Fewer Drugs In America Means More Problems for Mexico

Last week’s horrific killings at the Ciudad Juarez drug treatment center were front-page news in Texas. The murders are partly the result of what happens in a market when restrictions on supply are imposed in a related market.
It has become more difficult to ship drugs from Mexico to the U.S. because of increased border enforcement. This has decreased supply in the U.S. but increased supply in Mexico.
The increased domestic competition in Mexico has pushed prices down, resulting in a large increase in Mexican drug addiction and the violence associated with it. Sadly, I imagine that the new giant border fence will make shipping drugs to the U.S. even more difficult and result in still more addiction — and violence — in Mexico.