If AMLO Wins in Mexico

The reason that the US has an immigration problem is that Mexico’s economy stinks. One critic wrote years ago that the problem with Mexico is that it has tried everything, everything fashionable to come out of Europe. Everything, that is, except democratic capitalism. That has never been in fashion.

At least since the Mexican wipeout of 1994 (remember that?) Mexico has begun to fix its economy. But the trouble is, according to Robert Samuelson, that as much as two-thirds of Mexico’s workers are employed in the “informal” sector, i.e., the sector that doesn’t pay taxes, doesn’t have access to regular finance, and cannot grow without attracting the attention of predatory government officials. And the formal sector isn’t much better. Take
Pemex, the state-owned monopoly oil company. Without competitors or complaining shareholders, its operations are lax. In 2004, Pemex had $69 billion in sales and 137,722 employees, according to its Web site; in the same year, Exxon Mobil had $291 billion in sales and 85,900 employees.

Do that math on that. Exxon Mobil gets $3.4 million in revenue per employee. Pemex gets $0.5 million per employee. In other words, Exxon Mobil gets about 7 times as much in revenue out of each employee as Pemex.

And now it looks as though lefty Andrés Manuel López Obrador (AMLO) is likely to win the Mexican presidential election on July 2.

According to Enrique Krause he is proposing to slash salaries at the top of government.

Mr. López Obrador has also talked of revising Nafta's agricultural provisions and subsidizing exporters with cheap fuel (a practice prohibited by Nafta). He has declared that he will "allow" private investment, but not national or foreign interest in strategic areas that urgently require it, like oil and gas.

He also proposes a mammoth microcredit program (run by the government perhaps?) and bullet trains to the northern border.

But he is also proposing a presidency founded on his personal charisma, with referendums and plebiscites. We have a word for that. It is called fascism.

The problem for Americans is that when the lefty economics of AMLO fails, then we will see even more Mexicans crossing the border to find economic sanity. And who will be asked to pick up the mess south of the border?