The Falling Mexican Peso

     The mexican peso is in free fall, however most working mexicans without great means that I talk to don't really pay much attention to economic theories about why their currency is losing value each day. "Ojala va a mejorar", they say. They're comically stoic about their deteriorating economic condition. For those without means, though, woeful complaints have become accepted truths that cannot be changed and must be endured. Instinct honed by generations of oppression and empty promises is the mother of suspicion. The population suspects from where their economic woes arise but lack the fine details,, and details are usually scarce. Daily life in Latin America is about survival for a majority of the inhabitants, more so in after the last 5 years, so one endures within an eternal present tense bubble. That cancels any need for economic discussions.

"The trouble with being poor is that it takes up all your time."~Willem de Kooning


     "Quien huye del trabajo, huye del descanso Mexicans curse their leaders for their plight, and that plight includes the plummeting peso. Their complaints though are forseeable and not unlike the complaints one hears in the USA about politicians. It seems more hollow, however, coming from the mouth of a of a blue collar worker in the USA with two cars, a house, and a boat, or a rich mexican with three cars, two houses, and a cadre of servants. Poor mexicans are the real thing. Frankly I don't know how some Mexicans live at all. For sure though Mexicans are right when they complain about their political leaders. To understand the current crisis one must have a short lesson in mexican revolutionary history.

A brief very incomplete concise history:

The mexican revolution wrought great changes on mexican society, some good and some sinister. This was really a civil war between the classes. Poor against rich, dark skins against white skins, and north against south. It was a disorganized upheaval. The assorted leaders, the players really, switched allegiances as often as Kim Khardasian changes her clothes. Since the revolution lacked central leadership and a more precise cause, the outcome was destined to be uncertain. After it was all over the Mexican people were handed two folk heroes and a profusion of demons.

The players and the game:

Porfirio Diaz (born poor from the south), a mexican dictator for 32 years had tried to force Mexico into modernization by displacing peasants and inviting foreign investment. It is true he modernized the country and the economy grew but poverty festered. Díaz was an authoritarian intolerant leader. The stark contrast between rapid economic growth for the elite and dire impoverishment of the masses led to the Mexican Revolution of 1910. After 32 years of his dictatorial rule Diaz, in a rare weak moment, declared Mexico ready for democracy and vowed free elections.

Francisco Madero (born rich from the north) was elected president, jailed by Diaz, escaped, fled to Texas, and from there called the population to arms. The population took his advice rose up against the dictator.
 
Henry Lane Wilson, the US ambassador, afraid that the Mexican Revolution would disrupt US interests intervened and plotted with General Victoriano Huerta (born poor from Jalisco) in the murder of the first revolutionary president, Francisco Madero, the bookish indecisive one. That worked. Huerta became president. The US would continue to intervene in the revolution eventually tipping the balance towards the constitutionalists led by Venustiano Carranza.

The latter days Ismael Zambada and Che Guevera, Pancho Villa (born poor) and Emiliano Zapata (born sort of poor from the south) respectively, led peasant armies and were winning battles in their territories when Alvaro Obregon (born in the north, poor but his family had had money), a general with WWI experience, was called upon by Venustiano Carranza (born rich from the north), first chief of the constitutionalists to deal with the peasants.
Machine guns and barbed wire accomplished the task. Carranza and Obregon became presidents and were subsequently murdered. Victoriano Huerta fled Mexico to the States and died in a US prison. Emiliano Zapata was assassinated probably on orders from Carranza. Pancho Villa was retired to a ranch in the north, then assassinated probably on orders from then president Alvaro Obregon.
This bloody political stage fixed by the revolution saw a new class emerge, the evolution of a class of special people, the cold blooded political elite. The future of Mexico fell into the hands of men who were street wise, not bookish,, poor to middleclass ruffians for whom politics was to become a pirate's charade. If they were poor when they entered politics they exited very wealthy. The constitutionalists had triumphed over the peasants. For them the dreams of land reform became a theatre, a form of slow motion placation just enough to keep the peasants loyal. Zapata may have given away the entire store, we will never know,but Venustiana Carranza and his succesors were not about to fullfill all the promises of land land and liberty.

