Newspaper headlines and tabloid pictures tell the story: headless corpses, blood-soaked vehicles, and a growing array of ­victims—­drug traffickers, cops, politicians, journalists, and, increasingly, civilians. The lazy, tranquil Mexico I grew up in is engulfed in the bloodiest drug violence anywhere in the Western Hemisphere.

Nine years after an opposition party came to ­power—­an event that was supposed to solidify the democracy that had been little more than a word in Mexico during several decades of oligarchic rule—Mexico’s rule of law is withering before it takes root. Since 2006 more than 10,000 people have been killed in ­drug-­related violence—1,000 of them in the first 45 days of this year alone. Last year, more Mexicans died in Mexico’s drug war than Americans have died in Iraq since 2003.

To be sure, the Mexican government has scored important victories, though these successes, expressed in numbers, also suggest the scope of the problem. More than 57,000 cartel kingpins, couriers, hit men, and lookouts—known as falcons—have been arrested since 2006. In the last two years, as many as 77 tons of cocaine, 585 kilos of heroin, and thousands of tons of marijuana have been seized. Authorities have impounded more than 33,000 firearms and some 4.5 million rounds of ammunition tied to trafficking.

Many U.S. and Mexican officials say that a crime ­problem—­albeit a grave ­one—­is being overblown. They scoff at a year-end Pentagon report calling Mexico and Pakistan the two countries most at risk of becoming failed states. “Failed states do not have functioning executive, legislative, and judicial branches,” says Tony Garza, former U.S. ambassador to Mexico. “They do not boast the world’s 12th-largest economy, nor do they trade with the United States at a pace of more than $1 billion a day.”

Mexico’s attorney general, Eduardo Medina Mora, said in a recent interview with 

 that Mexico’s president, Felipe Calderón, had to make fighting cartels the country’s top priority upon taking office, but he dismissed the notion that Mexico is on the verge of collapse. “Mexico has never been a weak state,” he said. “It is not today. It will not be in the future. We do have a critical problem that needs very bold, determined action by the government, which is taking place.”

Calderón’s administration insists that much of the country remains immune to the ongoing violence. Federal officials stress that more than 60 percent of the killings are confined to three of Mexico’s 31 states: Baja California, Sinaloa, and Chihuahua. And they say that 90 percent of the victims are people tied to drug traffickers, though this number invites skepticism, as so few crimes are ever solved.

Since the 1930s, cartels have been a fact of life in Mexico. Sinaloa, a state on the Gulf of California that today is known as the country’s narco-capital, was home to the first cartel, established by a single family. Over the years, other regions with gateways to the United States gave rise to their own organizations. These include Baja California’s Tijuana cartel, controlled by the Arellano family; the Juárez cartel, controlled by the Carrillo Fuentes family; and the Gulf cartel, with the paramilitary group known as Los Zetas serving as its armed enforcers and eventually spawning their own criminal ­organizations.

Accommodation between cartels and political leaders was common, as it has been in other Latin American countries, including Colombia. Ultimately, however, such an arrangement cannot hold. Greed takes over. In 1986, Colombian president Virgilio Barco described the three stages of narco-power that had gripped his country: “The first phase was the amusement. It was the period of the grand orgy with the drug dealers, when everybody was in bed with them and nobody paid any attention. . . . The second phase was the discovery period, when drug bosses no longer could depend on that more-or-less peaceful coexistence,” and violence erupted. “The third phase began when the drug bosses wanted to take over the state.”

From all indications, Mexico is in phase two, and is within sight of phase three, as midterm elections loom this July. The possibility that drug money may influence the candidates’ campaigns is yet another sign that Mexico’s democracy hangs in the ­balance.

For too long, Mexican officials turned a blind eye to the growing menace in their country. Today, an estimated 600,000 people participate in organized crime. The foot soldiers, or hit men, who come to mind when we think of drug trafficking compose fewer than 10,000 of that number, says Raúl Benítez, a professor at the National Autonomous University in Mexico who specializes in security issues. The rest are marijuana farmers, truck drivers, money launderers, and other ancillary ­criminals.

Their numbers will likely grow. The deepening economic recession has already left more than 350,000 Mexicans unemployed, and jobs that were once plentiful in the United States are scarce. Mexico’s mammoth underground economy offers a cornucopia of lucrative occupations—kidnapping (for ransom, to intimidate rival criminals, or to collect on debts), extortion, or murder for hire. In Mexico, crime pays.

