Showing posts with label social collapse. Show all posts
Showing posts with label social collapse. Show all posts

Monday, January 31, 2011

RE: Retirement Fun-for Boomers and Beyond

Mayberry said:

Ryan, Yep, the division/diversion campaigns have worked very well. You are still in bed with the system, therefore you lash out at those who've done nothing more than start to collect on that which they paid into their entire career. Your diatribe is best directed at the criminals who 1) created the Ponzi scheme to begin with, and 2) stole from the "trust fund" for decades, and 3) made promises to pay ever increasing "benefits" from that fund, knowing full well there was not enough money to cover those promises. For no other reason than selfish political gain...

But those truths seem to be lost on the right wing crowd, who have no problem forking billions into illegal wars of imperial aggression, while screaming for SS beneficiaries to have their funds cut.

SS is not "welfare". It WAS a retirement program, which, by the way, was (is) FORCED upon us working stiffs by, and has been aborted beyond it's original intent by criminal politicians. Do I like it? No. Do I want it? No. But I've been forced to pay into it for 20 years now, and like all the others who've paid, I damn sure expect to get back what I've put in, with INTEREST.

Will it be my sole retirement income? No. Hell, I doubt I'll ever be able to retire. But do I want to see my 80 year old Grandmother's SS go away? Hell NO! That, and a small pension from my Grandpa is all she's got.

Now to address you on your Dave Ramsey high horse: MAYBE if SS was not extracted from our pay by the barrel of a gun, folks could have planned better for their retirement. But they suck a hell of a big chunk of cash from our pay, reducing our ability to plan and save for ourselves. So maybe you want to rethink your "welfare" position. Maybe you want to open your eyes and SEE that the government WANTS people dependent on them. It's a self preservation thing you know. Most people, yourself included, refuse to recognize that little fact. Chew on that for a while...

TOR here:

Mayberry, You've got it twisted. Maybe I wasn't as clear as I could have been anyway moving on.

First and most importantly I am not looking at what I want to happen but what I see happening. The combination of impossible numbers/ demographics and changing political power situations will make drastic changes unavoidable. I know old ladies who rely on SS to live also and don't think it would be desirable in any way to change the income they depend on.

If I was the King of America (a hypothetical situation where I had wide sweeping powers to fix entitlements and such) here is what I would do. I would sit down with a bunch of economists and actuaries and such. We would figure out how much money is needed to pay for those collecting or about to collect SS benefits. The unfunded obligation would have to come from somewhere, really a whole bunch of places. Foreign aid, agricultural subsidies, and defense (foreign wars, bases and cushy defense contracts) are likely candidates.

As for figuring where exactly to draw the line for who would get SS benefits that is a toughy. We would have to look at what we could actually afford and balance that with an individuals ability to adjust their retirement plans (ie a 55 year old doesn't have a lot of time while a 30 year old does). I would like to say we could offer some sort of benefit to those in their early to mid 40's but imagine the numbers will actually support SS benefits for those in their  late 40's or even early 50's. Maybe some sort of individual retirement fund type thing with some money could be done for people who we can't fund SS for but will be seriously affected by this move.
As for if entitlements are welfare. I tend to classify entitlements as welfare because, despite forced contributions, the money that comes in (even if you factor out the money pulled into the general fund) doesn't equal the money going out. I don't think anyone can actually believe the money they pay into medicare covers the free market cost of insuring them through the most expensive years of their life. SSI paying widows and children vastly beyond what a wage earner may have made, let alone contributed is IMO welfare. Social Security minus SSI is a bit more  complicated. We would have to do some research and look at all kinds of tables, charts, etc. However lets say we had all that stuff and were sitting around in a nice quiet bar. I would wager the next round of drinks that some people, most likely low income ones who just made the required number of quarters, receive a payout that is dispurportionately generous when compared to what others receive. Maybe welfare is a poor word because it has a lot of stigma attached to it. Anyway lets focus less on one word and more on the big picture.
As for blame. There is so much to go around that most everybody can take a nice big bite. I blame the politicians who created the stupid program as well as the people who voted them in. Most of the folks meaningfully involved in that stuff are long dead. I don't blame individuals collecting Social Security because they are just doing what normal reasonable people would do. That would be like blaming a bank teller because a bunch of CEO's got the bank into mortgage backed security madness.

