On September 23, 2009, according to the Los Angeles Times, a convoy of three vans packed with at least 76 Mexicans sped through the San Ysidro, California, border crossing, prompting police to open fire at the overloaded vehicles, making them crash. Police shut down the nation’s largest border check point, calling it a crime scene. All 76 immigrants were detained or arrested. Most of them will probably find a better method to enter the U.S. next time.
Every year, some half million Mexicans leave their families, communities, and towns to risk their lives trying to enter the U.S. Mostly they seek, at best, the U.S. minimum wage, which can mean as much as 40% more than what they might make in Mexico if they are lucky to find a job in their own country. Per year, they send more than a billion dollars back to their families in Mexico, who depend on the remittances to survive.
Is the U.S. to Blame for This Failure in Mexico?
Is the U.S. at least partly to blame for Mexico’s political and economic disaster? Or is America’s recent economic and military catastrophes the fault of some other country, such as Saudi Arabia or even Mexico? Who is the victim? Is Mexico some passive roadkill on the global highway? Not completely. Each country has its element of self-determination, otherwise what’s the point in calling it a sovereign country? But U.S. policies have pushed Mexico to the brink—and Mexico has returned the favor. The two countries dance to the same macabre song taking them both down.
How Could the U.S. Possibly Contribute to Mexico’s Failure?
The powerful forces of financial institutions, mostly influenced by the U.S.—like the World Bank, the Inter-American Bank, and the International Monetary Fund (IMF)—have imposed neoliberal—Reaganomic—policies on third-world countries like Mexico. This argument stands on some solid ground, especially in light of cases like Chile, where the CIA supported a coup against the popular Allende regime in 1973 in order to prop up a government sympathetic to U.S. corporate interests.
The U.S. has applied such neoliberal colonizing tactics in many countries, though, without much success. Most recently, this process failed miserably in Iraq after an unprecedented preemptive bombing and invasion—motivated by the prospect of gaining access to the oil reserves (and justified falsely by claims of WMDs, terrorism, dictatorship, and other lame excuses). In carrying out these bellicose acts, the Bush-Cheney administration took neoliberal policies to a new extreme, what Naomi Klein calls the Shock Doctrine.
The term “neoliberalsm” can be confusing and misleading. Political strategists have presented economic liberalism, or neoliberalism, to the middle class in branding terms like “Reaganomics” or “Coca-Cola,” as if it were some friendly, good-tasting sugar-water as compared to “rightwing.” However, economic liberalism—neoliberalism—is rightwing and not friendly to the working class. Over the last forty years, it has shifted the distribution of wealth from the middle class to the elite wealthy class.
In some ways, the largely U.S.-promoted NAFTA program—a neoliberal policy—ultimately affected Mexico negatively as early as its first year, when wages dropped 40 to 50% while the cost of living rose by some 80%.
Likewise, NAFTA also affected the U.S. negatively by moving U.S. manufacturing jobs south of the border. At least in the short term, the cheaper blue collar labor in Mexico did help to maintain U.S. industry status quo and profits, especially the automobile sector. In the long run, though, cheap labor in Mexico was not enough to prop up a lagging, stogy industry that failed to innovate.
On the other hand, Japanese automakers now dominate the U.S. market because they constantly change. Japanese improvements and innovations (kaizen) include government supported developments of their own work force and adapting to market needs such as fuel-efficient vehicles.
The key determining factor is how U.S. policy makers –mostly neocons—drank pitchers full of Reaganomics (neoliberalism) like Kool-Aid. Japan did not implement neoliberal policies, which include relying on the notion of wealth trickling down from the rich and allegedly wise elite. Many of Japan’s industries are supported and guided by its government’s MITI (Minister of International Trade and Industry), which ensures that certain industries (keiretsu) dominate. Likewise, in Germany and France, government plays a key role in maintaining the social infrastructure (transportation, education, healthcare), and in maintaining a stable economy. On the other hand, in America, many political leaders present this type of policy as an evil socialism to be avoided like Satan.