This is the massive problem Calderón inherited when he took office in 2006 and decided on a policy of confrontation with the cartels. Local law enforcement—corrupt or simply stretched too thin—is overwhelmed. Some former policemen serve as drivers for the cartels. Many others are suspected of collusion with traffickers and have been fired or jailed. Still others have fled for their lives and now live in cities across the U.S. Southwest. In El Paso, I’ve met former Mexican cops working as ­fast-­food cooks, gardeners, and ­roofers.

Just days after he took office, Calderón sent some 25,000 federal troops to regain control of areas beset by drug violence. In the three years since, that number has increased to about 45,000. In March, 5,000 new soldiers arrived in Ciudad ­Juárez—­now the epicenter of the country’s violence—to take charge of security. Today, more than ­three-­quarters of the soldiers in Mexico’s army work simply to keep peace in their own ­country.

Recently, the U.S. State Department issued travel alerts for the northern state of Coahuila, which borders Texas, and even for my native state of Durango, farther to the south. My hometown in Durango traditionally had local human smugglers, people who vouched for the safe passage of emigrants along established routes into the United States. No more. Those routes, which have been taken over by ruthless drug traffickers who often use migrants as mules to smuggle locally grown marijuana or heroin, sometimes resemble killing ­fields.

The story of drug violence and cartels overwhelming vulnerable democracies is one of the oldest tales in Latin America. Indeed, Mexico is ­proving—­as have Colombia, Peru, and Bolivia—­that the war on drugs is unwinnable as long as Americans fail to curb their insatiable appetite for illicit drugs.

“If Mexico is the springboard, the United States is the swimming pool,” remarked Mexican ambassador Arturo Sarukhan in a recent talk at Harvard. Mexican drug traffickers earn anywhere from $15 billion to $38 billion from U.S. consumers every year. It’s ­American-­style capitalism at its most effective. Supply and demand are bound like magnets, operating according to the “just-in-time” delivery concept that has made billions for companies such as ­Wal-­Mart. Some of the narcotics are grown in Mexico; the rest arrive at this gateway to the United States from elsewhere. About 90 percent of all cocaine originating in South America—much of it from Colombia—passes through ­Mexico.

Mexico doesn’t rely on the United States only for consumers. More than 90 percent of the weapons used to generate terror in Mexico, where gun laws are more restrictive, are believed to be of U.S. origin. America also originates most of the bulk cash drug proceeds smuggled into Mexico. More than half of this hoard is used to bribe law enforcement officials, politicians, journalists, even administrators of homeless shelters, where cartels often hide their hit men. The corruption extends to the U.S. side of the border, where a growing number of law enforcement officials have been busted for ­complicity.

In Mexico, corruption of top officials is pervasive. In a particularly glaring example, drug czar Noé Ramirez Mandujano was detained last November for allegedly receiving about $450,000 a month to share U.S. and Mexican intelligence with drug kingpin Arturo Beltrán Leyva. One U.S. intelligence official lamented that the war against drug traffickers is often really a war within the government ­itself.

Mexico’s drug problem has become an urgent American domestic one as well. The magnitude of the violence and the powerful reach of the transnational cartels, coupled with the help of a vast network of gangs across the United States, have strengthened distribution routes from El Paso to Boston, and from Tijuana to Anchorage. Mexican drug cartels are even using U.S. public lands in the West to cultivate marijuana. A recent Justice Department report declared that Mexican cartels, with a presence in at least 230 American cities, represent the United States’ single greatest organized crime ­threat.

Kidnappings in Phoenix are rampant. In total, 368 people, the majority of them suspected of involvement in the Mexican drug trade, were kidnapped there last year. In Texas cities such as Laredo, McAllen, and El Paso, kidnappings are also common, and rarely reported to U.S. authorities. In Dallas, suspected murders tied to Mexican drug cartels are a frequent ­occurrence.

Meanwhile, an influx of refugees, ranging from business owners to law enforcement officials, is flowing into cities from San Diego to El Paso. Mexican citizens, once hopeful that Calderón and the military were up to the job of restoring order, are losing faith. In cities such as Ciudad Juárez and Nuevo Laredo, many residents and local politicians tell me that what they want most is a peace pact between the cartels and the ­government.

One canary in the coal mine is the Mexican news media. More than 30 journalists have disappeared or been killed this decade. The result: growing ­self-­censorship, particularly along the Mexican border. “The essence of Mexico’s young democracy is under attack,” warned Carlos Spector, an attorney representing Mexico’s new class of refugees, including three reporters who formed an organization called Periodistas Mexicanos en el Exilio (Mexican Journalists in Exile). “Journalists, the cornerstone of any democracy, are the targets. Democracy is slipping away.”

