Mexico: The Model Country

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If you like the U.S. right wing and want to see its ruling philosophy in action in its purest form, look no further than the cruel, failing state of Mexico.

The Republican-style, conservative government in Mexico has always favored the wealthy ruling elite, with no real policies to improve its almost nonexistent middle class. The salient characteristic of the Mexican economy is inequality. “Mexico contains one of the greatest, most obscene gulfs between its wealthiest and most destitute citizens of all the nations on the planet,” (Mexico Unconquered, John Gibler).

model-countryThis gap between the haves and the have-nots has a past reaching back through centuries of history. It’s a tradition where a ruling Spanish elite took power and forever retained its conservative, right-wing reign over the country, much to its detriment.

The Mexican ruling class with its authoritarian theocracy, like the Republican Party in the U.S. today, has always been populated with the privileged making policy decisions, those who, for their own profit, widened the economic gap intentionally and continue to push its divide.

“The privatization process created a new class of super-rich in Mexico. In 1991, the country had two billionaires on the Forbes list. By 1994, at the end of Mr. Salinas’s six-year term, there were 24,” (“The Secrets of the World’s Richest Man,” D. Luhow, The Wall Street Journal, August 4, 2007). In the U.S., the Republicans would prefer to privatize practically every aspect of the government, including even the military, as is shown in their penchant for billion-dollar contracts with Blackwater, and their disgust for public healthcare.

In Mexico, there have always been those who rebelled against the conservative chokehold that represses dissent from groups like the recent Zapatista Army of National Liberation. The on-going desperation of the vast majority of the Mexican people who live in poverty has made the drug trafficking business extremely popular. In many ways, it serves as a new platform supporting an ongoing popular revolution for equality. A risky business on the streets, pushing dope helps elevate the poor to some semblance of a middle class where social mobility is otherwise impossible, except for those already in a position of wealth. In today’s Mexico, the rich get richer and the poor learn to make money by selling drugs—though, even in the illegal drug business, the bosses at the top of the Mexican Mafia, the drug lords, or what the media likes to call drug cartels, are making billion-dollar profits.

A risky business on the streets, pushing dope helps elevate the poor to some semblance of a middle class where social mobility is otherwise impossible, except for those already in a position of wealth. In today’s Mexico, the rich get richer and the poor learn to make money by selling drugs—though, even in the illegal drug business, the bosses at the top of the Mexican Mafia, the drug lords, or what the media likes to call drug cartels, are making billion-dollar profits.

Sow’s Ear Policy
Mexican drug trafficking has grown to an enormous industry and a force that outstrips the country’s military, with revenues exceeding $40 billion per year and rising. It’s the country’s top export. Mexico’s drug business is one of the most important economic generators. Were the drug trafficking shut down today, it would contract the Mexican economy by at least 63% by some estimates. The same study found that the U.S. economy would shrink by 19% to 22% without the illegal drug business (Down by the River, Bowden).

“A 2007 U.S. government study found that Mexican drug cartels earn about $23 billion in revenue, making illegal drugs Mexico’s number-one export, bringing in more money than either oil or the remittances sent home by Mexicans living in the United States,” (Mexico Unconquered, John Gibler, pg. 54).

Considering its history and economic impact, the so-called “war on drugs” is not a war at all—it is the use of law enforcement agencies, and the military, to regulate an overwhelming underground market which operates as one of the purest forms of free market enterprise. The demand for the products is unstoppable. The drug industry in Mexico enables millions of people to survive and to crawl out of the abject poverty that the conservative, right-wing Mexican government created for them by economic policies enriching only more millionaires in the elite, ruling class than ever before. The illegal drug lords prosper so well as to afford employing, not only the Mexican police as well as the army but also the Special Forces units, luring them with higher salaries than their meager government paychecks.

The greed that motivates the drug merchants resembles the “sow’s ear,” a phrase that Adam Smith coined to characterize the worst aspects of capitalism for which he, and later John Keynes, called for government intervention “to transform the sow’s ear into a silk purse.” In the case of illegal drug trade, there is no such “silk purse,” a metaphor for how government regulation tames humanity’s bestial greed to yield the highest benefits for all of society. The obvious result of this “sow’s ear” policy, favoring the wealthy, is the currently failing state of Mexico.

We read news reports daily about criminal, violent avarice in most every aspect of Mexican society, including more casualties in the drug wars than the fallen U.S. soldiers in Iraq. And this extreme self-interest has also become a prominent feature in U.S. culture, where high-ranking political leaders such as G.W. Bush and Dick Cheney lied to the American public in order to wage a preemptive war where they granted no-bid contracts to select corporations (e.g., Blackwater, Halliburton, and others) that returned the favor with lavish campaign contributions.
Bestial Greed Not Contained at the Mexican Border

One of their favored CEOs was Bush’s former classmate at Yale, Steve Schwarzman of the Blackstone Group, who paid Bush $1.2 million in campaign contributions as tribute for Bush having brokered a $4 billion investment in Schwarzman’s Group.