I am young enough that I've been paying in my whole working life knowing I will never get benefits. Seriously lighting a bunch of 20's on fire every payday would be way more entertaining. I could light a cigar with a hundred dollar bill somewhat regularly which would be kinda cool too.

I know you would like to receive benefits that reflect what you have put in. However lets be realistic here. As a guy in his 30's do you actually see that happening?

I agree that our government likes people being dependent on it. However the government is simply not going to be able to make it work. Right now the subject is essentially toxic. Expecting politicians to commit job security suicide is just not realistic. Sooner or later a radical change in entitlement benefits is inevitable.

Lastly I want to talk about why I wrote the original post. I am sure somewhere in the last few years you have heard the phrase "stress test". Basically a stress test is, at least in theory, a way to see how a corporation, bank or person would do in different scenarios. I wrote this to be thought provoking and to lead people to do their own personal stress tests on what I see as plausible scenarios. If it was a bit gloomy that is meant to be a warning. Sort of how you would warn your buddy if the 300 pound gorilla sitting at the bar slamming shots started angrilly glaring at them. My intent was not so much to talk about the ethics of entitlements or even entitlements in general but to provoke some thought and get folks to consider how these events would affect them.

Sunday, January 30, 2011

Retirement Fun for Boomers and Beyond

I should note that I do not have a crystal ball or a product to sell which will magically fix all the problems I am about to discuss. I am also not an accountant or a financial advisor or anything like that so nothing I say should be seen in that light. By all means read what I say and think about it. If you decide it might have some merit then consider it in your plans. However don't just mindlessly put a lot of money into this or that because I (or anyone else) talk about it if you do that you are a fool and deserve all the bad things that could happen. Be an adult and make your own decisions because you will have to live with them.

With the slew of municipalities being broke and having insolvent retirement funds, corporations dumping pensions whenever they get any excuse and a whole bunch of states broke I would be concerned if a pension was going to fund my retirement. Heck even the federal government isn't doing so great. Consider what would happen if you pension was radically reduced or even defaulted entirely.

Also if you haven't noticed the USA has a real problem with welfare social security and medicare. Like the level of problem Charlie Sheen has with vodka and cocaine. Social security was started by commie FDR with benefits at 65 when people on average died at 62. Also there were lots of workers to pay for it. The numbers don't work and are rapidly getting worse. Too many people are retiring and not enough are working to pay for them.

I imagine a lot of small things will be done to try and bend the exponential curve of welfare entitlement costs.The are to collect full benefits will likely go up, well off people will be charged on more of their income (I think it's 100k right now), and some sort of a means test will likely appear. I believe all of this will only succeed in kicking the can down the road a few years.

Also more significantly generations X and Y realize we are never going to collect meaningfull social security. As boomer politicians screw us with higher rates of theft contribution we will get pissed. Pretty quickly we will get into an age demographic that votes at a far higher percentage and are a significant force there is going to be a reconning. I am not sure how we will screw you the boomers but I bet we will. Best case is that they are going to be paid in inflated dollars. On a more gloomy side it could be significantly inflated dollars. Worst case for them the welfare social security checks will stop entirely.

My point here is that you should plan for retirement without counting on a pension OR social security. If you can collect either of them then go for it. However personally I would want to be able to support myself without either and just have them as icing on the cake.

In an even darker scenario the dollar and subsequently paper investments denominated in the dollar could take a nasty hit. Maybe it could be a slow slide or a fast crash, I don't know. In any case the have money in investments and live off interest/ dividends plan would fail in this scenario. To be honest this is relatively unlikely (slow slide to a currency among many versus world reserve currency and a moderate loss in purchasing power is more likely) but it would be a bad one. Most retirees would be devastated. The truly rich would generally be fine (somehow they always are) but middle and upper middle class folks would mostly be destroyed.

What can be done for those who are worried about this relatively unlikely (the extreme version anyway) scenario? The first thing that comes to mind is to have your basic financial house in order. For those close to retirement age having very minimal or no consumer debt and having your primary residence paid off is so huge. I watch a lot of those financial shows and the amount of people who are trying to retire with car loans and very little equity in their home (let alone having it paid off) baffles me. If you are debt free and retire then something happens so you face a drop in income at least this way you can shred your expenses. It would suck but as long as you can pay property taxes, fuel and food you will be OK if not happy. However if your pension fund fails/ the stock market and subsequently your investments collapse and you have all sort of stupid consumer debt and a high mortgage payment it will get ugly fast.

