Mexico vs. Mexico

Written By Brian Hicks

Posted June 27, 2006

Mexico lost, but the Mexicans play on. Following the national soccer selection’s fall to the Argentinean team on one of the most spectacular shots of the World Cup this weekend, the United States’ southern neighbor and its citizens are now left to decide which political goals it will aim for over the next four years.

This Sunday, Mexicans at home and abroad (though only 1% of Mexpats have requested absentee ballots) will select their next national leader.

I was working at a restaurant with a staff of mostly Mexican laborers in the year 2000, when current president and former Coca-Cola executive Vicente Fox became the first Mexican head of state in seventy years to be elected from outside the stalwart PRI (Institutional Revolutionary Party). My friends from south of the border expressed hope that the change in power would lead to a tidal shift in the fortunes of their countrymen.

Namely, my co-workers hoped that they would no longer have to flock north to places like Kansas City on El Conejo ("The Rabbit") busses in order to earn a decent living and remit funds home to Jalisco and Oaxaca.

If the frontier between the United States is a porous membrane, the only answer to current diffusion is to balance the economic mixtures on either side.

But which of the current candidates will be able to make conditions more favorable to staying put and building indigenous wealth, thereby mitigating the flow of migrants into increasingly wary US border states?

 

La Mano de Obrador

In Spanish, la mano de obra means labor. In this election, Andrés Manuel López Obrador is called the "workers’ candidate," though in the scheme of New World politics these days one must be careful in differentiating between populism and social democracy.

There is of course the brooding figure of Hugo Chávez to the south in Venezuela, and Cuba‘s Castro to the east. They, along with Bolivia’s Evo Morales, are spearheading the ALBA (Bolivarian Alternative for the Americas), a grouping of Latin American states hoping to provide a countervailing weight to the US’ foreign policy might.

But there is also a contrary force to the ALBA (which means "dawn"), embodied by the recent elections of right-of-center presidential candidates in Perú and Colombia. These leaders favor the development of supply-side means to encourage peace and prosperity, as opposed to the Bolivarian method of nationalization and demand-side stimuli.

Obrador has distanced himself from both extremes, and at this point holds a lead in the polls. He has pledged in a series of campaign compromisos (better translated as "promises," not "compromises") to reduce bureaucratic spending by 4% and boost poor and rural incomes by up to 20%.

Though Obrador was a member of the PRI until recent years (the longtime power party is now running a distant third), he is running this year on the PRD (Party of the Democratic Revolution) ticket. While serving as mayor of Mexico City from 2000-2005, he presided over the largest office building and condominium boom in the history of the capital.

So his redistribution may be balanced by measures for sound, investment-based growth. If we compare this to the current U.S. redistribution regime, which is redistributive to the supply side (nouveau trickle-down economics), Obrador’s mix is not so outlandish. But that doesn’t keep everyone satisfied.

Multilateral trade agreements, especially NAFTA, will likely get a closer look if Obrador is elected, as one of his advisers told Reuters yesterday, "We think that a 12-year marriage gives us plenty of justification to present to our partners where we think Mexico has done well and where we think Mexico has not done well." This reevaluation will include complaints about subsidies to stateside farmers, as well as demands for greater openness to Mexican products, especially agricultural ones.

Vicente Fox’s party, the PAN (National Action Party), is represented in this election by Felipe Calderón, considered to be the business candidate. Many Mexicans have been disappointed by Fox and what they had hoped would be a drastic shakeup for the better as the century turned away from the PRI.

But Fox’s election may instead have signaled the country’s genuine transition to democratic flexibility. In political science, generally it is agreed that three consecutive, peaceful changes of power means that a democracy is in effect. But even if the political order is set to a peaceful handoff, Mexico is plagued by corruption, violence, and the highest rate of kidnappings that end in murder of any place in the world.

 

The Anglo Face of Mexico

I was somewhat surprised to come across an English-language website for Mr. Obrador’s website. I was not surprised, however, to find that the content on that site differs greatly from its Spanish counterpart. See the English: http://www.lopezobrador2006.com/

Entonces el español: http://www.amlo.org.mx/

The English site is downright Clintonesque in presentation. A salt-and-pepper-haired man in a trenchcoat looks out over his country with an eye to the future, while below his image we see very familiar Yankee stump staples: "values, growth, competitiveness…"

But the Spanish site has a thumbs-up and a smile, "For the good of all, first the poor," the top banner asserts, while a news story below announces that, "The era of privatization will pass into history."

Though this does not promise nationalization, the assertion can be taken with alarm, or at least wonderment, at what force will be used to exile privatization into the annals of the Fox government.

In any case, it should be hoped for Mexicans and U.S. residents alike (*we are all Americans) that measures taken by Mexico’s new leader should do least harm (i.e. not stoke inflation by increasing aggregate monetary supply). The goal of the government should also stress competitiveness in a way that amplifies domestic industries to compete on more even footing and not only cast Mexico as a cheap alternative to northern labor.

The United States and its new trade representatives should gear up for a new round of critical NAFTA talks, where the twin issues of border security and reasons for migration must be addressed in tandem. If the worst situation for Mexican migrants in the U.S. is still better than the best situation they can imagine at home, the tension will persist and worsen, no matter what party is in control and no matter if Mexico wins the Cup in 2010.

For the latest in international market news and geopolitical insight, click here now to subscribe to your FREE Orbus Intel e-letter.

Angel Publishing Investor Club Discord - Chat Now

Brian Hicks Premium

Introductory