Cartels: America’s Economic Cocaine

By Kean Spencer

Eagle Source (Portland, Oregon)

AK’s, cocaine, and hundred-dollar bills. Cartels may seem like the plague that taints our nation’s economy with violence and corruption, but their impact is more than Netflix’s depiction of them as seen in Narcos. Despite common opinion, cartels justify the creation of government jobs, provide low-income neighborhoods with normally unimaginably high-paying opportunity, incorporate billions of laundered dollars all while sustaining American and foreign economies. To many Americans, this notion of the “War on Drugs” is a mere talking point on late-night news. Little do they know their buttery microwave popcorn and purposely-torn jeans cost less because of their friends across the border.

If one were to look at the explicitly negative coverage cartels receive from national media, it would seem appropriate to conclude that cartels are wholly atrocious- ethically and economically. Although the ethics of various cartels’ actions around violence may seem more comparable to those of the United States military, the fiscality of our nation undoubtedly prospers from these enterprises. Buyers and sellers dictate the prices of goods. The more goods that exist, the more potential buyers that follow them and the higher gross domestic product the nation excretes. Applying the same theoretical logic and understanding that cartels play by those rules, one must analyze the production, distribution, and profiting of cartels in the same respect. Cartels merely satiate a bountiful addiction existing in the drug-indulgent United States, and during the process such drugs and money excrete wealth to many working people, most of which are everyday Americans.

This all started in a small town of Medellin, Colombia where a young man by the name of Pablo Escobar gave naissance to what would become one of the most costly and world renowned wars to date: the War on Drugs. Fast forward to 2006, and Pablo’s and other’s Colombian drug cartels such as the Medellin and Cali cartels had collapsed resulting in Mexico almost singularly absorbing the supply vacuum of cannabis, cocaine, heroin, and methamphetamines to the United States. Cartels run off their very simplistic business model of creating several thousand percent profit margins. After deriving the opiadistic portions of the coca leaf from nations like Colombia, Peru, and Bolivia, drug cartels such as the Sinaloa Cartel spend anywhere from two thousand dollars to four thousand dollars depending on the location of purchase to create a kilogram of pure cocaine. However, once the cocaine reaches the hands of Mexican drug cartels, prices range anywhere from twenty-four thousand to twenty-eight thousand dollars when selling wholesale to American buyers, and up to two hundred thousand dollars for other international buyers. Numbers like these create wiggle-room for losses through government-seized operations, cartel raids, and excessive amounts of bribery and death. Rewinding back to the basics of economics, buyers and sellers dictate the cost of goods. Consequently, cartels over the decades have dictated the functioning economies of numerous neighborhoods, states, and nations.

Cartels justify the creation of various government positions in the United State. Such jobs include almost the entirety of the Drugs Enforcement Agency, various border patrol positions, and increased police force jobs. The United States government alone spends almost two billion dollars annually to fund the DEA, an overwhelming majority of which goes towards the 8,355 positions and combined 5,851 agents and intelligence officers working for the agency, all of which employ Americans with high paying salaries. Working for similar motives as the Drug Enforcement Agency, the U.S Customs and Border Protection provides almost 46,000 jobs. In conjunction with the upholding of preventing illegal immigration, drug trafficking still remains one of the CBP’s top priorities. Cartels create these American jobs and provide billions of dollars of money towards families that fight every day for a drug-free nation.

Cartels also serve as a bread-provider for millions of foreign people. Estimates from Marth Chew Sanchez’s Paramilitarism and State published in 2014 show that Mexican drug cartels employ around 450,000 people directly and consequently positively affect 3.2 million people daily. For comparison, Oregon’s inhabitants barely break the four million mark. These people exemplify the constructive nature of Mexican drug cartels, providing predominantly impoverished neighborhoods with job opportunities to a certain caliber that would otherwise remain unattainable. Furthermore, the majority of goods and tools utilized by such cartels such as transport vehicles, guns, ammunition, clothing, and more mostly originate from the United States, resulting in billions of dollars pouring into American corporations’ wallets. Cartels act as an aid towards these families. With the absence of such cartels and their funds obtained through the selling of narcotics, the money delivered towards the United States through the Cartel’s and their impacted families purchased goods would otherwise cease to exist.

Looking past the hundreds of thousands of impactful jobs created by the cartels both domestically and internationally, the illegally obtained money remains one of the most economically assisting attributes of these corporations. Estimates show that almost five percent of the world’s GDP, which equates to over two trillion USD annually, is laundered money- sixty billion dollars of which originates from Mexican drug cartels. This money not only touches the hands of mafiosos, but politicians, financial institutions, and companies. This laundering occurs on the highest levels which benefit the wealthiest of corporations. For instance, the fifth wealthiest banking institution in the world, HSBC, faced multi-billion dollar federal penalties after admitting their involvement of the laundering of eight-hundred and eighty-one million dollars of drug cartel money. HSBC is a mere microcosm of what allegedly appears to be apparent in other financial institutional giants such as Bank of America, JPMorgan Chase, and Western Union, all of whom contribute towards the laundering of drug cartel money which accounts for eight percent of all international trade. In fact, the head of the United Nations’ drug and crime office even stated that “hundreds of billions of drug cartel money was the sole entity to keep the banks afloat during the global banking crisis because the earnings of such organizations was “the only liquid investment available.” On a much larger scale, if the big banking institutions faced global meltdown, the repercussions of their greed would have collapsed the multi-trillion dollar United States economy and directly altered hundreds of millions of people’s lives.

Drugs cartels will never cease to exist as long as the nationwide drug addiction endures, not to mention the financial gain, it’s the addiction of the economy. The economics of these unrelenting institutions profiting millions of people billions of dollars appeals to too many for it to abruptly halt Cartel’s operations. Many argue that the drug cartels are simply the creation of Mexicans and those south of the U.S-Mexico border, but in reality, drug cartel money keeps the economic machine of the American economy afloat. As exemplified through the economical gain such cartels provide, this industry inadvertently creates lower consumer prices for all Americans. Simply put, Mexican drug cartels are the economic opioid to the addicted American economy.

Disclaimer: The views in this article are solely those of the author and not those of WANT News.

Photo Credit: Thomas Hawk

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