Deconstructing Mexico

Update II: the PRI against itself

2009-10-28T08:14:00.000-07:00

Quick answer to Sunday's quick update: the PRI deputies are in the thrall of the PRI governors - principally Enrique Peña Nieto, he of the hairdo, governor of the state of Mexico and imminent presidential candidate. Those governors (with the exception of one) are all pushing the avalanche of new taxes becuase they've been bought off with assurances that the states will all get new infusions of cash, which they can subsequently funnel right into their campaigns, and Peña Nieto to his presidential campaign (higher taxes=campaign subsidies). The PRI senators, however, are controlled by Manlio Fabio Beltrones (Don Beltrone of DEA drug legends), the other sure-fire PRI presidential candidate, for whom it is urgent to appear as the hero of the people, the defender of the downtrodden against the new taxes pushed so assiduously by his rival. The advantage of having such an ideologically amorphous party is that it's so very easy to come down squarely on both sides of an issue, no fuss, no muss (certainly not for Peña Nieto's hair), no explanations necessary.

Quick Update: Fiscal Package in the Senate

2009-10-24T08:02:00.000-07:00

Hold the phone, your taxes aren't raised just yet. It appears that a PRI-PRD alliance in the Senate is working to eliminate the new taxes from the fiscal package the House of Deputies approved late last week. This includes the proposed raising of the IVA value-added tax from 15% to 16%, raising the ISR income tax 2 points on everyone making over 6,400 pesos a month, a 3% tax on telecommunications, and an increase in the tax (and lowering of the threshold) on cash deposits in bank accounts (IDE). This, after a PRI-PAN alliance steamrolled the presidential proposal through the lower house practically unchanged, despite vociferous protests from the Worker's Party (and the usual equivocations from the PRD). Will somebody explain the PRI, please? Are their Senators more liberal than their Deputies? Have they had a change of heart after seeing the public's disgusted reaction to the proposals? Or - and this is most likely - are they simply trying to have it both ways, voting for the presidential proposals in the House in exchange for favors while trying to give a populist veneer to their machinations by tweaking things a bit before the bill inevitably passes? Votes are expected on Monday. Stay tuned....

The Assault on "Luz y Fuerza del Centro": Calderón's Step Too Far?

2009-10-20T11:36:00.001-07:00

From the very beginning of his ill-fated administration (bizarre televised midnight ceremony with an off-camera voice mysteriously declaring him to be the new "president" of Mexico, followed by a three-minute, through-the-backdoor appearance in Congress for an express swearing-in), Felipe Calderón has handled himself in the office he did not win with the bragadoccio and swagger of an emotional three year-old. Explosive, rancorous and revengeful, dogged by his own illegitimacy like a mythological tyrant, and with a propensity for hitting the bottle which is one the nation's more open of secrets (it is not for nothing that columnist Julio Hernández López has rebaptized Los Pinos, the presidential residence, as Los Vinos), Calderón has been giving, with ever-increasing frequency, the appearance of not being, as they say in Spanish, in his cinco sentidos. The results of such a catastrophic unfitness for office are in plain view: an economy set to tumble between 7 and 8% this year, the worst performance since the Great Depression; tens of thousands dead from a US-funded 'war on drugs' and millions more terrorized; the 2007 floods of Villahermosa provoked by dangerously-high water levels in reservoirs, the result of the shadow privatization of the electric industry; a tardy, bungled response to the swine flu outbreak; increased debt, higher taxes, a currency that has lost 30% of its value over the past year, and an upper-level bureaucracy which jealously retains salaries and benefits fit, literally, for kings.

All this notwithstanding, Calderón has been sustained in office, precisely as the rag doll (pelele) López Obrador contends him to be, by a combination of what in Spanish is called the poderes fácticos (defined by the Real Academia Dictionary as "those who operate in society on the margins of legal institutions by means of the authority or ability to pressure that they possess, e.g. banks, churches, the press). The "fácticos" in question here are, in addition to the aforementioned, are former president Salinas de Gortari; a fistful of super-rich magnates, beneficiaries of government largesse, tax exemptions, and the government's not daring to break up their comfy monopolies; and the television two-fer of Televisa and Tv Azteca (which could hardly be considered "press," so I'm putting them in a separate category). Although it has been touch-and-go at times, and has been helped by divisions within the institutional and non-instutional left, these powers behind the throne have succeeded for three years in keeping Little Lipe in office and more or less upright.

Events of the past week, however, have called into question how much longer they might be able to pull that off. A week ago Saturday (in Mexican terminology, a sabadazo: a move made on a Saturday, when things are closed, people aren't paying as much attention, and there's no TV news again until Monday), Calderón, by means of a patently unconstitutional decree, dissolved the state-owned electric company, Luz y Fuerza del Centro, throwing 40,000 electrical workers out onto the street in the depths of a recession. This was preceeded, as is standard operating procedure when a public service is on the neo-liberal chopping block, by decades of underinvestment and lapsed maintenance, an 'adjusted' fee schedule which raised rates on irate customers tens of times over, and a well-orchestrated campaign in the media to besmirch the reputation of what is the real target of the company's dissolution: the 90-year-old Mexican Electricians' Union, known by its Spanish initials as the SME. In the weeks leading up to the Federal police occupation of the company's installations (leading to power outages and blackouts, which some of the fired, and supposedly incompetent workers were forced to go back in and fix), story after story railed against the government money being sunk into the company and its union, of the inefficiency, corruption and bloated salaries. Before the ink was even dry on Calderón's decree, the move was hailed as practically an act of patriotism: finally those deadbeat unions getting what they deserved by an administration determined to take on those old, ossified structures of privilege.

The problem, of course, is that the average electrical worker makes 6,000 or so pesos a month, hardly the shower of pesos with which deputies, senators, cabinet ministers and judges bathe themselves daily. And while there is undoubtedly corruption in the SME's upper echelons, there is still more in the unions allied to the administration (Pemex, teachers, etc.), not a hair of whose heads are being touched by Felipe the Brave. No, the sin, as always in Mexico, lies not in being a union (whose armies of workers, properly controlled, can be pressed into service like a president's private army), but in being an independent union, anathema since the days of PRI hegemony. The SME both predates and withstood the historical co-opting of unions by the PRI, which resents them (and has supported Calderón's present manuever) precisely for this reason. Moreover, no amount of anti-union rhetoric in the world can cover up the practical motive underlying the dissolution of Luz y Fuerza: the desire to take hold of the company's fiberoptic network for private gain.

The SME's response, last Thursday, was a large, resounding, and combatitive march through Mexico City to the Zocalo, the largest the city has seen since the days of the desafuero and the protests against the fraudulent 2006 election, a rejection of the government's farcical negotiation terms ("first, accept the liquidation, then we'll talk"), and, by and large, and, by and large, a worker-by-worker refusal to be bought by the administration's offers of cash settlements, English and computation classes. The left appears re-energized, and as well it should, for if the attempt to squash the SME succeeds, one of the last bastions of the post-revolution social contract (that that it was) will be gone, and the left's weakness will have been made evident for all to see. If the left, in fact, cannot rally around the SME and take advantage of the discontent caused by 40,000 workers being summarily thrown out into the street, the worst economy in 70 years, and a host of higher taxes to come that will disproportionately hit the middle class and working poor, and convince the general public that there is a different and better way to go about governing the country, if it can't do this under the current conditions, then the right-wing might as well govern forever, and God help us all.

Stick-up!

2009-09-09T08:24:00.000-07:00

There's no two ways about it: it's a stick-up. Mexico's behemoth Finance Minister Agustin Carstens, he of the 3,000 peso-a-day meal stipend, announced a fiscal package yesterday designed to lead the country directly to penury, or revolution, or both. The proposed changes, designed to cover a 299 billion-peso gap between federal revneues and expenses, amount to a torrent of new taxes such as Mexico has never seen in its history. To whit:

1.) Increase of the top income tax band from 28% to 30%. Fine, and even laudable, if this were only to apply to upper-income earners, but, in this case, the increase of the upper band is going to tug all the bands underneath up with it. Result: if you earn over 4,000 pesos a month, the increase is going to affect you as well.

2.) A brand spanking new tax of 2% on all goods and services, food, medicines and books included, called - and get this - "contribution for the fight against poverty". And when I say it applies to everything, I mean everything, including, yes, things already covered by the 15% IVA tax (raising the effective rate to 17%). Viva la double taxation! According to diphead Carstens, the tax will not in fact hit the poor, as the money paid (by them) will go back into programs designed to help them. Plus, "those who consume more will pay more." Appears that Mr. C. doesn't quite get the concept of a regressive tax. In short (and how sad that a poor blogger has to explain basic economics to a finance minister), 2% of a low income (20 pesos less a month for a minimum wage earner of 1,000 pesos) weighs much, much more than 2% of a large income, which can easily absorb it. In Mexico, poor families spend 80% of their income on food; rich families, less than 2%. Taxing food and medicines, even if the full weight of the IVA is not be thrown onto them as originally considered, is a cruel, cruel way to suck a few more centavos disproportionately out of an already impoverished population.

And plus, once a tax like this is in place - this new 2% goods and services tax - it then becomes very easy to surreptitiously raise it in the future to 3%, then 5%, then 10%....

3.) Increase the tax on cash deposits in bank accounts from 2% to 3% and lower the threshold from 25,000 pesos per month to 15,000. The tax, designed to crack down on the informal economy, in effect becomes another poor tax. The wealthy, who do everything by check and electronic transfer, are not affected. It is hardly the poor's fault that Mexico remains such a cash-oriented economy and that bank accounts are so riddled with commissions and hidden costs that nobody in their right mind would want to have anything to do with one, anyway.

4.) Establish another new tax of 4% on the use of telecommunication services: cell phones, cable TV and internet connections. Again (how many times does this need to be said until someone listens?), a regressive tax that will hit harder on lower-income earners. It could be argued that only more affluent people have cable and internet access (not exactly true when you see how many satellite dishes there are in the poorer barrios), but considering how hard it is to get a land-line telephone (thanks Slim), can the same be said about cell phones?

5.) An increase in "sin" taxes: 80 centavos per pack of cigarettes, a 3 centavo increase on beer from 25% to 28%, and a new tax of 3 pesos per liter on spirits with an over-20% alcohol content. As of 2010, the tax on games of chance and drawings would increase from 20% to 30%. Of all the taxes mentioned so far, these are perhaps the most defensible, as they supposedly penalize "bad" behavior which implies a social cost to society. Needless to say, however, they are also REGRESSIVE TAXES.

6.) Last but most insidious of all, the plan seeks to revive the monthly increases on gasoline and natural gas that plagued us throughout 2008 and were suspended in the spring through public pressure. That means that once again, gasoline and gas prices will go up every month, at the least. The idea here is to withdraw subsidies on imported gasoline and gases in order to "harmonize" (what a lovely word) the prices in Mexico with the prices in countries where, say, people earn twenty times as much. This is a classic catch-22: for years, Mexico's neo-liberal governments have systematically dismantled Mexico's productive capacity in energy, refusing to build new oil refineries, sabotaging already-existing operations, and shadow-privatizing as much as they could of the production chain to crony-capitalist price gougers (the buy-gas-from-Peru-at-the-highest-possible-price-through-Spanish-company-Repsol scheme, amply denounced at the time by Andres Manuel López Obrador, is simply one case in point). Now that Mexico has become prostrate at international feet for gas and gasoline, then is the moment they choose to then withdraw the subsidies that have kept the prices moderately affordable until now.

7.) And on top of all this, the government is borrowing more money anyway from the International Monetary Fund, mortaging Mexico's meager future to the same institution that wields its loans like weapons to force hard-pressed countries to sell their national assets wholesale.

It should come as no surprise that the fiscal package does nothing to genuinely touch or tax the exaggerated salaries of the bloated upper bureaucracy that will be sucking down all these new taxes in the first place; does nothing to reduce the generous tax benefits enjoyed by the large corporations - preferential rates, seemingly-indefinite tax deferrments, and deductions to the point that said companies often receive windfalls back at the close of the year in "overpaid" taxes; does nothing to tax the stock-market speculators who did so much to cause the crisis (how about a transaction tax on every stock market transaction, paid by nationals and internationals alike? How about a speculation tax on stocks bought and sold within a very short lapse of time? How about an old-fashioned capital-gains tax?) and who have been making a mint on the Bank of Mexico's dollar auctions designed to prop up the ailing peso.

If approved by Congress, the new taxes will cause Mexico's economy, already set to fall between 7-8% this year, to flatline. This will depress tax receipts even further, creating new gaps which, if precedent serves as any guide, will be filled - or attempted to be filled (keep your eye on the moving target) by still more of the same. Meanwhile, Rome burns, and Felipe, on his balcony, plays the violin.

Howling with the Wolves

2009-08-21T08:44:00.000-07:00

The recent silence from this blog is, more than anything else, semantic in origin, to whit: what need is there to 'Deconstruct' Mexico when, as recent reports have amply demonstrated, Mexico is doing its damndest to deconstruct itself? According to the government's own agency INEGI, the economy collapsed 10.3% in annual terms during the second trimester of this year, the worst drop in 70 years, worse even than the Tequila crisis of 1995. But not to fear: Mexico's one major growth industry (no, not the flu) - poverty - is doing better than ever. According to the World Bank, ten million Mexicans have slipped into poverty between 2006 and 2009, raising the total number of officially poor to 54.8 million, over half of the country's entire population of 107 million. Of the 8.3 million new poor coined in Latin America by the crisis, half of them can be found here. In the midst of such suffering, the government comes out with a whiz-bang idea sure to lift all boats: a new ID card, with fingerprints and biometric information so everybody knows who, and how poor, you are! Meanwhile, the drug bloodbath continues unabated; on a visit to Colombia, the Little Napoleon applauds the US plan to further expand its military presence there, than tries to weasel out of having done so (not to worry, once the transformation of Mexico into Colombia II is complete, there will be no further need for him to travel south and genuflect before Urribe); and when even the "left-wing" government of Mexico City is privatizing water services - in the face of all this, this blog, too, has been one more victim of the torpor.

For his part, López Obrador is doing his best to turn himself into a dyed-in-the-wool oaxaqueño: for the next several months, he will be visiting all of the four hundred-odd muncipalities in the state governed through "usos y costumbres," or town-meeting assemblies, rather than through the party system. This on the heels of his visit, over the last two years, to every one of the over two thousand municipalities in the entire country governed (and I use that word very loosely) through the political party system. Now while these actos de presencia are obviously useful in keeping Obrador's profile high and proving to people that he penetrates into the poorest parts of the country where politicians practically never show there faces, a skeptical mind must inquire as to the organizational value (and the word incessantly on his lips is "organization," building a national organization that won't be caught flat-footed when the next fraud comes along) of making five or six whistlestops a day, making a short, campaign-style speech in each town, and then off to the next. Previously, at all of Obrador's stops, computer modules were set up to enroll people into the "legitimate government" and thus build that national organization, though I understand that has been suspended for the time being (in my and my wife's case, we enrolled in the legitimate government over a year ago and have not been subsequently contacted by anyone, not even a mass e-mail mailing - organization?). Clearly, the movement is organizing in some fashion - there are municipal committees, regional committees, etc. but one can only wonder if it will be enough.

Obrador's other reason for being here is the back-scratching alliance he has formed with Gabino Cué, currently a senator for the Convergencia Party for Oaxaca. In exchange for Obrador's support in Cué's second run for governor in 2010, Cué if he were to win, would provide a base of support for an Obrador candidacy in 2012 (as I mentioned in the last post about "out-of-control federalism", having governors on your side helps a lot in campaigns). All this is well and good - alliances are the mother's milk of politics - but recall, Cué started out in the PAN before becoming a Convergencista and Obrador ally, and it is difficult to conceive how a Cué governship would provide a sea change for Oaxaca (although anything, a pile of dung perhaps, would be better than the current horror). Recall that back in 2006, in the depths of the post-electoral crisis and protests, Obrador ran to Chiapas to help Juan Sabines, a PRIista turned PRDista in this case, get elected governor there, and Chiapas, three years later, is in no way the better for it. One starts to wonder, in short, how much Obrador, despite his anti-institutional rhetoric, is still caught in the stick spiderweb, the illusory maya, of party politics, to the detriment of a more genuine (less contaminated, perhaps) form of consciousness-raising and movement-building. Not to be idealists - in the current scheme of things, a connection with parties is necessary for any viable movement; where the greater danger lies, however, is in the movement being subsumed by the party and its aspirations. And the revolving-door system of party affiliations in Mexico only serves to spin the heads of the public and make them ever-more cynical about anybody standing in any party for any office.

Él que con lobos anda a aullar se enseña goes the expression in Spanish. He who runs with wolves soon learns to howl. What remains to be seen is if the national movement headed by López Obrador will prove to be more than just another electoral vehicle which, by participating in a rotten system, legitimizes and ultimely perpetuates it.

Election Round-Up

2009-07-17T13:40:00.000-07:00

The PRI victory in last week's legislative elections (36.68% to 27.98% for the PAN and 12.20% for the PRD) can be seen through a variety of prisms:

1.) Mexico as the battered wife, worn down by decades of rising wealth inequality, strength sapped by the emigration of its youngest and strongest to the United States, and even more brutally beaten over the last three years by a road-to-nowhere war against drugs that has sent 12,000, including 12 federal policeman just a few days ago in Michoacan, to their graves in various bits and pieces. After experimenting with life on her own (Mexican democracy 2000-2006 RIP) and finding it, with its frauds, corruption, violence and social unrest, not so easy to manage solo, the bruised wife returns, humilliated, to the devil she knows. Better a regular - and predictable - beating that's been going on for 80 years than having to work things out in a brave, new, PRI-free world. Oh, what a wonderful world that would be...

2.) People didn't really vote for the PRI at all. Well, think about it. Overall turnout was about 44% of registered voters, somewhat higher than the direst predictions of absentionism, but nevertheless, well over half of voters steered well clear of the polls. Of those, over 5% spoiled their ballot papers and 64%, in total, voted against the PRI. Do all the math (somebody else did; I didn't), and about 16% of Mexicans on election day actually went out and voted PRI. They just voted for everybody else even less.

3.) The PRI's never really left power in any event. Ever since the fraudulent administration-less-one of Salinas de Gortari, the PRI cleverly started to allow themselves to lose in certain parts of the country, although retaining control of the strings behind the scenes. Thus, the first gubernatorial wins for the PAN in the 90's and the first municipal victories for the PRD. In this lens, the great "democratic transition" of 2000 was a big sound-and-light show for international consumption, for the oligarchic elite was barely affected a ripple by it, and although a few PRI bureaucrats lost their jobs, the larger interests simply merged smoothly into the PRIAN. After the magna-fraud of 2006, the PAN required the presence of the PRI in Congress for the Little Napoleon to take his Flash-Gordon oath of office, and the PRI hasn't stopped blackmailing them with it ever since.

4.) In a phrase: out-of-control federalism. The PRI may have nominally lost control of the federal government (see point 3 above), but they still control the large majority of governerships, a fact which was further reinforced last week, where the PAN lost just about everything they could possibly lose, and the hapless PRD saw three of its gubernatorial candidates decline in favor of other candidates before the elections even took place! Just as the case of Oaxaca 2006 showed that "sub-national authoritarianism" can be just as brutal, or more so, than federal authoritarianism, the elections of 2009 reinforced the fact that state money can just as well be illegally diverted to vote-buying and palm-greasing as federal money can. In Mexico, the federal government subsidizes a large part of state budgets, but its powers of audit over those very funds are extraordinarily weak. Ergo: effectively blank checks being sent out to all 32 states on a regular basis. Free tacos and a bus ride to the polls, anyone?

And to conclude, the "Deconstructing Mexico" award for the most singular electoral event of 2009 goes to the Mexico City delegation of Ixtapalapa. Here, in a classic example of let's-do-anything-to-screw-López Obrador, the unholy collusion of the "New Left" (Ni Izquierda; see my previous post), Felipe Calderon and his cronies on the Federal Electoral Tribunal did everything in their power to thwart the wishes of the electorate, and came out with egg on their respective faces. The story: Ixtapalapa, population two million, is one of the poorest of Mexico City's delegations. In the primary elections for the PRD (which retained its pre-eminent position in the City in the most recent elections) for the city assembly, the two factions of the party sparred in open combat: the New Left vs. the United Left (Izquierda Unida), the Obrador-supporting bloc led by Alejandro Encinas. In the primary, the United Left candidate, Clara Brugada, handily defeated the New Left candidate. With support from above, the New Left candidate appealed - after the legal deadline for so doing had expired - her appeal was accepted by the Federal Tribunal after being rejected by all local courts, and surprise! the Federal Tribunal (if anyone still has any illusions about their objectivity, please look into medication) annulled just enough precincts to erase the 5,000 vote margin and hand the victory to Brugada's opponent, although they waited long enough so that the ballots had already been printed with Brugada's name as the putative PRD candidate! The response was swift and organized: in a matter of weeks, López Obrador rallied his supporters to vote for the Worker's Party (PT), which candidate, in the case that he won, agreed to decline in favor of Brugada taking her rightful seat. In sum, voters in a very poor district had to be informed in a couple of short weeks that, if they wanted to vote for Clara Brugada, they were going to have to vote against Clara Brugada, even though Clara Brugada's name was going to be on the ballot. Confused? The voters of Ixtapalapa weren't. Turning their backs on the PRD, they handed the Worker's Party a handy majority in last week's elections, Clara Brugada goes to the Assembly despite everything against her, and López Obrador remains in the ring for one more round.

The Coming Electoral Debacle

2009-06-17T09:42:00.000-07:00

Mexico slips and slides towards its July 5th mid-term election rendez-vous with belief in the legitimacy of the electoral - or any other governmental - institutions at an all time low. Turnout is expected to be an anemic 30% at best, and of that 30%, a growing campaign to spoil the ballot paper with one big X is gaining ground even among people who usually don't agree on anything else. The result could be - even given the highly dubious premise of an above-board election - a pack of 500 diputados (deputies, members of Mexico's lower house known as the Camara di Diputados) each elected by a third or so of 30%, plus the ballot spoilers, making for a plurality of less than 10% of the adult, voting-age population in their districts.

Low turnouts, of course, help the party with the best get-out-the-vote machine and core of loyal - or simply purchased - voters (known in Mexico as the "hard vote," or voto duro, traditionally made up of loyal "unions" and other organizations whose members vote as blocs), and the Institutional Revolutionary Party, or PRI, has 70+ years of experience in getting people to mark their box...by any means necessary. As for the foundering PAN, eager to avoid an argument over the tanking economy, the tack continues to be to point menacingly at enemies within and without: viruses (I saved the world from swine flu, contends an inebriated-looking Calderon on national television) and drugs (Support the President in his fight against organized crime, implores party propoganda) and to count on a potential alliance with the national teachers' union headed by Elba Esther Gordillo and good, old-fashioned governmental vote-rigging to avoid an otherwise-cataclysmic result. And as for the floundering PRD (the PAN founders, the PRD flounders), divided between the New Left (Nueva Izquierda or "NI," which columinst Julio Hernández has suggested truly stands for Ni Izquierda: Not the Left) -which with outside help and yet another baseless ruling by the Electoral Tribunal has taken control of the party machinery - and supporters of Andrés Manuel López Obrador, "divided we fall" takes on a whole new, and imminent meaning.

