Pablo Escobar's drug cartel spent $2,500 per month on rubber bands for bricks of cash

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During its heyday, Pablo Escobar's drug cartel spent $2,500 per month on rubber bands for bricks of cash. Mental Floss has a interesting profile of the drug lord.

The profits were astronomical at every step. In 1978 each kilo probably cost Escobar $2,000 but sold to Lehder and Jung for $22,000, clearing Escobar $20,000 per kilo. In the next stage they transported an average of 400 kilos to south Florida (incurring some additional expenses in hush money for local airport authorities) where mid-level dealers paid a wholesale price of $60,000 per kilo; thus in 1978 each 400-kilo load earned Escobar $8 million and Lehder, Ochoa, and Jung $5 million each in profits. Of course the mid-level dealers did just fine: after cutting the drug with baking soda each shipment retailed on the street for $210 million, almost ten times what they paid for it.
Soon Lehder was hiring American pilots to fly a steady stream of cocaine into the U.S., paying them $400,000 per trip. At one trip per week, in 1978 this translated into wholesale revenues of $1.3 billion and profits of $1 billion.

Mental Floss profile of Pablo Escobar (Via Neatorama)

(Image: Rubber band ball, a Creative Commons Attribution Share-Alike (2.0) image from tetrad's photostream)

Mark Frauenfelder is the founder of Boing Boing and the editor-in-chief of MAKE and Cool Tools. Twitter: @frauenfelder. Come and hear Mark speak at the ALA conference in Chicago on July 1.

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http://www.paradea.org/notes/ Teirhan

He lost $500 million a year to rats and rotting?

“Rats”, huh? is that what his subordinates told him?
- ultranaut
  
  Everyone knows rats love the cocaine!
- umbriel
  
  Yeah, between the rats and the rubber bands, it seems clear to me that self-serve bonuses were being taken throughout Escobar’s organization.
  
  So was there a _third_ set of books somewhere, giving an accurate picture of how the business was doing?
Ken Thomas

Unfortunately, Escobar’s performance was less than analysts predicted, and his organization’s stock was downgraded by S&P to AA+ status.
Teller

Geez, what was his newspaper bill?
Rotwang

It ought to be obvious that there’s no fighting these kinds of sums with arguments of “morality”…we ought to legalize drugs immediately and regulate their sale.
- PhosPhorious
  
  “we ought to legalize drugs immediately and regulate their sale.”
  
  That’s communist talk, you communist! Escobar was a job creator. Regulate his business and you will only be hurting the rubber band manufacturers.
  
  America has no use for your “soak the rich” policies.
  - bcsizemo
    
    But think of the taxes that he and all him employees are paying!
    
    Or we could do like tobacco and just tax the shit out of sales.
obeyken

It’s worth mentioning that they were really nice rubber bands.
James B

If you find this sort of thing interesting, check out the documentary “Cocaine Cowboys”. It is streaming on Netflix.
awjt

Umm… $2500 for rubber bands? It’s South America. They could dip bundles of bills in pure molten rubber straight out of a rubber tree.
bo1ngbolnguser001

I wouldn’t be surprised if the rubber band supplier was killed off. he was charging way too much for rubber bands.
http://disqus.com/Kimmoth/ Kimmo

!!!!!

This has to be one of the most mind-blowing factoids I’ve come across, at least as far as money is concerned.

$2.5k a month. On rubber bands. To hold bricks of cash together.

Reminds me of the eleven (IIRC? Could have been more) pallets of US $100 bills that simply ’disappeared’ in Iraq…
- trai_dep
  
  Bush’s America wouldn’t have lost those billions, had only they used rubber bands instead of shrink-wrapping them.
- awjt
  
  And then they “found” it again a few months ago…
trai_dep

Ironically, Pablo fired fewer of his employees (err, sorry, Reduced In Force) than the S&P 500 companies did.
User 100

Somebody may have claimed that they spent $2,500 on rubber bands, but some back-of-the-envelope math tells me that that number is highly unlikely:

One rubber band costs about one cent.
That means 2,500 dollars will get me 250,000 rubber bands.
If I assume a stack size of about 2 inches I end up with roughly 500 bills per stack.
At 500 bills per stack, and an average denomination of $20, this ends up as a total of Two billion and 500 million dollars. Per month.
Probably not…

I used fairly conservative numbers here — if the stack size is bigger, the total amount will be bigger, as you end up with more stacks for the number of bands used. Buying rubber bands in bulk will probably get you a better deal. And the average denominations will most like be higher (probably 20s & 50s)..
- awjt
  
  Nice. A great back-of-the-envelope calculation. Well done! Two thumbs up!
- wadef
  
  I think you are wrong to assume they could get rubber bands for one cent each. They didn’t have Amazon.com, Walmart, Staples, etc back in 1978. Why do you assume they could buy rubber bands in bulk from a discount super store? Try recalculating and make the rubber bands cost more, maybe $1 for 20? Who knows. Maybe they had to special order them through someone and they were paying $1 per 10 rubber bands. If I was selling rubber bands to drug dealers I’d try and mark them up as much as possible. :)
Payne Hertz

How much did he spend on envelopes slipped under the desk of US politicians to gain their support for the drug war?
Repurposed

So the maxim for law enforcement is no longer ‘follow the money’ but ‘follow the rubber bands’?
stuck411

Drug lords in the know only vacuum seal their cash. High cost up front but reduces the insect & rat problem. Still does nothing for those light fingered minions of yours though.