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The
inane euphoria at Vicente Fox’s electoral triumph in
Mexico was entirely to be expected. Every few years we are
regaled with stories of Mexico’s dynamic "new"
leaders. They are invariably pro-business, pro-democracy,
pro-markets, pro-free trade and pro-American. They are committed
to political reform and to cracking down on corruption and
drug trafficking. The now-reviled former President Carlos
Salinas was once the toast of Washington: Bill Clinton’s
candidate to head the World Trade Organization, and on the
board of directors of Dow Jones. His stealing of the 1988
elections was never held against him.
After
the euphoria comes the letdown. There is always a financial
crisis and the United States has to step in with a massive
loan to buy off social discontent and keep Mexico’s
rulers in power. Before long, Washington will find a new
team of leaders to contrast favorably with the old. For
Mexico is not a state in any meaningful sense at all. It
is a U.S. colony. The purpose of any Mexican government
is to ensure that the U.S. has access to a steady supply
of cheap labor.
In
Vicente Fox, our elites appear to have found their ideal
candidate. Not only is he a former Coca-Cola executive,
he even wants to expand Mexican immigration into the U.S.
"We have this huge difference in salaries between the
Mexican side and U.S. side. A worker on the Mexican side
will make five dollars a day; in the States, the same work
would make $60 a day… So our proposal is to move to
a second phase of NAFTA where in five to ten years that
border will be open to free flow of people…" Fox
is not suggesting that Mexican wages should become more
like U.S. wages. If they were he could not hope to attract
any investment. What he means is that U.S. wages should
become more like Mexican wages. Open borders will ensure
just that. The corporations purr at the prospect of a North
American Common Market.
Vicente
Fox has another proposal that our elites will find pleasing.
He intends to stop even pretending to be waging war against
the drug lords. Washington knows very well that almost every
Mexican politician and bureaucrat earns money from drugs.
Hard currency revenues from drug trafficking have become
essential to keeping the Mexican economy afloat. Therefore,
any crackdown on the narcotics cartels would have serious
economic and political repercussions. Happily, Fox has found
a solution to the dilemma. "We must put together countries
that produce drugs, countries that traffic and countries
that consume, and through this multilateral effort really
stop the growing of crime," he argues. In other words,
set up a blue-ribbon commission, let it ponder away for
years and then ignore whatever it recommends.
The
Mexican state has never been about the creation of a free
market or the promotion of economic growth. It was designed
to raise dollars for Mexico’s ruling elites. And the
U.S. was always on hand to make sure its interests were
secure. In August 1982, Mexico devalued its currency and
defaulted on an $80 billion debt. The Reagan administration
immediately extended $2 billion to refloat Mexico’s
economy. In July 1988, when Cuauhtemoc Cardenas Solorzano,
who had vowed to repudiate Mexico’s foreign debts,
appeared to be heading for victory in the presidential elections,
the U.S. jumped in with a $1 billion bridge loan. Thanks
to that, plus a good deal of electoral fraud, PRI rule survived.
January
1994 saw the implementation of NAFTA – yet another Washington-inspired
scheme to keep Mexico’s elite in power. Mexico received
$50 billion in new portfolio investment and tens of billions
more in private loans. By December things had gone sour.
Encouraged by Washington, Mexico had, since the 1980s, been
liberalizing, privatizing and deregulating. As a result,
the country had become dependent on capital inflows to finance
a growing trade deficit. When investors jumped ship, Mexico
was unable to support the overvalued peso.
Enter
Bill Clinton and Robert Rubin. They extended a $20 billion
loan to save their banker friends and clients in Mexico.
But the peso collapsed. Interest rates soared. And Mexico
experienced a terrible depression. Banks had to be bailed
out – to the tune of $100 billion – courtesy of Mexico’s
taxpayers. Clinton and Rubin boasted that Mexico had paid
back every dime of the loan. What they failed to mention
was that the Mexican government could only do that by borrowing
heavily in the international private markets at rates 5
percent above normal, thereby burdening Mexico’s poor
with yet more obligations.
As
businesses declared bankruptcy and wages fell, and millions
lost their jobs, Mexicans streamed north across the border.
Mexicans in the U.S. – legal and illegal – are
believed to send back something like $5.5 billion a year
– a substantial sum for a country short of foreign
exchange. This really is a redistribution of wealth from
the poor to the rich, sponsored by the U.S. government.
Fox’s
continental common market is sure to become a mechanism
for Washington’s continuing underwriting of Mexico’s
ruling elite. Transfer of resources from the U.S. to Mexico
will be labeled "regional development aid." In
the meantime the flow of Mexican immigrants to the U.S.
will continue unabated.
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