Hideous Constellation of Threats and Challenges Facing Mexico

The Risk of Contagion of a full-blown Mexican crisis is far greater today than it was during the Tequila Crisis 22 years ago.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

Things are rapidly going from bad to worse in Mexico. Hundreds of people were arrested and a handful of people killed over the past week as peaceful protests against the government’s hike of gasoline prices (by as much as 20% in some states) descended into widespread looting and rioting. The mood on the street was hardly helped when Mexico’s deeply unpopular president, Enrique Peña Nieto, tried to defend his actions by asking the public, “What would you have done?”

For a lot of people, the answer’s clear: a lot of things, very differently. Right at the top of the list would be launching an all-out war against the endemic culture of corruption plaguing virtually all levels of government. But now, time is fast running out as Mexico now faces a hideous constellation of threats and challenges, all at the same time.

NAFTA Hangover

There are few bigger threats to Mexico right now than the President Elect Donald Trump, who last week announced the appointment of Robert Lighthizer as the United States’ new Trade Representative. Lighthizer, a trade lawyer and vocal supporter of protectionist policies, is expected to play a leading role in the renegotiation of NAFTA, which helped transform Mexico into a low-cost industrial powerhouse while also shackling its economic fate to its northern neighbor:

The U.S. accounts for 80% of Mexico’s exports, 49% of its imports, and 60% of all its foreign direct investment.

Now that is all at risk. In the extreme event that NAFTA were cancelled, imports between Mexico and the U.S would be governed, at least on paper, by World Trade Organization rules. To access the U.S. market, Mexico would have to pay a tariff of up to 2.5% on all the vehicles it exported and as much as 6.4% on all its agricultural exports. As for the U.S. it would have to pay tariffs of 7.7% and 38.4%, respectively, in order for its industrial and agricultural products to reach the Mexican market.

The ramifications of such a sea change in trade relations are almost unimaginable. According to a report by Bank of America Merrill Lynch, cited by the Spanish daily El Economista, if Mexican exports to the U.S. fell by 25%, Mexico’s annual GDP growth could shrink by over one percentage point. The contraction could be as much as 3 percentage points if Trump were to seize the nuclear option of completely cutting off trade relations between the U.S. and Mexico. Whatever Trump decides to do, one thing is clear: Mexico’s industrial base is likely to suffer.

Pemex Debacle

The biggest problem facing Mexico’s much diminished oil giant, Pemex, in 2017 will be finding a way to service a growing debt pile of over $100 billion – most of it denominated in foreign currency – from the proceeds of a continually shrinking revenue base. According to Mexico’s Business Coordinating Council, Pemex doesn’t just have temporary short-term liquidity problems, as the company’s senior management and Mexico’s Finance Ministry contend, but is suffering from a structural deterioration that poses a serious threat to its long-term viability.

This deterioration is the result of “decades of bad management, lack of vision, negligence, abuse and in many cases, corruption.” The Mexican daily La Jornada went further, arguing that the company has been systematically “plundered” during successive administrations, including, of course, the current one.

If Pemex is unable to service its debts, Mexico’s increasingly debt-burdened government will have to step in, again. The problem here is that Mexico’s government is also struggling to rein in its own addiction to debt, with some states already on the verge of bankruptcy. One state governor, Javier Duarte of Veracruz, did so much fiduciary damage during his mandate that he’s now on the run after allegedly misappropriating vast sums of public funds.

By the end of 2016 Mexico’s total public debt is expected to have reached 50% of GDP for the first time in decades. In 2008 it was just over 20%. Some of this debt is denominated in dollars, euros, yen, and other currencies, which will become difficult to service as the peso comes unglued.

Peso Crisis

At the end of last week, the peso tumbled to its lowest level ever, prompting the central bank, lovingly called Banxico, to step into the FX market by selling about $1 billion USD spot in a desperate bid to halt the peso’s relentless depreciation against the dollar, or, as the central bank market operations manager put it, “strengthen the peso.”

But as was the case with the central bank’s previous interventions, developments beyond Mexico’s borders, in particular in Washington and New York, would ultimately dictate the movement of Mexico’s currency. All it took to undo the desired effects of Banxico’s $1 billion intervention was one Tweet from Trump threatening to impose tariffs on Toyota if it chose to expand its production operations in Mexico.

Banxico stepped in again during the late hours of Thursday evening with an as-yet undisclosed amount of dollar sales – enough to steady the currency for at least a day or two.

The potent combination of a slumping peso and the Mexican government’s recent hike in gasoline prices is almost certain to fuel inflation, which is already above the central bank’s target rate of 3% annual. In January alone it’s expected to surpass 1% on a monthly basis, its highest level since the year 2000. Meanwhile, Banxico’s desperate bid to tame inflation, by hiking interest rates, risks further constraining internal demand, which in turn places even further pressure on retail companies that are struggling to pay off their increasingly costly dollar-denominated debt.