Mexico Especially Vulnerable to Reaganomics
Reaganomics is merely a clever name for an economic policy that is much larger than the B-grade movie actor. Witty political strategists rebranded neoliberalism with the name Reaganomics because, during most of the 1980s, Reagan gained immense popularity among gullible groups of the American middle class. Using his name seemed like a great marketing ploy to promote policies that had little to do with benefiting the working classes. Little did many of Reagan’s fans know at the time that Ronald Reagan used his actor’s shoeshine-and-smile charm to sell an ideology that later would prove disastrous to the American people and cause the worst economic crisis in 2008 since the Great Depression, far surpassing the recession of 1979.
Although the mainstream media rarely uses the word “neoliberalism” in the U.S., anyone can see the effects of its policies today, which became widespread over the last thirty years. It is the direct cause of the massive failures in the U.S. financial system as well as extremely high rates of unemployment, bankruptcy, and foreclosures. Because of neoliberalism, we have seen drastic erosion of the middle class’s standard of living since the post-war boom, while the upper five percentile of the population, the elite plutocracy—CEOs, Senators, Congressmen—has greatly increased its wealth. In short, the rich became richer, the poor, poorer.
Conservative politicians—predominantly Republicans but also some Democrats—might say they hate “liberals”—the political liberals—while they love economic liberals or neoliberals. By using the word liberal in economics—the Milton Friedman type—political strategists manage to dupe many people with the confusing label.
The main tenets of neoliberalism are:
- Reducing or eliminating social services like education, healthcare, and other programs to avoid government involvement in maintaining a social infrastructure or the development of the middle class—and doing so while financially favoring large business entities. This destroys any sense of citizenry and civil rights as pressure is placed on the individual to “pull yourself up by your own bootstraps.” The U.S. culture now has little sense of civility as many individuals believe that our society has to be a dog-eat-dog environment where they can become millionaires by working hard at Starbucks or in a cubicle and by aggressively and rudely competing in the workplace.
- In the 1980s Reagan became the poster boy of neoliberalism by cutting taxes and social benefits while loosening government regulations. At the same time, he increased defense spending by more than 40% during a rare period when the U.S. was not waging a war, although he could have invested that same 40% in education or healthcare and still stimulate the economy out of the recession. Reaganomics—neoliberalism—is socialism for the wealthy. Reagan’s policies to cut social services while financing the military-industrial complex only provided a huge government subsidy to defense contractors, infamous for their waste of tax money—the F-22 fighter jet being a more recent and blatant example. In doing so, Reagan gained credit for the fall of the Soviet Union, despite the fact that the Soviet invasion of Afghanistan pushed the communists over the edge. The mastermind behind U.S. support of the Afghan mujahideen’s resistance was Jimmy Carter’s National Security Advisor, Zbigniew Brzezinski, as humorously portrayed in the movie Charlie Wilson’s War.
- Avoid government involvement in the social infrastructure. This is most blatant in how the Bush-Cheney administration granted no-bid contracts to private contractors, including Halliburton and, notably, Blackwater, whose mercenaries were sent to Iraq rather than doubling the number of U.S. military. This served to soften public opinion against the war by using uncounted, stealth soldiers. Today, we see how both Republican and Democratic Senators and Congressmen (e.g., Lieberman and Bayh), motivated by lobbyists and industry money, despise healthcare reform, especially the public option—a threat to the oligopolistic industry of private health insurance.
