AMERICAS QUARTERLY – FEBRUARY 14, 2019

Mexico’s president has so far governed as if by fiat. If he doesn’t heed market warnings, he may be in for a rude awakening.

Andrés Manuel López Obrador has a vision, but not a plan. His long-term objective to recentralize power is clear, but the specifics of everyday decisions – on everything from social policy to infrastructure investment – remain obscure.

The danger of this improvisational form of government is not simply that the economy will fail to achieve higher rates of growth (that is almost already a given). It is that financial markets will react negatively to so much uncertainty. The recent downgrade of state oil firm Pemex could be the beginning.

Fitch downgraded Pemex last month because of what it called “continued deterioration” of its credit-profile and underinvestment in its production areas. López Obrador’s response, simply to attack the ratings agency as “hypocritical,” must be understood in a context in which the president is running things basically on his own. There are no public policy debates, only objectives and actions that López Obrador instructs his people to carry out.

The president clearly believes that by announcing his objectives or actions, things will simply happen. In fact, he’s campaigning on a permanent basis and rallying the crowds. That approach has worked so far: his approval ratings are over 80 percent. His popularity comes in part because, at least rhetorically, he is addressing people’s concerns.

Everybody knew about stolen gasoline, about how much corruption there is and how deep social divides are. By talking about these issues and, at least in some cases, acting upon them, the public see in the president someone who is finally doing something about the issues that brought him to the national palace. People have been willing to stand in line for hours to get gasoline not because the issue is being fixed, but because the president is facing it.

But what happens when it becomes clear that the president has failed to deliver change? At some point, the public will want answers in the form of prison sentences for the corrupt or better economic performance. But AMLO’s policies do not appear likely to take Mexico down that road. He has already expressly ruled out pursuing past corruption, and economic growth is unlikely to materialize in the absence of more investment, both public and private.

Fitch’s decision should have been a warning that things could easily get dicey down the road, and compelled López Obrador to change course. Instead, he attacked and kept going.

The result of all this is to put private investors, both domestic and foreign, on wait-and-see mode. The broader pressures on the economy won’t help in that regard. First, there’s uncertainty stemming from USMCA discussions in the U.S. Congress and the potential demise of NAFTA without having ratified the new agreement. Then there’s the situation with Mexico’s energy sector.

Secretary of Energy Rocío Nahle recently announced the launch of a new oil refinery in Dos Bocas, Tabasco, the president’s home state. Nahle indicated that it would be wholly owned by Pemex and that there would be a restricted tender, by invitation only. In other words, it will be financed by Pemex, whose financial accounts are, in fact, indistinguishable from those of the federal government.

Several months ago, both Fitch and Moody’s warned of the possibility of a rating downgrade should the government proceed with the Dos Bocas refinery. Assuming the two ratings agencies proceed with their earlier warning, the federal government’s accounts could be affected. That could easily trigger a market run.

López Obrador has opened his administration on an enormous number of fronts. He’s launched, or is supporting, a series of labor actions geared to undermining current union leadership; he has attacked former presidents (though, oddly, not his predecessor Enrique Peña Nieto, the man who made it possible for him to win); he’s fighting with several governors on budgetary matters; and he has abandoned the war against the drug cartels. Some of these actions may make sense, others are just shots in the dark. The common denominator is that there’s not a policy behind any of them that has been analyzed and is being adhered to. Each action is independent of the rest, except for the broader goal of concentrating power.

The president is running the government on his own. He shows up every morning for a 6 a.m. security meeting and then talks to the press for an hour or longer where he sets the agenda. The members of the Cabinet, usually looking sleepy, stand behind as part of the scenery but say nothing.

Should things not work out the way the president expects and assumes, the real issue is whether he’ll begin to blame others for the results or if he’ll change course. His reaction to the Fitch downgrade suggests it’ll be the former: Rather than realizing that it was nothing more than a warning, albeit a serious one, he decided to fight things out in the street. He assumes, and has said, that everybody would have to submit to the president’s priorities, including the financial markets; the problem is that that’s not the way the world works in the 21st century, least of all for an economy as open as Mexico’s

https://www.americasquarterly.org/content/pemex-downgrade-was-warning-amlo-listening

ABOUT THE AUTHOR

Luis Rubio is chairman of the Mexican Council on Foreign Relations. He writes a weekly column in newspaper Reforma,and is the author and editor of dozens of books. His most recent book is A World of Opportunities, published by the Wilson Center.

