Obama, Romney and Mexico

The national “commentocracy” has a natural inclination toward Democratic candidates and more so on this occasion. President Obama irradiates enormous attractiveness, almost magnetism, and a personality that inspires as much due to his history as for being the first Black president of his country.Romney, on the other hand, has been presented in the media, there as well as here, as a radical Right extremist. Recent weeks have demonstrated that neither of the two biographies rings very true. Further afield than the preference that anyone in either country may entertain because ofthe candidate’s ideology or personality, my concern and perspective is more about the potential impact of each of the two options on the Mexican economy.

I have never understood the Mexican proclivity for preferring Democratic over Republican candidates, above all because, beyond the rhetoric, there is no evidence that one of these would be better for our interests than the other. With respect to political and legislative issues (such as migratory, drug and arms matters), the influence of an American president is relatively minor. Bush (George W.) as well as Obama promised a migratory reform, but neither achieved one being passed by Congress. In contrast, the impact of the U.S. economy on ours can be dramatic and this does not depend on any benevolence toward Mexico but rather on the conjunction of institutional and executive actions and strategies directly devoted to the welfare and development of the Americans themselves.

As in so many other things, perhaps no one explains the way that American politics work better thanAlexis de Toqueville, the French scholar who visited the U.S in the XIX Century and penned observations of prodigious farsightedness: “Long before the appointed moment arrives, the election becomes the greatest and so to speak the sole business preoccupying minds…. The entire nation falls into a feverish state; the election is then the daily text of the public papers, the subject of particular conversations, the goal of all reasoning, the object of all thoughts…. As soon as fortune has pronounced [the victor], this ardor is dissipated, everything becomes calm, and the river, one moment overflowed, returns peacefully to its bed.” The U.S. presidential elections will be over on November 6 and what happens after that will be what’s relevant: how it went for usin terms of the economic policy of the next administration.

The electoral dynamic changed radically over recent weeks for two reasons. First, and most important, because Obama lost the aura that protected him. For four years –in fact, throughout his (relatively) short political career-, Obama profited from his capacity to emanate that charisma that characterizes him and that allowed him to avoid having to defend or fight for specific actions or decisions. Perhaps nothing illustrated this better that his manner of handling the stimulus package at the beginning of his government: instead of advancing his priorities or those that his team considered those most likely to generate the greatest and speediest impact (the objective of any stimulus), he let his Party members in Congress determine the agenda, a circumstance that translated into an enormous dispersion of programs, many of these short of significant impact. But none of this appeared to affect Obama the candidate until he was unable to defend himself in the first debate. Although he recovered partially in the following two, the aura of invincibility had vanished.

The second reason that the presidential dynamic has changed is, simply and utterly, that Romney cast aside the radical farce that he devised to win his party’s primary-election showdown and has presented himself as the pragmatic, flexible and adaptable businessman that he is. I don’t know how good would it be for a businessman to occupya politically charged post of such decision-making transcendence, but what does appear evident to me is that his experience is, at least at the conceptual level, absolutely relevant for the present moment. Assuming that Romney would not to repeat the excessive expenditures of his Republican predecessors, Romney’s pragmatism would allow him to engage in the bipartisan agreements that are urgent in his country.

What the U.S. economy requires is the type of restructuration that the Mexican economy carried out, above all in matters of public expenditure, in the eighties and nineties. The rising trend of indebtedness due to Medicare and Social Security is of such magnitude that, on not resolving this soon, the U.S. will enter into a permanent, Japan-type, depression, dragging us along with it. Romney doesn’t seem to be a genius, but his professional experiences bringing off business workouts, and transforming bankrupt entities into profitable and successful projects are exactly what the U.S. requires today. In contrast with Obama –who little by little has been undermining what made his country’s economy so successful-, Romney offers at least the possibility of focusing on what is transcendent and likely to drive the growth of our economy.

Obama’s experience in the presidency as well as prior to that is totally shallow and alien to these matters. If one reads his books, his agenda is social and political more than economic. But the best evidence that he represents the least attractive option for us is the economic performance of recent years.It is evident that Obama stepped into a chaotic situation, but his strategy and actions have not improved it. He has achieved stabilizing the economy, but has not accomplished convincing his own society, starting with the American business community, of his policies. Unemployment remains at stratospheric levels, the deficit continues to rise and there is no program designed to confront either this paramount issue or that of the debt, even within a period of decades.

The defense that Obama brandishes of his performance is that things would have been worse had he not acted as he did. Although not a bad campaign argument, it is one that is impossible to prove in logical terms. What is indeed evident from the Mexican experience of financial crises is that imbalances sooner or later (sooner in ourcase) wind up deranging the economy. That hasn’t happened to the U.S. because of its size and importance and, no less importantly, because there are not many alternatives: the Europeans and Japan are worse off. However, if unattended, when the imbalances catch up with them, the cost will be dramatic.

Because of the latter it is so important when and how the Americans begin to face their structural problems. If Obama has proved anything, it’s that he doesn’t have a viable proposal. Romney hasn’t been convincing in this respect, but he undoubtedly understands perfectly well that the current reality is unsustainable and this, under these circumstances, is much better for us than staying the course headlong toward the precipice. What there’s no turning back from is that our future depends on how and when they act, the election thus being as transcendent for them as it is for us.