- Liberating private enterprise from regulations. The government could impose regulations in order to maintain the highest social benefits but instead, neoliberalism encourages hoarding profit among the lords of capitalism—the CEOs who garner millions in compensation—as was common during America’s Gilded Age at the end of the 1800s. The most recent example of this economic policy is allowing banks free rein to sell confusing balloon mortgages, which increased their profits in the short term while increasing costs over time to homeowners forced into foreclosure. This is the type of laissez-faire economics that was pervasive during the monarchies in Europe, benefiting mostly the royalty, feudal lords, and aristocracy. It was the main reason for the American Revolution, when “taxation without representation” was an operative slogan aimed against the ruling elites who collected the wealth while the workers toiled without any means to determine social policy through election. Today’s oligopolistic corporations in certain industries—such as petroleum, healthcare, banking, and defense—are merely the new fiefdoms of the feudal lords of our global economy.
Mexico has been particularly vulnerable to economic liberalism because monarchy ruled the country for centuries once the Spanish colonized the territory. The monarchy maintained a type of feudal economy in which many peasants worked the land and only the elite Spanish aristocracy owned or managed the land for the royalty. There was little or no social infrastructure for the peasants, the mixed bloods, or the native Indians.
In the last decades, Mexico’s government has implemented several neoliberal policies by privatizing many industries such as telecommunications, which has only allowed large corporations to grow into monopolies and their owners to become multibillionaires—a prime example being Carlos Slim Helu, owner of Mexico’s telecommunications, the world’s third richest man— while the middle class is left with few options other than to immigrate to the U.S. in search of sustainable wages. We can draw many parallels between old Mexico’s feudal economy and its more modern, large haciendas, where wealthy land owners profit from field workers and where large, unregulated corporations benefit at the expense of the greater social good.
Today’s neoliberalism has all the same economic policies as in old Mexico, where there was practically no social infrastructure to develop the poor, to educate them, to provide them with healthcare or programs to give them skills to expand the national economy and create a middle class or, at least, to help them plan their families—the number of children they can afford, despite the Catholic Church’s dogma prohibiting contraception.
Today, although Mexico benefits from some version of democracy with elected presidents, the government has become weak almost to the point of a failed state, especially since the drug lords operate much like the caudillos, regional leaders, whose centuries-long rule resembled the earlier Spanish feudal leaders.
Mexico’s first federal constitution was drafted in 1824, and the first president was elected. Nevertheless, just after Mexico first attempted to gain its independence from foreign monarchs, presidents appointed themselves into office, from Iturbide (1822, Constitutional Emperor) to Juarez (1867), who overthrew the empire that Emperor Napoleon III had established. “It was there that the future of the country would be determined, through military conspiracy, bribery of deputies, the rigging of elections, and the use of public money and institutions to back electoral campaigns” (Mexico by E. Krauze, p. 130). These traditions of corruption continue to the present, and the large haciendas of the old Mexico still exist like remnants of its feudal past.
Neoliberal policies carry on many of the same practices of the monarchy and the hacienda—based economies. Mexico’s President Calderon recently moved to privatize the central electrical utility in Mexico City, breaking up the labor union, a tactic to reduce labor costs and to increase profits for private investors.
"There's no doubt that Light and Power is an inefficient company," said John Ackerman, professor at the Institute for Legal Research at the National Autonomous University of Mexico. "But the fact that he has decided to go against the union that historically most clearly represents the achievements of union rights and the left in Mexico is very much a political decision."
In explaining the company's losses, Ackerman pointed out that Mexico City and its surrounding areas are the most industrial in the country but harbor a huge informal economy, in which pirating electricity is common.
“The revolutionary intent of the Mexican people, now as then, has not changed. It is a desire for the distribution of the land and resources of Mexico among the Mexican people.” This is one of the observations John Steinbeck made in the 1950s when he researched the story of Zapata for his first and only movie script—a 20-year project. Despite a dramatic history of attempts to revolt against oppressive traditions in Mexico, little progress has been made.
So long as Mexico remains stuck in its feudal, plutocratic traditions, it will never develop its people and pull itself out of its own trap of greedy caudillos, be they church leaders, politicians, drug lords or entrepreneurs and military generals.
Something similar can be said of the U.S., which too often slips into its own self-destructive periods from the Gilded Age to today’s Bailout Age.