“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Sunday, April 10, 2005

The congregated roar of corruption

How exhausting it is, the Sunday paper, after the pious filler that has rendered American newspapers almost unreadable for a whole week. What is there to say after the Pope, the Pope's will, the mourners, the Pope's successor, the greatness of the Pope, his gallant struggle against communism, the Pope as a good man, the Pope as a great humanitarian, the Pope salad, the Pope's favorite daytime tv show, the Pope's dressing tips? What is there to say? The Tom Delaying of America (a land of bigotry and superstition, with DDT for all) goes on apace. Other news stories have shyly peeped out from the bottom of A-7: a 300,000 person demonstration in Baghdad, here, a riot in Beijing there. What rivets us is the sad spectacle of the Gringo’s favorite democrat, Vincente Fox, operating just like it is 1988 – that magic time for power in Mexico when the presidential election was resolved by an open fraud, instead of recourse to the usual methods of covert suppressions, bribes, and threats, all of which made up the tissue of the PRI’s electoral power. This has provoked some sighing in Yankee editorial departments. The LA Times writes:

“Once merely disappointing, the state of Mexico's democracy in the era of Vicente Fox has become alarming. It's hard to believe that only five years after the long-ruling Institutional Revolutionary Party's inspiring defeat at the polls, the PRI and Fox's National Action Party are conspiring to bar a popular leftist candidate — Mexico City Mayor Andres Manuel Lopez Obrador — from the ballot in next year's presidential election. It's a foolish move that is tarnishing the credibility of the political system and is bound to backfire, enhancing Lopez Obrador's popularity.”

The editorial drenches itself in perfumed empathy for the struggling masses, yearning to be free (as in, free enterprisers). The Mexican poor, according to the orthodox North American interpretation of the law and the profits, have merely to be surrounded by the monuments of privatization to break out of their hovels and start singing If I were a Rich Man in Spanish:

“We should hasten to add that Lopez Obrador, who leads in the polls, is not a particularly appealing candidate for the presidency. Capitalizing on widespread disenchantment with Mexico's experiment with freer markets, Lopez Obrador threatens to take Mexico on a journey back in time, to a more socialist orientation that would seal the fate of his low-income supporters. He offers a great deal of messianic rhetoric backed by ill-advised policy prescriptions, including adamant opposition to privatizing Mexico's oil and electricity sectors, which are in dire need of outside investment. More worrisome is Lopez Obrador's penchant for incendiary demagoguery that seems to echo the likes of Venezuela's Hugo Chavez. He also has surrounded himself with pols entangled in corruption scandals.”

Ah, that little word, “outside”, is such an interesting word. If one takes it away, you have: “in dire need of investment.” Money can actually come from a lot of places. The state itself could do the investing, n’est-ce pas? They certainly came up with the bucks for the banking billionaires, with Fox’s compassionate support – 62 billion, in fact, to float them after the collapse of their schemes at the end of the nineties. It is in these little, teeny words that creep and creep in, little scratches and noise on the logical surface, that you can hear, if you are a backwards looking socialist, the distant underground sound of class warfare.

The congregated roar of the Mexican congress has upheld the rule of law, at least as it applies to a third of a mile of road. A golden future beckons – in a century or so, the rule of law might even apply to the massive bribes that went to the PRI and the PAN in the past, or the rampant corruption of police departments in the North that allow both for the serial killing of poor women and long term cooperative ventures with the narco-rich. One wonders how the honorable dino-legislatures from Tijuana voted, and who they had dinner with afterwards. Since the LA Times is so sure that a little foreign investment will just hit the spot to help “unseal” the fates of the poor, we wondered how the Mexican poor were doing under the liberty loving rule of neo-liberalism. Here’s a nice summary from an article, in February of this year, by El Universal.