Consider Chihuahua, Mexico’s largest state, which borders both New Mexico and Texas. In the 1980s, I began my journalistic career by covering Mexico’s nascent democratic movement in Ciudad Juárez, across the Rio Grande from El Paso. There, Mexicans who opposed the ruling Institutional Revolutionary Party (PRI) were staging hunger strikes, bridge takeovers, and other acts of civil disobedience in support of the National Action Party. It was a long, sometimes bloody fight. In 1992, Chihuahua finally elected its first opposition-party ­governor, but many of its underlying political maladies remained.

When Vicente Fox won Mexico’s presidency from the PRI in 2000, he promised that the rule of law would follow. I had my doubts. The PRI was leaving behind a massive power vacuum, and many pressing problems remained. Perhaps the largest was Ciudad Juárez’s inability to solve the killings of hundreds of women beginning in the mid-1990s, an issue that has galvanized international human rights organizations. Nonetheless, I left for Washington to cover U.S. policy toward Latin America, thinking that the relationship between Fox and President George W. Bush would lead to a more fruitful approach. But the attacks on September 11, 2001, dashed all expectations of increased U.S. attention to Mexico, as America’s focus shifted to Iraq and ­Afghanistan.

Mexico is proving that the war on drugs is unwinnable as long as Americans fail to curb their insatiable appetite for illicit drugs.

In late 2003, I returned to Ciudad Juárez to investigate the murders of these women. By then, democracy seemed a distant promise. My investigation fingered drug traffickers in some of the killings, though getting proof was impossible, as much of the case paperwork had been destroyed or had disappeared mysteriously. In one case, an employee at a forensics lab washed the remaining clothes of a victim, thus removing bloodstains, hair, and other evidence. Why? Because, the employee told a U.S. investigator, the clothes smelled ­bad.

Today, Ciudad Juárez, with a population of 1.6 million, is the most violent city in Mexico. Two cartels, Juárez and Sinaloa, are fighting for control of routes into El Paso. Last year El Paso recorded 16 murders; Juárez, more than 1,600. The city is slowly dying. Texas state senator Eliot Shapleigh estimates that as many as 10,000 people from Mexico’s northern region have migrated to El Paso since January 2008. That number is nearly impossible to confirm since many of Juárez’s ­well-­to-­do already commute between the two cities. Shapleigh has called for El Pasoans to help accommodate these newcomers, much as Houston took in refugees from New Orleans after Hurricane ­Katrina.

A few examples illustrate the gravity of the situation in Ciudad Juárez. Mayor José Reyes Ferriz owns homes in both El Paso and Juárez. Today, people close to him say, his family spends much of its time on the U.S. side. His children are enrolled in El Paso schools. Reyes, who has been threatened with decapitation because he has allegedly defied traffickers, shuttles between the two ­cities.

Jorge Luis Aguirre fled to El Paso after a colleague, crime reporter Armando Rodriguez of 

, was slain outside his home. As he was returning from Rodriguez’s funeral, Aguirre says, he was threatened by a state employee with ties to the Juárez cartel. “I was told I would be next,” Aguirre recalls. “And I believe him. Because in Mexico today anyone can kill you at any time and nothing ever happens.”

A Juárez cab driver charged me three times the normal fare because, he explained, “only crazies or desperate people drive the streets of Juárez on this day.”

Last summer, 12-­year-­old Alexia Moreno and two other girls walking near her home were picked up by two panicked gunmen on the run from rival traffickers. Alexia, according to local press accounts, had told her parents she felt increasingly unsafe and wanted to move to El Paso. Days after that conversation, she became a human shield for two strangers. Shots rang out. The two gunmen were killed, and Alexia was found crunched in the back seat of the car with a bullet in her ­head.

While the innocent aren’t the vast majority of victims, the impact of their deaths is magnified for ordinary Mexicans. The cartels play on that fear by posting threatening messages in city streets, on walls and statues, on the bodies of victims. YouTube, blogs, and Internet websites are also popular forums for spreading fear. “The tactics used coincide with what we know as terrorism,” explains Phillip Heymann, a Harvard law professor and terrorism expert. “In Mexico it’s called ­narco­terrorism.”

