The Peter Zeihan Podcast Series - Peter Zeihan || Cartels Part 2: Origins of the Drug Trade

Episode Date: March 10, 2023

Flashback to the 80s with me for a moment...we can leave out the big hair and leg warmers...but let's talk drugs. Most of the cartel activity came from one place, Colombia. If you've ever seen Miami Vice, you get the idea. But once the US caught onto the cartels' "distribution strategy," new ways of getting "product" into the US had to be created.Full Newsletter: https://mailchi.mp/zeihan/cartels-part-2-origins-of-the-drug-trade

Hey, Peter Zion here, still in Vegas, still talking about cartels. The thing to remember is if you go back to the 1980s, most cartel activity was not Mexican. It was Colombian, because that's where the cocaine came from. And it would flow up into the Caribbean. It would avoid Cuba-like the plague because the Cubans would just kill everybody who was associated with the drug trade at that time. And it would flow into Miami almost exclusively.

And this is literally the setting for the show Miami Vice. the drug wars, continental and scope going into a single place. But by the time we got to the 1990s, the United States started to shoot down small planes that were flying 10 feet over the water at night with no lights on, because those were not scuba divers. And the cartels were forced to change the way they shipped. And so they started sending shorter hops, not to the United States direct, but into Central America, where they'd go on land and then go up through Mexico to the U.S. border,

where it's a 2,000-mile border. And before you say building a wall will help with drugs, no, no, no, no, no. If you can put a half a million dollars a product in your backpack, a wall is not going to impede you, especially since a wall requires 50 construction roads going down to the border to build the road in the first place, which means you have now obviated half of the physical border of the Sonoran in the Chihuahuan Desert. So if anything, the road has made it a lot easier for illegal migrants and drugs to get into the country. So remember, Donald Trump, most pro-narcotic, most pro-illegal migrable, president of the United States has ever had. Now, where was I? All right, okay. So when the cartels were

going on land, that meant that the Colombian cartels had either find middlemen and or bribed the locals in order to help with transit. That generated the money flows that ultimately led to the rise of drug trafficking groups within the Mexican system itself. Now, if you fast forward to about 2012 to 2015, one of these cartels took a fundamentally different view of drugs from the rest. The other saw it as a means to power and they were basically gangs at scale. But the Sinaloa cartel rose up and thought differently. It saw drugs as a business and anything that interfered with the core business was something to be ruthlessly rooted out from within the organization. So you don't steal ladies' purses, you don't shock, shoot up the cops.

You buy the law, you make them your friends because as long as you can mud ruin drugs through a community, you are making money and that is your present. primary reason to be. And that sort of attitude allowed them to put groups deep into Mexican society and expand north of the border fairly easily where they interfaced with the American gang infrastructure. If it was Hispanic gang, you had the choice of joining them or dying. Most died. And if you were a black gang, you were probably just killed. One of the reasons that the murder rate in the United States dropped so participatively in the 2000s is that the Sinaloa in the United States killed the people who were doing the killing. So use that to inform our general assessment of how much progress we've made. Now, in the United States, this allowed Sinaloa to

not just become the largest cartel in Mexico, but in the United States and the largest organized crime group in the world. So the Obama administration worked with the Mexican government to capture the leader of that cartel, El Chapo. Then he got out and then we got him again. And this started the disintegration of the Sinaloa cartel. His former accountant, El Chappas' former accountant, has tried to take over a chunk of it. Some of his lieutenants have tried to take a chunk of it. Some of his sons have tried to take a chunk of it. One of his sons is on the process of being extradited to the United States right now, but they all lead their own factions. And so this umbrella organization that was Sinaloa really doesn't exist anymore in the way

that it used to. And whenever you've got factions in a system, you've got violence. And it's going to sound weird, but when El Chavo was in charge, and when Sinaloa was a top-down organization, Mexico was reasonably peaceful because there wasn't infighting within his own organization, and Sinaloa was able to cut a series of deals with the Mexican government to go after the other cartels. Now, on the other side of the equation, the cartel that suffered the most from that alliance was the gall for the Zetas cartel. Two different groups that have kind of interwoven history. One group was the enforcers to the other. But once the government and the Sinaloa both turned on them, they basically shattered.

And if you go to the eastern third of Mexico, you're in a situation where it's just gang-on-gang violence nominally under the names of Gulf and Zetas. And the Americans who disappeared and were kidnapped and killed this past week were people who fell in with the Gulf and the Zetas. So if you want to go with this idea of launching military strikes south of the border against the Gulf, that'll do nothing. because that's basically going after the crits or the bloods with military hardware. It will do nothing to change the environment because there is no hierarchical organizational structure to disrupt in the first place. You'd literally be going after street thugs, and that's just not the right tool for the job. And this group, its breakdown, that is the primary reason why Mexican murder rates are so high,

because you just have gang-on-gang action, not just at the regional level or the city level, but the block-by-block level, and they're fighting over the income that comes from the drug trade. Now, in the middle, you have another group that used to be at least partially affiliated with Cinaloa that calls itself Holiscoe New Generation. They're led by a dude named El Minchot. Now, El Mentiono does not have the same view of El Chappo.

So El Chappo, you can basically sum up as a position as don't shit where you sleep. Well, for El Mincho, the violence is the point. We're a gang that gets money from drug trafficking, not where drug traffickers who happen to be a gang. So the first thing he tells us people to do when they move into a town is go shoot up the mayor's office, the police office, and any gang headquarters that you can find.

Make it very clear to everyone who's in charge and who has the guns and what the penalty for non-cooperation happens to be. And that has made Hylosco New Generation very hierarchical, very violent, and has contributed massively to the violence south of the country. border. Now they are in the process of attempting to go north of the border to challenge Senaloa and basically what is the great field of income generation opportunities in the United States. They haven't succeeded yet. And if there is a fight to be had in the United States, it is at the plazas and the border cities to make sure Holisco New Generation does not cross in.

Because if they do, wow, we think our murder rate went up because of COVID. Holy crap. Halisco would go into Phoenix and Dallas and El Paso in Houston and Austin and San Diego and just start killing people to prove to everyone that they can. And if you want a 1930s Chicago level of violence in the United States in every city within 500 miles of the border, that's exactly what will happen if Holisco New Generation punches forward. So military strikes south of the border, this isn't going to fix anything. but perhaps an increased security presence in the city specifically to prevent Alisco from crossing north, that might be a pretty good idea. All right. Next time we'll talk about some of the economics of drugs and now things have changed.