As Goldman Sachs notes, the last time the peso’s Real Effective Exchange Rate (REER) was weaker than it is at present was in the wake of the 1994-1995 “Tequila” economic and banking crisis, which unleashed destabilizing effects across the whole Latin American region and put at risk some of Wall Street’s finest, including, ironically, Goldman Sachs itself. Things got so serious that the IMF and other international financial entities felt duty bound to engineer a massive bondholder bailout.

Capital Flight, Part II

Now, much as then, there is a pronounced risk of capital flight from Mexico. As Professor Javier Santacruz of Spain’s Institute of Stock Market Studies (IEB) warns, if Trump does launch a trade war against Mexico, it risks triggering capital flight from Mexico toward the U.S, which risks being further exacerbated by the rapid appreciation of the U.S. dollar and an exodus of investments toward other Latin America countries, which currently offer greater growth potential than Mexico.

But it’s not just Mexicans that should be worried. The risk of contagion of a full-blown Mexican crisis is far greater today than it was 22 years ago. As author and former investment banker Nomi Prins points out, Mexico has the largest concentration of foreign bank ownership of any country in the world (mostly thanks to NAFTA stipulations).

And the world has never been so invested in Mexico as it is today. As we reported a couple of weeks ago, foreign investors hold around $100 billion of Mexico’s local-currency government debt, the most for any emerging market economy. By Don Quijones, Raging Bull-Shit.

The Mexican government had used Pemex as an endless ATM, but now the oil company is stewing in a toxic mix. Read…  Shrinking Oil Giant Pemex Starts 2017 on Wrong Foot

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  86 comments for “Hideous Constellation of Threats and Challenges Facing Mexico

  1. pete says:

    So…maybe they will pay for the wall…PJS

    • Edward E says:

      Wonder what happened to San Francisco’s Trump statue? Maybe we could put some clothes on it and somehow get it to the inauguration swearing in ceremony. At least it cannot talk, it’s not as costly, gross and disgusting as the real thing.

      Throughout history Great Walls have stood as crumbling monuments to the stupidity of man. Various insane dynasties have met their Waterloo over paying for a stupid wall.

      • SoberMoney says:

        Brilliant! I love it.

        • Edward E says:

          Thanks, but I’m not brilliant not, just realized that the blue Kool-aid is just as incredibly frightening as the red Gatorade.

        • d says:

          So will this teach you to simply drink natures unadulterated water, After boiling in most country’s.???

        • Edward E says:

          Exactly right, you’re so sharp. Only pure free spring water from Boxley Valley, although I sometimes bring back glacial spring water from Wisconsin ?

  2. hidflect says:

    If nothing else, Trump is showing what power a President really has (before he’s even in the job) and exposing Obama as the cardboard fraud he really is. I agree with some pundits who say Trump decided to run the night he had to sit through Obama publicly mocking him at the correspondents dinner for over 20 minutes. As Frank Sinatra said, the best revenge is success…

    • Marty O Kely says:

      Now i know how Trump won the election. He sold people on trade being a win/lose proposal and the fantasy that high paying jobs of the 70s will come back.. A few things that folks seem to forget are the unintended consequences of these magical actions.

      1) U.S. pipeline exports of natural gas have doubled since 2009 and are expected to continue to grow in 2016, with almost all of the growth attributed to increasing exports to Mexico, according to the U.S. Energy Information Administration (EIA).

      In a “Today in Energy” brief issued Tuesday, the EIA said Mexico has accounted for more than half of all U.S. natural gas exports since April 2015. The agency said the United States exported 4.2 Bcf/d of natural gas via pipelines to Mexico in August, adding that through that month U.S.

      Also look at the massive about of exports of agricultural goods.

      If Trump executes his plan, the price of natural gas collapses which will have a huge ripple effect across the US… Jobs to build more cars are not coming back in droves.. A few PR stunts here or there mean nothing in the big picture. Make the decision yourself, when was the last time you paid say 8-10 percent more for something just because it had a “made in the US” label. Look around your house or office. Point out 3 things that were fully made in the US from beginning to end.

      He is a great salesman.

  3. Maximus Minimus says:

    “To access the U.S. market, Mexico would have to pay a tariff of up to 2.5% on all the vehicles it exported and as much as 6.4% on all its agricultural exports. As for the U.S. it would have to pay tariffs of 7.7% and 38.4%, respectively, in order for its industrial and agricultural products to reach the Mexican market.”

    Sounds like WTO is about just and equitable rules.

  4. Old Engineer says:

    “Pobre Mexico, tan lejos de Dios y tan cerca de los Estados Unidos.” (Poor Mexico, so far from God and so close to the United States.) Porfirio Diaz. A quotation we learned in my Latin American history class in high school many years ago and which seems more apt now than never. First NAFTA allowed cheap corn imports from the US which drove millions off their subsistence farms, then the maquiladoras moved to China except for items like autos, which are now under attack. And thanks to US fracking the price of oil has plummeted. And there are all the internal problems cited by Mr. Quijones along with the drug violence.
    It would seem events are conspiring to force Mexicans to consider leaving, perhaps in the 10s of millions, as in Africa, and one wonders if the wall can contain them if the Mediterranean can’t contain the Africans heading to Italy.
    You’d think that if the US really didn’t want the Mexicans moving to the US they might look for policies that would assist the Mexican economy. But that is a bit much to hope for from North Americans.

