The cartels, on the other hand, are pushing a renewable commodity with a fairly inelastic demand curve. The GAO says they brought in $23 billion in 2007, and it's possible that they'll do even better this year. Cocaine use skyrocketed during the 80s recession, and the decline of the Mexican economy and a rise in unemployment will make the drug business even more attractive to Mexico's poor.



Of course, plenty of the cartels' income is being spent on things like zoo animals, but what's left over still buys a lot of guns—a lot of guns. More importantly, it buys skills. In the 90s, the Gulf Cartel began employing rogue School of the Americas-trained Mexican and Guatemalan special forces members as bodyguards. Known as "Los Zetas," by 2004 they had predictably taken over leadership of the cartel. Los Zetas operate with a degree of tactical sophistication that the Mexican federal government, quite frankly, can't match. In the United States, a drug raid is a SWAT team kicking down the door of a crack house. In Mexico, it increasingly tends to be a hours-long infantry battle in somewhere like downtown Tijuana, with Mexican soldiers retreating under fire from grenade launchers and .50-caliber machineguns.



Right now Mexico has 45,000 troops bolstering the police in the drug war. The United States is helping to prop up the Calderón administration with money and surplus military equipment through the Mérida Initiative or "Plan Mexico," along with training from FBI and DEA advisors (who knows what other government agencies are doing down there, but it's not likely to be pleasant). Whether this support will be enough remains to be seen, but it's doubtful. $1.6 billion is a drop in the bucket in a conflict of this scale.



His nuclear option is to call for overt intervention by the United States military. That would be political suicide for him and probably Obama too. If military action is authorized, it would probably be limited to something quiet initially, like employing the US expertise in blasting SUVs with Predator drones. Targeted killings can only accomplish so much, though. If the situation escalates, the United States could easily face a worst-case scenario: being caught up in a de facto civil war in the urban slums of Mexico.



The cartels are already the new cultural heroes of Mexico. If they're aggressive enough to face down US military intervention, it would give them further legitimacy in the eyes of a people with a long memory. A US armed response below the Rio Grande, viewed as an invasion by a poor and angry population, could easily make Iraq look like a good idea. The cartels, or at least cartel members, could become the nucleus of an heavily-armed insurgency not only familiar with, but able to blend into, the interior of the United States. Not to mention the implications of millions of refugees pouring north across the border.



Admittedly, this is an unlikely scenario, but stranger things have happened. At the very least, Mexico has the potential to become the foreign policy focus of the Obama administration, eclipsing Iraq and Afghanistan. Hopefully Obama and Calderón can craft a solution that brings narco-violence back down to nuisance levels. If not, though, things look grim for Mexico, and with it the United States, if only by virtue of proximity.



To get back on topic, decapitations are still all the rage south of the border. In September, 11 human heads were apparently burnt as ritual offerings to Santa Muerte, a folk deity that the cartels have adopted as their patron saint (giving us awesome shoes and evocative terms like "narco-cultist"). Mexican soldiers have also started to lose their heads. While an alarmist might be tempted to draw a connection between the tactics of the cartels and Al-Qaeda, it's probably safer to assume that it's an example of convergent evolution. Decapitation is just scary, and these guys are into that.