Mexican Business Elite, US Government, Brace for Likely Win by Leftist Obrador as Mexico’s President

The US press has largely ignored a potential sea change in our neighbor to the South. A self-styled radical, former mayor of Mexico City, Andres Manuel Lopez Obrador, looks set to win Mexico’s presidential election on July 1. That possibility is giving heartburn to corporate interests in Mexico and the US, as well the US officialdom.

His opponents depict him as a wild-eyed radical, but while Obrador, widely referred to as Amlo, has called for agricultural self-sufficiency, infrastructure development, higher minimum wages, improved public education. But he’s also promised no new taxes, and as mayor of Mexico, entered into a public-private partnership with billionaire Carlos Slim to redevelop the downtown area.

Indeed, the website In Defense of Marxism had to make quite a case for its readers to vote for Amlo. They depict him as a type of Third Way figure:

AMLO does not propose a fundamental change of the system – replacing capitalism with socialism – what he proposes is a return to a more humane form of capitalism…. He does not propose a programme of expropriations, nor the development of a large-scale nationalized industry, as there was before neoliberalism. To the capitalists, he offers a country of opportunity, without special privileges and without corruption.

For the poorest, he also offers a good list of proposals, particularly for the youth: he is committed to providing education for all at all levels, universal healthcare – not the so-called “seguro popular” (“people’s insurance”), but healthcare systems like the IMSS and the ISSSTE (the Mexican social security and the public employees’ healthcare programmes) that will be made available for everyone. He also speaks of scholarships for young people and programmes where the state will employ millions of youths a year. He says he will raise pensions for seniors and for single mothers and so on. All of this is a good start and we support it.

He proposes that the funding for these reforms and a large-scale national infrastructure plan will be drawn from eliminating corruption and cutting the high salaries of the bureaucracy, as well as reducing the number of state workers, reducing unnecessary state expenditure and so on. That is to say, he proposes that the interests of the big companies and the banks are not to be touched, and that no more foreign loans are requested. We have real doubts about the possibility that the money he saves with his proposed measures will cover all his planned reforms.

The Financial Times reported on Amlo reassuring Mexico’s top bankers:

“I will support banks. We won’t confiscate assets. No expropriations, no nationalisations. We’ll have a country more focused on its main problem: the cancer of corruption. That’s my proposal, to end corruption,” he said….

But he stuck to his guns on his main policy pledges, including austerity, an end to fat-cat salaries, a president setting a moral example to fight graft, greater co-ordination of security forces which Mr López Obrador said he would personally supervise with a daily 6am security cabinet meeting….

He promised no rollback on structural reforms passed by the current government; a “very few” reforms of his own around the middle of his term, including removing the ban on a president being able to be tried for corruption. However he said there would be “no need to increase taxes, no new taxes, no VAT on medicine and food . . . no petrol price shocks”. He also pledged to respect the autonomy of the Bank of Mexico and to establish an “authentic rule of law”.

So why are so many people in and outside Mexico in a tizzy about a probable Amlo win? Jacobin argues that if Amlo hasn’t been convincing enough in his move to the right, he’s likely to assassinated. That’s not a far-out idea, given Mexico’s long-standing history of dirty election, including past assassinations, which Jacobin recounts in gory detail.

From a profile of Amlo in the current issue of the New Yorker:

I told him that many Mexicans wondered whether he had moderated his early radical beliefs. “No,” he said. “I’ve always thought the same way. But I act according to the circumstances. We have proposed an orderly change, and our strategy seems to have worked. There is less fear now. More middle-class people have come on board, not only the poor, and there are businesspeople, too.”

Even though Amlo has a strong left-wing economic agenda which makes him extremely popular in the poor south, the election has come to be more and more about fighting corruption. Again from the New Yorker:

With every major party implicated in corruption, López Obrador’s supporters seem to care less about the practicality of his ideas than about his promises to fix a broken government. Emiliano Monge, a prominent novelist and essayist, said, “This election really began to cease being political a few months ago and became emotional. It is more than anything a referendum against corruption, in which, as much by right as by cleverness, amlo has presented himself as the only alternative. And in reality he is.”

“Implicated” is an understatement. “Knee deep” would be more accurate.

Even in his measured way, Amlo intends to turn Mexico away from neoliberalism, which is enough to make heads explode. The US press either ignores or considerably downplays how poorly Mexico has fared under its tender ministrations. Again from In Defense of Marxism:

Mexico has been immersed in neoliberalism for 32 years and the results are overwhelming: “Under Porfirio Diaz, 95 percent of the population was poor. In 1981 it had fallen to just over 40 percent. Now it is actually 85 percent”, said Dr. José Luis Calva Téllez, a member of the Institute of Legal Research of the National Autonomous University of Mexico (UNAM), in an interview with Contralínea. (Contralínea 2015)

In addition, the purchasing power of wages dropped by 71.5 percent. It is practically impossible to live on the minimum wage…

The driving priority was “macroeconomic management above everything else. More than 1,000 state-owned companies were privatized to stop state intervention in the economy. Foreign trade was liberalized by drastically reducing all taxes or tariffs on foreign products; the Mexican financial system was privatized.”….

