similar loans to her own campaign.  It’s essentially a bet on your own success:  money may be hard to raise now while your victory in unsure, but once you win and become powerful donors will pop out of the woodwork with offers to help you retire your debt.

What’s unique about Napolitano’s loan is that she opted to charge her campaign an 18% interest rate on the loan.  Even more irregular is the fact that today, in 2009, she has yet to pay herself back:

During a decade in Congress, California Representative Grace Napolitano has pocketed more than $200,000 of political contributions by charging as much as 18 percent interest on money she loaned to her own campaign.

The suburban Los Angeles Democrat made the $150,000 loan in 1998, when she was first elected to the U.S. House of Representatives. Through Dec. 31, her campaign committee has used donations to pay Napolitano $221,780 of interest while reducing the principal by just $64,727, a review of her Federal Election Commission filings shows.

Napolitano cut the interest charge to 10 percent in July 2006. As of Dec. 31, the campaign owed $85,273 of principal and $5,549 of unpaid interest, according to FEC filings.

Of course, this shouldn’t be terribly surprising.  As long as they’ve been tasked with dolling out public funds, congressmen have been searching for a way to personally profit for this public service.  Now that the restrictions on lobbying are a bit more stringent, innovation like Ms. Napolitano’s may become more common.

Via Swampland.