For their own benefit, Bush and his GOP lied to allow banks complete freedom to sell high-interest-rate mortgages and push consumer credit to middle-class Americans who obviously could not afford them. Ameriquest, one of the nation’s largest mortgage banks, paid Bush and his GOP $7.8 million as a tribute for having promoted the Ownership Society initiative, marketing it as a means for poor people to own their own home. Despite its lofty title, the policy only enabled Ameriquest and the rest of the mortgage industry to act like sharks in a collective feeding frenzy, selling more loans that increased the prices of homes, inflating the housing bubble until it burst into a national financial failure with unemployment and foreclosure rates higher than those during the Great Depression of the 1930s.

Meanwhile in television news interviews, Dick Cheney often said, “Our economy is robust,” the strongest in the world because of its free enterprise system. In the U.S., well-coordinated, the Republican Party has given its unified messages that it calls for small or no government intervention, except in military matters that benefit large defense contractors.

In step with the GOP policy, Bush cut tax revenues by $1.3 trillion in a war-time economy, creating a rapidly deepening deficit while 33% of those tax cuts favored the top 1% of the wealthiest people. The result of these policies merely allowed that top 1% to become richer without benefiting the larger part of society. This “sow’s ear” policy is based on the theory that if government allows more wealth to rich capitalists, they will use the money wisely to benefit the general well-being of the country. As Dick Cheney explained during a television interview:

“We are generally not enthusiastic about big tax increases. Big tax increases impose burdens on the economy, and the money being taken out of the hands of private citizens and spent by government, and government oftentimes doesn’t spend it nearly as efficiently or as effectively from the standpoint of long-term economic growth and the creation of jobs and so forth as will the private sector.”

This theory has been proven false over and over again in history and in third world countries like Mexico.

Presidents with Sow’s Ears
“Twenty days after Salinas left office on November 30, 1994, the Mexican economy crashed; on December 22, the peso fell by 20%, $5 billion left the country in forty-eight hours. By the time the benefits of Salinas’s economic design had time to trickle down, two million farmers had left their land, poverty had risen from 45 to 50% of the entire population, and some 3.3 million children under the age of 14 had been forced to work,” (Mexico Unconquered, John Gilbert).

Despite the destitution, malnutrition, and total lack of affordable healthcare, the theocratic culture that reigns over the spiritual state of virtually all Mexicans still promotes large families and condemns the use of contraception. Little wonder now that many Mexicans living in poverty rebel even against the Catholic Church to worship their own Santa Meurte, patron saint of those who struggle outside the law to survive.

Similar to Salinas’s legacy, a striking parallel of disaster occurred when G. W. Bush left office in the U.S., having squandered trillions of dollars on an unjustified war. Where once there was the largest economic surplus in U.S. history, now the deepest deficit falls lower than ever before. The financial industry’s collapse caused millions of middle-class workers to lose their homes to foreclosures, to lose their jobs by the millions (over 7 million unemployed to date), and to lose their healthcare, if they even had it to begin with, while the rich became wealthier than ever before in American history.
G. W. Bush is responsible for an economic inequality in the U.S. surpassing even that of the Roaring ’20s:

“In 2007, the top .001 percent of American earners took home 6 percent of total U.S. wages— about twice the figure for 2000,” notes Emmanuel Saez, an economics professor at University of California—Berkeley. Saez also found that the top 10 percent of American earners pulled in 49.7 percent of total wages: a level “higher than any other year since 1917 and even surpasses 1928,” (“Another Legacy of G. W. Bush,” Peter Cohan, DailyFinance, August 14, 2009).

Following the Mexican tradition of running a country into ruin, the Republican Party used the public treasury to feather their own nests over the last eight years and sent the bill to the American middle class to pay for generations to come while bailed-out banks continue to pay million-dollar bonuses to their employees. The sow’s ear policies of the GOP make the drug wars in Mexico pale in comparison. But the worst of this is that an unusually high percentage of the American middle class believes in the policies even when they work against their own interests.

The GOP has applied powerful consumer marketing techniques effectively to American consumers. Many Americans believe that national healthcare is socialism. Few people consider the fact that the industrialized countries least harmed by the current economic collapse are places like Germany, France, and Japan. The ones hardly engaged in the preemptive Iraq war. The ones with more stable economic policies. The ones where citizens enjoy efficient national retirement pensions, healthcare, education, and transportation.

Despite their so-called socialism, Japan and Germany own the global automobile industry. Toyota could acquire GM and Ford in a heartbeat if the company decided it was a good investment. Probably not.

3 Comments
  1. Andrew J. Sacks says

    Mark, you are a voice of reason, very clear-sighted.

  2. Michael W Staib says

    Your analysis exaggerates American capitalism by conflating it with a system of more diametric disparity than the U.S., at its most conservative, espouses among reasonable American citizens. Our brand of capitalism compared to Mexico attenuates by comparison.

    If anything, the “U.S. right-wing” champions a more socially responsible system that discourages illegal immigration, by encouraging Mexico to actually provide their most impoverished of citizens jobs, so they need not seek emancipation elsewhere. If they attempted to remediate their ruthlessly repressive conditions, Mexicans need not look elsewhere. But, unfortunately, they seemingly desire to retain such deplorable conditions for presumably, “some of the most destitute citizens,” anywhere on this planet, as you incisively assert!

    Nevertheless, though I respectfully disagree with your conclusion, superlative work in pithy, perspicuous prose! Excellent!

  3. Michael W Staib says

    Thank you again for such a riveting read Mr. Biskeborn! – Michael

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