Sunday, September 27, 2009

Helping Mexico?

I used to think that all the Mexicans who can would move to the US and never leave. Recently I’ve been having my doubts. Even if another country is wealthier than yours, you may be poorer there because you do not speak the language, have no recognized education and do not know anything about the local customs.

You also would be away from your family and friends, and from the life that you know, which may be worth more than a small improvement in your finances.

The problem with Mexico is that it’s not just marginally poorer than the US, it’s massively poorer. It’s not as if a person is going from $6 an hour to $10 an hour. He’s going from $10 a day to $10 an hour.

I went to Mexico several times just this year, both on and off the beaten path. A lot of the people I met were returnees from the US. During my previous trips, I didn’t see nearly as many Mexicans who went back.

Those who can speak English well make a lot of money there. Waiters, cab drivers who speak English make almost as much money in Mexico as they would in the US, but life is much cheaper there than here.

I was wondering how Mexico can be improved to make it good enough for Mexicans to stay there. It doesn’t have to be on par with the US, but it can’t be as poor as it is now.

Building the wall would certainly help slow down Mexican immigration down to a trickle, but it would do nothing to get rid of the 12 million who are already here.

I said before that I would support expulsion of all illegals, but it’s not going to happen in the foreseeable future. If anything, we might get amnesty rather than deportation. It’s not a matter of what I want, it’s a matter of the government that we have. Realists like to berate others for not being realistic and preferring facts they like to those that exist. As one wrote, facts don’t change based on our ability to stomach them.

But that is certainly true for our government. We may not like the government that we have, but that’s our government and there’s no better alternative for the foreseeable future. Quick, name one major politician who support massive deportation of all illegals?

Improving the Mexican economy would be something that even liberals would support. I don’t support outright foreign aid, but I wonder what can be done in terms of building American resorts in Mexico, building condos for retirees who want to live in a warm climate but can’t afford Florida or California, investing in Mexican oil, etc.

All that would be done with private money by investors looking to make a profit. Maybe the Mexican government can be persuaded to lift taxes on major investors, while at the same time relaxing regulations.

I would also support paying some money to illegals who agree to leave and invest the money in the Mexican economy, such as buying a home or a business. France has a small version of this program. If we pay $10,000 per illegal immigrant and 5 million Mexicans leave, that’s only $50 billion, chump change for a country with a $4 trillion annual budget. Considering that the illegals will take a couple of years to leave, we are really only talking about a $15-25 billion hit, about 0.5% of the annual federal budget.

For illegals, this may be a great opportunity. A family of 4 would get $40,000, enough to buy an apartment and a small business in Mexico. If they invest in the Mexican economy, the former illegals will be less likely to want to move to the US, especially if we make it hard for them to cross the border again.

It would also be a significant boost to the Mexican economy, creating all sorts of construction and small business jobs. Just the $50 billion brought back by illegals would boost the economy several percent, enough to create several years of rapid economic growth.

American investors, meanwhile, would be keen on hiring English-speaking Mexicans, and illegal immigrants would be perfect. If taxes on large investments could be lifted at least temporarily, there would be a lot of investment. Mexico is close, relatively familiar and already has some Western infrastructure, both in terms of business and tourism.

Having 5 million small scale investors and thousands of big-time American investors suddenly flooded into the Mexican economy should boost the country’s economy from $14,000 GDP per capita to something close to $20,000, which is almost as high as Europe.

I get that there are 12 million illegals and this would have to be done on a massive scale. What other ideas do others have?

There’s no reason why Mexico can’t be the new California – warm weather and oil. Maybe it will bring us back the old California.

One in three Mexicans would migrate to the United States if they had the chance, and many would go illegally at a time of rising drug violence in Mexico, a survey released on Wednesday showed.

http://news.yahoo.com/s/nm/20090923/us_nm/us_mexico_usa

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