Tuesday, February 03, 2009

empty buckets


Economic news is bad all over. Mexico is certainly no exception.


The newspapers have carried announcements of factory and production cutbacks -- everything from soft drinks to automobiles. But the worst news came last week when, for the first time on record, the amount of money immigrants from Mexico sent home, dropped.


Many developing nations rely on their citizens to find jobs in wealthier countries and remit the money to their families at home. For Mexico, those remittances are its second largest source of foreign income -- the first being oil. Mexicans send more money home than is siphoned out of the trousers and purses of oil-slathered Brits and Yanks on vacation.


The amount of remittances has never declined from the previous year -- even during the 2001 recession. This year, they dropped by about one billion dollars.


In developed countries, the loss of a billion dollars in one year is chump change. In Mexico, the impact is felt immediately -- and often by those who can least afford to lose the money.


The remittances do not go to the type of wealthy Mexicans who drive fast cars and have even faster girlfriends and/or boyfriends. The Mexicans who will not see this money are the father-up-north gatherings of women and children who would make the Old Lady Who Lived in a Shoe look like Margaret Sanger.


The newspapers have also noted the prowling lion of the cloud cuckoo land left, Andrés Manuel López Obrador, is doing everything he can to stir up resentment for the sole purpose of snatching political power. Of course, resentment is so thick on the ground, it can be harvested merely by picking it up. It is not a good time to be the king -- even if you had nothing to do with the economic situation.


López Obrador speaks fondly of the 1910 revolution -- an iconic period for most Mexicans. With the exception of his more radical followers, most Mexicans will ignore the veiled threats to rise up against the current government -- for one very good reason. Today Mexico has a positive relief valve in its political system -- elections that really mean something.


As the world economy improves, perhaps, Mexico can develop jobs that will allow its best and brightest to stay in Mexico.

14 comments:

John said...

Although distribution of wealth in Mexico has a long way to go, I think your point about the democracy safety valve is right on the money. In 1910 there was no hope, so the people took up arms. Today the money may not be there, but the hope of better lives is, perhaps enough so as to deflect the message of the agitators.

Steve Cotton said...

I just hope that the Mexican voters can maintain that sense of hope. History has not been very kind to them.

Michael Dickson said...

Immigrants?? All those people who landed at Ellis Island in the past were immigrants. Everybody who arrives (usually by plane) to the U.S. today with plans to stay and with visa and proper documentation in hand, those people are immigrants too.

The great majority of folks sending money from the U.S. back to Mexico are, of course, illegal aliens. The widespread use of the word immigrant for these folks is a red herring.

Strictly speaking, even the illegals who manage to dodge the law and stay in the U.S. are immigrants, true, but the use of the term by the open-border crowd has transformed it into a red herring.

And I, sir, am shocked to see you fall into that hole.

Steve Cotton said...

I suspect my sloppiness in that area may be attributable to my family's suspect heritage. We tended to wander back and forth across the Canadian-American border for three centuries with no more sense of borders than Mongolian herdsmen -- finally deciding that the American side had more to offer.

Legal or illegal, Mexican citizens in America do (or did) perform services for which they are (or were)paid. July is going to be a rough election cycle for Mexico.

Michael Dickson said...

Ah, Mexican citizens in America! Still you waffle!

I am an immigrant to Mexico.

Anonymous said...

Alas, the Mexican economy faces tough times, as do all economies these days. At least Mexico doesn't have the debt overhang of its profligate northern neighbor. However, while we gringos are singing the praises of $40 oil, in Mexico it plays more like the blues. Pemex finances somewhere around 40% of the federal government's budget. So if oil prices don't rally significantly, Mexico faces the prospect of either higher taxes, or lower government services. Neither will be good for the rest of the economy. Tourism? Likely to still keep falling. As for remittances, I believe they dropped in 2007 and then some more in 2008 as many Mexicans in the US worked in residential construction. We all know how that story ended. I wouldn't expect remittances to rally much, if at all in 2009 either.

Can retirees fill the gap? Ironically, both Mexico and the USA would benefit from more of each other's citizens. The US needs more young workers to pay for Social Security and to fill the jobs of the retiring boomers. Mexico needs more foreign exchange. I say we quickly arrange some kind of geezer for young-buck exchange. We'll both be better off. The US will siphon off the most ambitious part of the Mexican population, and Mexico will get a source of foreign exchange, new ideas, and jobs taking care of the elderly. Or at least their houses. And as part of this system, each party should be required to learn the language of his/her new country. We'll quickly see whose language is harder to learn. I'm guessing this might make Americans a smidgen more tolerant of folks who don't speak fluent English.

Regards,

Kim G
Boston, MA
Where our own economy is challenged by falling everything.

P.S. To Sr. Dickson: I don't think the term "immigrant" speaks to the legality of the crossing, but rather to the intent to live in the new country. Whether Mexicans in the US are legal or not, if they intend to stay, they are immigrants. Illegal perhaps, but undoubtedly immigrants. Until, of course, they are rounded up and shipped home.

Steve Cotton said...

Kim -- The exchange program sounds good. Unlike Michael, I am not a big fan of borders. But unlike other libertarians, I admit that they exist and nations need to deal with them seriously. A more rational immigration policy between both countries could be to their mutual benefit. But it just is not going to happen. I suspect that the tourist trade is going to dwinle as long the press misrepresents what is happening in the drug wars.

Michael Dickson said...

Kim, a slower read of my earlier comment will show I admitted that strictly speaking the illegals qualify as immigrants. Webster´s supports you. However, the word has been hijacked by the open-border crowd because their openly supporting illegal activities by using the more precise term of illegal aliens makes them squirm in their arm chairs while they sip their martinis.

Anonymous said...

I wonder how Native Americans (Indians) would define the term "illegal aliens".
Frank Trevino
Detroit Mich.

Steve Cotton said...

Frank -- Your scenario is my my libertarian ideal: no borders, no restrictions. Free flow of labor and capital. It worked well then. It could work as well now.

Michael Dickson said...

No borders? There have always been borders. Not just people, but the animal world too. Borders come in all shapes and forms and sizes. And it will always be so, utopian ramblings notwithstanding.

Steve, I want you and Trevino to leave your doors and windows open tonight while you sleep.

Steve Cotton said...

Michael -- Leaving doors open is a perennial problem for me -- at night and when I wander off to work. Went off for a week of reserve duty a few years ago and left the patio door wide open. Found the neighbor's cats asleep on my water bed when I came home. But your point is well taken. Like Jefferson, I have my ideals. Then I live in the world as it is. Can you imagine the contradictions that abounded in old Tom's head? -- a slaveowner writing about the glories of natural law? The conservative in me accepts the reality of borders that must be defended. After all, there is evil in this world.

Babs said...

Two things, the other safety valve is the "illegal immigrants" who cross the border and therefore that pent-up anger is in another country! Shocked I say that? Ah well, sometimes I do have depth.

Secondly, You guys DO go on and on and on sometimes.......

Steve Cotton said...

Ms. Babs -- Anyone who would take you for anything other than having depth would be setting himself up for an incredible fall.

As for going on and on, I think we can all plead guilty. I was just laughing at one of my message boards today "debating" whether prejudice was worse in Mexico or the United States. You can just imagine how unproductive the "discussion" was. Our comment fest was a mere appetizer compared to that knife fight.