Two stories that raised questions about Mexico's economic sovereignty made headlines here last week. One was a corporate control story about bankers; the other was more of a human interest story about migrant workers. At bottom, the stories were both about global financial flows and they told us much the same thing. The bankers: A few days ago, the directors of the Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA), owners of 60 percent of Mexico's largest bank, Bancomer, let it be known they would spend US4.1 billion to buy out the mostly Mexican shareholders who owned the remaining 40 percent. The buyout would leave BBVA as the bank's sole owner, removing Bancomer shares from public trading on the Bolsa Mexicana de Valores (BVM). BBVA's move would leave foreign capital in control of some 90 percent of the Mexican banking system: Currently, the major players are the Spanish bank Santander Central Hispano, the British Hong Kong Shanghai Bank Corporation (HSBC), the California-based Bank of America and the New York-based Citibank, sole owner of the country's second-largest bank, Banamex. But Bancomer is the giant; it owns some US50 billion dollars worth of assets, about 25 percent of the value of all banking assets in Mexico. The workers: A few days before BBVA's intentions were publicized, the Bank of Mexico announced that remittances from Mexican workers abroad, money sent home by Mexicans working in foreign countries, mostly the United States, had reached a record US13.3 billion dollars in 2003. This 13.3 billion earned outside the country by mostly low-paid workers exceeded by some two billion dollars all the direct foreign investment received by Mexico in 2003 and amounted to some two percent of the country's 2003 GDP. Above all, the stories about the bankers and the workers both aroused the ever-present uneasy feeling in Mexico that the economy is being kept afloat by flows of investment, wages and entrepreneurial activity that originate elsewhere. There is a nagging worry that a broad based entrepreneurial class neither exists nor is coming into existence in Mexico. Beyond that tiny sliver of the population that controls the powerful holding companies and travels with bodyguards, one is hard pressed to identify a significant part of the population that has the ability to invest in the country, provide jobs and spur development. This worry is not alleviated by the fact that the number of firms listed on the BMV has been steadily declining. In 1998 there were 195 non-financial companies listed on the Mexican bolsa; today there are 170. Aside from the state firms Pemex and Federal Electricity Commission (CFE), the Mexican economy is now dominated by foreign companies. The country's largest private-sector company is General Motors. The next four (ranked by sales) are Telmex (Mexico), Wal-Mart (USA), Daimler-Chrysler (Germany) and Delphi Automotive (USA). Of Mexico's 25 largest private, non-financial firms, the corporate headquarters of only nine are in Mexico; eleven are in the United States, two each are in Japan and Germany and one is in Korea. And beyond the oligopolies, the country's stillprofitable maquila sector is virtually wholly owned by nonMexicans who repatriate profits to their home countries. Many in Mexico rightly worry that the Mexican economy is fast becoming a subsidiary of foreign, mostly transnational companies, companies with no particular commitment to the recovery of the country's domestic economy, much less to the movement of large numbers of people out of poverty. And now the southward flow of corn from Kansas and Iowa can be added to those financial flows we spoke of earlier as a source and symbol of the loss of sovereignty. Mexico's campesinos are being gradually displaced by industrialized agriculture, much of it based outside the country, and the broader Mexican economy has thus far been unable to absorb them. As the Mexican campo slowly collapses as a source of livelihood, many campesinos have joined the army, eight to 10 million strong, of Mexicans who are seeking work in the United States. The U.S. economy, it turns out, can happily absorb minimum-wage labor. The Secretariat of Work and Social Forecasting (StyPS) reports that Mexico's formal economy generated only 1,817 jobs last year.”

Wow, 1800 jobs. Talk about the capitalist wave of the future. Talk about those backwards lookin’ socialists. It is hard to understand why the populace would embrace those demagogic populist types when the wave of the future is so clear it knocks you off your feet, isn’t it?


Brian Miller said...


Of course, the acverage person in the United States will soon be viewing this lovely system from the other side.

Do you give much credence to the newest meme-that the American ownership class realizes that the American socio-economic system is soon doomed and that what we are observing is merely their rapid looting of said system?

roger said...

Brian, actually, I think the ownership class has been coddled, via decades of socialism for the wealthy, into thinking that ultimately any crisis can be handled by the state -- the S & L bailout being a prime example. So I don't think that there is a collective expectation of coming collapse. Call this Pavlovian ossification -- the fossilizing of reactions appropriate to an earlier economic situation, one in which the U.S. had no real economic competitors. It still hasn't sunk in that China, India, and the EU are real.