Plutarco Calles (born poor) was elected president in 1924, after Alvaro Obregon. Before his presidency he had made a pact with Obregon to share power. They plotted to assassinate Carranza so Obregon could be President. Later Calles may have conspired in the murder of Obregon. What is important, however, is that Plutarco Calles was the model for all subsequent politicians. A self-made member of a ruthless club, he created PRI, the party that to this day controls Mexico. Calles made revolutionary speeches about land distribution, justice, and education of the masses. He elevated the role of the military in Mexican life which was not instituted to protect Mexico from Guatemala, but to protect the political and upper classes from the lower castes. After he left office Calles named himself Jefe Máximo, the political chieftain of Mexico. That period, when Calles held the strings or attempted to control mexican politics was named Maximato. He became the model for the modern caudillo. The presidential tradition of choosing your sucessor began with him. Since that time PRI has used politically cultivated progeniture to ensure continuity. Little land was distributed during his regime. Justice was to become an auction house. Education suffered. Calles had performed an amazing ballet traveling from the left as a fervent reformer to a rich looter who founded the modern mexican authoritarian political state of empty promises. After Calles all that was left was to enshrine political theivery in the halls of government, and shroud their workings behind clouds of revolutionary rhetoric and empty praises about our rich indigenous past. All this was guarded steadfastly by an authoritarian one party rule. The political class indulged its orgy with its big business and criminal concubines, as with the press, the army, the police, the unions, and all the low level caciques that dispense the law,, and the dole. It had to end some day. The store had been left tended by prepotent hypocrites.
The sayings that describe post revolutionary mexico were:
 

“Con dinero baila el perro” With money the dog will dance. Money will fix anything in Mexico. or
“La moral es un árbol que da moras” Morality is a tree that gives blueberries. 

Former general, Revolutionary General Gonzalo N. Santos is credited with this phrase when someone claimed there were a lack of ethics in his actions. Santos ruled the State of San Luis Potosi between 1943 and 1949, and made violence and murder his best allies. The former soldier, who died in 1978, was considered by the writer Carlos Monsivais as "almost the eternal boss of San Luis Potosi".
No economy can operate to its potential under these adverse circumstances. Crime is on the rise and mostly unreported because there is no law or order. The mexican people bear an incredible burden. They bear the ever increasing weight of the past sins of their government and in addition the weight of its contents. Suggestions abound to fix Mexico. The problem is that to accomplish just one change one must repair ten past mistakes all of which complicate the original intent rendering any attempt at change inept. The tope, or speed bump, is the most relevant symbol of modern Mexico. They are everywhere, no two are alike, many are practically impassable, and none would be needed if police performed their job. Mexico sadly is a society of impediments.
For the Constitutionalists, this was often a cynical process. The distribution of land to the villages was for them a political manoeuvre not - as with Zapata - an article of faith. It was a means to quieten and domesticate the troublesome rural population, turning them into loyal subjects of the revolutionary state.
Why do currencies fail? Their devaluation is a reflection of older serious problems that have already existed in a country. Currencies fail because they are not preferred on the currency exchange market. Less people want to speculate in mexican pesos. Currencies reflect the state of production in a country. Mexico's production has declined drastically. Currencies also reflect the social climate in a country. Mexico's corruption, insecurity, and impunity represent impediments to national and international investment. It's true that the entire world suffers from an economic downturn. Our leaders, however, have done little to elevate the country. Public education produces hoards of unprepared youths,, whose destiny is to work in a tortilleria,, and with ever increasing deception and discontent. Private education produces "juniorism", exiles, and an untouchable elite class. The technocrats, led by "El Pelon", think, but really don't believe, that infrastructure will suddenly thrust everyone into a modern cauldron of boiling commerce. The true benefit of infrastructure in mexico goes to "Friends of Friends". Infrastructure is healthy for a society but Mexico's investment in expensive yellow brock toll roads, for instance, will benefit only a small portion of that society.
The politicians have forgotten from where their money comes. Government is inept at collecting real estate and income taxes. It receives revenue from a heavy sales tax, and a retro fiscal banking system that actually dobles taxes for legal businesses. Oil revenue is another fountain but that is in decline because of the world wide price of crude at the moment,,, and because of nepotism, corruption, and gross inefficiency in the state owned oil union, PEMEX. Like entities unto them selves the unions and political parties have corrupted their initial goals which has led to isolation and inflexibility. For the politicians it's all about garnishing votes and holding on to power not about national service. Taxes must be hidden within the price of a camera, a cantelope, or a Coca-Cola. The general population takes less notice of a sales tax taken in little swigs than a monster gaping maw in the form of income tax. Politics is burdened with arrogance and cynicism, yet the portrait I am painting in this blog isn't complete. Mexico is not just the sins of its leaders. When I think of the reasons why Mexico is a beautiful place, I think of its landscape rippled, bold, and volcanic, of its people happy, sensual, and giving, of its art and crafts expansive, colorful, and earthy, I smile. I know this will always make sense of it all, in spite of it all.