In response to the New-Left hijacking of the PRD, and the refusal on its part to re-establish the three-party "Por el Bien de Todos" coalition of 2006, López Obrador has been urging his supporters in most of the country to vote for the other two members of that coalition: Convergencia and the Worker's Party, or PT. The strategy here is two-fold: first, to spank the national PRD machinery, led by Jesus Ortega, and the state parties in places where they have effectively sold out (Obrador is supporting PRD candidates only in Mexico City and his home state of Tabasco); and second, to ensure that the other two parties get enough votes to maintain their registros - or registries, government funds for parties that exceed a 2% vote threshold. This is all part of Obrador's one foot in-one foot out dance with the party he helped found - hoping to be the party's standard bearer once again in 2012 by maintaining other avenues open in case the path becomes blocked if anyone by Mexico City mayor Marcelo Ebrard, who has already all-but-openly declared his candidacy, as well as to maintain a loyal wedge of deputies in Congress over and against the Ortega-ite wing of the PRD, known as the Chuchos.

So look for a new Congress with the PRIAN (the PRI-PAN duopoly) majority at least as large as the current one, if not larger, with the coopted sectors of the PRD added on, leaving little room open to the citizens' movement that struggled so hard, and successfully, to avoid PEMEX being privatized in the last session. Look for PEMEX privatization to be back on the table, as well as the proposal killed off in the Fox years to extend the value-added IVA tax to food and medicines, another blow to a recession-weary public, and Calderon's continued push for expanded executive powers that has even Senator 'Don' Beltrones openly worried about the progression of the nation in the direction of fascism (see Calderon's machine-gun military arrests of ten elected officials in Michoacan, without charges). In legislative terms, in short, things do not bode well for the next three years. What the non-party movements will be able to achieve on the streets through their activism is the only speck of hope on a gray legislative horizon.

"Mexican" Flu: the 9/11 Katrina

2009-05-20T09:45:00.000-07:00

Though Felipe Calderón has been trying his best to turn the Swine Flu Scare of 2009 into his personal 9/11, a quick look at the facts shows the resemblance to much closer with Hurricaine Katrina. Then again, if we are talking about 9/11 in terms of governmental negligence on a grand scale, the comparison is also apt. Now that the dust is settling, for the moment, on the worst of the hysteria, let's take a walk down Influenza Lane and see how that heady brew of corruption, incompetence and neo-liberal philosophy combined to make the Mexican Government the world's laughingstock.

First, the neoliberal philosphy: cut governmental services. In this case, the closing of the National Hygiene Institute and the National Virology Institute - whose job it was to investigate viral strains and to design vaccinations to combat them - under Ernesto Zedillo (and no doubt applauded by the IMF, which has recently extended a new loan to Mexico, keeping it under its yoke). This left only Birmex, the public laboratories for biology and reagents, but Vicente Fox did the work here, dismentaling the labs and privatizing them. The coup de grace was provided by the Little Napoleon himself, Calderón, whose 2009 budget reduced funds for epidemiological vigilance by 3.5%, a capper on years of underfunding of the Health Secretariat and the IMSS (private sector workers) and ISSSTE (government workers) health services. This to mention the privatizing of pensions and the funneling of these funds to the banks and the stock market, removing one of these institutions' main means of support.

Now, the incompetence. As far back as December of 2008 (earlier than I had known when I wrote my previous post), there was an outbreak of a serious respiratory sickness in La Gloria, Veracruz. Townspeople, who have protested for years against the presence of Granjas Carroll, owned by Smithfield Foods (see Jeff Tietz's 2006 exposé of Smithfield in Rolling Stone: http://www.rollingstone.com/politics/story/12840743/porks_dirty_secret_the_nations_top_hog_producer_is_also_one_of_americas_worst_polluters) sounded the alarm, but little was done except to spray the pig shit piles with insecticide. Here is where the index case of swine flu was discovered in Edgar Hernández. Between the 10th and 20th of March, the World Health Organization, according to their April 29th report, asked Mexico for information about what was happening in La Gloria, and got a response which was apparently somwhere between Homer Simpson and Alfred E. Neuman. In the following month, 47 more cases of severe pneumonia were reported in various parts of the country, 12 of which proved fatal, but the government kept a lid on things, according to some analysts in order to avoid the canceling of Barack Obama's visit to Mexico - thus potentially putting the US President at lethal risk and even infecting one of his bodyguards, according to some reports, with the influenza. With all of this, it wasn't until April 13th that the first samples of infected persons were taken, which were not sent off until April 22nd, and the startling analysis came back on the 23rd. And so the panic began: schools and offices closed, people told to stay home, wildly gyrating reports of contagions and deaths, and most ominously, a presidential decree - which remains in force - allowing the government to enter into homes without a warrant, to quarantine people indefinitely, and to break up public demonstrations, all on health grounds. Four days after the alert, a laboratory was finally set up to track the outbreak. To effectively do so, 500 samples a day were needed; the laboratory was equipped to handle 15.

As it turned out, this flu is not lethal if treated on time, and practically very few have died in other countries, but Mexico's shabby health system, after first skimping for years on prevention, ignoring the problem when it did break out and then allowing it to spread, was unable to respond by identifying and attending to victims in time, leading to a host of unnecessary deaths. Instead, the governmental response was all propganda and jingoism: Calderón's embarrassing televised speech claiming that Mexico had "defended all of humanity" against the propogation of the virus, his bullying of countries that took sovereign measures to prevent the contagion from entering their countries, including a remarkably crude broadside against Haiti, which refused to let in a Mexican food donation: "They die of hunger there, not of the flu!", and the blatant use of this "firm response" to the crisis for electoral purposes by the PAN. The government's overreaction, in the midst of a recession, led to a drop in tourism, a swathe of bad press and protests from other countries that may shave yet another point off Mexico's nosedive in GDP for this year. To sum it up, in the words of the remarkable political cartoonist "El Fisgon":

"Thus, due to deficiencies in the health sector, the virus was detected late, the danger of it was exaggerated, people died who shouldn't have and, belatedly, radical measures were applied which were unncessary and damaged our economy, affecting our lives and sowing panic across the world."

And...the corruption. Whether or not Granjas Carroll provided the toxic brew where this particular virus was born (and the index case being next door warrants an exhaustive investigation which will never happen), its practices are a known and open scandal. As Al Giordano suggests ( http://www.truthout.org/043009S), this might as well be called the NAFTA flu. Smithfield, which had been forced by the EPA to build a sewage treatment plant and clean up their act even in the Reagan 80's, came down to Mexico to open Granjas Carroll the very same year NAFTA passed, in 1994. Simply put, "the so-called "swine flu" exploded because an environmental disaster simply moved...to Mexico where environmental and worker safety laws, if they exist, are not enforced against powerful multinational corporations." And why aren't they? Because Verazruz's governor, Fidel Herrera - who put down the protests against the Granjas in La Gloria with an iron fist, and once news was out, lashed around for a culprit for the disaster: China! Puebla! - for one is in bed with Smithfield (http://www.jornada.unam.mx/2009/05/04/index.php?section=politica&article=015n1pol). And because the Granjas Carroll perform their own testing which always comes out - surprise! - squeaky clean.

It's a long, sad, but predictable story. And, absent any change, which appears unlikely, it is one that is bound to repeat itself, and with something much more serious than Swine Flu has so far turned out to be. Ignore the problem, propitiate the problem, exaggerate the problem, manipulate the problem - a winning combination!

The Swine Flu Disinformation Show

2009-04-30T08:30:00.000-07:00

In the world, flu paranoia reigns, the WHO raising its alert level for the imminent swine flu pandemic to 5, one below its maximum alert level of 6. In Mexico, what reigns is the typical circus of government obfuscation, incompetence and contradiction: what a day before was 159 swine flu deaths has magically dropped, in Benjamin Button-like fashion, to 7 (one can imagine Calderón and Dr. Miguel Angel Lazana, the head of epidimiological vigilance for the Health Secretariat - where incidentally, according to a reporter for El País, nobody is bothering to wear face masks - running the car backward like Ferris Bueller to get the flu odometer back where it started. Okay, two movie references in one sentence: enough). The other 150 now only "huelen" (smell) of influenza. Keep in mind that, for lack of viral assay technology, Mexico has had to send its swabs to a laboratory in Winnipeg, Canada, in order to identify the strain's genome, as Mike Davis reports, wasting a week in the process. Maybe the non-swine cases picked up some other kind of smell on the way there or back.

The question has then been clearly begged: if Ferris Calderón and Co. (same movie reference again, so it doesn't count) have managed to push the number of definitive swine-flu deaths back to 7, or 10, or even 20 (and without even the participation of the Federal Electoral Institute in such magic numbers, as Julio Hernandez pointed out), and if in the United States there has been 1 death of a Mexican infant in Houston, why the world pandemic level of five? Seasonal influenzas kill thousands of people every year. Well, apparently, this is a new virus, a mixture of swine and avian and who knows what else, which there is no history of human immunity to, so contagion could be quick and the consequences severe. So where, then, would such a new virus come from? In Mexico (and with belated interest by the international press), speculation is swirling around the American company Smithfield Foods, the world's largest pork packer and hog producer, which is part-owner of a subisidary known as Granjas Carroll (along with Agroindustrias de México) in the Perote Valley in the State of Veracruz, in operation since 1994. Smithfield, which was hit by a enormous civil suit ($1.285 million dollars) in 1985 for violating the US Clean Water Act and $12.6 million dollar judgment in 1996 for falsifying documents and polluting the.Pagan River, through its Granjas Carroll subsidiary, has long been the target of local protests in Veracruz due to the horrible conditions of its 800,000 pig-a-year operations. Residents in surrounding areas, who have been subject to lawsuits for their activism, have complained about the clouds of flies surrounding the manure lagoons formed by such enormous mega-farms, or as they are called in the industry, Confined Animal Feeding Operations (CAFOs). (see: http://www.timesonline.co.uk/tol/life_and_style/health/article6182789.ece)

Without going into the entire timeline, in the nearby town of La Gloria, people started getting sick back in February. As the Times reports (see above link): "Health workers soon intervened, sealing off the town and spraying chemicals to kill the flies that were reportedly swarming through people’s homes." It was here where the first case of swine flu was definitively registered, of a 4 year old named Edgar Hernández (who fortunately has since recovered). As the Times also reports, this is the area famous for the 400 Pueblos, the 400 towns who allege the government stole their land back in 1992. A full 60% of La Gloria's population of 3,000 had sought medical assistance for flu symptoms and respiratory illness.

So if people are wearing masks that the Health Secretariat itself admits doesn't stop contagion, if the number of confirmed swine flu deaths is now apparently falling instead of rising, if flu vaccine shots that used to cost $400 pesos are now being sold in Oaxaca for $1,000 pesos (as a doctor confirmed to me yesterday) and can't even stop such a "new virus" at that, if attention is conveniently being diverted away from the 10,000 deaths from the drug war and the fat new $47 billion loan Mexico has just taken out from the IMF, if the military now has another reason to be out patrolling the streets, what are we to believe? I suppose all we can do is emulate the Mexican Government, which must be obsessively washing its hands at this very moment. Certain stains, however, do not come off.

Meeting in the Zocalo: March 22, 2009 (report)

2009-03-22T11:32:00.000-07:00

As Andres Manuel López Obrador steps down from the template after addressing another chock-full meeting in Mexico City's Zocalo, today's blog will be dedicated to a run-down of the events.

The meeting began with an announcement of the formation of Municipal Committees for the Legitimate Government. This follows on yesterday's meeting of 12,000 members of these Municipal Committees, the goal of which are to represent the Legitimate Government in every town and city in the country, and enroll as many people in the legimate government as electors who voted for López Obrador's coalition in the last election - 15 million. Obrador will be making another sweep through each state's capitals from June 1st to the 15th to assist in the establishment of the committees.

Following an eloquent address by Laura Esquivel, most well-known in the United States for her novel "Like Water for Chocolate," Senator Ricardo Monreal of the Worker's Party (PT) took to the stage, and focused his remarks on denouncing five major atrocities in current government policy:
1.) the government's depleting of its dollar reserves in propping up the peso. Who gains, asks Monreal, from buying up cheap dollars from Mexico's Federal Reserve and speculating on them? And why is the announced policy of support for the peso only to last until July, when the legislative elections will be taking place? Will the peso be allowed to go into free-fall after then?
2.) the government's supposed help for small businesses to weather the crisis, 80% of which is actually going to large, oligarchic consortiums such as Soriana, Coppel, Chedraui and Feromex. The government is simply using its anti-crisis funds to buy up the debt of these large consortiums, charged Monreal, acting as their guarantor. Not coincidentally, these are the same companies that supported the electoral fraud of 2006, proselytzing with their employees and contibuting to the media "dirty war".
3.) usurious interest rates on credit cards and banking services. Banks charge for everything, Monreal pointed out, even to the point of charging to close an account. Not suprisingly, the banks are the only institutions reporting profits to their mother nations in this time of crisis. Monreal reported a recent meeting of bankers, where the charges of usury were brushed off: "local lending institutions charge even more!"
4.) Banamex operating illegally. The United States of America, through its bailout of the Citigroup, is now the largest shareholder in Banamex. This is prohibited by the Mexican Constittion and even NAFTA, but Treasury Secretary Carstens is doing nothing about it, preferring instead to offer a three-year waiting period to see if the situation resolves itself.
5.) PEMEX is now giving concessions in blocks of territory to private companies for underground explotation of resources, exactly what the movement warned about when the Pemex law was passed late last year. Of the four counselors recently chosen to form part of Pemex's governing board, none of whom meets the legal requirements: 10 years of experience in the field and no political party connections. In fact, all of the four counselors have party ties: 2 to the PAN, 1 to the PRI and 1 to the PRD hierarchy.

López Obrador began his speech with the gains an unfinished business left with the Pemex issue. The movement succeeded in avoiding privatization of Pemex, but the work remains to avoid the block concessions of exclusive areas that Senator Monreal mentioned, to avoid the endemic corruption of Pemex and the Federal Electricity Commission (CFE), and to prevent Mexico's oil to continue being produced as a raw material for export and instead be used for the domestic production of gasoline ad petrochemical products.

As regards the economic crisis, he reiterated the movement's demands for reductions in the prices of electricity, gasoline and diesel, a reduction in interest rates for loans and mortgages, and a reduction of $200 billion pesos in unnecessary government spending which could be funnelled into social spending: interest-free loans to farmers, advances in health care and education, among others. He also called for the IETU (the flat-rate tax on businesses and the self-employed) tax to be abolished and for pension moneys which were invested in the stock market and losing their value to be protected by the government.

For those who may think our labors are futile, he reminded, without it, things would be a lot worse: Pemex would have been completely privatized and the economic crisis would be even worse. The government was forced into announcing they will build an oil refinery, he noted, after saying there was no money for it. The movement has also forced the government's hand into providing pensions for senior citizens in towns with populations of less than 30,000. Furthermore, a law to set maximum salaries for government officials - which could reduce bloated bureaucratic salaries up to 50% - has been approved in committee and awaits approval by both Houses of Congress. A rally will be held outside of Congress the following Wednesday in support of the bill.

Obrador praised the city government of Mexico City for freezing the cost of the subway at 2 pesos, for providing scholarships for students, increasing medical attention and initiating a program of free medications, and for setting up 300 eateries to make sure people do not go hungry during the crisis. On the national level, the legitimate government is setting up support centers in the capitals of each state to provide legal assistance to people burdened with excessive charges on credit cards, loans and mortgages.

Obrador has recently finished a two-year tour of every single one of the 2,038 municipalities in the country which operate on the political-party system. There remains, he pointed out, the 438 indigenous pueblos in Oaxaca governed by "usos y costumbres" (town meeting government) which he will be hitting later this year. "I am going to live in Oaxaca for a while," he noted.

He further lauded the establishing of the Municipal Committees for the Legitimate Government, which will have four tasks: 1.) organization - "we learned our lesson from 2006," he noted; 2.) support the development of democracy; 3.) support the "people's economy"; 4.) form a national network of information and communication, a nation-wide alternative news and information service, including the establishment of a weekly informative bulletin.

With respect to the national legislative elections in July, besides the standard rallying cry of "Not one vote for the PAN, not one vote for the PRI," Obrador left to each person's criteria which of the parties of the the 2006 coalition to vote for this year: either the PRD, or the "Save Mexico" coalition comrised of Convergencia and the Worker's Party (PT). Personally, he announced, he will be support the Save Mexico Coalition in Chiapas, Veracruz and Oaxaca, and the PRD in Mexico City and Tabasco. The rest of the country he did not mention.

He concluded with a reminder that wealth and privilege in Mexico are more concentrated now than before the Mexican Revolution of 1910. Then, 300 families controlled the wealth of the nation; now, it is 20 or 30. We must form a new republic, one where people are valued for their honesty, and especially, by their generosity. With his standard recitation of Vivas!, Obrador left the stage and the National Movement for the Defense of Oil and the People's Economy returned to its labors.

Deconstructing Mexico (Literally)

2009-03-17T08:04:00.000-07:00

Suddenly, the word "Mexico" is on everyone's lips - drug-infested narco Mexico, that is, the shadowy projection of America's sunny, white, What-me-bomb? ego consciousness. Defense Secretary Robert Gates goes on Meet the Press to discuss putting aside some of the "old biases" against "cooperation with our - between our miliaries and so on." Joint Chiefs Chairman Michael Mullen briefs Obama on what his own Pentagon has conscpicuously labeled as a future failed state, and suggests borrowing from U.S. tactics in the war against terrorism to help Mexico in its drug fight, including the prospect of joint miliary operations; President Obama was reported to be "very interested in what kind of military capabilities could be applied." The governor of Texas calls for the border with Mexico to be militarized, with the military, the National Guard, Customs Agents, whoever. At a ceremony to name a new drug czar, and in the context of bringing about "the demise of the Mexican drug cartels," Vice President Biden suggests that "we've done this before. We did it in Cartagena -- I mean, excuse me, not Cartagena, we did it in Colombia, in Medellin." It has gotten to the point where little Don Lipe, the man who considers himself to be the President of Mexico, has felt it necessary to deny imminent US military involvement in Mexico. Alleging the existence of an international smear campaign designed to make Mexico look bad, Don Lipe goes on to deny that any part of the Federal Government is not in control of certain parts of its territory: "I'll take you there myself," he says with tremulous bravado at a business forum.

US policy towards Mexico is the moral, psychological and practical equivalent of forcing medieval Jews into money-lending, then blaming them for being usurers. The US needs its drug fix just like medieval Christians needed their money lent; better, however, to let a series of faceless Shylocks in their locked-away ghetto take care of the actual grubby business of lending, or in this case, a series of faceless Juans, shipping their merchandise past the borders of their locked-away nation so that a legion of doctors' sons can slip off and do a few lines behind the prep school gymansium.

And would that it stopped at mere demand for drugs. In fact, it is the United States that is arming Mexico to the teeth, either officially, through the Plan Mexico, the first $400 million dollars of which have just been disbursed for the purchase of "Bell helicopters, CASA maritime patrol planes, surveillance software, and other goods and services produced by US private defense contractors," or illegally through arms bought at US gun shops, often by US citizens, and smuggled into Mexico, undercutting Mexico's laudably stiff restrictions on the purchase of firearms. Both Mexican and US officials agree that over 90% of the weapons being used by Mexican drug cartels, including high-powered assault weapons, come straight from gun dealers in Texas, California and Arizona, thanks in large part, as ABC news put it, to "lenient American gun laws." John Smith provides the arms; Juan Pérez dies.

And if any further reminder is needed as to why American military intervention (disguised as "joint operations") in Mexico would be an unmitigated disaster, just have a look at the plan that Plan Mexico was based on: Plan Colombia. At a price tag of $6 billion dollars so far, Plan Colombia doesn't have much to recommend itself. As Robert Naiman reports, "an October report from the Government Accountability Office found that coca-leaf production in Colombia had increased by 15 percent and cocaine production had increased by 4 percent between 2000 and 2006." Human rights have fallen by the wayside: "Washington supports the Colombian government, and therefore the Colombian government can do whatever it wants without restraint." And does, from sending a bombing raid into neighboring Ecuador (Colombian President Uribe as a Latin American Nixon in Cambodia) to tarnishing human rights critics as members of an international guerrilla bloc, causing even members of the US Congress to fear openly for the human rights workers' lives. Result: following El Salvador's election last Sunday, the two remaining Latin American countries with propped up right-wing governments are...well yes, Colombia and Mexico.

But, as a certain Fr. Tothus reminds us in the comments string at the bottom of Robert Naiman's piece (http://www.truthout.org/030909T), it is difficult to be too cynical about what the real motives for Plan Colombia were. He writes:

Stop the drug flow? Human rights? This was never the intent. Plan Columbia's farcical premise was quite successful in providing cover for the actual US corporate aims, however. It provides a cover for US military "training" of quislings ready to overthrow a populist regime. It destroys native farmers and resistance to US Agro imports, impoverishes and starves the already poor. The cash generated keeps Wall Street busy laundering it, and provides funds for further US covert ops against official enemies. The drugs then find their way into American inner cities courtesy of our very own CIA. Meanwhile (surprise) it turns out that it is really a war on only certain drugs. Certainly not the world's deadliest - tobacco - which Columbia (among others) is forced to import and forced to allow advertising for, or US corporate Big Pharma. By US standards, Columbia ought to have the right to fund militant anti-US government groups, bomb our corn fields, and defoliate the Carolinas at the very least.

Mexico is teetering on the edge of this same fate, and Uncle Sam is its enabling accomplice.

Mexico: On the Verge of Collapse?

2009-02-28T08:57:00.000-08:00

Apocalyptic predictions about everything from dimes to donuts abound on the internet, and are often worth about a handful of the former or a dozen of the latter. But if the country in question is Mexico, and the year in question 2009, the only risk involved in making forecasts would be to understate the case. Things are, indeed, dire. How dire? Let's take a look.

The peso has tumbled to 15.30 pesos to the dollar, a 50% devaluation in six months. The Mexican Central Bank continues to auction off dollars in an attempt to halt the slide that has so far done nothing more than, arguably, slow it down somewhat, and - no argument needed - make a fistful of currency speculators even richer. At the moment, the Central Bank is sitting on reserves of 80 billion dollars. At the current rate of hemmorhage - about a billion a week - that's 80 weeks before Mexico becomes another Argentina. And the worst is yet to come, economically speaking, for the second half of 2009.
Narco-violence increases and disseminates itself, unabated, making a mockery of the idea that the state "holds the legitimate monopoly on violence." The Mexican government has effectively lost control of large swathes of territory - and not only on the northern border - where the drug cartels run the show, charge taxes, and operate their own mechanisms of justice (the death penalty being the preferred form of punishment).
And even if the government had the monopoly on violence, it would still not be "legitimate." Half of Mexico - and growing - considers Calderon to be an illegitmate imposter in office, installed via electoral fraud and maintained there through the mass media and the propogation of fear in the form of "his" drug war (L'État, c'est moi.). Over 8,000 Mexicans have lost their lives in this "war" since Calderon took office - doublt the amount of American soldiers killed in Iraq in six years. The result? To turn the drug cartels - bad enough as they already were - into para-military organizations, armed to the teeth with the American weaponry that inevitably finds its way into their hands.
The Mexican government is top-heavy in the extreme, with a non-existent separation of powers. In 2009, more than half the budget is going to paying the disproportionate salaries of the bureaucracy. Just to give an example, the members of the Supreme Court have just raised their salaries to 347,647 pesos base salary per month, plus bi-weekly bonuses, vacation bonuses (50% of ten days of their salary for each vacation period), a Christmas bonus of 40-days salary, two vehicles at their disposal, free cell phone and wireless internet use, a food budget, life insurance, retirement pension and health insurance. The President of the Court, Ortiz Mayagoitia, and Mariano Azuela, the Senior Member (he who plotted the desafuero of López Obrador with Vicente Fox), also receive special other perks, including three, tri-monthly bonuses of an extra month's worth of salary each. The collective cost of all of this is practically 10 million pesos per Justice per year; at 11 Justices on the Court, that's 110 million pesos annually. This is the same Court, mind, that ruled that the journalist Lydia Cacho was not tortured, threw out the case for abuses in Atenco, and refused to hear the appeal of the 2006 election, despite being constitutionally empowered to do so. This same week, the Federal Electoral Institute had to reverse course and cancel its planned 45% salary increase for its councilors in the face of bristling popular opposition.
Meanwhile, according to INEGI, 890 Mexicans are currently losing their jobs every 24 hours. Mexican exports are down 30% this year, falling to a historic low, despite the weak peso making the goods half as cheap. Inflation, meanwhile, continues to rise due to consequently more-expensive imports and the increases in electricity, natural gas, gasoline and diesel, the last of which has transport workers demonstrating and striking across the country.
The Pentagon comes out with a report putting Mexico in the same category as Pakistan in terms of potential failed states, a State Department report this past week lamented the country's excreable human-rights record, troop reinforcements are sent to Texas to protect the border, and, as of this week, the number one shareholder in the National Bank of Mexico is now...Uncle Sam!

