One pressing foreign policy problem that received not a single mention in the presidential debate on foreign policy two weeks ago was the security situation in our neighbor and third largest trading partner, Mexico. Mitt Romney’s tendency to stick a silver foot in his mouth squandered any electoral advantage he might have wrung from his family’s personal connection to Mexico, and Obama was borne to a second term in part by the Latino vote. The president also enjoyed a great advantage over Romney in popular opinion polls in Mexico. The changing demographics of the American electorate may mean that immigration reform becomes a policy priority in Obama’s second term, a welcome prospect for U.S.-Mexican relations. But Obama cannot afford to ignore the other, in some ways more urgent, dilemma of security and stability inside Mexico itself.

Some 60,000 people have been killed in Mexico since President Felipe Calderon launched an offensive against the drug cartels in 2007. The Calderon administration has succeeded in capturing and killing many high-ranking cartel leaders, often with intelligence assistance from America’s DEA. Yet if anything, these successes have often tended to spur more violence, as the cartels fight amongst themselves to fill the leadership vacuums that ensue, and neither government can claim much of an impact on the transnational logistics infrastructure that allows the cartels to continue funneling narcotics to the ravenous consumer market on this side of the border.

To the average American, and to the Obama White House, the problems in Mexico may seem somewhat distant: after all, “spillover violence” has been limited, and even as Juarez became “Murder City,” inheriting, for a time, the dubious distinction of deadliest jurisdiction on the planet, El Paso, just across the border, remained notably safe. And unlike Colombia in years past, or Guatemala, Honduras, or Guinea-Bissau today, Mexico is an enormous country, with a robust and dynamic economy. So even as the crisis has raged, Mexico has been insulated by its sheer size and relative prosperity from the varieties of outright demoralization the drug trade can occasionally inflict on smaller, more vulnerable, states.

But let’s not kid ourselves: there’s a war going on in our neighbor to the south, and we ignore it at our peril. The political sensitivities of counterparts in Mexico have largely silenced any suggestion by U.S. policymakers that the Calderon regime has been fighting an insurgency, but the fact remains that much of the territory in the country, including large stretches of the border with the United States, is not in any meaningful sense under the sovereign control of the government. In many areas, the dominant cartel will function as a kind of pseudo-state, extracting rents from local businesses. American corporations in Mexico have hardly been immune to this culture of local corruption, as recent revelations concerning Wal-Mart’s practices in the country make clear. The drug trade has thoroughly corrupted elements of the Mexican state, from the local to the national level, and while this erosion of institutional integrity might not appear today to present a first-order national security threat to the U.S., the potential second- and third-order threats are obvious, and dire.

Nor is it merely a narrow sense of realist self-interest that should prompt the second Obama administration to engage more aggressively on this issue. There is also the fact that we, as a nation, share a good measure of responsibility for Mexico’s plight. After all, we buy the drugs: we’re the single largest consumer market for narcotics on the planet, and just as Mexican drugs move north into this country in epic quantities, billions of American dollars move south into Mexico, subsidizing both the business and the violence of the cartels. Major multinational banks, from Wachovia to HSBC, have been implicated in assisting the cartels to launder their profits. And a disproportionate amount of the violence of the cartels is carried out with American guns.

President Obama will commence his second term just as Calderon’s successor, Enrique Pena Nieto, takes power in Mexico. Pena Nieto has announced that he will take a different approach to the problem than did Calderon, and there is speculation that this approach will be more conciliatory, or outright accommodating, to the cartels. But Obama should take advantage of the regime change in Mexico to signal a broader re-think about bi-national cooperation on this issue, one that actually delivers on the promises of the Merida initiative, allocating the funds that have already been committed and matching a focus on military and law enforcement hardware with an emphasis on the tricky business of training and institution-building. He should reassess our approach to the drug trade in the Americas, acknowledging that it is a dynamic cross-border market, and reallocating some law enforcement resources from the interdiction of northbound drugs to the tracking and interdiction of southbound guns and money. He should encourage the Justice Department to crack down to a greater degree on major banks that prove to be complicit in the laundering of drug money. He should also heed the call of leaders in numerous Central and South American countries to at least consider and debate the potential merits of legalization policies. Marijuana is often described by drug warriors as the “cash crop” of the cartels, so the new administration would be wise to study the impact that state initiatives of the sort we have just witnessed in Colorado and Washington might have on the traffickers’ bottom line.