One ­e-­mailed message last year warned of the bloodiest weekend in Ciudad Juárez’s history. Residents were urged to stay away from the city’s streets, restaurants, and shopping malls. On the designated Saturday, a cab driver from El Paso refused to take me to the Juárez airport. So I walked across the ­border—­and found an empty, lifeless city on the other side. A Juárez cab driver charged me three times the normal ­fare—­a hardship ­rate—­because, he explained, “only crazies or desperate people drive the streets of Juárez on this day.”

Washington clearly has been jolted by the violence. Veteran congressional aides can’t remember so many hearings about Mexico on Capitol Hill as have occurred this year. President Barack Obama supports the Mérida Initiative, a multiyear, $1.4 billion ­anti­narcotics plan introduced by his predecessor. Much of the aid goes to Mexico, though some Central American countries will also receive money. The plan aims to provide new technologies, training, and intelligence-gathering mech­an­isms, and to fortify Mexico’s weak judicial institutions. Perhaps now that the hypocrisies are exposed and Latin America’s drug war has reached the United States, real progress is possible. Maybe now, the two sides will talk as partners and not point ­fingers.

After nearly 40 years, U.S. drug policy, at a cost of $40 billion a year, is generally viewed as a failure. In a recent report by the Latin American Commission on Drugs and Democracy, three former heads of state, of Mexico, Colombia, and Brazil, called for a new approach, namely, decriminalizing ­marijuana.

Yet any proposal that smacks of decriminalization is taboo, even political suicide, in the United States.

Consider El Paso city councilman Beto O’Rourke. Concerned about the violence in Ciudad Juárez and spillover into El Paso, O’Rourke proposed in January that the city lead the nation in debating whether to legalize or decriminalize drugs. A motion to discuss the issue was approved, but Mayor John Cook vetoed the measure, expressing concern that a vote to decriminalize drugs would send the “wrong message to Washington.” His action forced a second vote a week later. What followed in the intervening seven days was a ­free-­for-­all of personal attacks on O’Rourke. Some even questioned whether he was “smoking something,” he recalled. The proposal was eventually voted ­down.

Privately, some officials from both governments entertain the possibility of moving beyond intelligence sharing to joint military operations, particularly if top Calderón administration officials are targeted for assassination. President Obama told 

 he has no intention of militarizing the border, but he didn’t rule out calling on the National Guard to help police it. That possibility isn’t altogether palatable to Mexicans, who don’t fancy having U.S. troops breathing down their ­necks.

The parallels with Colombia grow ever more striking. Since 2000, the United States has spent roughly $5 billion on the drug war there under a program called Plan Colombia. Violence decreased dramatically, but today drug traffickers are still very much a part of Colombia’s socioeconomic fabric.

“Cocaine production remains mostly unchanged,” says Álvaro Jiménez Millán, national coordinator of an ­anti–land ­mine program and a former member of the guerrilla group known as M-19. “Pablo Escobar is dead, but you have dozens of smaller drug lords who are now supplying Europe and Africa. So what Plan Colombia did was transfer the violence to Mexico and move cocaine to Africa, Europe. Is that success?”

A few months ago I spent a day touring the Mexican state of Tamaulipas with a source, someone in good standing with Los Zetas, some members of which were once elite soldiers in the army before deserting to do paramilitary work for drug traffickers. I was on a journalism assignment, seeking to confirm the existence of mobile camps near the Texas border where young Americans and Mexicans are trained as assassins. My agreement with my source was that I would not reveal exact ­locations.

Before entering any community on the Mexican side of the border, my source had to clear our vehicle so that there would be “no confusion, which could lead to bullets directed at us.” We drove endlessly, and he repeatedly phoned ahead to check with sources he didn’t identify. I saw Mexican policemen helping traffickers by calling in license plate numbers to ensure that vehicles didn’t belong to rival cartels. More than once, I spied an altar to Santa Muerte, or St. Death, a pre-Christian folk deity, by the roadside. The faithful, some loaded with high-powered weapons, leave candles, bottles of tequila, and other offerings. They pray for protection and for the destruction of their enemies.

 is a Nieman fellow at Harvard University on leave from his job as Mexico bureau chief of

for which he has covered Mexico for the past 15 years. He is a frequent speaker at the Woodrow Wilson Center’s Mexico Institute.

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As Mexico steps up its war against the brutal cartels that supply the United States’ drug habit, leaders on both sides of the border face tough questions about how to combat a problem that threatens the very fabric of Mexico’s democracy.

Alfredo Corchado