My next thought also flows well with what is likely reality for most boomers. The reality is that many of them saved like they have a cushy defined benefits retirement plan when in fact they have a 401k. Too many of them continued to upsize their home and used home equity like an ATM instead of paying off their home. Fundamentally a lot of people are approaching retirement age and just can't afford to retire, at least in the way the Greatest Generation did. Some will be able to retire and live modestly (versus lots of travel and recreation) while others will need to keep working in some capacity or another.

The advantage is that earned income (vs from dividend's, stocks, interest, etc) is pretty flexible. You can, at least in theory, renegotiate the deal for future services to reflect a changing economic situation. That could mean getting paid to reflect the real value of currency, in a stable currency, PM or barter. Hard to do that with your pension or retirement account. If something this ugly happened a lot of people would be headed back to the workforce in a seriously damaged economy. The way to get ahead of the game would be by working in some capacity already. Maybe you could work part time, consult or just have a couple clients. Even a modest income could (in addition to making todays retirement economics more comfortable) be the difference between making it and not.

Where you choose to put your money is important also. I am not against precious metals for an alternate currency/ store of value but have concerns about them for retirement. The reason is that they do not benefit from interest, dividends, etc. Every silver dollar or gold eagle you spend is coming strait out of your principle.

The reason that truly rich (maybe wealthy is a better word) people do not get wiped out is that they own businesses and real estate that produce income for them. If currency values change radically a solid business will continue to earn some money. People will continue to rent apartments, homes and commercial space.

Things that produce income are good things to buy. A lot of the downsides of real estate (and to a lesser degree businesses) are minimized if you pay cash. I would rather have some money in the bank and the market and a modest rental house or twelve in decent areas earning me income than a bunch of money in the market.

I don't know what is going to happen so I hesitate to suggest putting all your eggs in any basket. If your finances are in order, you earn a bit of income and have at least some of your money in tangible things that produce income odds are you can weather whatever comes.


Monday, June 14, 2010

Greek Debt Downgraded to Junk

Read about it. I have heard this called the year of sovereign risk. Will next be the year of sovereign default?

Saturday, June 5, 2010

Where We Are Going

I have been thinking about this in various forms for awhile. Maybe the world will go all Mad Max and we will be killing each other over cans of dog food but almost surely not. Maybe there will be a massive long term global economic implosion brought on first by the total collapse of the Euro Zone then hyperinflation in America and the total collapse of the US Dollar. I hesitate to try and quantify this one. It is more likely than a Mad Max scenario but less likely than say higher taxes, increased crime, inflation of significant but not hyper levels and a generally bad economy for some time to come.

I have been thinking about positive things an individual can do to improve their situation. Also real world quantifiable stuff that is likely to affect us. Of course common sense stuff like having food, water, arms and savings applies but I talk enough about those.

I am seriously concerned about the long term prospects of those in the 40-60 age range. My Grandparents (more or less the "greatest generation" did pretty well for retirement. Most of them spent a long time at one job and got a defined benefits retirement which coupled with social security and various personal savings left them comfortable. They generally bought, stayed in and paid off modest homes and were pretty good savers. I fear that my parents generation (the Baby Boomers) are in a far worse spot.

They generally do not stay for their whole working life with one company. Few companies offer a lot in the way of retirement anyway these days. The only folks offering defined benefits plans (great for the worker, bad for the company) are a few huge corporations, union jobs and government at various levels. Unfortunately this generation seem to have saved like they had a defined benefits style retirement coming when in reality they sometimes had a 401k match. Thanks to modern health care they are going to live for a long time.

Where my grandparents generally bought one house, paid it off and stayed in it they move a few times, often up sizing and or using their equity like a Visa card. Instead of a paid off home at retirement age Boomers often have a relatively expensive not paid off house. I watch the financial adviser shows and laugh my head off when somebody wants to retire and still has a mortgage or two. How the heck do they think that will work.

