Methonomics

On Monday, October 20, 2014, it was reported that twenty-two people were arrested for handling and transporting methamphetamine in Contra Costa County in California. The people involved were affiliated with Mexico’s Sinaloa Federation, which is a drug cartel that moves methamphetamine from Mexico to California with the help of another gang, the “Nitro Gang.” The Federal Bureau of Intelligence in Contra Costa County noted that it was the county’s largest meth bust ever. They recovered 500 pounds of meth, which is worth $18 million on the streets.
The Federal Bureau of Intelligence (FBI) and the Drug Enforcement Agency (DEA) are working together on a project called “Operation Road Trip.” This is a culmination of several meth investigations in California that has already led to a total of 67 arrests for the possession and distribution of 1109 pounds of meth. The meth recovered is worth $40 million, not including the $1.82 million in cash that has been recovered at the scenes as well.
Analyzing the numbers above, clearly the manufacturing, transporting, and the distribution of meth are all very lucrative businesses. Consider the 22-man cartel crew that was arrested this week. If they are to get away, they are all making tens of thousands of dollars (a cut of the $18 million) instead of doing hard time. The methamphetamine cooks are reeling in even more dough, as they keep a much larger slice of the $18 million than the drug mules. Finally, the owner, (the head of the cartel and its operations) is probably keeping upwards of half of the revenue.
When comparing the amount of money made by a cartel member in a shipment, and the amount of money the average American makes in a given week, (around $1,000) the numbers are not even close. We can see that a cartel member even on the bottom of the food chain makes what an average American makes in months of work, all in one shipment in a matter of days. These calculations help define how large-scale drug problems are a serious issue worldwide, all stemming from economics.
Since the demand for drugs has been pretty constant over the years, the best way to shut down the use of drugs is to cut off the supply. The serious problem is when deranged people realize that they can make tremendous amounts of fast money by building up the supply curve of drugs to reach the existing demand curve at the market equilibrium. The issue is reborn each time new groups of people are willing to put their skin on the line to make big money illegally.
As you know, federal law enforcement has existing punishments for the possession and distribution of methamphetamine. Possessing crystal methamphetamine is of course, a felony, and typically results in jail or prison time of some kind. The more meth confiscated at the arrest, the longer the prison sentence. Even an amount as small as 5 grams can earn a person a 10-year sentence in prison. Imagine getting busted with 500 pounds of methamphetamine on you. At that point, it can very quickly become a shootout, since a lot of criminals would rather die than rot in prison. In retrospect, a drug cartel is one of the most dangerous businesses out there; anyone involved must have a death wish.

Works Cited:

Hernandez, Jodi. “22 Arrested, 500 Pounds of Meth Seized in California-Mexican Cartel Bust.” NBC Bay Area. NBC, 20 Oct. 2014. Web. 23 Oct. 2014.

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5 thoughts on “Methonomics

  1. This is such an interesting topic to look at. I think it would be really interesting to look at this relating to the public. How would the social cost and value effect the demand for meth? There are also so many other factors one could look at when discussing meth (i.e. you could research how meth effects the consumption of other drugs). As much as some people want to deny it, meth has such a huge influence on society and how the world runs that it would be hard to imagine a world without it. Would the world run the same? Obviously there would be more money to spend on other things but is it inevitable that people would spend that money on something like drugs?

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  2. zukindr says:

    Since meth has such a negative externality on the public you would think the government would introduce harsher punishments for working in the meth distribution business. However, as you mentioned in your blog many of the people dealing in this business are willing to die rather than go to prison. In my opinion the most harsh punishment is the death penalty, but when they are already ready to die, threatening death has no effect. Does anybody have any other suggestions for punishments that might deter people from working in the meth business?

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  3. We’ve discussed social costs a lot in this class and the externalities they create. Reading this post made me think about personal costs (if there is such a thing) and their externalities. Is there a way to calculate/graph the personal cost of possible jail time for a drug dealer in relation to the lucrative profit they are receiving? Is it possible to quantitate the cost of jail on a persons life? Maybe you could sum up the loss of income during jail time but what about the memories they are missing out on and the emotional/physical damage prison could entail? What amount of money makes this worth it? Just some thoughts!

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  4. I agree it would be interesting too study the hypothetical cost of prison time, I guess looking at the amount of bail would be a place to start. These criminals are so good at what they do, I would guess that less than 5% of the drug transactions across the border are caught by law enforcement. Another thing to consider is the large amount of total revenue that drugs like marijuana, cocaine, etc that are brought over the border bring to the US economy. The distribution of illegal drugs across the US is extremely good for our economy, annually total revenue falls somewhere between $400 billion and $500 billion dollars. There are solutions such as increased border protection to decrease the distribution of drugs, but regardless of the increased security these transactions are inevitable, and unfortunately a contributing factor to the United States economic success.

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