There's more bad news from the crackhouse country next door: Presidente Calderon's military offensive against Mexico's drug cartels is losing ground rather than gaining it. The possibility of a failed state is becoming more likely. (And American taxpayers' $1.4 billion in military aid, aka the Merida Initiative, has been flushed down a rathole.)

What's interesting in this thorough report is how it describes a real war scenario in which territory is surrendered by local officials to the gangsters, with the cartels taking over some of the functions of government as it suits them.

Drug cartels tighten grip; Mexico becoming 'narco-state', Arizona Republic, February 7, 2010

MEXICO CITY - For months, the leaders of Tancitaro had held firm against the drug lords battling for control of this central Mexican town.

Then one morning, after months of threats and violence from the traffickers, they finally surrendered.

Before dawn, gunmen kidnapped the elderly fathers of the town administrator and the secretary of the City Council. Within hours, both officials resigned along with the mayor, the entire seven-member City Council, two department heads, the police chief and all 60 police officers. Tancitaro had fallen to the enemy.

Across Mexico, the continuing ability of traffickers to topple governments like Tancitaro's, intimidate police and keep drug shipments flowing is raising doubts about the Mexican government's 3-year-old, U.S.-backed war on the drug cartels.

Far from eliminating the gangs, the battle has exposed criminal networks more ingrained than most Americans could imagine: Hidden economies that employ up to one-fifth of the people in some Mexican states. Business empires that include holdings as everyday as gyms and a day-care center. [...]

In many towns, smugglers pay for playgrounds and other things the government cannot afford. Bank loans are expensive and hard to get in Mexico, a lingering effect of the country's bank crises during the 1990s, so traffickers have stepped in to provide small-business loans.

"What people did not recognize in Mexico was how deeply ingrained in both the economy and society the drug trade was," [Milken Institute fellow Joel] Kurtzman said. "So it's not as if the drug traders are unpopular - they're looked at in many cities like Robin Hoods." [...]

In March, the financial magazine Forbes included Joaquin "Chapo" Guzman in its list of the world's billionaires for the first time. Guzman, the head of the Sinaloa Cartel, was listed at No. 701 with a net worth of about $1 billion.

In fact, Guzman's cartel and other gangs probably bring in $3.8 billion just to Sinaloa state alone, said Guillermo Ibarra, an economist who used bank and government statistics to compile an estimate this year.

That is 20 percent of the state's economy, twice as much as all of its factories put together. The drug trade employs about a fifth of the state's 2.6 million population, either directly or indirectly, he said.

Of course, Mexican organized crime is well implanted in this country due to decades of immigration anarchy. The criminals swim in a sea of Mexican nationals, immigrants and illegal aliens who reside here in the tens of millions.

As noted in the article, cartel gangsters have invaded America's premier national parks and turned vast areas of protected lands into toxic marijuana plantations. But Washington has never seen the assault on the parks by Mexican organized crime as a priority for serious law enforcement.

Meanwhile, the Obama budget has taken money from border protection, reducing the number of agents by 180 and redirected the funds into the window dressing that masquerades as airport security.

So while the President is busy spending the country into oblivion and extending state power wherever possible, he is also actively weakening our southern border and enabling Mexicanization. Who says BHO can't multitask?

But he does not appear interested in the sort of tough border enforcement that would upset his Mexican base.