Even if they want to just continue working that might not be an option. Workers in their mid to late 50's are in a rough spot. They are generally expensive to employ as they have a lot of experience at something. Also as their experience is pretty specific they can have a hard time finding a new job. Plus their health care costs are higher and they are sick more often. The old back up plan of just working a couple more years to help the retirement numbers is not something that should be counted on. Many organizations have a strong incentive to replace them with younger less expensive workers.

So I fear many in my parents generation may economically need to work past when they would want to retire but be unable to do so. That means a lot of folks are going to be hosed. If I was a 50 something I would be doing the math to see where I was for retirement without social security. Without some X factor the best I can see (from the retiree perspective) is them getting paid in increasingly less valuable dollars based on progressively more and more cooked CPI numbers.

One interesting thing is that people did not used to really "retire" but they also lived far shorter lives and were part of a 3 generation household with a fairly large degree of self sufficiency and low taxation. People were usually pretty healthy, got sick and then died. Thanks to modern medicine people live far longer than a hundred years ago. However we haven't really been able to extend the plateau of "good years" much. 

As a young person I see a lot of families becoming 3 generation households. I will likely be one of them but not for economic reasons. Young people might want to have an informal talk with their parents about this. If just to see if they should look at tacking on another bedroom to their house.

For us younger folks I think it is going to be a crazy decade or two. The only good thing for us is that we are young and have the ability to ride something out and recover afterwords. I see the scenario for low skill "blue collar" workers as particularly bleak. These folks are either going to need to either change paths or reside themselves to a life which is below the "middle class".

As for my generation. I think that for us the differences in outcomes based on choices of jobs and money management will be the starkest since the Great Depression. Those who get marketable skills will be in a decent place. Cash talks in a bad economy. However people who decide to have 2 expensive cars with loans to match and a credit card bill that costs a buck and a half to ship then buy a house with a payment that is 40% of their pre tax income will fail miserably. Wages will not necessarily grow at old rates. Relying on home equity growing fast and forever to bail them out won't work either. As people change jobs at least a few times in a working life those with payments to the hilt will have issues.

Those who stay out of debt and live within their means will do OK. They always have and always will if just relative to the situation. It is probably going to be a wild ride but those with  available resources will be able to best position themselves for it. Folks with payments up to their eyeballs don't have many available resources. Good choices beget more good things and bad choices beget more bad things.

If nothing else those spare resources can be put toward building a bedroom for the parents.

Tuesday, March 30, 2010

quote of the day

"Our society is held together with fragile threads, and it won’t take much to tear them asunder."

Monday, March 8, 2010

Thinking About Entitlements

I have been thinking about entitlements for the last couple of days. I've written about them before but well, I'm thinking about them and blogs are somewhat redundant. I went back through my posts on these matters and the first of my relatively recent ones sums up my core views nicely. I think that picture is accurate, for at least a decade.

I was watching Tom Brokaw on some news type show. He made a very interesting point. My generation are going to screw older people. Those under 40 (and doubly so under 30) realize social security is a Ponzi scheme. More importantly (older folks aren't stupid, they know it's a Ponzi scheme too) we realize we are at the point in the pyramid where enough new contributors can't be found so it falls apart. Right now we aren't an important demographic for anything but beer, clothing and electronics sales, we are largely ignored in politics. However when 20 and 30 somethings become 30 and 40 somethings we get pretty important pretty fast. I think the likelihood of us adjusting social security benefits to fix a dysfunctional budget are pretty high. Look at what big corporations and nations do when they are broke, they cut the pensioners because aside from ill will by that group it is a darn easy thing to get rid of. Maybe we will screw you guys, at best we will pay you in highly inflated dollars.

In any case I think retirees and those approaching that age need to think about a stance based more on making the program viable and something my generation can have some trust in than getting their 2.5% this year. Also if I was anywhere close to retirement I would do some looking at where I would be without these entitlements.

When it comes to medicare. This is a bit more complicated because the benefits are far less clearly defined and the costs are booming. More people are going to start drawing SS but more people will start drawing medicare and each of them will cost more. We can figure the cost of SS for a given retiree is X plus a couple points a year. Medicare doesn't work that way. First I think we need to make it so retirees with access to other medical care must use it first, not visa versa as it is now. I had two grandparents, both of whom retired with good reasonably priced medical insurance for life. Instead of that insurance paying for their medical needs our government paid. In what world does that make any sense? Also some sort of a means test would make sense to me. Someone who is worth 3 mill in total assets (just to toss out a number) can realistically afford to buy their own insurance.

