AMLO outside the Senate, Monday, October 26

Worker's Party Deputy Mario di Costanzo Tears Apart Carstens Economic Plan

Friday, August 8, 2008

The Rupture

The Calderon regime is in the early stages of advanced decomposition. Incapable of governing, haunted Hamlet-like by the ghosts of his electoral illegitimacy, propped up only by the US, Spain and Televisa, little Lipe and his band of incomptent blunderers reel from one issue to the next, turning everything they touch into dross, and converting the nation in the process into an economic wasteland, kidnapper's paradise, and drug-traffic battlefield strewn with the cadavers of a dozen dead a day. And every day, with every assassination, social restiveness gets ratcheted up one step further. "There does not exist one single measure taken by the current government nor an agreement made among all of the political forces that will diminish these pressures," writes José Agustín Ortíz Pinchetti. "On the contrary, a series of crises are converging at once: crime is on the increase and the security apparatus is crumbling. No response has been given to the agricultural deficit. We are entering into a recession. Inflation is increasing and growth decreasing. Every social and economic indicator is on a downward slope. The oil reform touted in such an irresponsible manner has thrown the whole country up in the air."

Calderón makes cosmetic changes in his cabinet by replacing his Finance Minister, a Fox lackey (Eduardo Sojo) with a lackey of his own (Gerardo Ruiz Mateos) who, incidentally, has no experience in the field whatsoever. But who needs experience when you can just improvise? Meanwhile, prices soar on practically everything that has a price to soar with. Gasoline is up, for the second time this month alone, to 7.32 pesos for a liter of Magna and 9.13 for Premium. Diesel is up eight centavos on the liter. Gas LP, used by 80% of Mexican homes for heating hot water and for stoves, is up 7 cents in August - a little 20 kilo tank now rounds out at just about 200 pesos. Electricity is up ten percent since this time last year. And these are all prices controlled by the federal government, mind you (now I thought the surplus produced by high oil prices was supposed to be subsidizing the price of imported gasoline, which is why there supposedly wasn't a surplus at all, but now that gasoline's going up too, what happened to those subsidies after all? Where did the FUCKING SURPLUS GO, CARSTENS, YOU FAT FUCK? Sorry, sometimes it just escapes me.). Food prices, of course, are up globally, and Mexico - ever more dependent on imports to compensate for its NAFTA-induced agricultural crisis - is in no way an exception. According to the Bank of Mexico, any salary gains won by workers in 2007 were completely wiped out by the price increases in April, May and June of 2008 alone, and are now lagging behind. Running faster just to stay two steps back, that is (see:. The only figure that is headed down, besides economic growth, is remittences from Mexicans living in the United States.

Here we see the travesty of the neo-liberal economic model at work. In the name of keeping inflation under control (thus protecting the value of the financial assets of the haves), genuine, broad-based economic growth is hamstrung and worker salaries are eviscerated. This of course, knocks the engine out of things, because poor people can't buy anything, except on credit. So flood the market with credit cards and keep people buying - for a while. Meanwhile, inflation goes up anyway for reasons - energy and food, primarily - that have nothing to do with worker salaries, but in Mexico at least, everything to do with poorly-timed tax increases and handing over of national economic sovereignty to the globalization taskmasker. And who gets nailed again by the consequent higher interest rates used to fight this inflation? Yes - the workers! Higher inflation, lower purchasing power, no credit (except those credit cards at 60% interest). Mexico, not dissimilar to the United States, is settling into a worst-of-both-worlds situation: deflating economy with inflation to boot. And situations like that, once mired into, become very hard to get out of.

I don't suppose Calderón has much time to really grapple with this, however, because he is too busy simply trying to save his scalp. "Before I thought the rupture was possible," writes Ortiz Pinchetti, "now I think it's probable. It is impossible, however, to predict how close it is. Years may pass before it arises, or it may strike in the near future, around the symbolically-charged elections of 2009-2010. We also can't discard the possibility that things, and the country, will just keep stumbling along in agonizing decadence. The deterioration has no limits."

1 comment:

gil said...

Kurt - excellent analysis as usual. Were you not a citizen you'd be deported - like yesterday. Now, however you will be a thorn in their side: please don't make that a crown of thorns. Gil