In the three neoliberal decades, GDP per capita has grown at a rate of 0.6 percent per year; that is, an aggregate growth of 21 percent. That is not to mention the millions of Mexicans who emigrated in search of jobs they do not find in our country. “Counting the emigrants, the growth of GDP per inhabitant is scarcely 0.3 percent per year, or an aggregate growth of 10 percent in 32 years.” (José Luis Calva, Mexico Beyond Neoliberalism: Options Within The Global Change)

Jacobin highlights another manifestation of the failure of neoliberalism: the rise of crime and rule by drug lord:

Mexican immigration to the United States — historically seen as a safety valve in a country where about half the population lives in poverty — has declined to the lowest level in years. The unemployed and the underemployed are forced to stay home and can’t live on Mexican wages. With a population of 127 million, some 55 million live in poverty.

Violence remains a way of life and has not improved under the current administration. There are over 200,000 dead in the drug wars since 2006 and another 32,000 disappeared. Business Insider wrote on April 23:

The 104,583 homicide cases registered since [President Enrique Peña Nieto] took office in December 2012 are more than the 102,859 officially recorded under his predecessor, Felipe Calderon, who deployed military personnel around the country to confront organized-crime and drug-related violence.

The US is clearly not happy at the idea of an Amlo presidency. His instincts are nationalistic but both the New Yorker and Michael Ard, a former deputy national intelligence officer, see Amlo as willing to deal with America, just not on as one-sided terms as before. As the New Yorker notes:

In campaign events, López Obrador speaks often of mexicanismo—a way of saying “Mexico first.” Observers of the region say that, when the two countries’ interests compete, he is likely to look inward. Mexico’s armed forces and law enforcement have often had to be persuaded to coöperate with the United States, and he will probably be less willing to pressure them.

And Ard elaborates:

Much of the progress the United States has made with Mexico on security cooperation will probably be jeopardized. It’s hard to believe that AMLO will endorse the close relations that the DEA, the Pentagon, and the intelligence community have forged with their Mexican counterparts in the war on drugs. The extradition of the notorious drug kingpin Joaquin el Chapo Guzman to the U.S. in 2017 will probably be the high watermark in the relationship. It is doubtful that AMLO will permit more high-profile extraditions. President Trump’s disdain for a close relationship that has taken us decades to build may come back to haunt us.

But a poor relationship between Washington and Mexico City doesn’t have to be inevitable. Despite the rhetoric, the flamboyant American billionaire has much in common with the austere Mexican populist. Both countries have too many common interests to go down separate paths. The question is: does AMLO have to build the bomb to get Trump to care about Mexico?

But the US is already hostile. As Jacobin put it:

The business press is exceedingly gloomy about the future under a president who promises to improve the lives of Mexico’s working class. The New York Times wrote on April 26 that:

In addition to threatening refinery profits in the United States, his proposals could slow oil production in Texas and impede deepwater drilling in the Gulf of Mexico by international oil giants like Exxon Mobil and Chevron. They would also jeopardize the United States’ energy trade surplus with Mexico, which reached roughly $15 billion last year.

Mary Anastasia O’Grady, a columnist in the Wall Street Journal, writing on López Obrador’s “reinvention as a moderate,” suggests that her readers shouldn’t believe it:

Morena’s “declaration of principles,” posted on its website, asserts that the liberalization of the economy is part of a ‘regime of oppression, corruption and privileges.’ And that it is the work of “a true Mafioso state built by a minority of concentrated political and economic power in Mexico.” If that’s what Mr. López Obrador believes, fixing it would seem to require more of a socialist revolution than he proposes.

She writes that, “Over the years he has earned a reputation as a populist demagogue who uses the streets when democratic institutions block his path to power.” And she warns her readers against his “socialist party,” Morena….

The Council on Foreign Relations, the foreign relations think tank of the American ruling class, writes:

Champions of civil society, transparency, and strong independent public institutions can derive little comfort from some of [AMLO’s] recent pronouncements. On the stump, he offers a return to a time of business subsidies, state ownership, and agricultural self-sufficiency. He repeatedly questions energy and infrastructure contracts—including those undergirding Mexico City’s new $13 billion airport—and promises to roll back the educational shifts underway.

The reports in the business press and the warning from the Council on Foreign Relations are intended to convince the American business class and the State Department that something must be done to stop López Obrador.

The article concludes on a downbeat note:

I would be delighted if my speculations proved wrong and if AMLO could defend a social-democratic program and avoid being pulled into the arms of the US State Department and the Mexican clase política. But as they have for over a hundred years, the prospects for democracy in Mexico look dim.

Mexico desperately needs and wants change and Amlo has long sought to be a catalyst. Let’s hope he can fulfill his ambitions.