Nearly four years after President Felipe Calderon launched a military-led crackdown against drug traffickers, the cartels are smuggling more narcotics into the United States, amassing bigger fortunes and extending their dominion at home with such savagery that swaths of Mexico are now in effect without authority.
The groups also are expanding their ambitions far beyond the drug trade, transforming themselves into broad criminal empires deeply involved in migrant smuggling, extortion, kidnapping and trafficking in contraband such as pirated DVDs.
Undeterred by the 80,000 troops and federal police officers arrayed against them, gunmen frequently take on Mexican forces in the open. Operatives of one group, the Zetas, did so in northern Mexico this spring when they blockaded army garrisons. In June a group believed to be linked to another organization, La Familia, ambushed federal police in the western state of Michoacan, killing 12 officers in early morning light.
Since Calderon announced the offensive when he took office in December 2006, more than 28,000 people have been killed. Most of them have been traffickers, dealers and associates. But innocent civilians account for a growing portion.
Billions of dollars have been spent on the anti-drug effort with the enthusiastic backing of the George W. Bush and Obama administrations. Calderon and his administration say one reason progress is proving so difficult is that the problem festered far too long. They have predicted that the violence will subside by the end of the year.
But statistics, intelligence reports and interviews with Mexican and U.S. authorities over the last six months make it clear that the effort has failed to dismantle the networks or significantly slow the flow of drugs.
Scarcely a decade after Mexico took a giant step toward genuine multiparty democracy, traffickers may now pose a long-term danger to its stability. Rising chaos "requires us to change our view of the problem, that it is no longer a matter of organized crime but rather of the loss of the state," the leading newspaper El Universal said in an editorial in June.
Calderon himself acknowledged the threat last week in comments at a national security conference: "This criminal behavior is what has changed, and become a challenge to the state, an attempt to replace the state."
Mexican traffickers have increased their shipments of several types of narcotics north across the border, becoming titans of an industry that by some estimates earns $39 billion a year, equivalent to almost 20% of the government's annual budget.
They have muscled aside competitors to gain control over shipments of most types of illegal drugs in the hemisphere: marijuana, cocaine, heroin and methamphetamine.
And they are becoming increasingly important producers, a shift from an earlier age when Mexican gangs served chiefly as smugglers for South American producers. Marijuana and poppy fields have flourished for decades in the northwestern state of Sinaloa, but now production has expanded into states from Chihuahua in the north to Oaxaca in the south. Some of the world's largest meth labs have been uncovered in Michoacan.
The Zetas and La Familia have grown into trafficking powerhouses since Calderon became president. They have altered the playing field by employing methods once unthinkable, such as beheading or dismembering rivals and then displaying the remains in squares, on street corners and in other public places.
Trafficking groups flex their muscles by hanging threatening banners from bridges, stringing up corpses or parking buses across key streets to paralyze traffic, actions that appear increasingly aimed at cowing the populace.
Drug gangs armed with military-class weapons smuggled from the United States or, as The Times has reported, left over from U.S.-backed wars in Central America now threaten or hold sway over vital industrial cities such as Monterrey. On July 15, traffickers hit another chilling milestone by detonating a car bomb in an attack on federal police officers in Ciudad Juarez, Mexico's deadliest city.
The cartels have diversified, grafting human trafficking onto their drug-smuggling routes, and padding their income with kidnapping, extortion and the movement of a wide range of contraband, including fake luxury products and exotic animals.
In large parts of Calderon's home state of Michoacan, criminal groups charge businessmen to operate, essentially usurping the government's role as tax collector. The same phenomenon occurs in states such as Tamaulipas and Coahuila on the Texas border.
This year, traffickers succeeded for the first time in shutting down major operations of Pemex, the state oil company and top source of national income.
Juan Jose Suarez Coppel, Pemex's general director, acknowledged to a congressional committee that rampant kidnapping of workers forced the closing of oil and liquid gas plants in the Burgos Basin in northeastern Mexico, among the company's most lucrative installations. Traffickers have been stealing oil for years, but the goal in this case was to halt production and control the region.
The kidnapped workers' families told The Times that state officials, prosecutors and the army have proved unable or unwilling to help; hope that their relatives will return alive diminishes daily.
The spread of drug-related chaos across Mexico can be roughly gauged by the list of places the State Department says American citizens should avoid.
Two years ago, Americans were cautioned about border cities such as Tijuana and Ciudad Juarez. But a warning issued in July includes highways around Monterrey, Mexico's third-largest city, as well as the states of Coahuila, Chihuahua and Tamaulipas along the border, Durango and Sinaloa in the northwest and Michoacan on the Pacific coast.