    • Mills Antley says:

      We tried that already with NAFTA. That’s what Trump was elected to reverse.

      • james wordsworth says:

        Sometimes the result although it may not seem great is far better than the alternative. If you think NAFTA has been a failure, it is quite possible that without it the US would be even more inundated with Mexican immigrants. With many lower skilled/paying jobs now in Mexico it has substantially slowed the northward migration. Once Trump tries to uproot Nafta, and Mexico falls apart … good luck Texas and California and Nevada and Arizona. The only hope is that tRump is not as stupid as he looks, and is not an ideologue … so maybe someone can make him come to his senses. He promised down and out and ignorant americans the impossible. It will be fun to watch the contortions he is going to have to perform.

        • d says:

          “He promised down and out and ignorant Americans the impossible. It will be fun to watch the contortions he is going to have to perform.”

          My main issue with him.

          The only difference between him and her this time, is that he was making untenable job promises, and she was making untenable handout promises.

          She was slightly fitter for the office, so stupid Americans chose him, the worst of the evils, a choice they have been making regularly since 1999.

          I made good money on him getting elected. I should have put more on it, sooner. As he was not the logical choice.

    • Brian Reilly says:

      Mexicans ARE North Americans.

  5. Konghaakon says:

    Doesn’t the 20% + drop in the peso offset most of the potential tariff increases? If labor and other costs don’t increase more rapidly than drop in peso then profits from Mexican manufacturing should increase.

  6. Unitron says:

    So Mexico gets unfettered access to the largest economy in the world, and the U.S. gets a handy sledgehammer for American companies to drive down the wages of American workers, but drive up executive bonuses. I wonder how many American made products will be sold to a country that experiences civil insurrection because the price of gasoline is slightly higher?

    • Anthony says:

      “civil insurrection because the price of gasoline is slightly higher?”

      You sir, are vastly over-simplifying the pain that such an increase can cause the people of Mexico.

  7. Tyler from Grand Rapids says:

    At this point I’ve come to the conclusion that free trade is just one of the many things designed to gut our economy. Now if we can just raise the tariffs enough to meaningfully lower the income tax. That seems like a fairer trade than our terrible bargain of keeping the world employed at our expense.

  8. NotSoSure says:

    Stop this already. My projection for Dow 30K is end of this year. If Mexico were to fall into a crisis soon, it would be Dow 40K. If the Chinese were to devalue then it’s Dow 50K.

  9. Realist says:

    I suspect that there are people over in Spain that indeed do need a tequila or two to calm their nerves. I’m thinking on banking, construction etc that the Spainsih are involved in on the Mexican market …

  10. James says:

    Auto companies are hiring in michigan at ten bucks an hour. Then end is near.

  11. Raymond Rogers says:

    The people in Mexico are blocking all rail traffic for the past five days in an effort to “punish” the government.

    This is what you get with an entitlement mentality. Take away my gasoline subsidy and I will burn down the house.

    • JerryBear says:

      These so called “entitlements are all that are standing between people and starvation and absolute destitution in this day and age. They are an absolute necessity.

  12. Petunia says:

    I remember that the failure and eventual bailout of the hedge fund Long Term Capital Management started with a peso crisis that spread to Asia. Let’s see where this one goes.

    You would be surprised what becomes obvious when you bother to take a look. Maybe its time for Mexicans to insist all the revenue and expenditures be put online so every body can take a look.

  13. Gian says:

    Let’s not forget about the remittances sent back to Mexcio by Mexicans here in the US. Estimates for 2016 were $28 billion, an apparent source of revenue that is better than Pemex. When we build the wall and send them home, maybe Mexico can let these low wage earning peasants run the country and balance the books?

  14. Saylor says:

    When your neighbor’s house is on fire…, it is your problem also.

  15. ericbrindamour says:

    For every move that hurts Mexico’s economic well being, you’ll have to add another foot or meter to the Trump’s border wall. If Mexico’s economy goes down the toilet then illegal immigration will kick into overdrive. I know that illegal immigration is a crime but I would gladly cross the border for the sake of my wife and kids. In the end, we are all human beings trying to do the best for those who depend on us.

    • Kent says:

      I’ve read that Mexicans have already come up with a new invention to overcome Trump’s wall. They call it “El Ladder”. It is unbelievable how all of America’s greatest minds on dealing with the immigration issue were so easily defeated.

  16. anthony hall says:

    Trump`s Wall will look great on Bechtel`s balance sheet. Pity most Cartel Drugs travel North in Container Trucks. Thousands every month through the Customs Posts.

    • d says:

      The “Wall Call” isnt about drugs.