Put all of this together and stir, then add a pinch of the legislative elections set for this July, elections which Calderon & Co. have been trying to interfere in and rig in any way possible over the last three years and which nobody except the candidates themselves seem to have any faith in as a mechanism of democratic governance, and you see why the odds of imminent collapse in Mexico, unless drastic action is taken (but by whom?), is an ever more-real possibility.

Commented Version of NY Times Piece: "Economic Decline Lifts the Prospects of a Vocal Populist"

2009-02-09T08:25:00.000-08:00

Last week, The New York Times realized that López Obrador, and the movement he represents, is still a key force in Mexican politics. "Deconstructing Mexico" has decided to celebrate this belated realization by providing a running commentary in italics below on Elisabeth Malkin's perceptive and judicious piece.

Economic Decline Lifts the Prospects of a Vocal Populist
by Elisabeth Malkin
Published in The New York Times, February 3, 2009

MEXICO CITY — As the year began, the dominant political figure of Mexico’s left appeared to be heading swiftly toward irrelevance.
But Andrés Manuel López Obrador is not dead yet.
Only two years ago, Amlo, as he is known, was the driving force in Mexico’s polarized politics. After he narrowly lost the presidency and led months of street protests charging that it had been stolen from him, politics boiled down to one issue: who was for him and who was against.
Last year, his hold on public attention began to falter. The public, the news media and many of his supporters had simply moved on, letting the turmoil of the 2006 election fade into history.

Funny that the Mexican Secret Service, the CISEN, has been following Lopez Obrador to all of his rallies since 2006. As for the news media, especially the TV, I wouldn't call systemically shutting him out of their coverage in collusion with the higher-ups the same thing as "moving on," exactly.

But there are signs that the efforts of Mr. López Obrador, a former Mexico City mayor, to revive his political career may be gaining traction, as a deepening recession creates opportunities for his brand of economic populism.

"Populism," "vocal populist," as the title of the article has it. In my experience, all politicians are vocal - it's practically a job requirement. Why don't you just call him a "shrill agitator," Liz, and get it over with?

The question now is whether he can capitalize on that momentum to remake and expand the coalition that brought him to within a hair’s breadth of the presidency.

Funny how little of the direct evidence of fraud in 2006 made its way into the pages of the everything-that's-fit-to-print Times. Must have been a simple editorial oversight.

At a rally last week in Mexico City’s immense central square, the Zócalo, Mr. López Obrador, 55, drew tens of thousands of supporters. Though the crowd paled beside the hundreds of thousands who attended his rallies at the peak of the 2006 presidential campaign, it was significantly larger than that at any of his rallies in the previous year.
Unlike his campaign events, it was conducted without the benefit of his party’s machinery, which used to truck in supporters from around the country, demonstrating a substantial base of hard-core support.

A key point: people are participating in this out of their own volition, not for a boxed lunch and a T-shirt.

Saying that the economy will only get worse, Mr. López Obrador announced a campaign to press the government to cut wasteful spending, lower consumer prices and taxes, and do more for the poor.
“Our movement must continue demanding a change in economic policy, which has demonstrated its failure,” he said. “The model must be changed. You cannot put new wine in old bottles.”
The words clearly resonated with his poor and working-class base.
“We think he really can change things, so that people have the right to decide,” said Aide Florentino, 27, a member of a small garment cooperative in the rural southern part of Mexico City.
“It’s not important if López Obrador is the president,” said Víctor Baltasar, 49, who traveled to the rally from Guadalajara, where he is a supervisor for the city’s train system. “What’s important is that things change.”

This is a remarkably insightful opinion on the part of Mr. Baltasar that the press would do well to pick up on. The goal of this movement is to transform the country, not simply to install one person, or a series of people, in office so that they, too, can be co-opted.

But rising anxiety over the economy may be broadening his appeal. Despite government measures aimed at stimulating the economy and buffering households against the worst effects of the crisis, there is a widespread clamor to do more, from constituencies as varied as business groups and poor peasants and fishermen. That demand could alter the political calculus.

What government measures are you referring to exactly, Liz? The IETU tax? Higher electricity prices? Gas prices that were going up every week until public clamor put a stop to it? The diesel that keeps going up and has the fishermen out on strike? The pathetic two-peso minimum wage increase while the price of milk, tortillas and other staple items are going through the roof? The Afore retirement accounts that have been eviscerated by bad investments and ridiculous bank commisions? If you know something we don't, please come down to Oaxaca and tell us - I've got some neighbors who are pretty desperate to hear some good news.

“Mexico is fundamentally a conservative country,” said Federico Estévez, a political analyst at the Autonomous Technological Institute of Mexico. “But in 2009, the cards are different.”
Referring to the left, he said, “I think they’re holding a wild card or a couple of aces.”

Hello, sweeping generalization. Mexico has one of the world's most progressive constitutions, has been through two revolutions, succeeded in nationalizing its oil right on the eve of the second world war, has the most-powerful empire in the history of humanity to the north aiding and abetting the country's right-wing and whose major media are in the control of two conglomerates who thumb their noses at the government and the rule of law. If the playing field were even close to level, such a comment might be even close to relevant.

With the next presidential election three years off, Mr. López Obrador’s precise ambitions are unclear. He calls his new campaign a social movement and clearly aims to be a force to be reckoned with.
But his relationship with his own party remains fraught. Last year he lost a battle with a rival faction over the presidency of the party, the Party of the Democratic Revolution, or P.R.D., and he no longer holds any official position in the party or in government.
The low point came last fall, when most of the senators from his party broke with him to approve an important energy bill, as his supporters scuffled with police officers in an attempt to block the vote.
To many who had backed his presidential bid, Mr. López Obrador's street-brawling political style had become a liability.

You mean the energy bill that was approved only after Lopez Obrador and his movement succeeded in getting the most toxic provisions removed from it? And hey, love those terms "scuffled with police" and "street-brawling style": how many more ways can we make a non-violent movement sound menacing to the American readership?

His campaign to overturn the results of the 2006 election, which he lost by only six-tenths of 1 percent of the total vote to Felipe Calderón, consisted of mass rallies and a tent city that shut major avenues in the capital for weeks. Refusing to concede, even after the country’s highest electoral court ruled in favor of Mr. Calderón, he held a grand public ceremony in which he had himself sworn in as the “legitimate president” of Mexico, a title he continues to claim.

Boy, the Electoral Tribunal sure must be happy that the Times still takes them seriously, seeing as nobody else does.

Such antics have damaged the party’s reputation, officials say.

Two words stand out, here. First, "antics." It may be easy to sneer from the comfort of your bureau office, Liz, but for millions of Mexicans, the whole point of the legitimate government is to end the republic of simulation and to build a real republic in its stead. By extension, our Declaration of Independence, promulgated by a bunch of lawyers in Philadelphia who had less popular support at that time then Obrador does now and who were engaged in a war that appeared hopeless at the time, could (and probably was) just as easily have been labeled "antics." And then there is the great line, "officials say." By definition, "officials" would be people in Calderon's administration, who would say just that, wouldn't they? Or are we talking about PRD party officials nominated by Jesús Ortega? It might help readers ascertain what point of view these "officials" are coming from if they actually had names.

Jesús Ortega, the party president, who defeated Mr. López Obrador’s choice for the post, said the party’s polling showed that two-thirds of Mexicans identified the P.R.D. as disruptive.
Moreover, the polls put the party in third place for midterm elections in July, when voters will elect all 500 members of Mexico’s lower house, the Chamber of Deputies. The party is currently projected to win 18 percent of the vote, half its showing in 2006.

Recently, the illustrious Federal Electoral Tribunal (see above) stripped the victory away from the PRD in two municipal elections, under the argument that some priest had improperly gotten involved in the campaign. Conclusion: even when the PRD wins, they're not allowed to. Not much has changed since the days of Salinas.

While Mr. López Obrador’s popularity catapulted it in 2006 from the third largest to the second largest party in Congress, the party now stands to lose many of the seats it picked up then.
Mr. Ortega, while shying away from blaming Mr. López Obrador for the decline of the party, made it clear that he wanted to remake its image into that of a party closer to social democratic governing parties in Chile and Brazil, and that street blockades were not in the plans.
“Protests against injustice should not affect citizens’ rights,” Mr. Ortega said. “We have to learn to fight within the limits of the law.”

Which includes stuffing ballot boxes and playing ball with PRI governors in order to win your own party's presidency, right Chuy?

The party has begun running gauzy television spots asking voters for their forgiveness and declaring its willingness to work with other parties, a pointed contrast with Mr. López Obrador’s campaign of permanent harassment.

You say "harrassment," I say "resistance." Shall we call the whole thing off?

Publicly at least, Mr. López Obrador and his party say they have worked through their differences. Analysts say neither one can afford a split. “If the left as a whole doesn’t recoup before the elections on the basis of economic issues alone,” Mr. Estévez said, “then they really have no chance of ever ruling.”

True, and I think we're all coming to realize that, however much one may hate the co-oped, bought-and-sold PRD.

Mr. López Obrador needs the structure and resources a large party provides, analysts said. And the party cannot jettison its most charismatic politician.
“The P.R.D. realizes they can’t give him up,” said Daniel M. Lund, a pollster who has done work for Mr. López Obrador, but not since 2004. “If the P.R.D. breaks with López Obrador, they will go to single digits.”

Why was it so important to point out that he worked for Obrador, but "not since 2004?" I've been to the bathroom today, but not since ten o'clock.

Where that leaves Mr. López Obrador’s movement is uncertain. Although 2012 is a long way off, none of the party’s current leaders have anywhere near his larger-than-life stature as a potential presidential contender.
What is evident is that while talk of a comeback may be premature, so was writing him off.
“He’s a charismatic, intuitive politician,” said Joy Langston, an analyst with the CIDE, a Mexico City research institution. “He not only knows how to win over the masses but also to govern in a way that continues his popularity. Amlo will never be completely finished.”

You may be onto something there, Liz.

Of Drugs and Bailouts

2009-01-30T09:46:00.000-08:00

For those of us who live lives of relative privilege in our little Mexican bubbles, it may be hard to actually conceive of how much the country has deteriorated just over the last two years. Besides killing more Mexicans than American soldiers dead in Iraq, little Lipe's misnamed "war on drugs" (or rather, intervention in the drug market to favor certain cartels over others, as Luis Javier Garrido has it) has terrorized the population, shredded the social fabric, and created the conditions of permanent fear necessary for future bouts of "economic shock treatment," in the words of the thankfully-late Milton Friedman. His bungled response to the global economic crisis: raising regressive taxes in a time of recession and continuing to waste government coffers on profligate bureaucratic spending and salaries - upwards of $60,000 dollares a month for the highest functionaries - while the rest of the country goes increasingly hungry has led Mexico to the dubious honor of country with the worse economic growth in all of Latin America, several years running. And worst of all from the standpoint of simple justice, his government's continued violations of human rights, either actively or through turning a blind eye, as well as the maintenance in office of the likes of Ulisses Ruiz ("el gober penoso") and Mario Marin ("el gober precioso") - men with criminal pasts egregious even by the, shall we say, loose standards of Mexican politicians, cynically mocks any advances the nation had made towards rule of the law in the 1990's. And though his attempt to privatize Pemez, the crown of the neo-con strategy for turning Mexico into a backyard oil protectorate, failed in the short term through massive public movilization led by Andres Manuel López Obrador, there is no doubt that, after the mid-term elections in July, Congress will at some point try again.

What is amazing through all of this is that it has taken the American press so long to notice. A rash of negative pieces in elite publications such as Forbes at the end of last year proved themselves to be "shocked" at the country's spiraling drug violence, and a recent Pentagon report has Mexico on its watch list of potential failed states alongside countries like Pakistan, another major recipient of the dubious benefits of US military aid. Meanwhile, at the Davos Conference in Switzerland, in yet another example of breezy cynicism, former President Ernesto Zedillo allowed that the pricetag of Mexico's bank bailout, initiated under his administration, topped even that of the US's. Yes, Fobaproa, the Frankenstinian monster that sucked up 20% of Mexico's GDP to benefit the same people who pillaged and led their enterprises to ruin in the first place, then benefited from free government bailout money, then got them back with freshly-scrubbed balance sheets shining like new, then liquidated or sold them off several years later with just a few properly-targeted bribes to clear the way, capping off the greatest swindle in this nation's (and perhaps the world's, considering the relative size of the bailout to Mexico's economy) history: the conversion of the dirty, private debts of millionaries into the public debt of millions. Sound familiar? Speaking of which, meanwhile, President Obama rails against Wall Street bankers' serving themselves up nearly $20 billion bonuses in 2008 in the midst of the north-of-the-border version of bailout mania, and congratulates himself that his new Treasury Secretary succeeded in talking the Citigroup out of buying a new corporate jet. At least someone's putting their foot down (yes, there is some sarcasm in those italics). In France, two-and-a-half million people marched in protest of the Sarkozy government's decision to inject $26 billion euros into France's banking system, despite the fact that said banks ended 2008 in the black. In the US, Exxon reported a record $45.2 billion in profits for 2008 - sounds like they're ripe for a bailout, too.

Masters of finance, bingers on greed and the white-collar public dole: the whole world is watching.

The Hidden Cost of Higher Energy Costs

2008-12-29T15:56:00.000-08:00

Every month, every week, practically every day, the cost of basic utilities is on the rise in Mexico. This week ushered in gasoline-tax increase number 33 of 2008. Electricity has risen upwards of 100% this year alone, with prospects of more ahead: the front page of today's Jornada reports that although big business will, in fact, be getting a break on energy prices in the upcoming year, this is to be paid for by giving to them the subsidies that are being taken away from the public at large. Because electricity prices are pegged to the international cost of natural gas rather than what it actually costs to produce the electricity domestically, and because the government's goal is to "harmonize" (read: increase) the cost of energy in Mexico with ever-increasing global energy costs (while at the same time doing little or nothing to decrease Mexico's dependence on imported energy), expect continued monthly increases in your electrical bill throughout 2009.

Theoretically, I suppose, businesses which see their energy bills reduced will pass that savings along to the consumer in the form of lower prices. Unless they don't - and given the uncertain (at best) economic forecasts for 2009, and given that a large part of Mexico's major businesses are monopolies or quasi-monopolies, and given that the government sure won't be forcing them into it anytime soon, don't hold your breathing waiting for any price reductions. And even in the off chance that there are, the monthly surprises tucked into everyone's electric bills will be plenty enough to wipe them out.

Raising utility costs in the midst of the greatest world economic crisis since 1929 is dumb beyond belief. Higher energy costs provoke inflation in everything else, and at a time of eroding incomes, increasing unemployment and waves of immigrants returning to Mexico from the States hungry for work that doesn't exist, it's simply fuel on the fire. It would be entirely different if the gasoline and electricity hikes were being used for a massive, national investment program in alternative energy sources that could employ a swath of those returning immigrants, and others, in very worthwhile work. I would gladly pay double or triple my light bill if I saw banks of solar panels going up on every roof and light stansion, taking logical advantage of Mexico's sun-soaked climate. Or better yet, if Mexico put all its architects and engineers to work in designing and making the next generation of cheaper, more effective panels. Before the supposed failure of the "import-substitution" model (which should fairly have been called the "self-sufficiency" model, which is what it was), before Mexico became a country of piecework maquiladoras for, and adminstrators of, foreign concerns, it showed the world - three generations ago and with none of today's technology - that it could run its own oil industry just fine after the expropriation of 1938. Why couldn't it build and design its own panels now?

Therein, I fear, lies the rub. Mexico could build and even design its own solar panels if it were to want to, if the government invested even a part of what cloudy, cold Germany is pouring into solar research. The money could be found, just as money was magically found to build an oil refinery after we were told for so long that there wasn't any. What there is not is the will. The privatization of electrical energy in Mexico is now half-complete, that of oil - as we so dramatically saw this fall - temporarily aborted but the threat ever-present, and what private companies do not want is to have to subsidize (read: make accesible) the cost of their energy for the average consumer. "Harmonization" of energy prices with the volatile and pitiless international market will ensure that these energy providers will be able to make the same profits in Mexico as in the US, France and Spain, while at the same time benefiting from lower labor costs, no-bid contracts, and the same sweetheart package of tax deductions and deferrals their sister industries in other sectors benefit from now. Genuine national sovereignty can only result from genuine energy self-sufficiency, and a sovereign nation is one that is capable of making uncoerced decisions in its own national interest. And Mexico's national interest does not lie in making consumers pay more to subsidize (subsidies in this direction are apparently okay!) increasingly-privatized industries which, as time goes on, are having less and less to do with Mexico as a nation at all.

Banamex and Citigroup: The Great Double Swindle

2008-12-14T11:47:00.001-08:00

1. Beginning in 1995, the Mexican government bailed out the recently-privatized Banamex (Banco Nacional de México, italics obviously mine) to the tune of 79 billion pesos (seven and a half billion dollars) - a total which ascended over time to 104 billion pesos (ten billion dollars) in real value - as part of the giant Fobaproa bank bailout. Fobaproa, the costs of which were subsquently transferred to the Mexican taxpayer, saved Banamex from certain bankruptcy.

2. In 1998, the Citigroup came into being, assisted by the repeal the following year of the Glass-Steagall Act, a New Deal era law separating deposit banking from investment banking. The chief promotor of the law's repeal was Robert Rubin, Bill Clinton's Treasury Secretary, soon to become a director and senior advisor at Citigroup.

3. In 2001, Banamex was sold to the Citigroup for 125 billion pesos (12 billion dollars). This was done via a stock-market transaction (tax free, in Mexico), allowing Banamex to avoid paying the 12 billion, 500 million pesos it would otherwise have owed.

4. Citibank had long been the Mexican elite's bank of choice for spiriting money, drug money included, safely out of the country. Most famously, Raul Salinas, brother of former president Carlos Salinas de Gortari, laundered $80-$100 million dollars through Citibank to Swiss accounts.

5. In 2007, Banamex bought the airline Areomexico with just a fraction of the Fobaproa monies it continued receiving as late as 2006. The buy, moreover, was a steal: a mere $249 million dollars, barely the price of one new airplane. Bidding for the airline was prematurely cut off, preventing other bidders from getting involved and the price from going any higher. This transaction was widely seen as a payoff by Felipe Calderon to Roberto Hernandez, ex-director of Banamex and current member of the boards of both Banamex AND Citibank (and Televisa, for that matter), for favors received during the presidential campaign of 2006.

6. In November, 2008, the US Government announced that it was bailing out the Citigroup as part of the $700 billion bailout passed the month before. This includes the direct injection of capital as well as a government guarantee of $300 billion dollars of Citibank assets. The government further guaranteed to protect Citigroup against future losses over and above the first $29 billion. This despite a New York Times exposé (see: http://www.nytimes.com/2008/11/23/business/23citi.html?pagewanted=1) that shows that the Citigroup, through lax oversight and mismanagement, has only itself to blame for, among other things, getting over-involved in collateralized debt obligations (C.D.O.'s): bundles of sub-prime mortgages and other bad debt, as it turned out.

7. Robert Rubin, who was involved in this Citigroup strategy from start to finish, is now a key economic advisor to President-Elect Barrack Obama. He is unapologetic about his stint at Citibank, which has lost 70% of its shareholders' value this year and, in the same week as its bailout became news, announced 52,000 more layoffs, the "second largest job cut ever undertaken by any company on record" as Crain's new york business.com reports.
(http://www.crainsnewyork.com/apps/pbcs.dll/article?AID=/20081117/FREE/811179995/1048/INFORMATION)

Conclusion: the Mexican taxpayer bails out a previously-privatized asset that is then sold to an American banking group without the payment of a dime in taxes. Said group uses a fraction of that money to buy one of Mexico's privatized airlines in a pre-arranged, favor-swapping firesale as well as to engage in risky investment practices which lead it to the point of collapse. Not to fear, for where the Mexican taxpayer leaves off, the American taxpayer comes in, allowing Banamex-Citibank, in the space of little over a decade, to benefit from massive bailouts on both sides of the Rio Grande. Who says globalization ain't great?

Three Minutes Sixteen Seconds / PRD R.I.P./ We're not Paying for Your Crisis

2008-11-21T09:42:00.000-08:00

Three Minutes Sixteen Seconds
The following from Rocio Ortega, newly-unemployed radio producer, Oaxaca: "This past November 6th, the program 'Music Non-Stop' (which I was the producer of on 96.9 FM) had on as its guest the artist and curator Olga Margarita Dávila for its segment, 'Biographies and Personalities'...In order to put into context the founding of 'La Curtiduria,' a space devoted to promoting contemporary art and taking in artists from all over the world, Olga cited the Oaxaca conflict of 2006 in the following manner:

And amongst all the ups and downs life has provided me with, one of them has been to come to Oaxaca and work here thanks to Demian Flores at the Curtiduria, which is a contemporary space for the arts, for artist's residences, for projects and workshops, education. It's a space that was born out of the movement of 2006 as an inclusive space, as a response to everything that moved this great conflict, this great force, this big, little transformation that we all experienced, even more those who were behind the barricades and involved in the whole process. This allowed the Curtiduria ['The Tannery'] to be named what it was: in an abandoned space in the old tannery area on 5 de Mayo Street in Jalatlaco, we inaugurated this space in 2006 with the help and logistics and strength of a large community of creators and artists who...asked what can we do and how can we do it, who are we as artists and what are we to do with this occupation of life, and we decided to open this space. And I joined in at the end of 2006, the beginning of 2007 intermittently at first, coming and going, I had commitments in Los Angeles and Tijuana, and little by little I kept getting more involved until, starting in the middle of last summer, I began to stay in La Curtiduria and began to make Oaxaca my home. Now I have been living in Oaxaca definitively for the last six months, with a great deal of pleasure, and tranquility....

