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

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Thursday, July 06, 2006

mexico's election - and fairy tales from Jorge Castañeda

Jorge Castañeda has turned into the teller of the Mexican establishment’s favorite fairy tale, which begins like this (I take this from his current essay in Foreign Affairs, Latin America’s Left Turn):

“JUST OVER a decade ago, Latin America seemed poised to begin a virtuous cycle of economic progress and improved democratic governance, overseen by a growing number of centrist technocratic governments. In Mexico, President Carlos Salinas de Gortari, buttressed by the passage of the North American Free Trade Agreement, was ready for his handpicked successor to win the next presidential election. Former Finance Minister Fernando Henrique Cardoso was about to beat out the radical labor leader Luiz Inácio Lula da Silva for the presidency of Brazil. Argentine President Carlos Menem had pegged the peso to the dollar and put his populist Peronist legacy behind him. And at the invitation of President Bill Clinton, Latin American leaders were preparing to gather in Miami for the Summit of the Americas, signaling an almost unprecedented convergence between the southern and northern halves of the Western Hemisphere.

"What a difference ten years can make. Although the region has just enjoyed its best two years of economic growth in a long time and real threats to democratic rule are few and far between, the landscape today is transformed. Latin America is swerving left, and distinct backlashes are under way against the predominant trends of the last 15 years: free-market reforms, agreement with the United States on a number of issues, and the consolidation of representative democracy. This reaction is more politics than policy, and more nuanced than it may appear. But it is real.”

The fairy tale dimension of this – for instance, that Salinas, a man 'elected' by massive vote fraud, whose delivery of the presidency was not to a hand picked successor (oops, that guy was gunned down) but to a man who had barely begun ruling when the Mexican economy cracked up – casts a blot over Castañeda’s reputation for astuteness. Perhaps he is suffering from long term memory loss. The article is, nevertheless, important. The pathological hatred that Obrador evokes among a cadre of formerly leftist intellectuals (who view themselves as a Latin American form of New Labour – strong on free trade, strong on public investment in human capital – or not so strong on the latter if there is a banking collapse that requires looting the treasury to float various private fortunes) is not interpreted, here, but radiates from such paragraphs as:

“THE LEFTIST leaders who have arisen from a populist, nationalist past with few ideological underpinnings--Chávez with his military background, Kirchner with his Peronist roots, Morales with his coca-leaf growers' militancy and agitprop, López Obrador with his origins in the PRI--have proved much less responsive to modernizing influences. For them, rhetoric is more important than substance, and the fact of power is more important than its responsible exercise. The despair of poor constituencies is a tool rather than a challenge, and taunting the United States trumps promoting their countries' real interests in the world. The difference is obvious: Chávez is not Castro; he is Perón with oil. Morales is not an indigenous Che; he is a skillful and irresponsible populist. López Obrador is neither Lula nor Chávez; he comes straight from the PRI of Luis Echeverría, Mexico's president from 1970 to 1976, from which he learned how to be a cash-dispensing, authoritarian-inclined populist. Kirchner is a true-blue Peronist, and proud of it.”

In Castañeda’s fairy tale, the populist leftists – the devil’s seed – contrast with good leftists who – unsurprisingly – are just like himself. They came from the hard left – the Communist parties of yore – but as the cold war ended, embraced the idea of reform with enthusiasm. Reform, of course, means neo-liberalism on steroids. Castañeda does some bogus comparison work to show how bad populist leftists – like Chavez – are leading their countries into the financial abyss, while good leftists – former communists pursuing Chairman Milton Friedman’s revolutionary line – have been happy homemakers.

To do this, Castañeda does things like comparing Mexico’s growth – from 1999 to 2004 – to Venezuela’s. Disingenuous is no word for it. He is so set on discrediting Chavez that he gets his dates confused:

“A simple comparison with Mexico--which has not exactly thrived in recent years--shows how badly Venezuela is faring. Over the past seven years, Mexico's economy grew by 17.5 percent, while Venezuela's failed to grow at all. From 1997 to 2003, Mexico's per capita GDP rose by 9.5 percent, while Venezuela's shrank by 45 percent. From 1998 to 2005, the Mexican peso lost 16 percent of its value, while the value of the Venezuelan bolivar dropped by 292 percent. Between 1998 and 2004, the number of Mexican households living in extreme poverty decreased by 49 percent, while the number of Venezuelan households in extreme poverty rose by 4.5 percent. In 2005, Mexico's inflation rate was estimated at 3.3 percent, the lowest in years, while Venezuela's was 16 percent.”