Luis Rubio

Public security is a sine qua non condition for the development of the country and the issue that most concerns citizens. The problem is not new, but all attempts to confront it have proven insufficient, if not a failure. The three most recent administrations -each with its level of arrogance- has assumed the problem in its own way, but the results have all been pathetic; the only thing that is clear and unquestionable is that there are many myths around this issue*, but equally clear is that there is no single -or magical- solution to the problem: no silver bullet. If the López Obrador government does not recognize this point at the outset, its strategy, centered on the “national guard,” will end up in the same place.

The proposal to create a new structure in the form of a national guard, announced with great fanfare and little information, is not very different from the one that accompanied the announcement of the creation of the federal police two governments ago. In both cases, there was a big idea but not a plan for its integral development, much less a political consensus on the matter. The result was the expected: the insecurity did not yield. The causes can be many, but the winning prescription proved unsuccessful.

The creation of a national guard can be part of the solution or it can be another lost opportunity: everything depends on how it is constituted, what its objectives are, what strategy would be followed and, above all, what the project as a whole consists of. A misdiagnosis -which is what must be assumed because the plan presented lacks any logical coherence- entails a hazardous outcome. However, the danger lies not only in the fact that insecurity remains high, but that, unlike the previous attempts, this one comes fraught with an immeasurable risk in the form of the incorporation of the army in security tasks in an integral, permanent fashion and made permanent in the Constitution. That is, this is an extraordinarily hurried step, with unknown and, potentially, excessive and onerous consequences.

It is easy to understand why one administration after another has turned to the military: it is the most structured, respected and efficient corporation in the country. Given the vacuum, weakness -and corruption- that characterizes most of the federal, state and municipal police forces (and their counterparts on the side of law enforcement), the notion of resorting to the military is logical, even if it entailed a radical about face for the president. But the fact that there is such a fundamental challenge and such a competent institution does not imply that one thing can work to fix the other. The army has proven effective in showing the strength of the State whenever deployed, but not in creating conditions for public security beyond the time or place where it has had a temporary presence. The army is not a police corporation and should not be conceived as a long-term police response because it is useless for this and will never be different.

The army will undoubtedly be a central part of the solution to the security problem the country faces, but it cannot be the heart of the strategy. Unless the army is transformed into a police corporation -and everything that this implies in terms of conception and training- something that could be proposed as a strategy over a period of two or three decades, the military is trained to face formal enemies, not to be the guarantor of the security of the daily life of a community.

More important, the key question is not about recourse to the army for the purpose of protecting the citizenry, but about the creation of a new political and legal reality in the way the national guard has been proposed. Resorting to the army is necessary, but not in a permanent fashion, without a clear mandate or legal protection. It would be infinitely better to create a formal framework for the operation of the army in civilian security tasks than to elevate it as the heart of an unfinished security strategy in which there are no certainties for the citizens, the government or the soldiers themselves.

I wonder, why not bring the presence of the army through the national guard -or in security tasks in general- as a case of exception and, therefore, temporary? That is, what if, instead of encumbering the army in the Constitution to combat insecurity, the Congress legislates in a precise way how that corporation would act in an emergency and only for the time the emergency lasts. If what exists is a situation of exception, what is appropriate is to contemplate an equally exceptional response in the form of a regime of exception such as that contemplated in Article 29 of the Constitution.

What has been proposed is a desperate, ill-considered and inadequate response to build security, protect the citizenry, give legal certainty to the army and solve the problem that the government has raised. Instead of a single action aimed at trying to solve a complex problem once and for all, it would be far better to develop a multifactorial strategy in which the participation of the army is temporary, limited and exceptional.

*see a good summary of this: http://www.consejomexicano.org/index.php?s=contenido&id=2475

www.cidac.org
@lrubiof
a quick-translation of this article can be found at www.cidac.org

         Luis Rubio

One way of thinking about what is to come is to contrast what the new government says that it wants to achieve and what it in fact proposes to do. The case for austerity is illustrative: nearly the first priority of the new Congress was the Law of Austerity, followed by that of compensatory payments to civil servants, as an axis of its strategy. It is obvious, as a starting point, that no one can be against austerity  in principle; however, it is relevant to ask what the objective of the austerity is, and how it is to be put into practice: it is not the same to raise the efficiency and efficacy of the governmental function     (something desirable and for which there is a great lot of ground to cover) and it is something quite distinct to submit other branches of government by means of expenditure cutbacks (above all those that confer on the Congress the capacity of functioning as a counterweight) or to penalize  good functionaries by reducing their incomes. Two very distinct objectives, although both are equally consistent with austerity. The question is not an idle one: what is proposed to be achieved and what ensures the citizenry that this is adequate and necessary.