"This audio segment lasted 3'16", and preceded some music that the guest shared with our listeners. The listeners, however, were not able to hear it. On orders from Mercedes Rojas Saldaña, director of CORTV, the transmission was interrupted and music was broadcast with the excuse of technical problems, thus censuring the program's content.
"If this were not enough, and without any reasons, the head of programming informed me by phone that I was being suspended (on the 11th, one week later), that my programs would not be going on the air anymore and that my professional relationship with the station was being terminated. He alleged they had tried to contact me to tell me that the people invited onto Music Non-Stop 'weren't Oaxacans' and as well that the program's music 'didn't convince them.' Along with this the program 'Music para Respirar' (Music for Breathing), which I am also the producer of, will be taken off the air - a progam devoted to genres such as world beat, new age, ambiental and hetero...
"If this is not to be seen as a lack of ethics and professionalism, a demonstration of ignorance and incompetence, a brazen and high-handed act, an attack of free speech and fundamental rights perpetrated by the director of a station paid for by our taxes, I demand an explanation and make a call to the support, friendship and gratitude of those who that afternoon, on this station, could not and now will not be able to hear me any longer.

Rocio Ortega,
Oaxaca, Oaxaca November 18th, 2008

If two radio progams can be pulled from the air and a producer fired for comments as innocuous as Olga Margarita Davila's, if people are being kidnapped in broad daylight only 7 blocks away from where the Governor is gearing up for his State of the State message (http://www.noticias-oax.com.mx/index.php?option=com_content&task=view&id=15502&Itemid=31), is it not clear that Oaxaca is suffering through the worst of both worlds: on one hand, the arbitrary repression of a police state, and on the other, the lack of any state-provided security whatsoever?

(Spanish speakers can read the full text of Rocio Ortega's comments at:
http://www.arteven.org/profiles/blogs/carta-de-rocio-ortega-a)

PRD R.I.P
Friends, please break out your mourning clothes to attend the political wake of the year (no, not Mouriño): the PRD is dead, cut down in the flower of its youth at only 19 years old. The party, founded by Cuauhtemoc Cardenas and the coalition of parties that had supported him in the 1988 presidential elections, died last week when the Federal Electoral Tribunal - the same one that installed electoral deliquent Felipe Calderon into the presidency of the nation, installed electoral delinquent Jesus Ortega into the party presidency of the PRD. The decision, an unprecedented meddling in internal party affairs which flagrantly overruled a wise internal party decision to simply annul the damned thing, was made even with the Tribunal itself admitting that a mere 22.88% (!) of precincts contained anomalies, and in grand Mexican style, included in its final count the results of polling places which were never set up on the day of the election! As I understand it, the high-minded ethical reasoning of the Tribunal goes thus: even if Ortega did do what they say he did, as long as what he did didn't "change the final results" (however circumlocuitously those are gotten at), his little shenanigans - oh you, Chuy! (slap slap) - are A-okay in the ledgers of justice. Kant is dead: there are no wrong acts as such, only wrong results...er, results subject to change.
With this, the circle is closed, and the party is pulled off the life support it had been on since its circus-like internal elections earlier this year. Felipe Calderon, with the help as always of his state-level surrogates (namely the governors of Oaxaca, Chiapas and Veracruz, from whence came the phantom results from inexistent precincts) have succeeded not only in installing their own man in the presidency of the PRD - one who will make a "modern" left that "Mexico can be proud of" (I can see the 30-second spots now), but in converting the party, born in the aftermath of one electoral fraud and toppled by another, sixteen years later, into yet another co-opted organ of the state. The clear intent is to remove any institutional channels for the mass popular movement led by López Obrador, and by attempting to marginalize him within his own party, make him look even more extreme and that much more cut-off from the normal political life of this grand, inclusive republic. With Jesus Ortega and his new-left "chuchos" in control of the party's apparatus, expect a bland and innocuous slate of compromised candidates for next year's legislative elections, absent any Lopez-Obradoristas or other rabble rousers. Expect, too, a sound thrashing for the PRD at the polls, not only due to the pre-announced (Garcia Marquez style) defeat of the left by the right (he who controls the electoral mechanisms controls the votes), but due to massive defections of the what was formerly the base of the PRD brand in favor of the other two members of the Broad Progressive Front: Convergencia and the Worker's Party (PT). For what it's worth (a bag of chips? cup of watery decaf?), this blogger, for one, will be voting PT/Convergencia.

We're Not Paying for Your Crisis
The three-time Berlusconi government in Italy (talk about electoral masochism) has recently introduced an educational counter-reform which, among other enlightened measures, slashes elementary school class time, eliminates up to 100,000 teaching positions, reduces the number of degree programs offered at the college level, and opens up the university system to privatization by stealth by allowing them to create "foundations" to traffic in private dollars for supposedly public ends. The massive protests stemming from this (surrounding the Senate building a la Mexicana, among other things - we should send over the Adelitas as back-up) have as their rallying cry: "We're Not Paying for Your Crisis."
I loved that. We're not paying for your crisis. The world financial system, by means of rampant speculation, disproportionate greed and sheer, deregulated stupidity, has dug itself into the biggest hole it has managed since 1929, and already, the cuts are coming everywhere to compensate it all. But not where the cuts should be made - in the boardroom - but in the living room, the classroom, and the lecture hall. This is also, in Naomi Klein's paradigm, the use of a "shock" (world financial crisis) to force through draconian cuts in education which, just as in Mexico, has the goal of dismantling one of the last functions of government (with its accompanying unions) that hasn't been privatized or sold off. Now I am no fan of public education as it exists in any country I know of - where the main goal has historically been that of producing docile capitalist cogs rather than questioning, creative human beings - but the practical matter is, public education and teacher's unions are pretty much the last thing standing the way of the final dismantling of many nation-states, and thus must be disposed of when the shock is right. Hence, Mexico's Alliance for Education, the closing of the normal schools, the ongoing war against dissident sections of the national union.
All this not to mention the twenty-some-odd increases in the gas tax this year in Mexico and the application of the flat-rate, regressive 16.5% IETU tax, which has nailed those of us who actually try to be honest and declare our earnings with the Revenue Department (que pendejos somos...!). We're not paying for your crisis. You broke it, you clean it up.

Why Obama and not Obrador?

2008-11-08T09:21:00.000-08:00

For this blogger, the festivities and rejoicing of last Tuesday night, where Barack Obama swamped John McCain in the electoral college and the Democrats picked up decisive majorities in both Houses of Congress, came with a bittersweet edge. Watching the returns at an election party, surrounded by cheers and clapping as the networks projected an Obama victory and the epicenter of the global party erupted in Chicago's Grant Park, I turned to my wife and said: "Mexico deserved this two years ago." At that moment, applauding along with the rest, part of me was back on that infamous night of July 2nd, 2006, watching the networks, and then the President of the IFE, proclaim the race to be too close to call, watching the helicopter shot from above following Lopez Obrador's car as it wound its way through the Mexico City night, watching as he arrived in the Zocalo to ensure his puzzled and mystified supporters that he was not going to accept the doctored results being offered up by official channels, that the fight would go on. The next morning, July 3rd, all of us got up to see that Obrador had taken a decisive lead in the district-by-district vote count, one he maintained throughout the entire day, only to lose it at 3 AM in the morning as the yellow and blue lines crossed on the chart and Calderón was annointed with a virtual victory of one-half of one percent. Losing honestly, disappointing though it would have been, would not have been a problem; it was having the thing snatched away through dead-of-night machinations that hurt so much.

So what did Obama do that Obrador didn't? First off, it is important to point out that the similarity between the two men is substantial. In general terms, as Jaime Aviles pointed out in yesterday's Jornada, "Both [of them] - the 'legitimate president' of Mexico and the president-elect of the United States - agree that, in order to reduce the devastating effect of the crisis amongst the most vulnerable sectors of the population, it is necessary to strengthen the role of the state, revive the internal market, stimulate the creation of jobs and rescue the poor." That last one may be a bit of an overstatement: whereas it was Obrador who made a focus on the poor the centerpiece of his campaign ("For the well-being of all, the poor come first"), Obama's campaign, with its obsessive focus on the middle-class (read: swing voters) ignored the poor just about as much as the McCain camp did. Nevertheless, the platforms of both the Democratic and PRD candidate were strikingly alike in a series of key areas: Obama: tax cuts for the middle class to be paid for by tax increases for those making over $250,000; Obrador: lower gas and electricity costs for individuals and businesses to be paid for by having the rich actually pay taxes instead of deducting and deferring them away. Obama: energy independence through alternative energies and increased domestic oil production; Obrador: energy independence through increased oil production and the construction of three new refineries. Obama: an immediate stimulus package including money for public works, extended unemployment benefits and aid to state and local governments; Obrador: an immediate stimulus package including money for public works, a modern train link to the US, and a national public pension for those 70 and over. And so on.

Obama and Obrador are also alike in another very important way: both have attempted to create a political structure independent of the traditional party system, Obama through his website, network of donors, and community organization, and Obrador through the "redes ciudadanas," the "citizen's networks," before the election and the several million-member strong "legitimate government" after it. It is in the differing successes of these networks, in fact, that a large part of the differing fortunes of the two men can be pinpointed. Obama succeeded in raising tremendous amounts of money through his network within a plutocratic elections system that heavily favors the haves over the have-nots in terms of campaign cash. In the US, public financing, and the limits associated with them, are optional. In Mexico, public financing is obligatory, as is, theoretically, the spending limits associated with them. Obama's network, inspired by the candidate's charisma, succeeded in identifying large numbers of new voters and getting them to the polls. Obrador's network, inspired as well by its candidate's charisma, motivated a large number of voters, but failed in organizing sufficient oversight of the actual voting and vote-count processes, and, like Gore in 2000 and Kerry in 2004, did not succeed in racking up a large-enough advantage to counteract the shaving-off of votes through identical means of electoral fraud: the purging of voter rolls, the manipulating of ballots and the untoward interventions of the US Supreme Court, on one hand, and Mexico's Federal Electoral Tribunal on the other. To this should be added two more important factors: the identical negative campaign tactics which Obama was more successful in both utilizing and neutralizing, and which I believe American voters have become more inured to after seeing them in use over and over again, year after year. In Mexico, these tactics, especially the 30-second attack ad, are much newer on the scene, and consequently had a much more visceral effect. And lastly, the economic crisis, which detonated just in time for Obama this past October. Would he have won, or won as handily, in July of 2006?

Overall, though, it must be admitted that Lopez Obrador had to fight a much more uphill battle, with more against him. In the US, for example, the Clintons grumbled and groaned, but did eventually get out and campaign for Obama. How much of a difference would it have made here, for example, if Cuathemoc Cardenas could have put his ego just a couple of inches aside and hit the hustings for his party's candidate. Plus, Obrador had Mexico's absolutely hermetic, all-powerful political, financial and media elite to contend with. As José Agustin Ortiz Pinchetti writes:

"The election of Barack Obama induces us to make some unpleasant comparisons. Let's compare the evolution of American society with our own over the past 40 years. In 1968, Martin Luther King was assassinated and the Mexican government ordered the slaughter at Tlatelolco. Since then, Americans have succeeded in dismantling white hegemony and banning racism without a civil war breaking out. Obama's triumph is symbolic; for many years, racial minorities have opened a breach in the elite due to a system of meritocracy. We, meanwhile, have founded in a decadence that now threatens us with collapse. Our racism has only become more acute, without our being capable of admitting it. A minority of Creoles that doesn't represent even 5% of the population continues to impose an economic dictatorship on the rest of the classes and castes. Control over the media provides a soporific effect while poverty and destitution increase. The American crisis detonated our own, but we have neither their resources nor their flexibility. Our country has not grown in 25 years because 50 groups control the market and prevent competition. Whereas Amercian democracy has just demonstrated its vigor, our own democratic transition has been shipwrecked."

Agree or not with all of Pinchetti's black-and-white comparisons made in the glow of this past Tuesday - and I do not see America anywhere near as rosily as Pinchetti paints it here - it is a fair assessment of Mexico, and by extension what Lopez Obrador in his campaign, was and continue to be up against. This does not excuse Obrador his campaign's failings, but fraud is fraud, and one can only hope that Mexico will only need one 2006, while the United States needed both a 2000 and a 2004, to realize that "Yes, we can."

The Great Temptation: Oil in Mexico, Part II (translation)

2008-10-21T15:28:00.000-07:00

Today, the conclusion of my two-part translation of excerpts from Andrés Manuel López Obrador's The Great Temptation, available in Mexico from Grijalbo.

The Great Temptation: Oil in Mexico
by Andrés Manuel López Obrador
translated by Kurt Hackbarth

“The Gangrene of Corruption”

This entire disaster in the nation’s energy sector has been fed by the corruption that reigns in the government, Pemex and in the Federal Electricity Commission. This is the evil that most afflicts Pemex and torments the nation. Though the examples of corruption are endless, I will limit myself here to a few of the most current cases which I consider relevant.

The first contract for multiple services [contrato de servicios múltiples] which was granted – in violation of the Constitution – to a foreign company was signed when Felipe Calderón was Secretary of Energy and President of Pemex’s Administrative Council. On November 14th, 2003, without any other company having participated in the bidding, a contract for $2 billion 437 million dollars was awarded to Repsol of Spain to explore natural gas deposits in the Burgos Basin (Cuenca de Burgos).

In the annex to this multiple-services contract with Repsol, entitled “Catalog of Maximum Prices,” it is shown how the costs of the services contracted for and their astronomical overpricing were arrived at: for the acquisition of infrastructure, an additional 120% over and above the direct cost is stipulated; in the case of maintenance services, up to 320% above the direct, daily cost. Moreover, the original per-unit price is to be applied independently of whether the contracted company uses new or used materials; it is the contractor itself that has the “absolute responsibility” to inspect, test and certify the materials, and if that were not enough, a series of additional, unforeseen expenses are added on such as import fees and tariffs, labor taxes, taxes for the acquisition of premises and permits, licenses and public registries.

The worst of it is that these contracts have proven beneficial only for the foreign companies, but unproductive and downright harmful for the national interest. Pemex agreed to pay a sum total of more than $5 billion for all of the unfair contracts it shelled out to Repsol, Tecpetrol, Petrobras, Teikoku, Schlumberger and Haliburton, among others, using the justification that natural gas production would increase by 50% in the Burgos Basin, which would have meant 500 million cubic feet per day. In five years, however, these companies have increased production by only 63 million cubic feet, going from 126 million – the level of production Pemex was obtaining when it handed the fields over – to 189 million cubic feet; an increase, that is, of 4% of the estimated production in Burgos. Over the same period, Pemex increased production in the fields it itself operated from 1 billion to 1 billion, 347 million cubic feet. In short, the multiple-services contracts have increased production only very marginally, but at an elevated cost. They have been a disaster.

“Useless Investments”

For the retooling of the Cadereyta oil refinery, the companies Sunkion Limited, Siemmens and ICA were contracted in 1997. The job was supposed to be concluded in July of 2000, but it went on more than double the amount of time agreed upon. The work was handed over unfinished, with irregularities, and with the per-unit prices paid being much higher than as originally contracted. A November 2001 audit quantified the losses, up to then, at over a billion dollars. Pemex, which had renounced jurisdiction of the national courts, was sued by the consortium in international tribunals. Due to the lack of an adequate defense, it was obliged to pay an additional $630 million dollars. Not one person has been held officially responsible, much less sanctioned, to the present day. The cumulative loss to the nation has been at least $1 billion, 630 million dollars.

The contracts with foreign companies in Chicontepec, Veracruz also demonstrate, at the very least, the absurdity of privatization policies. With ample reserves of oil, the extraction of which, though, was said to be technically difficult, this area saw investment increase from $2 billion, 905 million to $4 billion 871 million pesos between 2004 and 2007, practically a 70% increase. These dates coincide with the contracting of the companies Schlumberger and Haliburton for the perforation of 300 oil wells. However, production over this period only went from the equivalent of 25 billion, 223 million barrels of crude oil a day to 26 billion, 625 million barrels, an increase of 6%. In sum, Burgos and Chicontepec turned out to be great business for the contractors but a terrible one for the nation.

In 2007, the Norwegian company PetroMena, owner of deep-water perforation platforms, rented three platforms for five years: the largest, for three thousand meters deep, to Petrobras America Inc. for $750 million dollars. The medium-capacity platform, for 2,500 meters of depth, was rented to Petrobras Brasil for $645 million dollars. The lowest capacity platform, for two thousand meters of depth, went to Pemex at a cost of $940 million dollars. In other words, Pemex rented the smallest platform for $300 million dollars more.

[…] Following such a litany of fraudulent acts, it becomes clear that what lies behind the current right-wing privatization mania are the ambitions of the same group that has been doing private business behind the shield of public power, at the cost of our national heritage, for years. Over and above any technical, financial or administrative considerations, the intention to privatize Pemex is based on the interest of rapacious minorities and corrupt officials who intend to stay mounted astride the oil business.

In synthesis, it is an undeniable fact that during the period of neo-conservative sacking, the powers that be have attempted to destroy the nation’s oil industry. Over this time, Pemex has suffered from more interventionism and point-blank sacking than any other company in the world. Nevertheless, it continues to be indispensable to defend Pemex against the current onslaught that seeks to destroy it for good, for upon the salvation of the oil industry depends, to a great extent, the destiny of the country and our people.

The Great Temptation: Oil in Mexico, Part I (translation)

2008-10-20T10:27:00.000-07:00

On September 15th, the most recent book by Andrés Manuel López Obrador entitled The Great Temptation: Oil in Mexico was published by Grijalbo. As the Mexican Congress is just now on the verge of passing a Pemex "reform" law of some kind or other, I will over the next two days be presenting here a translated excerpt of Obrador's book, from the chapter entitled "La política irresponsable," or "Irresponsible Policies."

The Great Temptation: Oil in Mexico
by Andrés Manuel López Obrador
translated by Kurt Hackbarth

"Irresponsible Policies"

The neo-conservative governments have confiscated from Pemex all of its earnings. From 2000 to date alone, while Pemex has registered accumulated sales of $6 trillion 442 billion pesos, it has paid $4 trillion 467 billion of those in taxes, which amounts to 75.8% of its sales. In contrast, direct public investment in Pemex (without including debt) over the same period came to $162 billion pesos, barely 2.5% of its total sales.

These oil-obtained revenues have been used to finance the federal budget, to the point that, for every budgetary peso, forty cents (centavos) are derived from oil. Such a fiscal policy – one which bleeds Pemex to death – has been used to make up for the deficit in tax collection, in light of the fact that the large corporations in our country pay practically no taxes at all.

In 2007, for example, Pemex posted sales of $1 trillion, 134 billion 980 million pesos, and its contribution to public finances amounted to $846 billion 200 million pesos, that is, 74.6% of its sales. In this same year, according to Mexican Stock Exchange statistics, nine large corporations posted sales for $1 trillion, 209 billion 316 million pesos and paid $51 billion 325 million in taxes: 5% of their sales. Pemex, in other words, provided sixteen times more. It is necessary to add, moreover, that these corporations were allowed to defer $106 billion 296 million pesos in taxes in their balance sheets, making the fiscal credits they received amount to double what they paid in taxes. In the end, we do not know how much they really did pay because it often happens that corporations like these also wind up benefiting later from tax rebates.

The enormous corruption that is rife in the upper echelons of economic and political power in Mexico can be described by noting that a worker, a member of the middle class or a small-to-medium businessperson or entrepreneur is required to pay between 15% and 28% in income tax (ISR). However, the large monopolies linked to power, due to the privileges they receive, reduce their tax payments to a minimum, and in certain cases, pay nothing at all.

The fiscal reforms undertaken by the Fox government, and continuing to the present, have only aggravated the problem. This is confirmed by the recent report of the Federal Audit Bureau [Auditoría Superior de la Federación], which states that in 2005, “fifty large taxpayers were detected whose individual income tax payments, after deductions, were less than $74 pesos.” In the same vein, it points out that “tax rebates in the 2001-2005 period came to a total of $604 billion 300 million pesos. This generates a situation of privilege for a certain few taxpayers that goes against the principle of fiscal equity.” This situation continues unabated: during the first semester of 2008, tax rebates rose to a total of $93 billion 613 million pesos.

Finally, it is important to add that the PAN governments have had the advantage of having the highest oil prices in the history of the world. During his administration, Fox received budgetary contributions from oil revenue to the order of $335 billion dollars, and just for high prices alone, $10 billion dollars extra per year over the three-year period 2004-2006. And the disgrace was – and continues to be – that, this money, instead of going to modernizing Pemex, promoting development in Mexico and guaranteeing the well-being of the people, was squandered in top-level bureaucracy or was spilled down the drain of corruption.

Thus, in 2007, the de facto government took in $12 billion extra dollars due to the high prices of oil exports, and in 2008, it is on pace to take in $20 billion more. Let’s remember that the Chamber of Deputies [Cámara de Diputados, Mexico’s Lower House] set an estimated per-barrel price of $49 dollars in its Federal Revenue Law, and it has been selling instead at an average of $100 dollars a barrel. Since 1901 – when oil production began in Mexico – to the present, no president of Mexico has ever obtained so much money from oil as will the usurper Felipe Calderon this year. Nevertheless, just like with Fox, all of these resources have either been used to subsidize his large corporate allies, have been squandered in corruption, or have been funneled into maintaining the privileges of high-level public officials. It is worth noting that the de facto government has done nothing to reduce the enormous costs of its bureaucracy. On the contrary: in 2007, it increased it by $154 billion pesos. And it is projected to spend $250 billion more on bureaucracy in 2008. In only two years then, $404 billion pesos more. In short: ineptitude, corruption, and waste by the bucketful.

Corporatism, US and Mexico-Style

2008-09-15T14:24:00.000-07:00

While Americans suffer through the psychological poison of another farcical election campaign charade with its by-now standard quota of lies, character assassination and fascistic bullying, and while Mexicans are gearing up for their annual celebration of their nation’s so-called independence, this blogger felt a few thoughts to be in order as to what is currently at stake both in the United States and Mexico in these such adverse times.

The radical regimes in power both in the US and Mexico got there, first and foremost, through undemocratic means: the constitutional coup is no less a coup for hiding behind the skirts of a nation’s constitution. Said radical regimes – aligned with sister movements throughout the word – seek nothing less than the absolute rollback of the national state’s welfare function, to turn the clock back to the no-holds-barred industrialism of the nineteenth century when men, women and children were wage slaves to their bosses in a penury hardly better than their great-great grandparents under feudalism (and worse in the sense of the factory conditions they were forced to labor under), and when American and other foreign companies in a tax-free Mexican heaven with the most absolute of impunity (remember that one of the precipitating moves for the nationalization of PEMEX were the oil companies’ conspiring to split off the oil-producing states from the rest of Mexico to form “A Gulf Republic” all their own). Even now, a full hundred years since the outbreak of the Mexican Revolution, historical revisionism is alive and rife on the Mexican right: maybe Don Porfirio wasn’t such a bad guy after all – he did industrialize the country, didn’t he, bring in the railroads (since sold off) and factories and French fashion? Lest we forget what things were really like, I refer the reader to John Kenneth Turner’s México Bárbaro, an account of an American’s tour through the hell of Mexican slavery in 1907, a scant three years before the outbreak of revolution, which is required reading in many Mexican secondary schools – we’ll see for how much longer.

Mind you, these radical-right regimes do not have the balls to bring their philosophy to its logical conclusion: the abolition of the state altogether. That would be an altogether more interesting, and more honest, point of view. Oh no, they want a state all right – a police state, whose exclusive functions are to protect property, enforce contracts, and keep enough of enough of a lid on dissent that we can all keep schlepping off to work and the mall every day. The multi-national corporation (considered to be a person by both the American and Mexican juridical systems), the jewel in the crown of the neo-right, could not exist without the state, could not exist without its infrastructure, roads and airports and traffic lights, could not exist without its police and army (to suppress internal dissent, as Calderon is so blatantly using them together for), could not exist without the courts that put a legal veneer on their purchasing of justice, and above all, could not exist without its television, not only to sell its products but to render us all brainwashed and neurologically passive enough so that all of this can go on with our full complicity as “autonomous” citizens.