If Chavez came in in 1999, why are we dealing with Mexico in 1997? And where are those GDP growth figures for 2004? 2005? Argentina and Venezuela, devil states according to Castañeda, posted the best GDP figures for 2005 in Latin America. And Venezuela's inflatin problem, in 2005, surely stems from GDP growth of 17 percent in 2004 -- sorta missing from the article, eh? Since 2005 does seem to interest Castañda when it comes to inflation, surely that is a relevant statistic. Unless, of course, he is making a crooked case before a packed jury. In fact, Castañeda has been making crooked cases for a long time, now. It is his version of Foxismo.

One can agree with part of Castañeda’s fairy tale, at least. Among the many reasons that the communist party was a complete disaster in the 20th century was its inculcation of a power mad mindset among the intelligentsia. In Latin America, this meant that communists could easily move from the far left to the far right in the social and economic policies they pursued – or rather, that they allied with the powerful to pursue. J. Edgar Hoover was right – never trust a communist. He was simply wrong about the reason – Hoover thought you could always trust a communist to be communist – showing that he should have gotten out of the house and snuck away from the horsetrack set a little more often. Actually, you can never trust a communist to be communist.

Mexico is, at present, the house that Salinas built. (And speaking of houses, since Salinas has once again settled in Mexico City, it seems Castañeda has been his guest at various parties. Both men share an astonishing lack of shame.) Zedillo and Fox have both basically followed Salinas’ path of trade liberalization and an absence of state policies to either invest in human capital (in spite of the Blairist rhetoric) or to leverage the Mexican place in the global system to once again jump start wages. The state organizations that desperately did need reform in order to create strong instruments to countervail corporate interests – notably, the interface between the state and the labor unions, and the regulatory regime that should oversee environment, health, finance, etc. – have never been reformed – they have been undermined. The Salinas economy has aggravated the perennial Mexican problem of cumulative advantage and the elite, people such as Castañda, have become even harder in their attitudes. New Labour is impossible in a place where there exists no compact at all between the elite and the working class. In England, no working man would chuckle at the kidnapping and torture of some rich City banker. In DEF, however, there is a distinct schadenfreude whenever a doctor's family has to pay a ransom for the son or daughter. That's a sign that things are bad. Very bad.

It may be that this election is the end of the line for Salinas’ vision. As the more astute financial papers have perceived, the PRD has emerged as at least the second party in Mexico, displacing the PRI. In the 50/50 state, Obrador – who is not going to go away and sulk, like Cardenas did after 1988 – has the pieces to block “reform”. The PAN, at the moment, has the pieces to block Obrador’ s New Deal. This election shows the marshalling of forces, but far be it from LI to predict the next moves in the game.


Brian Miller said...

Slightly off-topic, but this piece reminds me of the old Tom Paine Online (or something like that) where they basically went through business section headlines and reporting, skewering the biases, conventional wisdom, and outright fallacies that pass(ed) for unquestionable truth. The horror stories about leftish Latin American governments were always a favorite topoic. Bravo, roger!

roger said...

Brian, you are talking about everybody's fave economist, Dean Baker, who still comments frequently at Max Speak -- which site, incidentally, has a very nice post on Obrador.

roger said...

ps- I just noticed that I misspelled Castañeda's name. But it wasn't my fault! I copied the name from the Foreign Affairs article, because I didn't want to fool around with the little squiggle over the n. It never occured to me to look at how they spelled his name - and it turns out they misspelled it. Such are the vagaries of cut n paste, which is obviously the downfall of civilization as we know it.

Luckily, I caught it as I was looking at it and spelled it right. Sorry about that. Never trust Foreign Affairs.