Also as unpleasant as it sounds we need to really talk about end of life care. I am not a socialist and I do not want to control peoples medical care. I believe people should be free to spend as much money as possible to prolong their life or their quality of life. If Warren Buffet thinks taking a bath in a tub full of diamonds then throwing them away every day will cure cancer then good luck. However I do think an articulate discussion needs to be had about how much money I AM GOING TO BE FORCED TO PAY to keep a 75 year old morbidly obese man with stage 4 cancer who just had a massive stroke hanging on to life for the next week. We spend an obscene percentage of the total cost of health care at the very end of peoples lives and it needs to be looked at. Back to Social Security to close.

To be honest I think it is going to get ugly. Maybe the whole thing will collapse and we will go all hyperinflation. More realistically things will just be bad and we will pay seniors with highly inflated dollars. Maybe my generation will radically change benefits and just shove the old folks under the bus. I see several potential outcomes, all of them bad. It is more a question of how bad and for whom than if it will be bad.

Upon reflection I just can't see the Ron Paul way out working. The first reason is that if there is an example of our government massively slashing expenses in order to pay for an already existing benefit I can't think of it. Secondly I think we are just talking about too many people getting too much money to meet those obligations without a massive dedicated tax. Third I think the "stop gap" concept fails to really recognize how long it would take. I think that in order to not screw over/ honor the contract with seniors we are going to have to pay most of them a high percentage of what they had been promised for the rest of their lives.  I do not have an actuary table for the population we are talking about handy but this plan would have us coming up with a whole lot of money for at least a couple (more likely 3.5-4) decades. We aren't talking about sending these folks 4 more checks and calling it good.

There are just too many retirees getting too much money from the government to be able to have my garnished waged go into my own privatized account (or just stay in my pocket?) and Granny to keep getting checks. I just don't think the math works out.

 In closing, buy silver and ammo. Not that silver and ammo have anything to do with the above, just that I wanted to close on some good advice which everybody can agree upon.

Thursday, August 27, 2009

Can One Country Collapse Without Others?

FerFal had some thoughts on this matter which sort of helped remind me of what I was thinking last night. Anyway here we go.

I think it depends a lot about how we define collapse. The way we define is is certainly significant. One country having a major national disaster (katrina or a tsunami or whatever) does not significantly affect the fortunes of countries outside that immediate area. While the terrorist attacks of 9/11 did change the world as we know it the immediate lives of Germans or Brazilians at large did not change.

As for an economic collapse that is another interesting question. In the curent system one currency collapsing will tank a lotof businesses intertwined with that currency and some traders. [except the dollar which is the reserve currency but that is another matter] A currency collapse in Argentina certainly changed the lives of those countries residents and their immediate neighbors (unless I missed something) they didn't change the world landscape. It is however worth noting that Argentina was a fairly small nation at least in its world influence.

Lots of countries have had their currencies collapse but had things more or less continue with power and water mostly working and police/fire/ems and government moving along at decreased effectiveness but still being very present.

Could a big country have a currency collapse without changing the world market and by default the lives of people all over? The Soviet Union collapsed and it drastically changed the lives of everyone involved in it but because of their limited connections to the rest of the world it did not have the effect it could have. Also their collapse wasn't purely economic (currency collapse) so it isn't exactly apples and apples.

It is worth noting that a currency collapse of a small nation leads to hyperinflation and things generally sucking but the currency collapse of a big nation can lead to war. I recall Germany during the Weimar Republic era. If you haven't kept up on your history there was this guy called Hitler who (at least in part) caused all sorts of problems.

I am not so certain a single country in our modern connected society can collapse without seriously affecting the rest of the world it connects with.


Friday, July 31, 2009

quote of the day

"No group has been more taken care of by government than American Indians and no group is in worse shape. "
-John Stossil

Friday, July 24, 2009

Does This Sound Familiar?

Read this. Think Glenn Beck has talked about it in the past but sometimes it is easier to get information from the written word. It lets me stop and reflect on something for a second instead of needing to keep up with what is being said on the telly.

