Roger L. Simon: Senor Slim could solve the immigration problem

The idea that a Mexican telcom billionaire - Carlos Slim - is now the world's richest man to the tune of $67.8bn is worth more than a little thought. According to the Guardian, this guy's fortune is equivalent to 8% of Mexico's gross domestic product, emphasis on the gross in Slim's case because the plutocrat could easily solve the border by himself. Forget all the legislation and fences, Slim alone could create so many decent jobs in Mexico he could slow illegal immigration to a trickle. But as far as I know, Slim is not emulating his fellow mega-billionaires Bill Gates and Warren Buffett both of whom have pledged to give away their fortunes and have clearly already started. Moreover, Gates and Buffett already live in an advance industrialized state and in Gates' case at least is a heavy donor to the developing world. Slim lives in the developing world. That's peculiar by itself when you think of the income disparity, even more so when you think of the insoluble problems of the Mexican economy. It would be fantastic if he got involved in this. For all I know, he could be already. That would be great.

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Carlos Slim is Lebanese Christian. Mexico's entire ruling class is made up of immigrant families like the Slims and the old Spanish (often plantation) families. The rich mostly white minority feels it is in their interests to get rid of as many resentful mestizos and Amerindians as possible. That's where the US comes into it. Don't hold your breath waiting for Mexico's corrupt ruling class to do anything to help its poor inside Mexico itself.

You know, I hadn't thought of it in those terms, but there is an ethnic cleansing aspect to Mexico's policies here.

When Hugo Chavez wanted to shut down the only broadcaster that was still in vocal opposition to his Cubanization of Venezuela. He was going to pull their license. So the owners would not only be out a business, but it would be worthless. In comes Carlos Slim who gets a, ahem, �nice� price for the business. Carlos likes Hugo. Hugo likes Carlos.

Another racket Carlos is in, is concrete. I believe most concrete sold in Mexico is bought from him, and it is very expensive. American and others have looked at entering the market, unfortunately there is always 'permitting' problems.

As an American example take the hallowed Warren Buffet. Warren is for inheritance tax. Of course he sells insurance that covers the certainty of death. How convenient. Less know is that he has another business, he buys family companies after the death of their owners. After the death of the innovative owner, if they haven't bought Warren's insurance policy, the family has a year to come up with the cash to pay the IRS. Usually no one will loan such a sum to the children. In a phase, they aren't the old man. So in comes Warren to low ball the family. Nice business. Warren even now has a good business in buying into family businesses so that while still living the owner can enjoy some of his created wealth.

Another racket for Warren who is always in favor of competition limiting taxes is his Netjets. The commercial carriers have partitioned for a fee change to have ever growing number of rich peoples private jets to pay a fair share of fees at airports. Surprisingly Warren is against it. Every night Warren and Carlos get down on their knees and thank government.

Anyways, the very rich love government and dictators. Vast sums of money, suppression of cranky small business competition and in the case of dictator's very quick access to rule changes. Carlos is no more going to change the system then the ever rich Chinese Communist are theirs.

Carlos Slim has in fact recently increased his charitable committment from $4B to $10B (mostly health and education):

http://www.nytimes.com/2007/06/28/business/worldbusiness/28slim.html?pagewanted=1&ei=5088&en=38f26a01b5f58b34&ex=1340683200&partner=rssnyt&emc=rss

This is good; however, to *really* help Mexico he needs to focus on further development of industries employing large numbers of people at reasonable wages.

Much of the manufacturing that was expected to move to Mexico in the wake of NAFTA has in fact gone to China instead. It's true that labor is cheaper in China than in Mexico, but there are also tremendous logistical advantages to manufacturing in Mexico--access to major US markets in 2-3 days by truck/rail rather than 30 days by ship. The long delays in overseas supply lines can have real adverse consequences as Wal-Mart (for instance) recently found out.

I suspect that the major problems with manufacturing in Mexico have to do with government bureaucracy, but would love to hear from someone who has done it (or tried to do it)

Carlos Slim illustrates a perpetual problem w Latin America. Money in the hands of the few,gotten there not by entrepreneurial acumen but by government-supported monopoly. If Mexico would open up the telecom business to businesses other than Mr. Slim, prices would go down and Mexico's ability to compete in international markets would improve.

We should not primarily be encouraging Carlos Slim to give away his money. No, he needs to instead champion capitalist principles and the rule of law. Is he likely to do so? Hell no! Slim has made much of his money because Mexico's corrupt political institution allows him to monopolize certain major segments of that country's economy. A Mexican wishing to purchase a cell phone, for instance, has virtually no other option but to subscribe to a service owned by Slim.

Bill Gates has done more good for humanity by his entrepreneurial efforts then he could ever possibly achieve through altruism. Business people create the jobs that enrich the world. The Mother Theresa types are of far lesser importance.

Andrew Carnegie may have done as much good through his libraries as he did through his steel mills. How many people were able to educate themselves, and go on to great things, because of the "network" that Carnegie created?

Let's not forget that it's paper wealth. If Bill, Warren or this guy tried to sell off all their shares at once they wouldn't end up with anywhere near the amount of money they are "worth".

I left this comment on another forum: The rich get richer and the poor get (strike)poorer(strike) to sneak into the US so they won't be a burden to the rich Mexicans.

My HTML powers don't work here so the word "poorer" doesn't have a strike through it :-(

The US economy is something like 14 trillion, per year. Gates, Buffet and company are pimples. They could shotgun them selves tomorrow and domestic markets wouldn't hick up.

Mexico's problem is corruption, the common denominator of failed and failing states throughout the world.

The corruption is endemic and ubiquitous, extending from the lowliest of officials to the highest in elected office. In such a society, efficient capitalism (and effective democracy) will not happen.

Sadly, Mexico is getting worse. As the second (to Iraq) most dangerous country in the world for journalists, it is losing a critical democratic institution which helps provide transparency. The rapid breakdown of law and order in the northern states, Mexico D.F. and other places exacerbates other negative trends.

The current immigration problem we see may be little compared to a flood of refugees if Mexico collapses.

A billionaire isn't going to change this whole society, even if he has the best of intentions.

July 3, 2007: Senor Slim could solve the immigration problem

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