      Those drugs are distributed by Illegal immigrants. Run by Mexican and Latin American drug cartels.

      All the major players in the American drug distribution markets today, are not American’s.

      • 91B20 1st Cav (AUS) says:

        …but who are the customers???

        • d says:

          The Majority of the customers are not white.

          How many first use, as it is available, and socially acceptable, even a peer group requirement.

          Since man discovered abusable substances, there has always been a % of abusers.

          The demand position to protect the cartel’s is unacceptable.

          The drug trafficker, is a bigger danger to society, that the Terrorist.

          Look at how many guys were deliberately hooked up and OD’d in nam, by the VC supplier’s.

          If it was harder to get, many less would use it.

          Cocaine became very acceptable in the US, as it became “cool” in Hollywood.

          Drug addicts are sick, they belong in custodial rehab, not prison.

          Drug traffickers, belong in front of a firing squad.

          Less traffickers = less retailers, less retailers = less drug fueled crime. Simple.

        • Wolf Richter says:

          The biggest drug problem in the US today are prescription opioids, manufactured by big pharma.

          In 2015, more than 15,000 people died from overdoses, according to the CDC. And look at the racial setup:

          “Overdose rates were higher among non-Hispanic whites and American Indian or Alaskan Natives, compared to non-Hispanic blacks and Hispanics.”

        • d says:

          ““Overdose rates were higher among non-Hispanic whites and American Indian or Alaskan Natives, compared to non-Hispanic blacks and Hispanics.””

          Definitely there is a big Midwestern and northwestern Pharmaceutical opioid abuse issue in the US.

          Differtent social and ethnic stream’s do different drug’s.

          Upmarket heroine addicts call Meth a “Gutter Drug”.

          Whereas I say “Pot, kettle” as they are all addict’s (Black).

          A lot of the Opioid OD’S are due to erratic use, which raises dangerous tolerance issues, with Pharmaceutical Opioid abuse.
          Particularly when dealing with Poly-addicts.

  17. Greatful again says:

    Anyone there right now? It must be getting tense.

  18. Craig 2 says:

    “This deterioration is the result of “decades of bad management, lack of vision, negligence, abuse and in many cases, corruption”

    Sounds like how Mexico has been managed for decades.
    So, seriously, when do the Mexicans have a revolution? My impression is that the Mexican people are beaten down and largely hopeless (not too unlike many US citizens).

    What decisive factor will ‘blow the country up’ so to speak.
    Watching Brazil and Venezuela makes me think that no real change is possible as all potential leaders are corrupt.

    I have no doubt that Trump will be able to bully Mexico into submission as a lesson for China. As there are major labor strikes going on right now in China, the possiblity of civil unrest there is real.

    So what will break Mexico? Or is it so broken, such a non-country (not insulting, just speculating), that nothing will change because the place has already crashed and burned??

    P.S -never been to Mexico

    • NotSoSure says:

      Here’s a couple of quotes from Cormac Mccarthy’s Mexican Trilogy, not sure how true this is:

      “In Mexico they are mad for society and for politics and very bad at both. My family are considered gachupines here, but the madness of the Spaniard is not so different from the madness of the creóle. The political tragedy in Spain was rehearsed in full dress twenty years earlier on Mexican soil. For those with eyes to see. Nothing was the same and yet everything. In the Spaniard’s heart is a great yearning for freedom, but only his own. A great love of truth and honor in all its forms, but not in its substance. And a deep conviction that nothing can be proven except that it be made to bleed. Virgins, bulls, men. Ultimately God himself.”

  19. nick kelly says:

    Putin, just like the former Soviet Union he misses so much. will welcome a unstable, ideally revolutionary Mexico.
    Why? Because it weakens the US.

    Using resources to build a wall weakens the US.

    Removing labor from California’s agricultural sector weakens the US.

    Driving up prices of econo- cars like the Ford Focus, and all other imports, widens the gap between the US economic classes. (The dream of many Trump supporters, the 50’s, was also the dream of Detroit’s Big Three- one with no foreign cars, or small cars. It was only the invasion of the VW Beetle that provoked Pinto and Vega.)

    Trump supporters see Mexico as an alien foreign power.
    Russian real politik sees it as part of the US sphere of influence and as part of an integrated North American economy.

    Unfortunately for Putin, Russia is not the Soviet Union and can’t credibly stir up a communist insurrection in Mexico. (Although with 70 % of the Russian economy now controlled by the state, what is different from Soviet Russia, except now the privileged class doesn’t hide itself?)

    Russian finances and its almost depleted reserves probably limit its taste for support of any anti-US adventures along the lines of the million a day in virtually free oil the USSR extended to Castro.

    The same does not apply to China, which has been actively seeking and liberally financing influence in South America. (A large loan to Venezuela is all that is preventing complete collapse)

    If both China and Mexico are US targets, the two may draw closer.

    In the Russian dream, Trump starts a trade war with both, causing a recession in all three countries.