Ever had someone talk about what they would do in a hypothetical situation and then years later been in a similar situation? Maybe it is a weird coincidence that they have done steps 1,2,3 of a 7 step plan but I would get ready for steps 4-7 just in case.

Monday, July 20, 2009

An Interesting Perspective On Retirement and Social Security

Retirement during the collapse. Can't say that I am certain this is how things will play out but it is as likely as anything else I have heard. That both younguns who are paying in and old folks who are looking to collect 'benefits' are going to get shafted is probably realistic. The combination of information, a unique view on history, some anecdotal personal experiences and a few good laughs is prime Dakin. Good to read over a cold beer if you check this in the pm or a nice cup of coffee if you're an am reader.

Wednesday, April 22, 2009

Pakistan Might beat Mexico in the race to the bottom

Taliban tighten their grip on Pakistan's northwest

This is pretty darn bad. A country with nuclear weapons is falling to the Taliban. Their population (and by default government and Army) is at best neutral towards the lawless factions in their completely ungoverned Northwestern Frontier Province who (in an rather optimistic view) aid and abed terrorists. Look at what happened the last time the Taliban was in charge of a country? That country didn't have nukes. This could be bad, real bad.

In the two nation race to collapse I think Pakistan just pulled ahead.

Saturday, April 4, 2009

Mexico: Background and Thoughts

I decided that I don't know anywhere near enough about Mexico. I like their food, beer and little gold coins. I would love to travel there some day when it is a bit calmer and I don't need an o-6 to sign off in it. Also I know bad stuff is happening there now and think it is going to get worse. While history doesn't necessarily repeat itself it definitely rhymes so it is time to do some reading. After posting links to the stuff I read I throw up some quotes that stuck out then write have some thoughts.

BBC Mexico Country Profile (always a great place to start as it offers a great concise analysis)

Wikipedia on Mexico (I like Wikipedia and the linkage to other topics is great)

PRI (The political party that had control from 1929-1997)

Tlatelolco Massacre (Soldiers shot a bunch of peacefully protesting students in 1968)

Mexico's Dirty War (I couldn't find one single article but these pretty much cover it)

Zapatista Army of National Liberation

1994 Economic Crisis

Mexican Gun Laws (These are just about a mute point as they are almost uniformly ignored. This shows how black markets fill voids where there is sufficient demand)

Quotes (from Wikipedia unless otherwise noted):
Despite being considered an emerging power,[17] the uneven distribution of income and the increase in insecurity are issues of concern

While the government respects the human rights of most citizens,[63] serious abuses of power have been reported in security operations in indigenous communities and poor urban neighborhoods.

Despite the efforts of the authorities to fight crime and fraud, few Mexicans have strong confidence in the police or the judicial system.

Drug cartels are active in the shared border with the US and police corruption and collusion with drug cartels is a crucial problem.

According to Goldman Sachs, BRIMC review of emerging economies, by 2050 the largest economies in the world will be as follows: China, United States, India, Brazil, and Mexico

income inequality remains a problem, and huge gaps remain not only between rich and poor but also between the north and the south, and between urban and rural areas.

The remittances from Mexican citizens working in the United States account for 2% of Mexico's GDP[93] (Mexicans in the USA (illegal or not) not being able to work can really hurt their economy. )

few advancement opportunities for the largely Amerindian population in the impoverished southern states

Tourism is also the third largest sector in the country's industrial GDP. Seeing as the news is full of mass murders and gun fights I think tourism for 2009 is probably going to be down a bit.

Mexico has the largest Spanish-speaking population in the world with more than twice as many as the second largest Spanish-speaking country. Almost a third of all Spanish native speakers in the world live in Mexico.[112]

I guess this is the time for some awesome analysis and wisdom:

Here are my thoughts on the potential collapse of Mexico.

Mexico has always had a huge gap between the few rich and the many poor. It is also urban northerners vs rural southerners. This gap has meant there is consistently a lot of people who are pretty unhappy with the 'system'.

The most interesting thing (which I knew nothing of before this post) is probably the Dirty War. Basically between 1968ish and 1985ish the Army and assorted other government agencies brutally repressed leftist political protesters. Between massacres, kidnappings, and various rape and torture somewhere in the neighborhood of 1,200 people 'disappeared' never to be seen again. The true numbers are not ever going to be known.