The state and the corporation exist, in neo-con land, in a perverted symbiosis: the state protects the corporation and the corporation buys its protection by enriching the upper echelons of government, which are often one and the same: the revolving door between corporation and government ensures that it is often the same functionaries serving themselves with the big spoon (as the Spanish expression goes) from both sides of the bowl. The state sucks taxes, Matrix-like, out of its citizens in order to provide the above-mentioned services, along with selective tariff protection and fat public contracts for armaments, energy and the like, to the corporation. If the corporation fails, the government bails it out; if the corporation becomes an abusive monopoly, the government does its best not to have to break it up. Thus the government allows the concentrating tendencies of the free market to go unchecked (monopolies, cartelism – can anyone say Telmex and Cemex?), but carefully reigns in the corrective effect of bad business practices in the form of selective bail-outs (can anyone say Fobaproa, Bear Stearns and the Citigroup?) and preferential tax treatment, including the turning of a blind eye to offshore tax havens. The free market does not apply to the corporation that is ‘too important to fail’. Free speech, on the other hand, as Chomsky points out, is just another commodity to be bought if you have the money; for everyone else it is restricted to the bubble of the ‘free-speech zone’ far from the cameras (try to stray from that and just watch how fast the FBI will barge in and steal your laptop).

What the radical-right regimes in power in the US and Mexico aspire to, then, is the corporate state – corporatism par excellence. The state for the corporation, the corporation for itself, everyone and everything else, especially democracy, be damned (although the farce of elections will have to continue in order to keep up appearances). And when I say ‘corporation,’ I of course also mean ‘bank’: the concentration of international capital in certain institutions used both to lubricate the cogs of corporatism and to bludgeon weaker countries into falling in line with their strictures. Of course, the people will eventually rebel against all of this (although Americans seem to have entered into a state of terminal passivity, much like the wife who has been abused for so long that she rallies to her husband’s side when he is called onto the carpet), but that’s what the armed forces – arms supplied by the corporation – are for. This is more of an imminent danger for ‘weak states’ like Mexico, which is why the upper classes here have become more practiced in taking the money and running – to Miami, Madrid or Mallorca, to states that are just that much stronger in order to protect their loot. Plan on seeing Calderon on an extended sojourn abroad in 2012, if not before.

The point here is not whether the corporation can or cannot fulfill a positive function or whether it can or cannot provide useful services to people. It is, rather, that this sickening symbiosis between corporation and government is creating, has created, a stratified, authoritarian structure where the freedoms (political and social and labor) our forefathers fought for have been subsumed into a dictatorship of capital that is as abusive as any aristocracy ever was – and in the arming of the world for profit and the mass destruction of its natural resources and social fabrics, much, much worse. So let the campaign in the US drone its sad way on, let the grito be uttered in every town square in Mexico tonight, but then let us go home and work to start liberating our minds, each and every one of us individually and then together, of the insidious notions that have been implanted in our minds: that life is a war of all against all, that we must simply pay our taxes and keep our heads down, that this is just the way things are.

Petro-Superpowers

2008-09-06T12:34:00.000-07:00

As Michael T. Klare, author of "Blood and Oil" and "Rising Powers, Shrinking Planet: the New Geopolitics of Energy" puts it succinctly, America's wealth and power (as well, this blogger hastens to add, its profligately wasteful lifestyle) "has long rested on the abundance of cheap petroleum." Unbelievably now, the United States was once the world's largest producer of oil; the fortunes of the Rockefellers, of course, did not come from nowhere. Says Klare: "Abundant, exceedingly affordable petroleum was also responsible for the emergence of the American automotive and trucking industries, the flourishing of the domestic airline industry, the development of the petrochemical and plastics industries, the suburbanization of America, and the mechanization of its agriculture. Without cheap and abundant oil, the United States would never have experienced the historic economic expansion of the post-World War II era." The year domestic American oil production hit its peak, in 1970, was also the peak year of the post-war economic boom. From there on in, it would be oil shocks, stagnant wages, the slow but inexorable rollback of America's already-minimal welfare state, and of course, an increasing dependency on foreign oil: the United States now imports 65% of the stuff, transferring in the process $548 billion dollars a year to its happy suppliers, who use the profits in turn to gobble up American assets through sovereign-wealth funds (SWFs): "state-controlled (note) investment accounts that buy up prized foreign assets in order to secure non-oil-dependent sources of wealth." As Klare point out, the Abu Dhabi Investment Authority alone has assets of $875 billion dollars, and has over time bought into Citigroup, Advanced Micro Systems, and the Carlyle Group, to the financial benefit, not surprisingly, of both the Bushes and the Bin Ladens.

In short, America would not be able to toss so many of its bombs around the world without the oil to do it with (one last Michael Klare stat: the US Department of Defense uses more oil per day than the entire nation of Sweden). It is not so hard to envision a not too-distant future in which the United States military invades other nations simply to get the oil to keep itself going enough to invade the next country in order to get the oil to...until, spent, it simply grinds to a halt, all of its tanks and Humvees wasting away, Mad-Max style, rusting hulks in whatever desert they were stationed in before the black gold ran out.

Where does this leave the world's energy exporters? Financially speaking, pretty good: these are the Petro-Superpowers, the 21st century answer to the outdated, 20th century, just-plain Superpower. We have already mentioned the Arab States through the example of the Abu Dhabi Investment Authority; its neighbor Saudi Arabia, of course, is the world's largest oil producer, a big-time investor in the US stock markets, and a fast friend of every White House. Meanwhile, Russia, the world's number two oil producer - and its top natural-gas producer - has been recently flexing its muscle in very blatant fashion in Georgia, but has been building itself back up for a good decade now, throughout the period the US State Department was so contemptuously writing them off. Instead of letting American oil companies buy up its assets after the fall of the USSR, they concentrated most of them in state-owned Gazprom which, as Ukraine learned in 2006, can turn on and off the supply to its neighbors at will. Closer to home, Venezuela under Hugo Chávez is using its oil wealth both to provide cheap gasoline to its own citizens (a starker contrast to current Mexico there cannot be) and to lead the way in the financial and energetic integration of South America.

And Mexico? Petro-superpower? Petro-power, at least? Petro-pussy, more like. With the alacrity of Richard Pryor in "Brewster's Millions," Mexico's current constitutional-coup installed government (in cahoots with the top brass of its state-owned company PEMEX) is doing everything possible to squander and sell off the nation's oil wealth as fast as it humanly can, without, like Pryor, the possibility of getting something back at the end for its efforts. The scandal-of-the-week of PEMEX having acquired a piece-of-crap ship entitled "El Señor de los Mares" for up to ten times its market value is just one more example, tedious in its predictably, of the spectacular waste of the nation's oil wealth in a web of corruption implicating PEMEX head Jesus Reyes Heroles (who first haughtily denied López Obrador's allegations regarding the just slightly-marked-up ship acqusition only to have to eat crow through surrogates by the end of the week), Vicente Fox's ever-present stepsons, the Bribiesca boys, and practically everybody else in the federal government with keys to the storeroom. Rather than use its oil revenue to reinforce the state's stewardship of the economy, environment and internal security, Mexico is witnessing the exact opposite: the sinking of said state under the waves in a losing war with the better-funded, better-armed and better-trained drug cartels and a policy of transferring whatever public wealth and resources that happen to be left over into private - and foreign - hands through bogus, inflated contracts and bullshit buys like "El Señor de los Mares".

"Whether we know it or not," Michael Klare says, "...the United States is an ex-superpower in the making." How much sadder is it, then, that Mexico is simply going to go from poor to poorer when the last of its oil is sucked right out from under its feet - and with so precious little to show for it.

(Read the Michael Klare piece in full at: http://www.tomdispatch.com/post/174929/michael_klare_america_out_of_gas)

Kidnappings and Congress

2008-08-24T07:16:00.000-07:00

Back in the sunny old days of 2006 when only Oaxaca of among the 32 states seemed to be on the verge of social collapse, a political joke made its rounds. A rich kid says to his friend, "Boy, I really hope López Obrador wins the election this year." The friend, incredulous, responds, "Why?" And the friend explains: "Because my daddy said that if he wins, he's going to take us all to live in Miami!"

Now its 2008, and the rich are going to Miami. And to Houston. And to Spain. And not because of López Obrador, but because they are no longer safe from kidnappings wherever they go, whatever they do to protect themselves. 13-year old Fernando Marti, son of a wealthy businessman, is kidnapped and killed even though he was traveling in a bullet-proof car with escort and bodyguard and even though his father paid the kidnappers a six-million dollar ransom. Police are alleged to have been involved. María de Jesús Delgadillo, 27 years old and ten weeks pregnant, is kidnapped in the State of Mexico when she goes out to visit friends, is kidnapped and held four days, 150 thousand pesos is charged for her release but she is killed anyway. An ex-police office is arrested in relationship to the case. In the state of Jalisco, an anti-kidnapping agent is arrested along with six accomplices for the kidnapping, extorsion and execution of a family; in Baja California, a series of anti-kidnapping agents are under investigation; in Ciudad Juárez, the federal police arrested a city police officer along with five accomplices for allegedly being part of a gang of kidnappers. Here at home in Oaxaca, a network of delinquents made up of police and members of the gang "Los Zetas" are being accused of a number of kidnapping and killings. Kidnappings in 2007 were up 35% over 2006, and it is estimated that for every reported kidnapping, of course, two or three more go unreported. According to a study at the Tec de Monterrey, approximately 400 professional kidnapping gangs are currently active in Mexico. A true growth industry in a time of decling profits.

Meanwhile, Congress is due to reconvene on the 1st of September, and besides considering whether or not to get tough and raise the penalties for all those kidnappers (useless if they are never caught, useless if the police who are supposed to catch them are involved in the first place, useless if the gap between rich and poor continues to rise), the issue of oil privatization will be right back on the front burner. Stalled in the spring due to public demonstrations, the oil privatization measure has been repackaged and rechristened as the "Beltrones" proposal, for the PRI senator proposing it. A close look at the list of ingredients, however, proves that the products are pretty much the same, and where not the same, even worse. Though this new and improved bill has been touted as a compromise which removes the most objectionable of Calderón's original proposal, turns out that ol' Senator Beltrones (himself a top name on the DEA's list when he was governor of Sinaloa for alleged involement in drug activities) copied his buddy's homework: 28 of his bill's 49 articles were copied directly from the original proposal. The privatization of exploration and development would proceed apace, but now the "sharing" of national oil profits would not only occur with private companies, but with the Mexican states (dominated by PRI governors the likes of Mario Marin and Ulisses Ruiz), as poor PEMEX would find itself being divied up into a series of decentralized, state-level companies, all financed with public capital. These chopped-up PEMEX companies could then contract out the construction of refineries, etc. and clearly, in the future, be simply bought out outright: much easier to sell off a series of small regional companies on the sly than one, big, prominent national entity. In fact, the bill specifically provides, in the future, for the "desincorporation of the descentralized organizations...without being bound by the Federal Law of State-Owned Entities" As El Fisgón points out, that is code for privatizing in parts once the protests die down. The war shaping over this issue for the fall should prove to be very interesting, indeed.

Calderon: The Region 4 Bush

2008-08-16T15:25:00.000-07:00

For those of us of American descent living in Mexico or naturalized as citizens, the most depressing thing about having to live under the Calderon junta is that, well, we have seen it all before. We have seen it all exactly before. In fact, Mexico's current agonizing descent into chaos is such a precise replay of what Americans have - with heroic stoicism (to be fair) or resigned passivity (to not be) - had to endure since 2000 that one can only wish that the world was such that we would be able to qualify for an exemption the second time around. Or that, as with DVDs, what plays in Region 1 wouldn't work in Region 4. Unfortunately, it looks like we were all fed a pirate version that plays on all machines, however jerky the image or shrill the sound (jerky and shrill: the modern right in a nutshell, ha!).

So here's the script: Bush and Calderón, both mediocre men piggybacking to prominence on the shoulders of their famous fathers (Bush Sr., himself son of a senator*, head of the CIA and one-term president; and Papa Calderón, one of the founders of the PAN, the political party set up in 1939 by oil interests in order to - yep, oppose the nationalization of the oil industry by Lazaro Cardenas). Both boasting of Ivy League degrees of more-than-questionable value (see my post: So Where Did You Go to College, Presidente?). Both rising to power through fradulent elections, using voter-roll manipulation (Florida and the Hildebrando connection in Mexico), vote-rigging (Ohio and the IFE), and the complicity of the judicial branch (the US Supreme Court on one side and the Federal Electoral Tribunal here on the other), beneficiaries of smear campaigns based on exploiting fear and dividing the population (Swift-Boating, for example, vs. 'Peligro para Mexico'). Both, to be blunt, installed in office by energy interests, for energy interests and of energy interests (through the invasion of Iraq and privatization of its oil, and, in reverse order, the privatization of Mexican oil followed by potential US invasion through the Plan Mexico to safeguard its future new holdings), each coming personally from a background replete with energy interests personally (Bush, failed oil man bailed out time and again by the Saudis, Calderón, failed Energy Secretary bailing out family members with contracts). Both the puppets (peleles) of far stronger men (Cheney) and women (Elba Ester) behind the throne. Both, in their puppet/pelele status, serving the interests of counter-revolutionary right-wing movements who see no positive role government can play in society except that of lining their pockets and those with 'preferred partner status' (Haliburton, Repsol...), using free-trade ideology as a convenient smoke screen to cover the construction of ever-more corporatist states (a highway bailout here, a Bear Stearns bailout there; some institutions are just "too important to fail..:"). Both, boxed in by that very ideology, criminally negligent when it comes to situations where government is indeed necessary (Bush in New Orleans, Calderon in the Tabasco flooding). Both flaunting their essentially-fundamentalist religiousness for political gain. Both kept in power through the complicity of a compliant corporatist media. Both presiding over the lower-growth, higher-inflation economic decline of their respective countries. Both benefiting the rich (tax cuts for the rich and tax breaks for the oil industry in the States, tax exemptions and enormous give-backs to individuals and corporations in Mexico) at the expense of the poor (an ever-more regressive tax structure, higher unemployment and price increases on staple goods). Both masking with tough rhetoric the increasing insecurity of their countries (in Mexico, the obvious rise of drug killings and kidnappings; in the US, the long-term, largely-ignored deterioration of its urban areas). Both subject to impeachment, if the ineffectual Congresses supposedly keeping checks on them would ever fulfill their respective Constitutional roles.

Region 1 Bush; Region 4 Calderón. Aren't we lucky to have one foot on both sides?

*Clarification: In my original post, I referred to Bush Sr. as son of a "censured senator", this in reference to his father, Prescott Bush. Prescott Bush was never, in fact, censured by the Senate in the manner of Joseph McCarthy. The controversy swirling around his legacy - and the reason he is often referred to as having been "censured" - is that four of his business interests, the Union Banking Corp, Holland-American Trading Corporation, Seamless Steel Equipment Corp, and Silesian-American Corp, were seized in 1942 under the Trading with the Enemy Act. Brown Brothers Harriman, for which Prescott Bush was a managing director, was the principal US banking partner for Fritz Thyssen, the top Nazi banker, and continued to do business with the regime even after the United States' post-Pearl Harbor declaration of war. Bush was never charged - the war was on and there were other priorities - but it remains an embarrassing black mark that the family has never fully been able to expunge.

The Rupture

2008-08-08T09:37:00.000-07:00

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:.http://www.jornada.unam.mx/2008/08/01/index.php?section=economia&article=029n1eco). 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."

Oaxaca: Corruption and Impunity Without Limits (translation)

2008-07-14T14:41:00.000-07:00

Instead of writing a piece of my own today, I'm including here my own translation of an op-ed piece by Gustavo Esteva in today's Jornada that describes recent events in Oaxaca better than I could have. For all of you living in Mexico, please join in the nationwide boycott of all Chedraui stores. I know that all corporations are doing something, and if we boycotted all of them we wouldn't be able to shop anywhere, etc...but what happened last week in the Colonia Reforma is happening now, under our noses - the late-night rape of a hectare of woodland, with the full collusion of the municipal government, that the neighborhood was trying to get converted into an ecological park. Read on...

Oaxaca: Corruption and Impunity Without Limits
by Gustavo Esteva, La Jornada July 14th, 2008
Translation by Kurt Hackbarth

“Yesterday at three in the morning, an army of para-police from the Chedrahui company, protected by actual police, entered into the Predio Sarmiento in the heart of the Colonia Reforma in Oaxaca City and destroyed, without the required permits but with the complicity of the PRIista [from the political party PRI] municipal authorities, an enormous ecosystem home to thousands of birds and squirrels. The destruction covered over a hectare of trees, including three, hundred-year-old huanacastles, dozens of jacarandas, pirules, willows, oaks and date palms. The clandestine tree-cutters chased out and macheted to death hundreds of squirrels – a truly pathetic image. Only the intervention of hundreds of neighbors managed to put a halt to the barbarity, but it was already too late to save this small urban woodland. The environmental damage caused is incalculable.”

I take this quote from the manifesto of the organization “Pueblo Jaguar” which, together with others, has been circulating through Oaxaca this week to denounce last Wednesday’s aggression, the goal of which, obviously, was to prevent the consolidation of a citizens’ movement that for weeks has been working to prevent the building of a shopping center on the site, seeking instead to turn the forest into an ecological park. And clearly, the action [taken by Chedraui] has proven counterproductive. The movement has taken on an uncommon strength, working to organize a national boycott against Chedraui, as well as demanding punishment for the guilty parties and a stop to the construction. It will surely spread to other regions. After the destruction of the most beautiful of squares, the Plaza de la República, which lost some of its own hundred-year-old trees in a “modernization” project that sought to turn it into a sort of subway station, the Alameda de León, adjacent to the Plaza, is next on the list for being torn apart.

This is the state of things. On July 2nd, the local leader of the Employer’s Confederation of Mexico described the prevailing climate in Oaxaca: “Here they can kill two young indigenous radio announcers, and nothing happens; they can kidnap, and nothing happens; they can break into a house and rob it, and nothing happens; they can commit any offense, and nothing happens.”

No one should be surprised. When the Mexican Supreme Court discussed how to contribute to reestablishing constitutional order in Oaxaca, creating an investigative commission for this purpose, it stated: “We cannot allow arbitrary detentions and tortures of prisoners to become ordinary and normal in our country…The Oaxacans have lived through, and are perhaps still living through, a state of emotional and legal uncertainty…It is logical that people are living in anxiety when faced with authorities that make limitless use of public force, to the point of ignoring the human rights that our legal framework recognizes (La Jornada, 14/6/07)”.

While the Court continues with its apparently interminable investigations, the arbitrary detentions and torture of prisoners have become ordinary and normal in our country. In León, the police receive training in torture practices…so as to refine them. In the first six months of 2008, the Attorney General’s Office for Human Rights in Guanajuato has opened fourteen cases for torture and degrading and inhuman acts. The secretary for human rights for the United Nations recently indicated that respect for human rights is not a priority of the Mexican government. The unlimited and illegal use of public force is a daily practice throughout the nation. For the president of Mexico City’s Human Rights Commission, in national public security policy and in the administration of justice “no controls are placed on the action of the police, and the message is sent that everything goes in order to fight crime” (Proceso 1652, 19/6/08). And it is a crime, for the authorities, to participate in social movements. Not only the Oaxacans are currently living through emotional and legal uncertainty.

The leader of Coparmex reacted in Oaxaca to the kidnapping of one his own, a prominent Spanish businessman, which provoked the local leader of the National Chamber of Small Commerce into making the elegant expression: “That’s a load of crap!” The leader of the National Chamber of Transformative Industry said: “We want zero tolerance for those who disrupt the peace of Oaxaca!” Legislators from the PAN party, for their part, demanded the immediate intervention of the army and federal police in order to apply a remedy clearly worse than the disease, as the Oaxacan experience demonstrates, one which has begun to spread throughout the entire country.

Practically a year ago, Carlos Monsiváis stated that the continuance of Ulises Ruiz in power was “a profound enigma and a very severe insult to republican logic.” Perhaps it has stopped being an enigma. The insult is now open to all: it defines national policy. In different ways and in different degrees, the entire nation is suffering the consequences of not having adequately reacted against the intolerable affront that the people of Oaxaca have suffered, and are suffering still.

The Interests Behind the Interest Rates

2008-07-07T12:40:00.000-07:00

Two weeks ago, in the face of a slumping economy, declining remittances from the United States, and a spate of regressive tax increases that are destined to further dampen consumer spending, the Stamford-educated President of the Bank of Mexico Willy Ortíz did the only logical thing to be done under such dire circumstances: he raised interest rates a quarter point to 7.75%. The ostensible reasoning for such an ass-backwards maneuver was to fight inflation; the underlying realities of such a decision, however, tell us a good deal more about both Mexico’s incestuous political-economic system and the equally-incestuous global system it has become so openly a part of.

Without going into too much detail of the finer points of economics, high interest rates tend to help creditors, who have money to lend, as well as people who live off investment incomes, both of which categories in Mexico are restricted to an elite, wealthy strata. Conversely, lower interest rates help debtors, who pay lower interest on money they owe, and entrepreneurs who seek to borrow money to start or expand businesses. When the economy is sluggish, lowering interest rates is one way to stimulate people to borrow and spend, and thus stimulate the economy; when it is “growing too fast” and the inflation monster appears again on the horizon, raising interest rates can tamp down excessive borrowing and spending. But here, all signs point to a substantial economic slowdown in Mexico, yet interest rates go even higher. Who gains, who loses?

For a generation now, governments the world over have held the Damocles sword of inflation over workers’ heads in order to force them to accept minimal pay raises that have essentially amounted to zero in real terms. Such a threat has been particularly effective in Mexico, where the painful memories of the devaluations of 1982 and 1994 are still fresh in people’s minds, and where unions have historically acted in collusion with the government in turn, often in direct opposition to the interests of their own members. One would at least expect that the reward for all this “good behavior” on the part of the working class would be lower interest rates in order to make it easier to borrow money and get credit. In fact, the only place in Mexico where interest is low (read: non-existent) is in bank accounts; everywhere else, interest rates are, and have remained, stratospherically high, enough to make the most die-hard usurer blush with embarrassment. The great unsung tragedy of this country, in fact, is the inability of the average person to get credit on anything resembling reasonable terms. Mortgage rates routinely run three to four times what they are in the States, with mountains of up-front costs loaded on, so practically no one ever gets one and houses remain half-finished until someone in the family can scoot back across the border and send some cash back down. Credit card rates shamelessly shoot up to sixty percent or more, and now that banks are peddling credit cards like water, ever more Mexicans are going to get the chance to get caught in sickening, American-style debt spirals at several times the interest rate. Feasbile small-business and first-time-homebuyer loans are practically non-existent. What you get back, however, pales in comparison: interest on “inversiones” (COD-like investments) often runs less than a half-percent a month, even on large sums; interest on “Afores” – the individual pension accounts Bush didn’t manage to turn Social Security into but Mexico has already been experimenting with for a decade – were running around 9% annual last time I checked mine, with more than 3% of that taken out for commissions; in six years of working at a job with benefits, I’d saved up the equivalent of about six months of salary. And who’s administering my Afore? Citibank, eh, Banamex, the National Bank of Mexico.