    • Wolf Richter says:

      >>> “If both China and Mexico are US targets, the two may draw closer.”

      That’s already in the works. Mexico is now coddling up to China. China doesn’t need Mexican cars. But Mexico needs Chinese money if the US relationship falls apart, and China could use Mexico’s oil…

      • Lee says:

        Pemex is running out of oil.

        Just wait and see how long before Mexico becomes a net importer of oil.

        Isn’t it already a net importer of NG?

        • Wolf Richter says:

          There’s plenty of oil. But lack of re-investment of profits over many years (they were siphoned out instead) caused production to decline. A big boost in investment will do wonders for Mexican oil production.

  20. Crazy Chester says:

    Forget “The Wall”. There is a simple remedy: lock up the employers who hire illegal aliens. Make it a mandatory sentence, perhaps 30 days for the first offense 60 days for the second, a year for the third. Then pass a corollary law which, for the first year, offers free transportation home for illegals. Then sit back and let the howling from the hypocrites begin.

    You will hear that Americans will not do the work. That’s crap. Americans will not, by law, be exploited to allow for higher profits to corporations – who would have to adjust their earnings per-share in light of being forced to pay legal wages for workers. You can almost hear the hissing of the air going out of the stock bubble with the very thought.

    I suppose the corporations can buy back their stocks for a good while hoping Hillary (who I voted for) will run again in 2020 (which Democrats are dumb enough to go for having no political bench), but ultimately workers would have to be paid more, and crony capitalists and their managers would have to make less so their products could remain competitive. I know: “yeah right”.

    The problem of course is a variation on ‘we have met the enemy and he is us’. Take away the high-priced managers and the obscenely overpaid and undertaxed speculators and the capitalists turn out to be all of us holding 401(k)s, suckered into thinking we have money to spend by Bernanke’s calm before the storm ‘wealth effect’. A real wealth effect must float all boats. Bernanke just did not think this free money to corporations thing out far enough.

    Me, I would invest in a factory in Mexico to manufacture an inexpensive Bushmaster knock off, ammo and motion detectors for export to the Rust Belt. My guess is demand there for such things will be increasing soon.

    • Frederick says:

      I like your idea and yes you are spot on that it’s crap that Americans won’t do the work I was willing and able but my emboss paid those guys 12 an hour in cash and I couldn’t pay a mortgage on that much less anything else And that was in the Hamptons a very wealthy enclave They came in every morning 4 or 5 in a beat up Toyota Corolla CRAZY and they wonder why Trump won What a joke we’ve become

      • nick kelly says:

        If Americans won’t work for 12 dollars an hour cash it’s going to take more than beating up Mexico to put California’s lettuce and strawberries in supermarkets.
        Nor will anyone pay more than that in the US to sew clothing panels, so beating up on China won’t do anything about its huge budget apparel segment- 19 % of imports.
        All it will do is raise the price to Americans who shop Walmart, i.e., those who can least afford it.

        Trivia: the Made in (country) label used to give origin of a manufacture was first introduced by Britain at the height of empire to make sure no one accidentally got ripped off buying something made in up- and- coming Germany.

        Around the same time the Brits introduced the slang ‘jerry built’ to convey the same warning about houses built by German workers.
        So these warnings kind of backfired.

        When British forces met Germans in the Western Desert ( Libya) in 1941 they soon found their thin metal gas cans sprung leaks so they loved to capture ‘jerry cans’. Neither design nor name has ever changed.

        I said it was trivia.

        • d says:

          “When British forces met Germans in the Western Desert ( Libya) in 1941 they soon found their thin metal gas cans sprung leaks so they loved to capture ‘jerry cans’. Neither design or name has never changed. “When British forces met Germans in the Western Desert ( Libya) in 1941 they soon found their thin metal gas cans sprung leaks so they loved to capture ‘jerry cans’. Neither design or name has never changed.”

          When When the ANZAC and Indian forces, met the Germans in the Western Desert ( Libya) in 1941 they soon found their thin metal gas cans, made in America, sprung leaks so they loved to capture ‘jerry cans’. Neither design or name has never changed.

          Just like the LRDG which became the SAS.

          Started in the desert, with a few British officers, over mostly over ANZAC predominantly NZ enlisted personnel. And some already worn out Chevrolet pickups.

          After the first leg of the Benghazi handicap.

          Rommel considered the Anzac forces. Particularly the Australian’s. to be the elite of the British forces in the desert.

          He was also happy for the Africa Core personnel taken in the desert, it meant they would not go to Russia, be well cared for, and mostly survive the war whole.

    • Petunia says:

      I’m a college graduate and clean my own toilets. Is that a job an American won’t do?

      And to Marty O Kely — I just received three items of clothing purchased from a company named FRESH PRODUCE who makes their clothing in the USA. Please encourage the ladies in your circle to give them a look.

      • nick kelly says:

        A ‘job’ in this context is employment not a household chore. It’s a job most Americans won’t do for someone else. When Americans stay in a motel or hotel they expect to have the toilets cleaned by someone else.