This is significant for a couple of reasons. The government of the time had no qualms with brutally suppressing people who challenged their authority. The nail that sticks up gets raped and tortured. Second the fact that nobody (to my knowledge) was punished for the organized atrocities makes it pretty clear to those in service now that whatever nasty violent stuff they are ordered or encouraged to do they can act with impunity. People have a tendency to refer to what has worked in the past. If the Dirty War kept PRI in power that manual might get dusted off and read again should civil unrest arise. Those tactics are almost surely being used against the Cartels now.

I also think it is interesting that Mexico has has only 3 peaceful exchanges of power in the last eighty years. During the last election things got pretty ugly and if there was fuel present the spark of it would have caused an explosion. Watch out for their next elections in '12.

Lots of people going back home (from illegally working in the USA) could also make for interesting events. Lots of males between 15-30 with nothing to do has been the start of real problems many a time. They have a nasty habit of getting involved in crime or extreme political groups. Throw in some brutal government oppression and fun times would not ensue.

Guess that is all I have to say. Did I miss anything significant?

I am now done writing about Mexico for the time being.

Thursday, February 12, 2009

Mexico's Potential Collapse

The article I read yesterday got me to thinking about this topic. Mainly I thought around two questions.

1. What would cause Mexico to collapse?

2. How would Mexico collapsing affect the United States?

I guess now is time for my thoughts on these two questions.

1. What would cause Mexico to collapse. I don't think Narco Guerrillas and the Cartel's are going to do it. They don't seem to have any interest in running the government and seem more or less content to use a slightly watered down version of Pablo Escobar's Plata O Plomo. They seem content to function in and contribute to a generally unstable situation.

I will offer an alternate theory for the potential collapse of Mexico. I think the prices of basic commodities (mainly corn which is their staple) rising is what will do it. Mexico started controlling the prices of basic foodstuffs pretty recently after a rapid increase in their prices. They were able to do that in part because of oil revenues that directly correlate with high oil prices. Oil is way down right now and though it will rise it is quite possibly going to stay relatively low for awhile. Corn on the other hand (at least in part to our great Ethanol plans) could potentially rise dramatically in price.

Commodities tend to move somewhat together but it isn't unthinkable for the price of one to rise and the price of another to drop simultaneously. I believe a rise in corn prices coupled with low oil would force Mexico to stop subsidising (when a government fixes the price of a commodity that must be imported they in effect agree to pay the difference between the "fixed" price and the free market price) corn. Mexico's large population of very poor people rely on low food prices to survive. They went to the streets once (I believe it is somewhere in my archived posts. Search the BBC if you are really interested) because if a big rise on Corn prices which forced the government to fix the prices of a dozen (or so) basic commodities.

I believe the chaos which would result from exploding Corn prices would result in absolute chaos in Mexico. Said chaos would almost surely result in the government being toppled. In lots of nations a few hundred guys seizing the seat of power and a few tv and radio stations is enough to do it if a strong response doesn't follow rapidly. The Army playing a significant role in this series of events is quite likely. Some kind of an opposition (probably socialist/ populist [seeking support from the lowest levels of the country] group would probably form rapidly. Maybe the Zapatistas would get going again. On the bright side then Rage Against The Machine might do some concerts to buy them guns. I don't really like their politics a ton but that band fucking rocks hard.

Now with a "government" probably composed of some kind of a council filled mostly with high ranking Army officers and a socialist rebel movement there is a full on civil war. This civil war would be quite bloody with all manner of atrocities on both sides. Since running south would more or less be hopping out of the kettle and into the pot people would flee north.

This leads us to question #2

2. How would Mexico collapsing affect the United States?
Lets just say that I am glad I don't live near the border. I see a civil war in Mexico leading to a bunch of refugees fleeing to America. Our current administration is somewhat inclined to be more permissive of illegal immigrants then lots of people would like. Also there is something of a president for giving residency to people who flee bad circumstances somewhere else to seek the American Dream. Expect people to flee from Mexico and be allowed to stay in the US. Think about anchor babies and throw in some more ridiculous stuff. It would probably lead to a massive influx of Mexicans to America. Also the question of amnesty for the illegals already here would probably be revisited with results I would not like.

