Nov 062014

There seem to be two global winds blowing in opposite directions: companies are merging like never before while nation-states from Spain to Iraq to the United Kingdom are threatening to break apart.

What if the United States bucked the trend of nation-states and instead went the way of companies? What if, for instance, the U.S. decided to merge with Mexico? Welcome to Amexico, with a population of nearly half a billion people and the best hamburgers and enchiladas in the world. Is this as crazy as it sounds? That’s the question we explore in our latest Freakonomics Radio episode, “Should the U.S. Merge With Mexico?”




Stephen J. DUBNER: If you’ve been paying even a little bit of attention to the news lately, you will have noticed a worldwide trend. You might call it “Independence Fever.”
MEDIA CLIP: The polls have closed in Scotland and…the vote over independence went down to the wire, closer than a lot of people imagined.
MEDIA CLIP: And a plan to split California in six different states is one step closer to a vote this morning.
MEDIA CLIP: Hundreds of thousands of people gathered in Barcelona…to demand the right to vote on independence from Spain.
MEDIA CLIP: Now Catalonia is not alone in the battlefield for sovereignty. Another Spanish region, the Basque country, is also seeking a referendum on independence .
MEDIA CLIP: In Iraq, the president of the country’s autonomous Kurdish north…has asked the regional parliament to prepare for a referendum on independence.
DUBNER: But while countries are threatening to break apart, companies are moving in the opposite direction:
MEDIA CLIP: U.S. fast food giant Burger King is in merger talks with Canadian coffee and donut chain Tim Hortons. If the deal goes through, it will create the world’s third-largest fast-food chain.
MEDIA CLIP: Dollar General has gone hostile in its bid to buy rival Family Dollar.
MEDIA CLIP: America’s two biggest cable companies announced a $45 billion merger.
MEDIA CLIP: Three of the four largest German deals ever have happened in 2014. And we’ve seen $61 billion dollars’ worth of German companies buying US companies this year.
MEDIA: CLIP: But here we are again, and it’s just another example of an M&A frenzy.
DUBNER: Is it really a frenzy?
Jim CRAMER: We’ve had three multi-billion dollar deals just in the last week. I see a lot of cross-border deals.
DUBNER: Yeah, it’s a frenzy. You know that voice, don’t you?
CRAMER: Yep, I’m Jim Cramer, and I am the host of “Mad Money with Jim Cramer,” the co-host of “Squawk on the Street,” and I’m also the markets commentator for
DUBNER: We had Cramer on the line because we had a question: if all this consolidation is good enough for companies, why not for countries? That is, rather than “Independence Fever,” why not “Merger Fever”? This came from a listener named Dan Woerner who recently sent us an e-mail. He wrote: “I was lying awake last night thinking about what might happen if the U.S. somehow incorporated Mexico. I’m not talking about waging war and taking over, but rather a mutually beneficial merger.”
DUBNER: Now, last year, Jim, you said, quote: “I think Mexico is a great buy.” I believe you were talking about a Mexican index fund, maybe some individual stocks, but I wonder, Jim, if that goes for Mexican stocks, do you think it might go for Mexico as a whole? Do you think maybe we Americans should think about acquiring Mexico?
CRAMER: Well, I think that if currency matters, yes, we ought to! The dollar is way too strong at 13 pesos. If we make that acquisition then I think our gross domestic product goes up, our workforce will be, uh, I’d say energized, and there’s a country with tremendous natural resources that we’d be able to exploit. Uh, I sure wish we’d do it!
DUBNER: And what if there were a stock offering for this merger, for this new conglomerate called Amexico, or maybe MexAmerica?
CRAMER: Look, that IPO, I want everyone in and I’m willing to pay 20% above the price talk. Because I think people are short-selling Mexico because they think it is just a place where you just have lawlessness. They have not been to Mexico, they don’t realize the immediate premium this deal’s gonna go to. I want in that deal, and I’m also gonna buy in the aftermarket after it comes public.


More Freakonomics Podcasts

Top Series

Click for more Freakonomics Shows
download the audio
Listen to ESL Podcasts and AudioBooks with Transcript
Listen to ESL Podcasts with Notes
Learn English from Teachers
Practise Your English Online

Choose Meaningful Pre-Intermediate, Intermediate, Upper-Intermediate or Advanced Series

Source: Freakonomics

More Series for You:

 Leave a Reply

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>