And therein lies the rub: the American and European banks who dominate Mexico’s banking system charge high commissions on everything and lend out money at usurious rates, not because Mexicans are such a credit risk, but simply because they no one is stopping them from doing so. This makes running a bank here extremely profitable, more so than in the bank owner’s home country – look at Bancomer’s surge in profits in Mexico profits in 2007 (http://www.elperiodicodemexico.com/nota.php?sec=Nacional-Finanzas&id=165586) or Santander’s 208% leap in profits in the first trimester of 2008 (http://noticias.mx.yahoo.com/s/28042008/7/negocios-logra-santander-utilidad-neta-cuatro-mil-742-mdp-enero.html). Why else would Mexico’s banks have so quickly been gobbled up after being cleaned up at taxpayer expense (to the tune of 6,000 pesos per Mexican as of 2004, and growing) by the Fobaproa bank bailout? And the revolving door between government and bank board – witness Fox’s finance minister Gil Diaz’s quick leap to HSBC – ensures that government regulators will never lean very hard on what these banks do. Let’s face it: Citigroup, Santander, Bancomer Bilbao and HSBC are simply not interested in making sure Juan Pérez gets a home mortgage or a micro-credit to start a shoe store; as multi-national conglomerates, they’ve got much bigger fish to fry, like speculating in Asian futures and then crying to their governments of origin when they get burned. Giant, multi-national banks are not interested in making relationships with local (poor) clients or in becoming part of a (poor) community; they are much more like vultures, swooping down to suck in commissions, reap large profits and invest the money elsewhere. Meanwhile, Willy Ortiz at the B of M raises interest rates in the midst of imminent recession in order to fight the inflation caused by the government’s increasing, NAFTA-ized dependence on food imports and the rising prices for its own oil which, instead of using to its own advantage, said government is trying to sell off as fast as possible.

As for me, I’m pulling my money out of my local multi-national bank and opening an account at the Caja Popular Mexicana. The Caja Popular is a cooperative, and by opening an account you become a member of that cooperative, not just a client, with a right to participate in the cooperative’s decision-making. Plus, the Caja Popular offers – gasp! – savings accounts that pay interest, investment opportunities, loans for people who wouldn’t otherwise get them from banks, deposit protection, and – gasp again! – no commissions. To paraphrase Hemingway, what if the big banks were still there, but nobody went to them anymore?

So Where'd You Go to College, Presidente?

2008-06-23T15:21:00.000-07:00

Robert Lansing, former Secretary of State under Woodrow Wilson, wrote in 1924 that "Mexico is an extraordinarily easy country to dominate, as it necessary to control only one man: the President. We must abandon the idea of installing an American citizen in the Mexican presidency, as that would only lead us, once again, to war. The solution requires more time: we must open the doors of our universities to young, ambitious Mexicans and make the effort to educate them in the American way of life, in our values, and in respect for the leadership of the United States. Mexico will need competent administrators, and over time, these young people will come to occupy important positions and will eventually take posession of the presidency itself. And without the United States having to spend a single cent or fire a single shot, they will do what we want, and do it better and more radically than we ourselves would have done."

Lansing's counsel, directly or indirectly, was well-taken: the United States did not subsquently place a puppet onto the Mexican presidential chair, as it did with a laundry list of Mexico's Latin neighbors, and over time, it did open its doors for Mexico's political elite to come and study at its illustrious centers of higher education. A simple look at its roster of Presidents over the last twenty-five years confirms the success of Lansing's prescient vision: Miguel de la Madrid (1982-1988) - Master's in Public Administration, Harvard; Carlos Salinas de Gortari (1988-1994) - Ph.D. in Economics, Harvard; Ernesto Zedillo (1994-2000) - Ph.D. in Economics, Yale, currently a Yale professor of International Economics and head of the Yale Center of Globalization; Vicente Fox (2000-2006) - supposedly studied at Harvard, but definitely sold a lot of Coca-Cola; and Felipe Calderon (2006-how much longer will he hold out?) - Master's in Public Administration, Kennedy School of Government, Harvard. The year 1982, not coincidentally, marked a watershed in Mexican public policy, it being the year the country's leadership took advantage of the peso crisis to institute a neo-conservative, IMF-approved policy of economic shock therapy (see my previous post "Shocking and Awe-ing"), and has not looked back ever since. The results, as Hugo Carbajal Aguilar puts it (http://www.elregional.com.mx/?c=136&a=4376), "are on view for anyone who cares to look: rampant unemployment, drug trafficking on the increase with a consequent tsunami of insecurity, massive migration abroad - with all the risks that implies - disintegration of the family, lack of expectations for young people, students or not, deliquency in droves, ecocide..." As grandfathers around the world, eyebrows raised and brow furrowed, might ask in chorus: "What are they teaching you at that school of yours?"

Actually, that question is not at all hard to answer. Just as the proliferation of universities through the land-grant system were key in "winning the west" and just as the explosion of Latin-American studies programs in the 1960's was an instutional response to fears that we were "losing Latin America," US colleges and universities take in and groom future foreign leaders, no less than in Lansing's time, in "the American way of life, our values, and respect for the leadership of the United States." Said values entail massive privatizations, the scaling back of essential government services in the name of budgetary discpline, a hard-money, inflation-busting policy (note the Bank of Mexico raising interest rates lasty Friday in the face of a clearly-slowing economy) and the "opening" of the nation to foreign "investment" (or dumping, as the case may be). Anyone who opposes such obvious - and academically-tested measures - is a "protectionist," or worse, a "nationalist," as opposed to an internationist, cosmopolitan, English-speaking member of the trilateral world elite come home to be big fish. Father knows best: just check the framed diplomas on his wall. Whereas would-be dictators without an academic pedigree are simply sent to the School of the Americas in Fort Benning, Georgia to learn how to torture; those with 'more of a head on their shoulders' are sent to Harvard or Yale and taught to do regression analyses that demonstrate how cutting taxes raises revenues and other such - dare I say? - white man voodoo. The process is the same: the pimping of institutions to power. An austerity plan is one thing; an austerity plan by a Harvard-trained Ph.D. in a country which has been taught to fear and loathe itself is quite another. Didn't we learned from Kennedy's best-and-brightest Harvard-boy disasters in Vietnam and the Bay of Pigs not to trust those places once and for all?

Of course, educating the Latin-American elite is not all. Once their term of office is expired, or once the ignorant masses of their countries throw them out, the Ivy-League graduates usually wind up gravitating like magnets back to the source of their force. In a perverse form of retro-alimentation, Harvard, Yale and Stamford happily bestow their venerable names on the Salinises, Zedillos and Calderons, send them home to wreak havoc, and then welcome them back with open arms, padding out their faculty lists with an impressive line-up of former presidents and finance ministers to show off to the Alumni Board. Zedillo, as previously mentioned, schlepped right back to Yale to pimp globalization. Salinas and Calderon have been back to visit and gave stately talks. And most recently, Doctor Luis Carlos Ugalde (Ph.D. in Political Science from Columbia), fresh from doctoring the 2006 election as head of Mexico's Federal Electoral Institute and finding himself out of work ahead of time (wonder why....) found a comfortable sinecure in the Government deparement teaching Latin American Politics at Harvard. How a hack like that can lie into the camera before millions of Mexicans who saw their decades-postponed hopes of a genuine democratic transition dashed before their eyes, only to be allowed to lope across the lawns in professorial robes in Cambridge, Mass. is enough to make any honest person's blood boil. Lansing, however, would be proud: without spending a single cent or firing a single shot, America is getting what it wants out of Mexico, and then some.

Free for Whom? (part 2)

2008-06-13T09:11:00.000-07:00

An article by David Bacon entitled "How Do You Say Justice in Mixteco?" that appeared this week on the Truthout news site (http://www.truthout.org/article/how-do-you-say-justice-mixteco) begins by discussing the case of several Mixteco farmworkers living in California who were evicted from their trailers at the butt of a forklift, which lifted the trailers into the air and tipped them over, possessions still inside. One of the farmworkers, Erasto Vasquez, had lived in the trailer for seventeen years and raised his family there. Though the workers eventually won a settlement thanks to the efforts of the California Rural Legal Assitance (CRLA), the case is emblematic of the new wave of Mexican immigration into the United States and the dangers that new wave of immigrants faces. Bacon writes: "While farmworkers 20 and 30 years ago came from parts of Mexico with a larger Spanish presence, migrants today come increasingly from indigenous communities...[E]conomic changes like NAFTA are now uprooting and displacing Mexicans in Mexico's most remote areas, where people still speak languages that were old when Columbus arrived in the Americas." According to the Binational Front of Indigenous Organizations, 500,000 indigenous people from Oaxaca alone are currently living in the United States, 300,000 of them in California.

In another piece on the Truthout site (http://www.truthout.org/article/plan-mexico), Maya Schenwar considers the implications of the Plan Mexico, which is at the point of being tucked into the - note - Global War on Terror supplemental spending bill and approved, to the tune of $1.1 billion dollars over the next three years. After objections from Mexican lawmakers that they didn't want any strings attached to the funding, the American Congress (how nice of them to have listened!) dutifully took all the teeth out of the accountability and human rights provisions. Senator Chris Dodd, after first warning that the United States doesn't write "blank checks," later stated that the US would drop any provision that "smacks of certifcation." Yes, Chris: sounds like the only smacking that's going to be done is US-bought weaponry on the backs of protestors' heads.

The circle at work here is so elementary, yet so effective: free trade aggravates poverty, increasing immigration - US employers benefit from low-wage labor - increasing poverty aggravates social conflicts in Mexico - US contractors benefit from the sales of weapons used to crack down on the restive populace. Schenwar references a Mexican government study which concluded that 90% of the illegal guns seized in Mexico come from the United States (not to mention what the government acquires: a friend of mine, during the Oaxaca conflict of 2006, found and photographed tear gas cannisters from Pennsylvania among the debris left behind by the crackdown here - having breathed in said gas, I can attest to their effectiveness). As she further points out, much of the Plan Mexico money will never leave the States, but will go to buy "Bell Helicopters, CASA maritime patrol planes, surveillance software, and other goods and services provided by private US defense contractors." The drug trade, of course, will not be stopped - the Mexican government and military is far too complicit in it and demand from the US is certain not to fall off anytime soon. Not to worry: the militarization model is "easily and inevitably adapted to fighting internal dissidence." Gives 'em something else to do, you know.

Needless to say, the US is not alone in benefiting both coming and going from this most vicious of circles: the Mexican political elite do quite fine by the process themselves, thank you very much. It has often been said that immigration functions as an "escape valve" for the Mexican economic structure, siphoning off workers the system can't provide jobs for and getting back money in turn in the form of remittances the immigrants send back to their families from the States. This is doubtlessly true: with the twin pillars of remittances and oil money, a rigid, corrupt and hierarchical system has propped itself up for decades without ever having to face the need for a fundamental housecleaning. Less often mentioned, however, is how this "escape valve" functions in a political sense, siphoning off potential dissent. Forced immigration breaks up families, breaks up communities, and it is a no-brainer that communities that are less cohesive, less united, are easier to control and keep down. There are entire pueblos in Oaxaca where there is hardly an able-bodied man to be found, leaving behind women and the elderly to run the roost. Mixteco, for example, is the language spoken by the majority of those indigenous farmworkers in California, and it is in fact the case that the Mixtecs who have stayed behind are not, as a whole, as politically active in the state of Oaxaca as the Zapotecs of the coast (where the first ever socialist government was elected a generation ago and which is still a hotbed of activism) or the Trique or Mixe, groups who, not coincidentally, have also been more active on the linguistic front, preserving and promoting their languages. This is hardly the Mixtecs' fault - the loss of their forests years and years ago have led to their arid territory in the northwest part of the state becoming amongst the most eroded landscapes in the world - but rather a commentary on how displacement fosters passivity. The United States knew this very well in places like Vietnam, Guatemala and El Salvador: to control a nation, civic and religious groups must be broken up and ethnicites split up and moved. What the ancient Scandanavians called landnama - claiming the land you inhabit by naming it and ideally becoming one with it - must be reversed to make for rootless, disoriented peoples, whose only goal is to survive, both psychologically and culturally. And mass immigration from Mexico to the United States does this work for those in power without their having to lift a finger. Escape valve, indeed.

For me, one of the most telling parts of the documentary Fraude by filmmaker Luis Mandoki, which documents the fraudulent Presidential election in Mexico in 2006, was the part of the interview with Andrés Manuel López Obrador where he recalls receving the results of a national poll in his tent in Mexico's Zocalo, where he lived for a month-and-a-half along with his fellow protestors. The poll, taken by the respected Mexican polling firm Mitofsky to gauge the political climate in Mexico at that moment, found that a full 10% of those polled were willing to take up arms against the government. Projected onto a nation of over 100 million, that makes for fully 10 million potential citizens in open revolt. And even if many, or even a majority of those polled wouldn't actually go through with it, the fact that they felt strongly enough to say so to Mitofsky should indicate to somebody who's listening that even the escape valve won't be able to let off enough pressure to keep the tottering old system in place forever. López Obrador, to his credit, has eschewed the route of violence, opting for non-violent civil resistance. Provoke enough more people with American arms through the Plan Mexico, however, and it may become harder and harder, if not impossible, to convince people with nothing to lose that the path of non-violence is the most appropriate one to take.

Free for Whom?

2008-06-05T08:04:00.000-07:00

As the speculation-fueled global food crisis aggravates Mexico's already-dire economic situation, now is a good time to shake a stick at the free-trade Santa Claus and see if the gifts he has promised to produce from his magic sack have actually made their way into any little boys' or girls' hands.

Santa's promise in the North America Free Trade Agreement of 1993 (the Tratado de Libre Comerico, or TLC, in Spanish - as noted before, in Mexico, it is a treaty whereas in the States it is merely an Agreement) was the same as the one perenially made by free-trade economic theory: by eliminating tarriffs and other hidden costs, free trade lowers prices for consumers while at the same time, by providing greater choice, it stimulates healthy competition between domestic and foreign producers, thus improving quality and efficiency. And like most economic theories out of a textbook, it looks good on paper, but depends on a heavy dose of naivité regarding how the world really works. Anybody who's ever been to a schoolyard knows that artificially leveling the playing field between unequal opponents (or in economic jargon, "trading partners") means essentially throwing the game to the stronger. That distinction is particularly bald in the case of Mexico vs. the United States, where Mexican producers are forced to compete against giant, multinational corporations who not only benefit from the obvious economies of scale, but are also the happy beneficiaries of all kinds of governmental largesse, from tax breaks (the oil companies) to subsidies (agro-business) to fat contracts (defense contractors) that the Mexican government, even if it weren't leaking millions by the minute in corruption, could hardly compete with (and if they did, would be lambasted by the World Bank, IMF and WTO). Not only, then, is the big kid on the schoolyard allowed to beat the puniest into a pulp in a "fair fight", the principal's office is paying for his membership at the gym and talking his teachers into letting him out of class early and getting him out of having to do his homework in order to give him time to go and lift weights, all the while humilliating the puny kid in front of his classmates for his inability to stand up for himself like a man.

No problem, say free trade advocates. Every country has a "comparative advantage" in something, and if each side can only exploit that advantage, both stand to benefit. Unfortunately, the miniscule benefit Mexico has gained in exploiting the comparative advantage of its low-wage labor pool is mostly located along a small strip of maquiladora factories located along the border, where workers slave away at the five-dollar a day wages that have hardly risen since NAFTA's infancy, with the cold comfort that they are making slightly more there than the even-worse pay they might get elsewhere in the country. Meanwhile, the American companies located along the border revel in tax concessions and freedom from pesky safety, health and union regulations - those that are on the books are hardly being enforced by the gang-that-couldn't shoot-straight currently in power. The devastation of the Mexican countryside, caused by farmers' inability to compete ("like a man") with their lavishly-subsidized neighbors to the north, along with NAFTA's recent removal of the last protections against bean and rice imports, means that there will always be a limitless army of unemployed refugees from the countryside willing to work for that little, or if not, to cross the desert in search of work in the US in a hellish odyssey across the desert that makes Dante's Inferno seem like an amusement-park funhouse, and which allows US companies to benefit from the human arbitrage opportunities showing up, hungry and desperate, right on their doorsteps.

At least in the late nineteenth century, when American imperialists like John Cabot Lodge were prying open markets for American overproduction at the butt of a gun, they were more forthright about they were up to. "Gunboat diplomacy" was just that. But the current feeble treacle of free-trade pap is supposed to make the losers not only accept getting reamed in the exact same way as before, but feel thankful for now being the glorified dishwashers of the global village. To be fair, prices for some consumer goods - cars, electronics - have come down for the average Mexican consumer over the last several years. But the questionable benefit of that boost to the consumerist lifestyle pales in comparison to the stagnant wages, dribbly economic growth, crippling monopolies, and massive immigration of family and friends that the average Mexican grapples with daily, not to mention - to return to the beginning of this post - the skyrocketing prices in staple food items. Meanwhile, Walmart has become Mexico's number-one private-sector employer, and was an active campaigner amongst its staff and customers for Felipe Calderón in 2006. Poorer countries, you see, have to accept that free trade means the domination of its economy by foreign multinationals. The policy that the US has the luxury of calling "stimulating domestic production" is scoffed at in the Latin American sphere as the "import substitution," as if the natural state of affair for our Latin amigos is to depend on somebody else making everything for them but letting them, at least, be the ones to sell it to their brothers and sisters.

In the final analysis, as I believe only Noam Chomsky has consistenly pointed out, NAFTA is not really a free-trade agreement at all - it is, in his words, an "investors' rights" agreement allowing multinational companies to shift production and profits in a shell game in and around their international subsidiaries for labor and tax advantages. The lion's share of the much-vaunted post-NAFTA increase in trade between the US and Mexico, in fact, has been just that - internal shifting around of goods within corporations with one foot on both side of the fence, straddling it for that good old comparative advantage. Have the American engineer design it, have the Mexican line worker assemble it, declare the profits in the Cayman Islands or the losses in the States, and each movement of the good from subsidiary to subsidiary counts as trade. Magic. We're all better off. Haven't you noticed?

Shocking (and Awe-ing)

2008-05-27T08:40:00.000-07:00

In her remarkable new book The Shock Doctrine: The Rise of Disaster Capitalism, journalist Naomi Klein blows out of the water the fanciful notion that people around the world in the 70's and 80's spontaneously started waking up with the realization that free markets and free trade were the only way for their countries to go. In fact, Klein argues, free markets - with their associated privatizations and rollback of the social safety net - have always been imposed upon the prior basis of a shock, real or fomented, a shock sufficient in magnitude to disorient the public to the point that a radical, "Chicago Boy" program can then be rammed down their throats under the guise of a bitter but necessary pill. The US-provoked coup d'etat in Chile in 1973, followed by a radical economic revision designed by Milton Friedman himself (who apparently had no qualms about working for dictators), was the Ur-shock, though Klein subsequently guides us through a series of other examples, from the collapse of the Berlin Wall in Eastern Europe to the Asian currency crisis of 1997, the aftermath of Hurricane Katrina in New Orleans and yes, to the Mexican "tequila crisis" in 1995 that unleashed a second, massive wave of privatizations here.

So far, that's two shocks: the original one (coup d'etat, natural or economic disaster, massive societal upheaval) followed opportunely by economic shock therapy. But no public can be fooled forever; people everywhere inevitably start to protest when they catch wind of the implications of what has been done to them. This is when the third shock becomes necessary: repression and torture to break the back of the resistance. Drawing on a careful reading of psychiatric "shock therapy" practices as well as declassified CIA manuals dating back to the 60's, Klein notes that the fundamental goals of such torture (under whatever name it has been given over the years: de-conditioning, counter-insurgency, counter-intelligence) is to induce a regression of the subject to a state of child-like defenselessness: in short, to destroy their personhood. How ironic it is that the twentieth century, supposedly the century of psychoanalysis and the knowing of one's self, witnessed at the same time the widespread use of psychiatric techniques to achieve the exact opposite: the reversing, the canceling-out of psychological development on a mass scale in order to revert persons or peoples to a timorous, uncritical state of passive acceptance...or else.

The parallel with present-day Mexico is exact. After several previous, shock-induced waves of privatization (the first, by Presidents de la Madrid/de Gortari following the peso crisis of 1982 and the second, mentioned above, by Zedillo following the second peso crisis in 1995 which all the previous privatizations obviously did not forestall), the only public institution left that is worth anything to international investors is the big enchildada: petroleum. Whenever the public is objectively asked, however, if they believe oil privatization is a good idea, they overwhelmingly reject it. Calderón, knowing this, has done what any administrator of "disaster capitalism" has by now learned how to do: provoke a crisis - and allow for the torture of those who do not toe the line. His lack of originality, however, has led him to import a hand-me-down shock the neighbor to the north already wore out a generation ago: the "war on drugs". If the ostensible objective of such a program is to eliminate the drug trade, it is failing in Mexico just as it failed in the US and just as every such program that depends on militarism and killing alone will fail. Four thousand Mexicans have died in this futile war in the year-and-a-half since Calderón took office, the same as the number of American soldiers killed in Iraq in five whole years of equally-useless conflict. Viewed from the perspective of "shock therapy", however - the shock needed to disorient the public and ram through oil privatization - it remains to be seen if the "war on drugs" will prove to be, like its antecedent shocks across the world, a perverse success. It is true that the Mexican public has proven itself to be enormously resistant, but is also true that the government's willingness to apply the third shock (torture) is as strong as ever, the disappearance of two members of the EPR, the "white brigades" in Oaxaca that so terrorized the population here and which have gone unpunished at the federal level, the hammering of the population of Atenco into the ground for protesting the location of a planned new airport, and the slew of abuses committed by soldiers all over the country under the current administration are just a few of the most prominent examples. One shudders to think what else is going on unobserved, under the radar, nation-wide, as the militarization of the country (see the latest in the state of Sinaloa) proceeds apace.

Despite such bleakness, Klein points out in an interview available on YouTube ( http://www.youtube.com/watch?v=JG9CM_J00bw) that there is cause for optimism due to one, simple reason: publics worldwide have not chosen such economic shock programs of their own free will - have needed, precisely, to be shocked into them. If people can learn to psychologically resist the onslaught of shocks exploited or created by those who would use them for their own ends, they still have a chance to reverse the noxious effects these policies have had on society, culture, the economy and the environment. Mexico, that means you.

The Dismantling

2008-05-14T10:16:00.000-07:00

Would that it were that the pretensions of those who are attempting to privatize Mexico’s oil, both from within and without, were “merely” financial: getting rich on crony capitalism via stakes in the companies who acquire the no-bid spoils provided by the sacking of the state. The grand design, in fact, is not to sack but to dismantle (or rather, to sack while dismantling): that is, to eliminate the Mexican state as a functioning entity in all but name in order for the United States to exercise unlimited dominance over its neighbor’s limited - and therefore all the more vital - natural resources.