Gun battles have spilled into the famed resort of Acapulco. The mayor of Cancun, Mexico's top tourist destination, was arrested in May on drug-trafficking charges in the middle of his campaign for governor of the state of Quintana Roo.
An assessment of the drug threat issued early this year by the U.S. National Drug Intelligence Center said Mexican drug-trafficking organizations, or DTOs, "continue to represent the single greatest threat to the United States."
Mexican cartels, with operations in more than 2,500 U.S. cities, are the only ones working in every part of the United States, it said. They have largely displaced Colombian and Italian traffickers.
"The influence of Mexican DTOs, already the dominant wholesale drug traffickers in the United States, is still expanding," said the report, known formally as the National Drug Threat Assessment.
Cultivation and smuggling of Mexican marijuana had doubled since 2004 to an estimated 23,700 tons, it said. Production of heroin had more than quadrupled by 2008, to an estimated 41.9 tons. A separate State Department report said poppy cultivation doubled again between September 2008 and September 2009 and that cannabis production had reached its highest level since 1992.
Production of methamphetamine is also on the rise, despite the Mexican government's efforts to crimp the flow of precursor chemicals. Its availability in the United States has hit a five-year high.
The availability of cocaine north of the border has declined, however. The U.S. drug assessment report cited several possible explanations, including major seizures by Mexico. It also cited a drop in production in Colombia and the increasing flow of cocaine to other markets.
Calderon administration officials have cited the data on cocaine as a sign they are winning the war against drug-trafficking groups, and they dispute some of the U.S. statistics on marijuana and other drug production as excessively high.
Seizure rates for marijuana and heroin have often been higher under Calderon than under his three predecessors, according to Mexican government statistics. Yet in some cases, the Calderon record is no better, and comparisons are even less favorable when adjusted for the growth in the drug market.
Mexican forces seized 74.2 tons of cocaine during Calderon's first two years in office. Without a record-setting 25.9-ton seizure in the Pacific port of Manzanillo in November 2007, the total would be about equal to the amount impounded in a similar period under Calderon's predecessor, Vicente Fox, and under Ernesto Zedillo in the mid-1990s. It is far short of the 98.6 tons seized under Carlos Salinas de Gortari in 1989 and 1990.
Only two top-ranking cartel leaders have been killed, Arturo Beltran Leyva and Ignacio "Nacho" Coronel Villarreal. But authorities are arresting more suspects, nearly 78,000 from the start of Calderon's term to January of this year. Of those, roughly 96% were street dealers, lookouts and other low-level helpers. But only about 2% were charged and convicted of a crime, according to official statistics. The rest remained in jail or were released.
The arrests have been unevenly distributed. Fewer than 1,000 of the 53,000 drug-trafficking arrests studied in a report this year by Edgardo Buscaglia, an international expert on organized crime and a legal scholar at the Autonomous Technological Institute of Mexico, involved people working for the Sinaloa cartel, the oldest and mightiest of the narco-empires.
Those figures have led many in Mexico to conclude that Calderon's government is going easy on the Sinaloa traffickers, whose leader is the country's most wanted fugitive, billionaire Joaquin "Chapo" Guzman. The motive, this argument goes, would be to reduce violence by allowing one group to essentially win. Calderon has vehemently denied favoritism.
"My government is absolutely determined to continue fighting against criminality without quarter until we put a stop to this common enemy and obtain the Mexico we want," Calderon said in a paid, two-page message in Mexican newspapers in June.
More recently, officials have countered the idea of favoritism by pointing to the killing July 29 of Coronel, a top figure in the Sinaloa conglomerate.
For now, says Guillermo Valdes, head of the secretive national intelligence agency, Mexicans will have to accept that increasing violence is inevitable.
"We have made progress in deploying forces and in slowing down the operational capacity of organized crime," he said in a rare public appearance this month. "But we have not achieved the objective of restoring normal living conditions in regions affected by organized crime."
Officials and institutions remain under threat, particularly poorly protected small town mayors, city council members and
police chiefs in the provinces.
A day after Calderon published his defense of his crime strategy, residents in the west-central state of Nayarit were in a near panic. Recent gun battles had left more than 30 dead and rumors circulated on the Internet that schools would be targeted.
It is a threat that would once have sounded preposterous.
No longer. The governor, Ney Gonzalez Sanchez, called an end to the school year three weeks early to prevent what he called a public "psychosis."
Cecilia Sanchez of The Times' Mexico City Bureau contributed to this report.