Guess those are my thoughts on Mexico's potential collapse.

Texas Prepares for Breakdown in Mexico

The El Paso Times

10 Feb 2009

Texas Prepares for Breakdown of Mexico

AUSTIN -- Texas officials are working on a plan to respond to a potential collapse of the Mexican government and the specter of thousands fleeing north in fear for their lives after recent reports indicated the country could be on the verge of chaos.

"You hope for the best, plan for the worst," Katherine Cesinger, spokeswoman for Gov. Rick Perry, said last week. "At this point, we've got a contingency plan that's in development."

Late last year the U.S. Department of Defense issued a report that listed Pakistan and Mexico as countries that could rapidly collapse. The report came after similar alarms sounded by the U.S. Department of Homeland Security and former U.S. drug czar Barry McCaffrey.

"I think their fears are well-grounded," Texas Home land Security Director Steve McCraw told lawmakers recently at a border security briefing.

Lawmakers expressed concern that the state's southern neighbor, embroiled in drug violence and facing uncertain economic conditions, could send thousands north in search of safety.

State Sen. Dan Patrick, R-Sugarland, asked McCraw at the meeting whether Texas had a plan to cope with such a situation.

"We have a preliminary plan," McCraw said. "There needs to be one in place."

McCraw, a Perry appointee, was unavailable to comment for this story, but Cesinger said the plan was in early stages.

It now deals with only law enforcement concerns, she said, and not any potential crush of humanitarian needs the state might face if thousands of refugees flood across the border. "That might be something that comes into consideration as it's developed," Cesinger said.
Destabilization in Mexico might be only a remote possibility, but lawmakers said preparing for any potential disaster is prudent.

State Sen. John Carona, R-Dallas, said Texas should plan to deal with not only security concerns but also basic needs refugees would have for housing, health care and food.

"It seems very far-fetched that something like this could occur," he said. "At the same time, I think it would be na ve to believe it's impossible."

El Paso Democratic state Sen. Eliot Shapleigh said El Paso is already seeing refugees from the violence in Juárez.

More than 1,600 died in the drug violence there last year, and the bloodbath continues. More than 200 people have been slain so far this year.

Nearly 50 victims of the violence in Juárez were shuttled to Thomason Hospital for treatment last year. And Shapleigh said many people from Juárez who can afford to are moving north to El Paso.

Developing a contingency plan to deal with a potential Mexican downfall makes sense, he said.

"Better to investigate, examine and plan now, rather than make ad hoc decisions later," Shapleigh said.

Tony Payan, a political science professor at the University of Texas at El Paso, said Mexico is nowhere near the brink of demise.

Problems in Mexico are serious, he said, but the nodes of violence are concentrated in specific areas of the country and primarily involve the warring drug cartels.

"I am standing on campus in Ciudad Juárez now," Payan said Thursday. "Students are working, students are going to class, people are shopping."

Developing a plan to cope with a disaster south of the border was not a bad idea, Payan said.

But Texas could do more to help prevent a catastrophe in Mexico, he said, by working with state and local officials in that country to reinforce their governments.

While federal officials in the U.S. and Mexico often work together, Payan said, state and local leaders with firsthand knowledge of the problems often mistrust one another and fail to collaborate to deal with their mutual concerns.

"Often we want to solve the problems with the border as if they stopped at the international line," Payan said, "and they do not."

Friday, November 28, 2008

Christmas Officially Starts!

Well folks, Christmas officially started today. Now, some people argue that the Christmas season has slowly been moving up, getting closer to Halloween, or that it starts when various crappy Christmas starts playing on the radio. For me, the Christmas Season doesn't start until people die; in other words, Black Friday. Today was no exception. Thus far today, the body count is at three. While only one person getting trampled to death is standard for the holiday celebrating the birth our lord and savior, this year we out did ourselves! Its been a couple of years since we have gunned each other down over a Tickle-Me-Elmo (at least as far as I am aware).

Anyway, just wanted to wish everyone a happy Christmas Shopping season. Remember, enjoy the holiday responsibly, with a flak-jacket, good cover, and enough firepower to fight your way back to the car, and eventually home. People are going fucking crazy out there, so keep your head down.
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