        • Petunia says:

          Nick, when I lived in FL the main source of employment for illegal women was house cleaning. By cleaning my own toilets, I am actively contributing to reducing the demand for illegal immigration. Who cleans yours?

        • nick kelly says:

          I do. I just don’t congratulate myself that by so doing I am helping the economy.

  21. SoberMoney says:

    The ignorant pro-Trump xenophobes who write here are fools. Mexico and China did not take our jobs. American corporations gave them our jobs – to cut costs, increase profits, and raise their stock prices.

    Trump is a shameless Kleptocrat who has duped all of you. Wall Street is behind all these trade agreements. Only pathetic victims blame the government.

    • NotMyPresident says:

      Agree (+1)

    • Frederick says:

      Hey you’d better sober up I’m not xenophobic in any way I just don’t like my country being overrun by people who don’t speak English don’t want to assimilate and many of whom are felons Call me crazy Xenophobe NOT

      • SoberMoney says:

        How can they assimilate when the xenophobia is so disparaging your dictator wants to deport them and built a reverse Berlin Wall?

        Take responsibility for the exploitation the US does to these people. You have been directly benefiting from their cheap labor and the low inflation for decades.

        It’s hypocritical to blame them for our companies dumping American workers so your S&P index fun will go up. Get a life!

        • Raymond Rogers says:

          America belongs first and foremost to the American people, the the American Citizen. It is the job of the United States Government to look after the interests of American citizen before any foreigner. The primary responsibility of a government throughout history has been to take care of the CITIZENS of that country. I’m tired about hearing about the plight of immigrants. And yes, they do steal American jobs. Many of them have jobs lined up before they get here. I know because I have talked to many of them.

          Yes the companies play a large part, as they turn a blind eye. So too have the politicians. The traditional republicans had wanted cheap workers, and the democrats wanted the votes. That has changed, as the democrats have just as many hands in the pot of businesses that desire cheap labor.

          Trump is the only President (elect) to have fought the forces of globalism in a very long time. Clinton is no different from Obama, who was no different from Bush, who was no different from Bill Clinton in terms of globalist aims.

          There is a real fear in many of these companies, that Trump will level the stick, if they continue to outsource jobs,

    • wkevinw says:

      Wall Street/Businesses are in it to make money. They play within the rules (sometimes outside), that the government makes and enforces. The government is at fault because it refuses to legislate properly, so makes trade laws that disadvantage the US worker. The government fails again when it fails to enforce the law when “Wall Street” breaks the law.

      Almost nobody was prosecuted for the fraud the went down over the past 20 years in financial markets.

      How about that great bipartisan government that repealed Glass-Steagall at the end of Clinton’s admin.?

      Or how about that great government that put Paulson, Gheitner, et.al. in charge of things for several years?

      Or how about that government that appointed Holder who said that basically a bunch of the financial firms were too big to fail or jail?

      Yes, government has failed.

    • Petunia says:

      NAFTA was passed by Bill Clinton, when even Bush senior didn’t have the nerve to do it. Bill Clinton was the one who gave away our technology for campaign contributions. The Clintons made me a republican.

  22. wkevinw says:

    Back in the ’60’s to the early ’80’s we used to go to the border towns to eat Mexican food walk around a little and drink Mexican beer. It was no big deal and we were never bothered.

    I don’t think I would go there even with a posse of big strong guys now.

    You have to feel bad for the average Mexican citizen trying to live a regular life.

  23. James Murray says:

    Mexico is a survivalist country.
    When I lived in Albuquerque, there was a water leak in the street, so I reported it, A couple of days later, 2 guys in a truck showed up, looked and left.
    A few days later, a lowboy and a dump truck showed up with a backhoe and a compressor and jackhammered out a huge section of the street, hauled the asphalt off (hazardous waste) then dug up the street and hauled the dirt off. Took all afternoon.
    The next day, 4 guys showed up and worked all morning in the hole and stopped the leak.
    2 days later, they brought the dirt back, put it back in the hole, tamped it down with an air driven tamper and left. Two big trucks that day.
    Then a week later, they brought in a truck of asphalt and a roller and replaced the asphalt .
    They probably used $500,000 of equipment and 4-5 man days to fix it.

    In Mexico, I was getting a haircut and there was a leak in the street. A guy with a bucket, shovel, pick and a little boy shows up. The guy pries out the cobblestones, sets them aside, digs out the dirt, piles it up and gets down in the hole. He fills the bucket with dirt, puts the pick in the bucket upside down, puts it in front of the hole as a warning and disappears for 20 minutes.
    He returns, gets back in the hole, fixes the leak, then shovels the dirt back into the hole, replaces the cobblestones and leaves, maximum of 2 hours.
    When things go bad, the US won’t be able to have the money to fix a leak. In Mexico, you can always find a guy with a bucket, shovel, pick and a little boy to help.