Andrés Manuel López Obrador won the presidential election in Mexico with a percentage of the vote to which we had all become unaccustomed. None of his predecessors, from the nineties to date, had the level of votes or legislative support and legitimacy of mandate that these entail. For all of these, the Congress and the diverse State entities that enjoy autonomy served as counterweights, at least at some of the most critical moments. The Congresses, from 1997 forward, did not enjoy a partisan majority and, at many times, impeded the advance of presidential initiatives. In reality, their opposition was almost always rooted in short-term political misgivings to a greater degree than in a careful reading of the bills that were defeated, but now it is not even probable that this will occur. Nonetheless, there is great value is doing so.

The Mexican political transition that initiated with the 1996 Electoral Reform resolved the problem of access to power, but not that of the way Mexicans should be governed. In fact, much of the deterioration that has come about in recent decades -in security, economic growth and corruption -is due, nearly exclusively, to the political disorder deriving from the defeat of the PRI in 2000.  The end of the PRI-Presidency binomial brought with it all types of consequences, many of these negative: immense transfers (and waste) of funds to governors without any accountability; occurrences instead of government strategy; systematic deterioration of the institutional structures (procuring justice, the police, Offices of the Attorneys-General, customs); and, in general, the collapse of civility in day-to-day treatment among citizens, among politicians, and among both. Today it is not strange to hear a Mexican, on finding himself abroad, asking whether he can safely go out to walk in the street. That question would have been ridiculous some decades ago. The anger and dysfunctionality are not the product of chance. The question is how to carry out the changes that Mexico needs, rather than to go back in history to impoverish the country.

The solution that can be sensed in what AMLO has been doing and proposing consists of centralizing power through means such as virtual proconsuls in the states; the re-conception of the Army as supervisor of all affairs at the regional level; the reduction of the salaries of first-level civil servants; the creation of the distribution of programs of transfers to youths, the elderly and other susceptible groups, and the reduction of Congressional and Senate budgets. Centralization of power is not something that is good or bad in itself; the matter concerns centralizing for what. What the actions of the President in his early day suggest is that this is about a means to eliminate all dissent and to enhance loyalty.   However, the important part is not the accumulation of power in itself, but rather whether it can be changed for the better, not for change’s sake.

The mandate that AMLO received is to change the reality, but not just any kind of reality would result in an improvement of the living conditions of the most vulnerable population to which it would devote itself or to the creation of a better future in general.  Good wishes are not enough: there are problems of extreme complexity, beginning with that of security, that require careful planning.  Clearly, there are solutions, as demonstrated by some successful exercises at the state level, but an integral solution is going to require a plan that is well articulated by professionals and a willingness to build for the long term. Instead of this, what we are currently observing is a series of actions, not always coherent with each other, to angry clashes among groups close to the President, such as the mistreatment given to the Army, blaming it for all of the ills while, at the same time, turning it into the core of the strategy. The country, and AMLO, require long-term solutions. If he, with all the power and the mandate behind him, does not promote these solutions, the country will end up worse than it was.

Instead of cuts to the Congress, effective checks and balances are required that aid the President himself to ensure that his proposals will be liable to changing the reality for the good. Checks and balances do not diminish the presidential power but do oblige it to produce projects that can improve the life of the population. That is the mandate that appears evident in the past election; here’s hoping the new President interprets it thus.

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@lrubiof

Luis Rubio

According to the historian Micah Goodman, the difference between animals and humans is that the former live exclusively in the present and act instinctively, while humans think and care about the future. The future is always unknown and generates fear, for which humans turn to religion and politicians. Religion allows to calm the spirit and the soul; politicians take advantage of the fear to deceive the voter: while on the campaign trail they make promises that can never be fulfilled, and thus clash with the reality, once they become responsible for the duties of government.

This story is repeated again and again in all latitudes. But today Mexicans are living something peculiar: the President is not only trying to fulfill all his promises, but he does not believe that there are limits to his capacity to achieve it. This has introduced an air of freshness in the function of governing that had not been seen in a long time and that the majority of the population recognizes and seems to appreciate.

The case of gasoline speaks for itself: by now it is evident that the government acted without much care, knowledge of cause or foresight about the consequences of its actions. But, after decades of flagrant robberies to the treasury through Pemex, the citizens applauded the boldness with which it acted, even if the latter implied tens of hours lost in the search of fuel for their automobiles. However, the story will only end when those responsible for the theft of gasoline are identified and detained, which does not seem to be in the cards or, given the weakness of the justice system, within the realm of possibility within the government. In that scenario, what began as a laudable goal could end up becoming a highly costly.