In order to understand this, it is important to recognize that Calderon’s privatization proposal comes accompanied with its own escort to the dance of global hegemony: the so-called “Merida Initiative” or “Plan Mexico”, the Bush administration's proposal to provide (for 2008 alone) $500 million dollars in aid for Mexico’s “War on Drugs”. In the same way as with its sister “Plan Colombia,” the Mexican version would commit American aid in the form of weapons and “training” to aid Mexico in its quixotic battle against the very drug problem America itself has created, in the process injecting another jolt into the process of militarization that has had such devastating effects on Mexico since Calderon’s taking over. And the most chilling precedent in all of this is precisely that the “Plan Colombia”, itself beginning with the provision of weapons and training, eventually led to the direct participation of the American military in the country starting in 2003. Once all of North America is militarized through the Bush Administration’s Security and Prosperity Partnership (SPP), it only stands to reason that Mexico, much closer than Colombia and that much more essential for America’s “security”, will be next.

What does the escort have to do with its date? This: once the privatization bill goes through the Mexican Congress (an agreement has already been reached between the upper echelons of the PRI and PAN to pass it once the debates are over, either in the summer or early fall, barring the effects of the national resistance movement), American (Exxon Mobil, Haliburton) and Spanish (Repsol) companies stand to scoop up most of Mexico’s oil refining and transport business. And once they get it, they don't want to ever risk having to give it back, as they already did once in President Lazaro Cardenas’ historic oil expropriation of 1938. This is why Felipe Calderon's privatization proposal gives international courts the final say in the matter of the oil contracts and concessions, incredibly stripping Mexico of the juridical means with which to defend its own Constitution (at least somebody is learning from history: Cardenas’ 1938 expropriation was sparked by a ruling by the Mexican Supreme Court against the foreign oil companies then operating in Mexico). The Courts being cut out, that would leave only the Mexican President and Congress, but if they were ever to try anything so bold as to re-nationalize its own oil, the American military, emboldened by their Plan-Mexico carte blanche, could in the extreme case occupy Mexican oil wells and refineries to protect its “national” interests: read, those of the American companies that will by that point be in operation there. Most likely, they would never have to get to that point, just rattle their sabers a bit from close range until the Mexican President or Congress meekly backed down. Considered as a Latin America-wide strategy, this is much more effective than fomenting coups d’état and installing friendly, right-wing dictators, the preferred US policy through the 1980’s. Direct interventions are bad PR these days, and plus, dictators can die or be overthrown, and their policies reversed by succeeding governments (as in Bolivia and Venezuela). A permanent US military foothold in the country by invitation of the host country’s “democratically-elected” government proves much harder in practice to reverse.

Just as the North American Free Trade Agreement of 1993 sought to lock in by treaty (yes, for Mexico it is a treaty, with all that implies; for the US and Canada it's just an ‘agreement') an economic policy for Mexico that future governments would be bound to follow, the Plan Mexico’s military activities seek to permanently lock in the effects of the concurrent changes to Mexico’s energy policy – as Thomas Shannon, State Department sub-Secretary for Western Hemisphere Affairs, baldly put it, “to a certain extent, we’re armoring NAFTA.” At the same time, the Mexican government would neatly find itself stripped of the financial resources (read my previous post on the Mexican government’s budgetary dependence on oil) with which to maintain any form of real autonomy whatsoever. This, in a word, is treasonous, and as was stated at last week’s forums on petroleum held at the UNAM, Calderon could rightly be brought up on charges for treason against the Mexican state - while there is still anything left of it to betray, that is.

Alternatives to Privatization

2008-05-06T14:02:00.000-07:00

It has been said over and over and over again, but nevertheless bears repeating over and over again: it is not necessary to privatize Pemex. The only "crisis" Pemex- the world's second most-profitable oil company after Exxon - is in is self-induced, and whatever is self-induced can, logic dictates, be self-uninduced. If Pemex hasn't invested in new technology and new refineries over the last twenty-five years or so, it is not, as privatization mavens disingenuously argue, due to lack of resources or declining oil reserves; it is very simply because the federal government cannibalizes 80% to 90% of its revenues to fund the federal budget, corruption, perks, bloated salaries and campaign funds (read: 2001's Pemexgate), leaving poor Pemex itself with dimes on the dollar to do anything with. And this because the Mexican Feds have become so addicted to sucking on the oil teat (just as their neighbors to the north are addicted on sucking on its counterpart: the military spending teat) that they have never managed to come up with ways to provide an independent tax base for all of the (very dubious, to be sure) ways it has of spending money. Pemex funds 40% of the annual federal budget. Leave it alone to invest its own substantial resources in growth (Mexican oil just topped a $100 dollars a barrel today in international markets; it only costs $4 dollars to extract the same barrel) and it will grow. Imagine doing anything productive yourself if 90% of your blood was consistently sucked dry?

Vampiric allusions aside, here are some very modest proposals for providing other means of revenue for the 40% of the federal budget oil revenues currently provide:

1.) Cut government spending and waste: top government ministers and judges in Mexico routinely earn $50,000 dollars A MONTH in pay, benefits and perks - think there may be anything to cut there? Calderón, despite having lost the election, now finds himself to be of the world's top-paid "heads of state", and once he retires (or is forced out, which would be preferable), he will keep his fat salary in terms of a fat pension for-life, just like the rest of the nation's already-fantastically-wealthy-so why-in-God's-name-do-they-need-a-public pension ex-presidents. Cutting salaries and waste was exactly, in fact, what Andrés Manuel López Obrador did as Mayor of Mexico City, and was a fundamental (and much poo-pooed) part of his platform in the 2006 Presidential campaign. Far from being the wild-eyed leftist the PAN and complicit media made him out to be, this part of Obrador's plan (along with his insistence on breaking up the big monopolies that strangle the country's economy) should make any true conservative warm to the gills. But in Mexico (and everywhere else, really), it's not about ideaology. Ideaology is just the smokescreen for privileged classes to retain privileged positions which provide them with lots and lots o'privilege. Excessive spending and waste at the federal level has only gotten worse since 2006, by the by.

2.) I am not so naive as to believe that cutting waste and salaries alone will fill the gap. Not to worry, there are plenty of other ways. How about raising the top income tax level bracket back to 35%, where it was before the Fox administration flattened it to 28%? A generation after Reaganomics has been discredited, Fox lowered top income-tax and corporate rates while pushing to extend the IVA sales tax to food and medicines - cutting taxes on the rich and raising them on the poor, making Mexico's generally regressive tax structure even more so. Sound familiar? Not only raise the top bracket back to where it was, then, but at a millionaires' surcharge on top of it of 40%, or even 50% on the top bracket. The top bracket in the US after World War II was 70%, lest we forget, a time of some of the fastest growth in the history of the States. Last I heard, no one has ever accused the US of A of being a communist state. And considering how vast is the wealth of Mexico's top millionaries (amongst the richest people the world has to offer), a higher upper tax bracket would hardly put a nick in their armor...just kick their tax-avoidance accounting departments into overdrive, which is another story.

At the same time, the IVA sales tax should be reduced back to 10%, which it was up until quite recently. This is a regressive tax, and just because it's easier to collect than income and other such taxes is no excuse for a hapless, ineffective system to continue to fund itself on the backs of the poor.

3.) Tax stock market earnings. As I mentioned in a previous post, Mexico does not tax stock-market earnings at all - other capital gains are taxed just like regular income. Apply a genuine capital gains tax, including stock market income, and you could raise plenty. I didn't have the time to crunch the numbers, but will leave that to those who are better able. I hardly imagine people will stop investing in the Mexican stock market - which within Mexico is strictly a wealthy person's game - simply because of a capital gains tax which plenty of other countries with larger and more successful stock markets levy.

4.) Apply a transaction tax on international capital flows. This tax, known as the "Tobin tax," would apply a small tax on currency flows into and out of Mexico. The tax, as economist James Tobin himself has said, would cushion exchange rate fluctuations, which Mexico has historically proven itself to be highly vulnerable to. But beyond that (and beyond Tobin's personal justification for it), the tax - even at a very low rate of 0.1% of the amount of the transaction - would generate necessary income, and require those international traders who make tax-free money off of Mexico, and whose injections and abrupt withdrawals of investment destabilize the economy to the detriment of its citizens - to pay a little for the privilege.

5.) Stop the white-collar bailouts. The FOBAPROA bank bailout (fattening up national banks in order to allow them to be sold off, turning private debt based on some dumb decisions into public debt), the periodic highway rescues, the tax give-backs to companies that do services for the President in turn (to name just one example, the JUMEX juice company's tax exemption for participating in the 2006 campaign in favor of Fox's far-from-first-choice, Calderón; it goes without saying that the President's discretionary power to grant such tax concessions by decree must also be done away with). And at the same time, eliminate the tax exemptions designed to lure companies into the country, only for them to make billions and send all the profits back home. The tax exemptions for the maquiladoras operating along the Mexico-US border constitutes just one scandalous example. And stop making sweetheart deals with companies like Repsol which only raise the prices for the folks at home. Anybody notice the cost of a small tank of natural gas (used by just about everyone in Mexico - who can afford it - for stoves, ovens and boilers for heating water) about to top $200 pesos?

So there, just off the top of my head, are five ways the government can raise the revenue it needs in order to provide Pemex with the budgetary autonomy it needs. Any more suggestions? Send 'em in!

Oaxaca's Slow Burn

2008-04-23T13:43:00.000-07:00

While I have found it easy to begin this blog and post about national issues in Mexico - the war for petroleum principally up to this point - I have found it much harder to speak about Oaxaca, the city where I have lived for seven years. Perhaps I am too close to it, perhaps I feel that there is nothing I can say that has not already been and is not already being said better elsewhere - or perhaps it is that I share with local residents a taste of the same sense of desperation and discouragement born of being long at odds (and at long odds) with an oppressive regime that clings nominally to power in the face of widespread repudiation. "We've marched and marched," a Oaxacan friend told me, "and what has it gotten us? Nothing."

At first glance, it does seem that way. If anything, things seem much, much worse. Trucks armed with machine gun-toting cops do rounds on the streets, both downtown and in the outlying colonias. Relatives of former governors are kidnapped at high noon from prominent downtown restaurants. Top-level police officers are shot, also in broad daylight and also in very public places. Corpses are deposited in plastic right outside the State Judiciary Offices, or wrapped taco-style in a blanket and left by the house of the Director of Public "Security." Low-intensity warfare continues, picking off a person here, a person there, not enough to generate signficant media coverage: two Triqui Indians from the town of San Juan Copala, members of the community radio station "The Voice that Breaks the Silence" were the latest victims this past April 7th, ambushed and killed as they were making their way to Oaxaca City to attend a statewide conference on, ironically, the defense of the rights of the peoples of Oaxaca.

What has the conflict of 2006 gotten us? On one hand, an overt police state. In his book on the Oaxaca conflict, Professor Victor Raúl Martinez Vásquez from the Autonomous University of Benito Juarez, the State's public university, makes use of Edward Gibson's term "subnational authoritarism" to describe the example of Oaxaca as a state with a retrograde authoritarian regime in the midst of a (supposedly) democratizing national scene. While accurate, the term does not go far enough, as it is insufficiently descriptive of the desperate acts of state-sponsored terrorism that Governor Ulisses Ruíz and his cabal have resorted to in order to try to keep a lid on Oaxaca's slow burn. On the other hand, however, the fact that the trappings of the police state have become so overt shows just how tenuous Ruiz's hold on power truly is. What is truly moving Oaxaca now is not overweaning power but its exact opposite - a power vacuum, the child of governing institutions that have lost all face. Nature abhorring a vacuum, it of course finds itself being filled - by paramilitary operations and narcotrafico, to name two. Who knows if the police have been killed by disgruntled citizens, drug lords or by the government itself, settling old scores or trying to silence people who know too much? Above the "who" question lies the salient fact that no amount of "Nights of Lights" downtown can outshine: in Oaxaca there is no "gobernabilidad", no governability, no more real government (besides the pro forma one) than there has been since it essentially ceased functioning in June of 2006.

There is another force filling the vacuum. Also under the radar and invisible to most of the mainstream media, Oaxacans are organizing. They are organizing in ways that do not match traditional models of top-down leadership with media-hogging leaders, or even what was seen here two years ago. Going, in fact, beyond the APPO experience of 2006, they are learning from both the successes (non-hierarchical organization, cross-class community involvement, increased public awareness, lack of dependence on traditional political parties, decision-making by consensus,and just plain balls) and the failures (succeptibility to infiltration and actions that alientated public opinion, such as graffitti and seizing private property, an insufficient ability to explain their cause clearly and cogently to people who did not by nature sympathize), and are quietly laying the groundwork for the next chaper of this social movement, one that will see them pressing their demands with more order and discipline, perhaps, with fewer blood-rushing confrontations in the streets, but one with no less determination and commitment to achieving their ends: the end of the Ruíz junta, a release of all political prisoners, and a new state constitution that enshrines the right to initiative and referendum, just to name a few. And I would add, the urgent formation of a Truth and Reconciliation Commission, similar to the ones held in South Africa and Chile, that would clarify the crimes of the past, identify those responsible, and set the stage for both prosecuting and at the same time overcoming. The numberless dead and disappeared from the conflict, who my next-door neighbor contends she can sense lamenting in the night winds blowing across the Central Valleys from Ejutla to Etla to Tlacolula, demand it.

Postscript: 7:00 PM: Just put Google Ads on this blog to see how they would work, and 3 of the first 4 ads that came up were about...investing in oil! The crawler is clearly picking up mechanically on all of the references to oil in previous posts. One of the ads is for investment opportunities in Malaysia. One can only wonder if there is a site out there called "Deconstructing Malaysia" where the Google Ads are advertising new oil opportunities in Mexico. God help us.

Post-postscript, following morning: Looks like there is, in fact, a way to filter out undesirable or inappropriate ads - let's see if I can get that to work.

López Obrador's Speech in the Zocalo

2008-04-13T16:52:00.000-07:00

López Obrador's speech at today's assembly in the Zócalo in Mexico City summed up the fundamental tenets of the nation's burgeoning civil resistance movement against oil privatization, so I thought it would be useful to present a rough translation of it here:

"My friends. Many thanks once again for your participation. The call for this assembly was made just three days ago, and here we all are.

"Our movement is advancing with serenity and optimism, because time has shown that we are in the right. This movement, made up of free and conscious men and women, has on its side the indisputable fact that we are speaking the truth as opposed to an adversary who has opted for the hackneyed road of simulation and deceit.

"In this battle being fought in defense of our oil, we have little by little been exposing those who, moved by greed and the profit motive, wish to strip the people of Mexico of its heritage; the heritage of this generation and the heritage of future generations, of our children.

"We were the first to denounce the plan to mug the Nation that was being hatched. We said very clearly that the intention was to privatize the oil industry and we called upon those who we consider to be the principal promotors of this felony and treason against the Nation to debate it.

"None of them responded openly. As always, they had their followers speak for them and launched instead another of their media campaigns against us.

"They accused us of hallucinating, of seeing ghosts, of tilting against windmills, of looking for notoriety for political reasons. 'What privatization?' they exclaimed. 'What reform? What initiative?'

"When we made it known that they were preparing a video of the so-called 'hidden treasure in the deep sea', first they denied it and then, cynically, put it on the air in an attempt to thus trick the people of Mexico.

"From that moment on, they started using euphemisms in an attempt to hide the privatization they were hatching, by using a series of terms and phrases, those past and those yet to come.

"They talked of association, alliances, accompaniment, opening-up, manufacturing, permits, risk contracts, multiple-services contracts, third-party contracts, widened-service contracts, operating autonomy, anything that would help them hide their genuine intentions.

"Only later did they fully take off the mask and stop beating around the bush. Last Wednesday, the usurping President sent his energy-reform initative to the Senate, and his desire to privatize the totality of the national oil industry is now undeniable.

"What was clear before now becamse crystal-clear: their wish to consummate one of the biggest affronts that the people of Mexico have suffered in their entire history.

"This explains Calderón's nervousness when he appeared on national television to talk about his proposal. This is why he was sweating and so unsure of himself. Inside he knew that he is very close to the role played, in his time, by Antonio López de Santa Anna.

"What do these reforms translate into and really mean? What they mean is that they want to modify the secondary laws in violation of both the letter and spirit of Article 27 of the Constitution.

"They propose to grant permits to foreign companies to privatize the exploration, perforation, refining, petrochemistry, transportation, ducts and storage of oil products, leaving Pemex as a simple provider of crude oil.
"They wish to eliminate the possibility of using all of the potential of our energy sector to carry out the independent economic development our country needs.

"They wish to condemn us to only selling raw material, without ever being able to use it to produce gasoline, petro-chemical products and electrical energy for ourselves and in this way industrialize Mexico, create jobs, strengthen our internal market, reduce prices for the consumers of natural gas, electricity, gasoline and, especially, raise our people's levels of well-being.

"And if that weren't enough, they propose a legal framework that not only grants rights to foreign companies and requires us to submit to international courts, it allows the highest governmental functionaries to wield a free hand in making lucrative business deals, raising corruption in Pemex to a whole other level.

"For example, it is proposed that there not be public bidding, that contracts for projects and services be assigned directly. That is to say, Calderón, Mouriño, Elías Ayub and others will be able to keep feeding themselves with a very large spoon.

"Here I just wish to remind us all of the following irrefutable facts, which I enumerate:

"1. The first contract for multiple services which was granted, in violation of the Constitution, to a foreign company was made when Felipe Calderón was the Secretary of Energy and president of the Council of Administration for Pemex. On November 14th, 2003, without any other company participating in the bidding, Repsol of Spain was awarded a contract for $2 billion, 437 million dollars to exploit natural gas reserves in the Cuenca de Burgos. This contract is currently, by the way, in litigation in the courts for unconstitutionality.

"2. Recently, the Federal Bureau of Audits denounced the damage to Pemex's finances when Calderón was Secretary of Energy and president of the Council of Administration for Pemex, when they made a low-price sale in bonds of the stocks that Pemex holds in Repsol of Spain. Months later, those stocks increased in value, provoking a loss for Pemex of $655 million dollars.

"3. This plainly demonstrates that Juan Camilo Mouriño, current Government Secretary in the usurping government, is a confessed influence-trafficker: he has cynically accepted signing contracts with Pemex to the benefit of his family's business. And we must point out here - it is important to call a spade a spade - that in the face of such a flagrant case of impunity, our detractors on the radio and television, who are constantly screeching about us, have been as quiet as mummies.

"4. We also have proof that the contract awarded by the Federal Electricity Commission to Repsol of Spain, without their being any other bids, for $21 billion 650 million dollars for the purchase of gas from Peru, the profits for which will be $15 billion dollars, was authorized from Los Pinos [the Presidential residence], in 2007, when Juan Camilo Mouriño was the coordinator of the President's Office.

"5. And if all that weren't enough, we are also in possession of proof that even before the reform bill was sent to the Senate and Calderón began talking about the oil bonds that the public will supposedly be able to acquire, before all that, bankers and financial speculators were already making the details known confidencially to their main friends in the trade. That is to say, ahead of time and with privileged information, bankers and financial speculators were already rubbing their hands in preparation.

"As is clear, behind and ahead of the thirst for privatization is the voracity of a minority of corrupt politicians along with a handful of national tycoons in association with foreign companies.

"This is why we have come out against oil privatization. This explains why the peaceful civil resistance has come into being. Fortunately, we were able to see what was coming and made good use of our time, not only to denounce this attempt at dispossession but also to organize ourselves in order to prevent it.

"Last Thursday, in a coordinated, unified and simultaneous manner, the actions of peaceful civil resistance began.

"The first measure was taken by our Senators who occupied the rostrum of the Senate. A round of applause to all of the Senators.

"And immediately following the members of Congress from the Broad Progressive Front did the same in their chamber in support of their colleagues. A round of applause for our Members of Congress.

"All of this was accompanied by the extraordinary, generous and exemplary action of the women's brigades. A round of applause for the women.

"The woman brigadeers were themselves supported by the men who make up the brigades from Mexico City and the surrounding metropolitan area in the State of Mexico.

"We have depended upon the solidarity of many millions of Mexicans, free and conscious women and men. A round of applause for everyone in Mexico who has participated in this movement, for all of the progressive sectors.

"This is why they haven't been able to destroy us politically. Let me repeat here the words of President Juárez: 'With the people, everything; without the people, nothing.' This is where our strength lies.

"With the first actions of peaceful civil resistance and with the support of many, including those with whom we have some differences but with whom we are in full agreement in the defense of our oil, we have succeeded in casting away the risk of a surprise attack in the legislature.

"And now this bill is not going to get snuck through in the early-morning hours!

"Let us not forget, and let this help to explain why we are taking the actions we are. What do they want? They want to approve this on the fast track, like they did with the ISSSTE [Pension] Law. They want to make a deal among the leadership and sneak through something as fundamental and vital as the oil issue is.

"But the opportune action of our legislators and the brigades prevented it. And it is practically a fact that they will not be able to approve any give-away iniative in the current session, which ends on April 30th. Not one step forward, my friends.

"However, we cannot become complacent. We know how our adversaries think and act, but we especially know how much greed they possess, their hunger for money.

"Let me make it clear what our principal deamand is. What we want is something that is completely rational, peaceful and possible. I repeat: rational, peaceful and possible.

"What we are demanding is the summoning of a national debate. We are demanding the summoning of a national, plural and democratic debate with the participation of all of society. An unrushed, non-simulated debate, open to everyone who has something to say, with the understanding that oil is the property of every Mexican, and thus, everyone has the right to express their opinion on it.

"It may be that the Senators and Congresspeople have the final word, but the people of Mexico will always have the first word.

"We cannot, in any way and for any reason, accept that a few wish to rob the Mexicans of their heritage, and much less that this robbing take place behind their backs.

"My friends: as long as there is no response to our request for a broad, national debate on oil and what it implies as regards sovereignty, history, legality, corruption, development, well-being and social peace, we will continue with the peaceful civil resistance.

"This coming Tuesday we are going to be attentive to what happens in the Senate Chamber; upon that depends the actions that we will be taking. All of us are in peaceful civil resistance, all of us attentive and alert.

"I also propose that all of the state brigades, women and men, as well as those who wish to voluntarily join in, that we dedicate ourselves to informing the people of Mexico, letting them know our reasons and the grave consequences privatization of the oil industry would have.

"For this reason, starting this week, we will be distributing a folder of basic information which will serve as a tool for brigade members and citizens in general to generate consciousness-raising house by house, neighborhood by neighborhood, district by district, town by town.

"Are we going to do it? (The people respond yes.)

"Faced with a closed media, each one of us will become a means of communication. Faced with deceit and manipulation, we will take charge of opening a breach for the truth and penetrating the most distant corners of our Nation.

"I further propose, because the circumstances demand it, that next Sunday we hold informational assemblies in all of the main public squares in the country. These meetings will be organized by the National Committee in Defense of Oil and the state Commitees in Defense of Oil.

"I make a call once again, friends, to not allow yourselves to be provoked. Not one broken window, not one throwing of a stone. Only those who are not in the right need to make use of force. They are the violent ones, not us. This movement has been, is and will continue to be peaceful.

"My friends: as we know - we have said it several times here - and as we predicted, the media campaign against us has intensified since last Thursday. It is clear and out in the open, in the majority of the media, with honorable exceptions. They have hit us with everything.

"With great hypocrisy, using double-speak and dual morality, with the hypocrisy that is their trademark, they have dedicated themselves to throwing up their hands in horror and attacking and offending us in a vulgar manner.

"In midst of all this clamor, what is that one hears, what do they allege? They say that our legislators have hijacked Congress.

"But we ask this question: is it possible for a Senator or Congressperson to stand there with their arms crossed while the Constitution, which they have taken an oath to protect and defend, is violated?

"Is it not the powerful, the tycoons of this country, those who have hijacked the institutions for their personal benefit?

"Have they not converted the government of this Republic into a committee at the service of the few?