    • Frederick says:

      That’s true but that pipe will probably be leaking again within a month Count on it There is a happy medium you know

      • d says:

        It was probably weeping when he filled the hole in, its how a lot of sink holes start.

    • Greatful again says:

      Kinda funny. I have a house in ABQ with a leak at the water meter. Just a month ago. The city workers came out and noticed that it was their meter that was leaking. Fixed it in an hour. Two guys.

  24. SoberMoney says:

    The judgemental arrogance about Mexico in some of the posts here is laughable. For as rich as we are the US has some of the poorest lifestyle statistics in the developed nations.

    Our population is so unhappy WE are the ones who buy and consume most of the drugs the Mexican cartels import.

    Our US gun manufacturers sell the cartels their weapon in the black market – with the implicit lobby money approval of the NRA.

    Mexican labor has kept our inflation low and helped our stock prices rise. Low Auto price inflation has benefitted from Mexican plants.

    And of course now our incoming Kleptocracy leader want to scapegoat Mexicans for our economic greed?

    • Robert says:

      Gunwalking was a tactic of the Arizona Field Office of our government ATF allowing licensed firearms dealers to sell weapons to illegal straw buyers, hoping to track the guns to Mexican drug cartel leaders and arrest them. This tactic was a failure as the drug cartels got guns and were not arrested.

  25. Chhelo says:

    And then! We could just merge Mexico with the US and move the US border the border with Guatemala. Divide Mexico in to several states and make them all US citizens.

    Until a better form of government or “rule of law” is imposed the theives that run the show (includes the current and all past Presidents, cabinet officials, governors and their henchmen and the top leadership of government run businesses) will continue to steal the wealth of the country. The average Mexican citizen does not stand a chance for a better life.

    Trump should move forward to stem the flow but liberalize the movement of Mexicans to and from the US via a guest workers program. A stronger legal integration with Mexico is the only course that will really solve this issue.

    I have worked in and out of Mexico for the last 30+ years and have many friends there and also now living in the US. I’ve seen the good and the bad from both sides of the border. The one thing I pray for is the average citizen of both countries that have been used and abused by the crooked politicians and crony capitalist. True free markets and trade are a win for both countries.

    Viva USA & Mexican.

    • Petunia says:

      Nobody has a problem with legal immigration that protects the jobs of Americans first.

      • d says:

        “Nobody has a problem with legal immigration that protects the jobs of Americans first.”

        Should read

        Nobody has a problem with legal immigration that protects the jobs of Nationals first.

        The people who have a problem with that, anywhere, are not nice people.

      • walter map says:

        “immigration that protects the jobs of Americans”

        Pray tell, what exactly would be the point? After all, federal policy is cheap labor, even if the government has to pay corporations to move overseas using tax money paid by their workers.

  26. walter map says:

    That’s what happens when corporatists bleed an economy too aggressively: they have a way of killing the host. But that’s what corporatists do, and they do it knowing the governments they control will sacrifice the livestock to preserve their lootings. The subject population naturally lacks any effective recourse.

    • SoberMoney says:

      Well said, Walter.

      Again, the hypocrisy of comments that blame government for the havoc wrecked on Americans is so insipid.

      You “poor govt victims” don’t get it. The Federal government is a capitalist govt. It is in operation to funnel tax dollars to make profits for the private sector.

      ALL tax dollars going to entitlement programs end up in the private sector: food stamps, Medicare and Medicaid, defense contractors, Obamacare, etc.

      I am incredulous over how out of touch Americans are about our so-called government – which is controlled and directed by the private sector.

      Why do you think we have the Goldman Sachs revolving door with the US Treasury? It’s so obvious to anyone with an analytical mind.

      • walter map says:

        “Why do you think we have the Goldman Sachs revolving door with the US Treasury?”

        As a convenience to Goldman Sachs. Only a couple of hundred rapacious corporatists have this kind of access. Since the election, two hundred and one.

  27. Randy says:

    Mexico is a corrupt country and has been going back before Adam & Eve. We have supported their corruption in MANY ways including inviting in their unskilled, illiterate hordes allowing the government to rip off even more money. We allow in their cartels, purchase their heroin and method then allow unlimited quantities of cash to be legally remitted by all the millions of illegals.
    THEN, we allow Vicente Fox to berate us for being stupid, racist, sphincters.

    • walter map says:

      “Mexico is a corrupt country and has been going back before Adam & Eve.”

      Well, actually, it started when the U.S. was founded.

      • d says:

        ““Mexico is a corrupt country and has been going back before Adam & Eve.”

        Well, actually, it started when the U.S. was founded.”


        It started when the Spanish arrived.

        long before the American colonies were founded.

        Please get the basic facts correct in the stuff you post.

        • walter map says:

          “It started when the Spanish arrived.”

          Americans grabbed everything the Spanish didn’t, including a lot the Spanish had already grabbed, thereby benefiting from the pursuit of cupidity as an industry rather than as an art form.

          Fine, fine, Spain started it, but ultimately lacked the necessary venality, so America finished it. Happy now?

