The Narco War in Ciudad Juarez Has A Winner

It looks like the narco war in Ciudad Juarez, Mexico, that sub-state conflict on our southern border that has raged on with such excessive violence, and which two years ago reached into the U.S. Consulate staff and their families, has now settled down.

Good news, to be sure, but maybe for a bad reason, as the WaPo reports today - In Mexico’s Murder City, the War Appears Over:

CIUDAD JUAREZ, Mexico — When this city was among the most murderous in the world, the morgue ran out of room, the corpses stacked to the ceiling in the wheezing walk-in freezers.

Medical examiners, in plastic boots, performed a dozen autopsies a day as families of victims waited outside in numbers sufficient to require a line.

For all this, Mexico has not made much sense of one of the most sensational killing sprees in recent history, which has left 10,500 dead in the streets of Juarez as two powerful drug and crime mafias went to war. In 2010, the peak, there were at least 3,115 aggravated homicides, with many months posting more than 300 deaths, according to the newspaper El Diario.

But the fever seems to have broken.

In July, there were just 48 homicides — 33 by gun, seven by beatings, six by strangulation and two by knife. Of these, 40 are considered by authorities to be related to the drug trade or criminal rivalries.

Authorities attribute the decrease in homicides to their own efforts — patrols by the army, arrests by police, new schools to keep young men out of gangs and in the classroom.

Yet ordinary Mexicans suspect there is another, more credible reason for the decrease in extreme violence: The most-wanted drug lord in the world, Joaquin “El Chapo” Guzman, and his Sinaloa cartel have won control of the local drug trade and smuggling routes north.

Put that crown squarely on Guzman's head, because "El Chapo" (Shorty) is by acclamation the biggest drug lord ever. How big is that, exactly? Well, no one on the outside knows exactly, but the New York Times had a very informative essay last June on Cocaine Incorporated that gives you a pretty good idea of how big:

So in a spirit of empirical humility, we shouldn’t accept as gospel the estimate, from the Justice Department, that Colombian and Mexican cartels reap $18 billion to $39 billion from drug sales in the United States each year. (That range alone should give you pause.) Still, even if you take the lowest available numbers, Sinaloa emerges as a titanic player in the global black market. In the sober reckoning of the RAND Corporation, for instance, the gross revenue that all Mexican cartels derive from exporting drugs to the United States amounts to only $6.6 billion. By most estimates, though, Sinaloa has achieved a market share of at least 40 percent and perhaps as much as 60 percent, which means that Chapo Guzmán’s organization would appear to enjoy annual revenues of some $3 billion — comparable in terms of earnings to Netflix or, for that matter, to Facebook.

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Even so, the business generates such volumes of currency that there is only so much you can launder or reinvest, which means that money can start to pile up around the house. The most that Martínez ever saw at one time was $30 million, which just sat there, having accumulated in his living room. In 2007, Mexican authorities raided the home of Zhenli Ye Gon, a Chinese-Mexican businessman who is believed to have supplied meth-precursor chemicals to the cartel, and discovered $206 million, the largest cash seizure in history. And that was the money Zhenli held onto — he was an inveterate gambler, who once blew so much cash in Las Vegas that one of the casinos presented him, in consolation, with a Rolls-Royce. “How much money do you have to lose in the casino for them to give you a Rolls-Royce?” Tony Placido, the D.E.A. intelligence official, asked. (The astonishing answer, in Zhenli’s case, is $72 million at a single casino in a single year.) Placido also pointed out that, as a precursor guy, Zhenli was on the low end of the value chain for meth. It makes you wonder about the net worth of the guy who runs the whole show.

When the Sinaloa cartel got that kind of crazy-big it could afford to mop up its remaining enemies and consolidate control over its market. That consolidation allows it to operate as a true cartel for the first time, and when cartels are cartels, public safety wins:

To anyone conversant with economics, reading stories about the Mexican drug wars has long come with a bit of irony. The drug trafficking organizations are commonly known as cartels, but the horrific violence stems precisely from the fact that they aren't cartels. In a legal competitive marketplace in a country with an effective legal and law enforcement apparatus, firms compete by trying to offer a good value proposition to their customers. In an illegal market, firms can compete by trying to kill one another. And in Mexico, that kind of violent competition has been running amok leading to a massive body count. Insofar as you get true cartels—stable, anti-competitive arrangements—then a lot of the problems associated with the drug market go away. There are no competitors to kill, leading to less violence and fewer risks to bystanders.

The U.S. Government once offered a reward of 5 million Gringo dollars for the capture of Guzman, but I can no longer find that offer online, so it may be that we have withdrawn it out of embarrassment. After all, five million would hardly be enough to motivate anyone who is close enough to Guzman to rat him out. He and his crew probably spill that much money.