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Captain Capitalism: What a Friend We Have in...Mexico?

What a Friend We Have in...Mexico?

I had a hunch, and usually my hunches are right.  So off into the Cappy Cap Mobile I went and started doing some research and, shucks howdy, what do you know, I was right (again)!

The Mexican economy is doing much better than the US economy!

How interesting.

It has a better current account balance:

Less government debt (and this does not include 2011 where, of course, your beloved Affirmative Action president jacked it up with yet another 8% GDP deficit)

Economic growth that has consistently trounced US economic growth by margins in excess of 1.5+% per year.

Resulting in unemployment rates that are a fraction of the US'

Now you might be saying, "Well that's horrible!  MEXICO is beating us!?" but you are not thinking correctly.

If you are a hard working individual, looking for opportunity chances are you won't find it here.  But just to the south of our border is an economy that has not only proven resilient to the dire global economy, but is actually booming with old school 1940's style US growth of 4% RGDP growth.  Furthermore, Mexico is starting to look like a nice place to not just retire to, but maybe a place to move to before you retire.  Set up a company, do something on the internet all while enjoying warmer climes and better economic prospects.  In other words, Mexico is a decent back up plan.

This puts Mexico in a very advantageous position relative to the US.  Specifically, it could be a destination for capital flight.  It has lower corporate taxes, a better economy, better public fiances (who thought we'd see the day!) and again, a nicer climate.  So, in an ironic sense, while the illegal alien element of Mexico is moving to the US resulting in labor flight out of Mexico, US investors, rich folk, corporations and entrepreneurs could be heading the other way.  And while the US would benefit from lower prices in terms of agriculture, roofing and janitorial services, something tells me trillions of dollars in wealth, capital and investment out of the US and into Mexico might override those benefits.

Calderon (or whoever succeeds him in the future) would be wise to start to woo some of the more productive members of US society.



Published Tuesday, November 6, 2012 11:32 AM by Kanoa Biondolillo


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