        • d says:

          NO south America is much more corrupt than the north. And always has been.

          You blame all evil on the north, because you can, and few will object.

          This makes Anti (White) Americanism for the sake of it. Acceptable

          This is wrong.

          Just as wrong as Racism. Which is ultimately simple discrimination.

        • walter map says:

          “NO south America is much more corrupt than the north.”

          Latin America hasn’t garrisoned the planet for the benefit of transnational corporations, doesn’t run death squads in 139 countries, and doesn’t have five or ten wars of attritrion and conquest going on at any one time.

          Your corporatists, by contrast, get away with millions of counts of fraud at a time and keep coming back for more.

          Yanks whining about the corruption of other countries. Tell me true, what’s the level beyond ‘utterly fatuous’?

        • d says:

          “Your corporatists, by contrast, get away with millions of counts of fraud at a time and keep coming back for more.

          Yanks whining about the corruption of other countries. Tell me true, what’s the level beyond ‘utterly fatuous’?”

          I am not an American and dont live in America so.

          YOU LOSE again.

  28. Driver says:

    Whatever you think of Trump, I find it refreshing to hear US companies ‘claiming’ to be bringing jobs back to America.

    Can’t say that Obama did anything in that department. Trump certainly has the US corps running scared.

    I thought the whole Wall thing was silly, since as said above you can just fine people for hiring illegals. But sanctuary city’s will not do that and hence the need for a wall.

    • walter map says:

      “Whatever you think of Trump, I find it refreshing to hear US companies ‘claiming’ to be bringing jobs back to America.”

      Insofar as it is existentially possible for transparent propaganda lies to be “refreshing”.

    • Edward E says:

      Have you noticed the pro-corruption bias of the Republicans as they’ve attempted to gut the House Ethics Committee? Have you noticed how Mitch McConnell is ramming Trump’s well heeled nominees through the review process in a few chaotic days? How he’s hamstrung the OGE?
      They want unfettered freedom to exploit their offices for personal gain.

      • d says:

        But clinton was so crooked??

        Clinton beat PE 45.

        She was defeated by the FBI, The racist in her own party against her, and the Continuous DRIP DRIP DRIP of poison, directed from Russia.

        The Americans who elected 45 will now start to pay the price of their folly.

        The DNC has put a black man in the oval office having achieved that objective, its next objective is to put a black woman in it. (I first said that in 2008.)

        Clinton was an unwanted impediment to that objective.

        There is a serious possibility that PE 45 will be another Baby Bush.

        Guaranteeing the DNC the ability to run a, deaf, dumd, blind, three legged donkey with a heart condition, and win.

  29. SoberMoney says:

    Funny how the free markets fundamentalists all of a sudden like a non- free markets authoritarian when they are duped into believing jobs are coming back.

    It’s like calling yourself a conservative while approving of big government Republican laws that repress women and gay and suppress voters.

    Pure hypocrisy!

    • d says:

      “Funny how the free markets fundamentalists all of a sudden like a non- free markets authoritarian when they are duped into believing jobs are coming back. ”


      P45 is a “laissez-faire” Capitalist.

      You cant get more free market than that.

      His issue is. Unfair competition.

      Not in wage rates, but in all the other, environmental, state aid, currency manipulation, Tariff, uneven investment conditions, and safety standards, that make up the total standard package.

      If the playing field on these issues was level, it would not be economic, to ship goods from china to America. Even if the chinese wage rate, was zero.

      china and india in particular compete with America by being, dirty (POLLUTION AND UNECOLOGICAL WASTE DISPOSAL) unsafe worker condition’s and building’s, manipulating their currencys, using massive state aid, uneven import tariffs, and using unfair FDI REGULATION’S. Where an indian or chinese company can own 100% of a US company and the land it sits on.Whereas a US company in their country. Can not own more than 49% and can never own the land the company sits on.

      P45 wants that leveled out. How is that “non- free markets authoritarian”??????

      Thats how it should have been from day 1 of trade with china.

      Then many of these issues of US offshoring, causing massive US under and unemployment would not exist.

  30. Humpty Dumpty says:

    Mexico will continue to degrade into a narco state and the citizens will cower – they rise up like Barney Fife – but they back down. These are fearful and resourceful people who have never had a structurally honest government at any level and will vote for anyone who says the right things, just like everywhere else in the world. Everything depends on the whim of a politician and so, everything fails. It is rich in resources but now it has gotten its last easy peso and bad things will happen in some places and very bad things in others and catastrophic things in still other locales. There will be pockets of enterprise and winning, but these are few, tentative and without structural force. Mexico needs a new constitution free of socialist and corporatist views. This will not happen. The corruption is no different than anywhere else, it is just easier to do – imagine a country being run by thousands of Harry Reids and you get the picture. The USA is not the issue, nor Trump’s tweets or the wall to come, none of that means a thing. The people believe government largesse is the answer and until that notion changes, Mexico goes nowhere but down. All roads lead to Venezuela.

Comments are closed.