"With what moral authority do they speak of democracy, when they themselves have been publicly recognizing that they stole the Presidency of the Republic 'whatever it took?'

"They say we have to follow legal procedures, but they deliberately overlook that the majority of the ministers of the Supreme Court of Justice do nothing more than cover up corrupt politicians and white-collar delinquents.

"Of course we know what the legal procedures are when faced with a violation of the Constitution; we have very good Constitutional lawyers.

"Of course we can go to the Court and lodge an appeal on the grounds of unconstitutionality. But we are not naive. Unfortunately, that institution's only role is to put a legal stamp on the looting committed by the powerful.

"In the majority of the media, especially on radio and television, the presenters are also vociferating about our hijacking Congress.

"I ask them: are they not hijackers of the word, of information, the most tenacious manipulators of public opinion?
"Right from this spot let me tell them that their campaigns of hate and political lynching will not stop us.

"They must know what nothing and no one will make us turn into accomplices of the mugging of the people and of the Nation.

"This movement - let this be known, let it be heard near and far - this movement is made up of dignified women and men who do not size themselves up by the measuring stick of traditional politics, but of history.

"In the politics of old, where all interests counted except the public interest, women and men in public life, politicians, had to adjust to the rules of the game. They could not make full exercise of their freedom, they could not think out loud, they were obligated to taking care of their image so as not affect their careers, and to submit to the codes of conduct demanded by established interests.

"Our case is different. For us, what is most important is to maintain our dignity and our principles. We are moved by ideals and convictions, not mere political interests.

"Here, I insist, it doesn't matter if we use up political capital if we succeed in preventing oil from being handed over to foreign companies.

"It doesn't matter if we use up political capital if we succeed in our main goal, that our oil not be handed over to foreign companies.

"As opposed to the right wing, which dehumanizes everything, and in its pursuit of material benefit acts with irresponsability and intolerance, we are at peace with our conscience.

"We know what love for our neighbor means. We know that love means fighting for others and respecting differences.

"And we also know that peace is the fruit of justice and freedom. We know that snatching things away never brings about anything good. And it is precisely for this reason that we maintain that the looting of our oil will create an environment of insatisfaction, farse and frustration, making us live in constant risk of internal confrontation and threats of conflicts with foreign nations.

"In short, we are defending our oil because we want to live in peace.

"Friends: we are trying to create a new kind of politics, based in principles, moral values and respect for the people, where the common good prevails above private interests.

"Along the road to this new way of doing politics, we have had to confront authoritarian power, exerting a counterweight which provides us with moral authority and the support of the people.

"For example, in Congress, the legislators of the Broad Progressive Front do not have the quantitative power of the votes, but their defense of people's causes confers upon them an important moral, qualitative power: the power of veto, the power to oppose and, in the last resort, the right to carry out peaceful civil resistance when their arguments are not taken into consideration in the making of decisions that concern the people and the Nation.

"This counterweight consists, also, in not playing the system's game, that of the traditional politics that has lorded over our country for so long, where everything is resolved up above, in the upper echelons, without taking into account the feelings and needs of the majority.

"My friends: history teaches us that advances in justice, freedom, democracy and sovereignty have only come when the people, the workers, the farmers, the indigenous people, the students and the women have mobilized against national or foreign oppressors.

"Only the people can save the people, only the people can save the Nation.

"Let us continue to struggle together to defend our aspirations for freedom and justice for the people of Mexico."

Game On

2008-04-11T10:22:00.000-07:00

After many months of veiled jabbing in the shadows, Mexico's battle for the future of its petroleum is now openly underway. In a nationally-televised address two nights ago, a sweating Felipe Calderón promised a land of milk and honey for all - more schools, more hospitals, chickens in every pot, and 100 peso ($10 dollar) bonds for each citizen, gee wow! - if the initiative clumsily delivered to Congress earlier the same day is passed. Although carefully avoiding open privatization, the proposed law would allow private investment to intervene in practically every stage of Pemex's operations, from transportation and storage to distribution and petrochemistry, private industry even being able to own its own ducts and other installations outright. It would expand the infamous "Contracts for Multiple Services" that have led to the privatizing in the shadows of 35% of Mexico's electricity production, legalizing this category of contracts while creating yet another: "Contracts for Expanded Services". Moreover, the law would dote Pemex with "autonomy" by creating a sort of Board of Directors to run the show, with ten of the fifteen members handpicked by...the President himself, thus neatly severing any possibility of real Congressional or public oversight while nominally providing the institution with "indpendence". Independence along the lines of the Federal Electoral Institute, that is. The only thing the initiative does not do is share Pemex's profits directly with the companies who would participate in all of these operations, but as the Repsol case clearly shows (see my April 8th post below), it is enough in Mexico to simply open the door, and before you know it, somebody's favorite company is getting no-competition contracts to do more expensively (factoring in kickbacks and price gouging) what was once done more cheaply and effectively by the much-demonized public sector. One can only imagine now, if oil is opened up, what the government's next spectacular contract will be: a $50 billion dollar contract for Repsol to import oil from Iran, perhaps, while building a plant for them to unload it, this time on the Atlantic, rather than the Pacific, coast.

Nevertheless, the fact that overt privatization was avoided allowed the PRI, in the name of the shadow President of the country, Senator Manlio Fabio Beltrones, to jump on board the project, contending that several of the provisions (presumably the "autonomy" for Pemex) that were included in the proposal had been originally generated by them. An ebullient Beltrones, in fact, was already predicting the day after the official proposal that it could be approved, with a change or two (letting Congress choose the Board of Directors instead of the President, one imagines), in the remaining two weeks of this Congressional session, a stunningly short period of time for a proposal of this magnitude to be debated and considered in full. Debate and consideration, however, is precisely what is not wanted, or, that is, a controlled and manipulated debate. The center-left FAP (Frente Amplo Progresista, or Broad Progressive Front) coalition of parties knew this. Fresh from their experience with ISSSTE pension reform, which was slipped through Congress Patriot-Act style last year al vapor, as they say in Spanish, the FAP insisted on an open, national debate, lasting for several months, which would give time for the public to weigh in in open (as opposed to orchestrated) hearings along with scientists and technical experts. And yeserday, seeing this basic demand going nowhere and the proposal heading directly towards Committees and then to the floor, they occupied the podiums of both Houses of Congress, stopping sessions in their tracks and closing Congress down. This triggered the civil-resistance brigades (see my first post) to kick into action, with a contigent of several thousand women (known as the "Adelitas" in honor of a revolutionary-era women's brigade) setting off for the Senate building, which they surrounded as close as the police blockade would let them. They remained until the evening at which point they were relieved by several of the men's brigades who spent the night. And the occupation continues to this hour: FAP congressmen inside the Congress, the brigades outside of it.

The mass media response to the taking of Congress was apoplectic. Dispensing with even the slight pretense of objectivity he usually offers up, Televisa anchorman Joaquín López-Dóriga, for example, was literally foaming at the mouth in a twenty-minute diatribe kicking off the nightly newscast about minorities hijacking democracy, coups d'état, and so on (oh, where were you in 2006, Joaquín?). The respect all of the mass media suddenly showed for the august debating chamber that is the Mexican Congress was truly heartwarming. Here is where proposals are debated and discussed. Here is where Congresspeople and Senators bring in all the experts, hold public hearings, gather expert information, debate and discuss, change their mind, go over the proposal word by word, and, above all, represent the people. Deals are never made in backrooms, the parties never dictate how their members are to vote (they just always seem to spontaneously agree), money never changes hands, Presidents are never elected by fraud, laws are never approved al vapor. Fortunately, the massive public civil resistance movement to oil privatization is not that naive, or we'd all be waking up two weeks down the road with yet another unconstitutional measure rammed down our throats. And undoing something once it is underway is much harder than preventing it right from the outset. This is what the proponents of this measure in the "government" are banking on - by the time the legal challenges to this law (should it be approved) ever make it to the Supreme Court, the damage will already have been done.

The Repsol Connection

2008-04-08T15:00:00.000-07:00

Follow the contracts. In a pair of provacative pieces in the two most recent Saturday editions of the newspaper La Jornada, journalist Jaime Aviles traces the tortured path of Mexico's threatened energy privatization from several years back. Aviles uses as his starting point a November 10, 2003 interview hosted by Jeffrey Davidow at the Institute of the Americas with one Felipe Calderón, a chat sponsored by the Reinhart Foundation (promoter of "projects" in Mexico and Guatemala) and Servicios Integrados de Gas de México ("Mexican Integrated Gas Services" or Igamex, owner of 13 gasoducts in Mexico and whose partners include Fergus Thermes, Corporativo San Ángel and Saks Energy). Calderón, then an obscure, recently-named Secretary of Energy for President Vicente Fox, makes no secret, despite his stumbling English, of his zeal for energy privatization, in order to provide Mexico the investment it needs to grow and create jobs and the usual canned blah blah. What is fascinating about the timing of this interview, however, as Áviles points out, is that just three-and-a-half weeks before it on October 16th, Secretary Calderón had provided the Spanish energy company Repsol with its first contract for the "development, infrastructure and maintenance" of gas fields in the Cuenca de Burgos in the Bloque Reynosa-Monterrey for over $2 billion US dollars. All this is part of the "silent privatization" of Mexico's electricity and gas industry (also supposedly protected by Article 27 of the Constitution) through such mechanisms as the so-called "Contracts for Multiple Services", as this hefty contract for Repsol, in fact, was.

The rest of the story, as Áviles lays it out, goes like this: Calderón quits as Energy Secretary in June of 2004, having made sure in the meanwhile to get a construction project for a regasification plant in the State of Colima underway. Why? To thaw out frozen natural gas arriving from South America by ship. A year and a half later, on December 12, 2005, Repsol makes a surprise announcement; it has signed a contract with the Peruvian government to buy natural gas from them and re-sell it in Mexico.

Mexico, however, has still not announced any intention to buy Peruvian gas or build a regasification plant. It is vitally important, then, that Calderón make it publicly known to Davidow (as he does in the final part of the interview, available on YouTube with the title "Encuentros: Davidow and Calderon November 2003) in order to, in effect, seal the deal (make explicit his intentions) with Repsol before beginning his candidacy for the Presidency.

On October 23, 2005, the PAN nominates Calderón for President. Shortly after, on December 12th, Repsol gives advance notice that it intends to sell Peruvian gas to Mexico. On June 6, 2006, just 26 days before the Presidential election, the Diario Oficial (the official publication of the Mexican government) opens the bidding for the provision of natural gas and the construction of the regasification plant in Manzanillo, on the coast of Colima. President Fox thus gives the green light in code to Repsol, and to anyone else who is paying attention: the election is stacked; come what may, Calderón will safely get in and execute this contract (López Obrador would certainly have not). The bidding is for a 25-year contract, with the meeting for the bidders to make their offer being set for September 25, 2006. That day, Repsol makes its offer, but with a catch: it can only offer gas for 20 years. The very next day, Mexico's Federal Energy Commission magically modifies the terms of the bidding so that the Mexican government contract will only be for 20 years.

Calderón is subsequently installed in office, not without great difficulty, and on September 18th, 2007, the Federal Energy Commission awards the contract to Repsol, but for 15 years, as Peru had in the intervening time modified their own agreement with the Spanish company for a lesser period. Peru will sell the gas to Repsol at Peruvian prices but Mexico, per the terms of the contract (in which only Repsol, of all the companies in the whole world, met the terms and conditions to make an actual bid), will buy it at Texas prices, the highest in the world as they are subject to what is known as the Henry Hub index - the $15 billion dollar cost to Mexico I mentioned in my last post may, consequently, spiral upwards of $21 billion dollars. And here we are today, with Calderón and his very interested Internal Affairs Secretary grasping at any argumental straws available to push the "opening" of Pemex, and the contract between Peru, Mexico, and their costly intermediary Repsol, safely in place, the plants being built, and all is well. Except, of course, for the Mexican consumers of gasoline, natural gas, and electricity.

(The two pieces by Jaime Áviles can be found at: http://www.jornada.unam.mx/2008/03/29/index.php?section=opinion&article=004o1pol and http://www.jornada.unam.mx/2008/04/05/index.php?section=opinion&article=004o1pol.)

Dog Days

2008-04-02T09:11:00.000-07:00

These are, indeed, dog days for Felipe Calderón. Faced with a recalcitrant Congress, an energized social movement, and the sweltering end-of-dry season Mexican weather, Calderón - as it usual oscillating between Napoleon complex-style authoritarianism and visionless vacillation (one, of course, plays off the other) - finds himself trying to hand off responsibility for the hot potato that is oil privatization to the Congress, which (the PRI faction at least) insists on trying to hand it back to him. "The Executive must lead," says the PRI. "Congress is where the energy initiative will originate," says Santiago Creel, head of the PAN (Calderon's conservative party) faction in the Senate. But what will the initative include, exactly? One can hardly tell if the "government" can't even get it together enough to decide what the justification is for presenting the initiative in the first place. First, we heard that we needed to associate with private enterprise because Mexico was running out of reserves, fast. Then the tune changed, and we heard, in a sweet-sounding television spot (making a moot point of the new electoral reform law that supposedly bans political advertising on TV) that Mexico has a "hidden treasure" buried deep in the Gulf of Mexico, and that only association with private enterprise will provide Mexico with the technology necessary to extract it (incidentally, two versions of that ad were made, one for foreign consumption, and one for the national audience, with the privatizing language toned down). Question: with over $50 billion dollars in oil revenues last year alone, why can't Mexico acquire the required technology itself, instead of associating with private companies who don't have it either? Norway, for one, offers a moveable ocean rig for rent at 250,000 euros a day called "Erik the Red" which can penetrate down 3,000 meters, three times the depth of existing, fixed rigs (check out a Discovery Channel program on this new rig on YouTube: http://mx.youtube.com/watch?v=meaMr0v2scs). Surely, with $50 billion in revenue, PEMEX could rent Erik the Red itself, especially considering what it stands to gain from it? And what's more, if Mexico ever quit being the lackey of international capital and started looking out for its own interests, it could use its oil revenues to become an expert in oil-perforation technology on its own (certainly in its interest), start building these kinds of rigs and training its engineers to use them, and even export them for other countries to use. Or even better than placing its entire bet on a dwindling store (depending on which governmental argument is being used on which day) of polluting fossil fuels, it could use its revenues to become a leader in eco-technology and electric cars. Hell, with oil prices at a record high and promising to rise, Mexico should be building its own refineries on the double, a long row of refineries right on the border with the United States, and then sell refined gasoline for energy-hog Americans to fill up their SUVs with, undercutting Exxon Mobil and Texoco by just enough and still making an absolute killing. As it stands now, Mexico sells its crude oil to the States and buys back the gasoline; it hasn't built a new refinery in 25 years (not suprisingly, the same amount of time the neo-cons have been running the show here). How pathetic is that?

All of this is part of an energy-reform smokescreen which is doing nothing more than undercut what's left of Mexico's national sovereignty. The Calderón "government", for example, recently signed a deal with Repsol of Spain to provide natural gas to Mexico for the next 15 years, at a cost to Mexico of $15 billion dollars. Repsol, who was the only bidder, will buy the gas from Peru and sell it to Mexico, who has dutifully committed to building a plant in Colima to house it. As a mere intermediary, Repsol will make its own killing. And this, despite the fact that Mexico has gas reserves of its own lying fallow in the Yucatan, and despite the obvious conflict of interest of PEMEX having bought Repsol stock back when Calderón was Secretary of Energy and on PEMEX's Administrative Board, and then making a hash of it (for the public interest, at least) by effectively selling the stock off before its value subsequently rose, for a neat loss of $655 million dollars. So one wonders: how did Repsol, "Calderón's favorite company" happen to get that no-bid gas contract anyway, and how did it know to put in its bid just at the right time? And incidentally, whatever happened to old article 27 of the Mexican Constitution, making energy production the property of the nation?

A Walk Down Privatization Lane

2008-03-29T09:42:00.000-07:00

Why are at least 70% of Mexicans opposed to the privatization of the state-owned oil company PEMEX? Why, after twenty-five years of Mexican governments extolling the virtues of privatization while at the same time privatizing everything they could get their hands on short of their wives and children, is the Mexican public not swallowing the pill of bliss that will sweep them right into the first world of their dreams?

Let's take a walk through a typical Mexican day.

I get up and go to work, if I am lucky enough to have a job. Despite 25 years of privatization, Mexico's growth rate lags behind the rest of Latin America, including those countries that refuse to accept the privatization doctrine as obediently as Mexico. Immigration to the United States has soared since the signing of the North American Free Trade Agreement. The minimum wage remains less than $5 US dollars a day. The country is stagnant.

I begin working. If I am truly lucky enough to have a job with benefits, those benefits no longer include a government-provided pension that will allow me to retire any time before I'm dead. Thanks to the reform of the IMSS (Mexican Institute of Social Security) law in 1997, pensions were replaced with individual retirement accounts known as AFOREs, which are administered by the nation's banks, which have also been privatized in the intervening time. The interest paid by the AFOREs is measely, amounting to a whopping 9% annual, with more than 3% of that disappearing in commissions. A good deal...for the banks. In my personal case, when I resigned my job last year after working at what, in Mexican terms, was a fairly well-paying job for seven years, I had saved up all of $6,000 US dollars in my AFORE, the equivalent of....six whole months of salary. Last year's ISSSTE (Institute of Social Security for Government Workers) reform law pulled a similar maneuver for government employees, with the added bonus of the pension funds being controlled discretionally by the Machiavellian head of the teacher's union, Elba Esther Gordillo, instrument of the electoral fraud of 2006.

I go out and buy something with my credit card. Woe be to me if I don't pay off the card in full every month. Credit cards in Mexico charge interest rates up to five times more than the same cards in countries like the US and Spain - up to 80 and 90% - not to mention the tidy annual fee they practically all charge just for the right to rack up such astronomical debt. The profits of the banks in Mexico who emit these credit cards are substantially higher than those of the mother bank in their home countries.

Mother bank? Home country? Yes. All but one of the major Mexican banks have been sold off over the last ten years, but not before being bailed out at taxpayer expense in the infamous FOBAPROA bailout. Banamex, the country's largest bank, is a prime example. Roberto Hernández, the then-head of Banamex, was one of the largest beneficiaries of FOBAPROA, the large majority of whose proceeds went, not surprisingly, to people who did not need them. Fresh with government-infused cash, Hernández turned around and sold the bank to Citigroup, for which transaction he paid the grand total of....$0 in taxes. Oh, perhaps you didn't know - sales of shares on the Mexican stock market are not subject to taxation of any kind. No capital-gains tax. Well, maybe the Mexican people will get a tiny portion of that back in some highly-publicized philanthropy. Private giving substituting government programs, you know. And just try doing something as simple as going to your local branch and making an address change on your Banamex account. Go ahead - I dare you.

I make a telephone call, if I'm lucky enough to have a phone line - there are often "no new lines" when you try to go and get one installed. Mexico's national telephone company, TELMEX, was sold off during the administration of Carlos Salinas de Gortari to one Carlos Slim, then an unknown who has risen to become one of the top three richest men in the world, at times topping the scales as the richest. TELMEX maintains a virtual monopoly of Mexican land-line service, and charges the phone rates to match. By the way, Slim also owns the largest cell phone company, Telcel, whose profits in Mexico are more than in any other Latin American company where it operates. It controls most of the Mexican cell-phone market, and also charges the rates to match. Did anyone say "anti-trust?" Slim's stock profits, of course, are not subject to taxation: see above.

I get into my car and go drive on the highway. Tolls on Mexican highways are amongst the highest in the world, for a service that is usually little more than a two-lane (one lane each way) potholed road, the only benefit being that you avoid the speed bumps that are endemic on the country's secondary roads, at least down here in the south. Mexican highways were contracted out as concessions several years back, which goes a long way to explaining the state of the roads: what private company wants to invest in maintaining roads, money which will only reduce their profit margin, when people have no choice but to use those roads anyway? Despite this, many of the concessionary companies have gone belly-up. Not to fear, though: the Fox government, clearly following its free-market philosophy to the letter, rescued those troubled highways (not the first time this has happen, either), taking them back and refurbishing them on the taxpayer dime. Then Calderón, playing Robin to Fox's Batman, contracted them back out in his first year. Privatization of the profit, nationalization of the risk - who could ask for anything more?

Exhuasted, frustrated and angry, I go home and turn on the television. Two private companies - Televisa and TV Azteca - control Mexican television channels, serving as mouthpieces for the government and fabulous venues for product placement in their programming, which tends rather more to soap operas than to anything resembling a serious debate on something of a nature as serious as oil privatization.

Not convinced? Come down and spend a day with me. We'll run some errands together.

The PRI's Turnaround on Oil

2008-03-27T08:57:00.000-07:00

One day after insisting that if Felipe Calderón didn't stop dithering and present his own initiative to "reform" the state-owned oil company PEMEX that they would, the PRI is now insisting that they are not going to play any part in the privatization of PEMEX. Senator Manlio Fabio Beltrones, leader of the PRI faction in the Senate, even went one step further and accused Calderón of manipulating figures and engaging in a misleading public-relations campaign ( http://www.jornada.unam.mx/2008/03/27/index.php?section=politica&article=003n1pol) in order to trick a hostile public into giving up the farm; one can only wonder if he was as shocked as Captain Renault about the gambling going on in Rick's Café. And to any of us who might be tempted to see this for the 180-degree turnaround that it is, Beltrones scolded the assembled media at yesterday's press conference, for the "lightness" with which many people understand things in poltics. I suppose it would, in fact, be light-headed of anyone to expect a principled position of any kind coming out of the PRI, whose main concern over the last two years, more than oil, the economy or anything else, has been rather to blackmail a weak and illegitimate Calderón into keeping in gainful employment the infamous PRI governors of ill-repute: Puebla's own pederast Mario Marín and Oaxaca's own assassin, Ulisses Ruiz. Support the "family," and it doesn't matter much what else you do in your free time.

This can only be seen as a victory for Andres Manuel López Obrador, who the day before in the Zócalo of Mexico City presented, in an impressively-organized manner, the people's brigades for the defense of PEMEX: 20 groups of 500 women each for a total of 10,000, and 36 further groups totaling 18,000 more mostly-male volunteers, all lined up and ready to go the moment that Calderón stops wringing his hands and dares to present his privatization proposal to the Congress. What does "go" mean? It means citizens' blockades of Congress, airports and highways, everything the movement could have done but chose for the sake of prudence not to do in the aftermath of the fraudulent elections of 2006. This is serious, and should be: with oil topping $100 a barrel and headed for more over the next five to ten years, there is many an oil exec drooling over the chance to stick his rig into this bonanza, not to mention the internal political elite here in Mexico just waiting to go high-on-the-hog with contracts for family businesses and friends (Calderón's Interior Minister, Juan Camilo Mouriño, has already been publicly busted by Obrador for conflicts-of-interest related to shoving PEMEX contracts at family businesses during his time in Congress and in the Energy Ministry under....Calderón himself! Expect much more of the same with privatization). Obrador, whose activism in the oil issue predates his career as an elected official, is fully aware that only massive and hard-hitting public mobilizations will have a chance at stopping the backroom deal-making and pay-offs that would, in their absence, slip the privatization proposal, disguised as "alliances," "cooperation," "participation" or what you will, quickly through Congress like the Patriot Act in the States, preferably without giving any legislator who cared enough to do so the time to read it. And the pressure exerted by these citizens' brigades, even before they have been "deployed," is already starting to pay off.