If Trump succeeds in closing off and controlling illegal access across the US southern border the biggest beneficiaries are likely to be Mexicans who are not members of the various cartels.  There is no question that total border control can be done, wall or no wall.  Deploy three men with rifles every mile and provision a generous allotment of radar motion detectors and night vision  and nothing is getting across.  Operating 24/7 365 requires a force of 15,000 people.  US customs and border patrol employs 21,000 people.  DEA employs 10,000.  If the Trumpster wants to get really serious he has the US Marines.  The Zetas, the Sinaloans, the Nortenos are no doubt “bad hombres”  armed to the teeth, but they will never, ever, ever win a gun fight with US Marines.

The rational way to build the wall is to let the people guarding the border decide where to first build walls. But I’m not even interested in whether a wall is built or not.  I think it’s more interesting to speculate about the effects of closing off illegal border crossing into USA.

I do not think it will materially change the available supply of illegal drugs inside USA.  Too many ways for drugs to get in – hidden in commercial shipments, via private aviation, boats.    Or domestic suppliers might start synthesizing cocaine and heroin and/or create GMO plants with coca leaves.

Could the same thing apply to illegal entry of construction, agriculture, and other “low skill” labor?  Less likely I think.  I will admit most day laborers make enough in a year while here  to afford a round trip commercial flight to Central America.  So maybe they can probably afford a contraband flight.  But I still think illegal crossings would be much, much lower.  And if US government deports or the illegals elect to go home, we will see a tightening and some wage inflation at the low end of labor market.  And hence reduced income inequality in the USA.

Beside income inequality, there are probably big savings for US government and taxpayers in gaining control of southern border.  For example, what does it cost to deport someone from USA once?  I would be amazed if it is less than $20,000.  How about nineteen times?

But I would still say the big winners if the border is controlled are the Mexican people. Reason for this is simple – controlling the border cuts the cartels supply chain.  Control illegal transit of people, things and money across the border is what they fight for. it pays for the bullets as well as plenty of guns, girls and tequila.  Once it is cut off, control of the territory along the border in Mexico is no longer worth fighting for.

Just to put my money where my mouth is I took a modest position in the Mexican stock market right after it fell about 20% when Trump won.  Has not bounced back much but we will see!

 

 

 

 

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