The theft of gasoline is part of a complex chapter of public life in recent decades. In these years, there has been a dispute between two ways of conceiving the national reality and its future. On the one hand, those who promoted the reforms, especially the economic ones that stemmed from the virtual bankruptcy of the government in 1982, proposed the integration of the economy into the technological and commercial circuits of the world as the means to increase productivity and, with it, to generate much higher rates of economic growth that, in turn, would improve incomes and create many more jobs. On the other hand, especially since the 1995 crisis, the post-revolutionary vision has returned to the forefront, which affirms that higher growth rates have not been achieved, that inequality has increased and that the country has lost the stability and security that characterized the pre-reform era.

If one goes beyond the political narratives and interests behind each of these positions, it is clear that both approaches have a basis in everyday life. Regarding the first, nobody can deny the virtues of the reform project in terms of economic growth, employment and productivity in virtually the entire northern half of the country. On the other hand, if one observes what has not happened in the south, the conclusion is equally evident: the contrasts and differences are clearly breathtaking. While much of the north of the country grows with extraordinary speed, the south has frozen in time, with what that implies in terms of employment, incomes and expectations.

What is a common denominator throughout the national territory is the collapse of security and justice structures, producing great impunity. That is, various regulations and concepts were reformed, but the necessary governmental capacity was never developed to preserve the most fundamental aspects of life in society: the safety of the people. The president has proposed a project for these purposes that, like its predecessors, is incomplete, not very well thought out and very risky, first of all because it is does not stem from a diagnosis that recognizes that the problem lies in the governmental structures themselves. Thus, by ignoring this, the new program will only deepen the problem, but this time politicizing the army along the way, while potentially corrupting it.

The problem of security is not different from the theft of gasoline. In both cases, the nodal factor is impunity: those who steal gasoline – and the officials and governors who charge a fee so that the robbery can take place- are no different from those who steal, extort, kidnap or kill without even blushing. In both cases, this occurs because there are no restrictions on their activity and abuse. It is this impunity that the president apparently wanted to show with the closing of the gasoline pipelines. But evidencing the phenomenon does not solve the problem: this is not a group of thieves, but a system within the governmental apparatus, at all levels, that benefits and promotes impunity.

The problem does not lie in the reforms that the president condemns day in and day out, but in the lack of clarity of the nature of the problem. At the end of the day, as the historian Margaret Macmillan says, “Reforms forestall something worse from happening.” The government has to review its biases about the national problem so that, as Goodman says, it becomes realistic about what it can actually achieve.

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@lrubiof
a quick-translation of this article can be found at www.cidac.org

 Luis Rubio

Live by the sword, goes the saying, die by the sword.  In this manner, storm clouds- in the form of animosities, rancor, disqualifications and contempt- have ushered in the government of Andrés Manuel López Obrador. This is a way of conducting politics that wagers on the permanence of favorable winds, of continuous support, and the resignation of the population to its fate. It is a risky bet because sooner or later, storms arise and, by then, the “others,” those who have been wronged and reviled, will be involved in other things. The politics of discord are useful in electoral times, but lethal in the process of national construction.

All nations require a level, at least a basic one, of agreement to advance; but equally valuable is disagreement, whenever the latter concerns ideas and ways of resolving problems and never involves personal disqualifications. At least this is the way that civilized and democratic societies get ahead, as the United Kingdom showed in full color this week. However, in recent months the morality is judged of persons and groups by their political position: the good are with me, the others are conservatives or, in the vernacular, highfaluting, “fifi” in Spanish. The President pardons and excommunicates at will, with an almost religious fervor. Instead of bringing the population together in what should be the essence of the governing function, he disqualifies, eliminating spaces of agreement.

No one disputes who the president is; his legitimacy is the point of departure. That the electoral process is over and that the President is responsible for the future of the country are not under discussion. The nation’s best interest lies in joining with the population as a whole in his development project: nothing works better than with the participation and acquiescence of everyone. The strategy of dividing, polarizing and disqualifying is logical and rational in times of electoral contest, but it is not only absurd in governing times –all the more so when no one challenges his legitimacy- but it is also absolutely counterproductive.

Six years comprise many months, many weeks and many more days, each of which can dawn with problems, crises and complex circumstances difficult to manage. Some of the latter are domestic, others worldwide, but problems never fail to emerge for the President of Mexico. The question is how to confront these and solve them when they make themselves known. The strategy that the President has followed to date suggests that his calculations are optimistic: everything will come out fine, there will be no problems and time is on his side. Any one of the last fifty presidents of Mexico, including AMLO’s favorites, could confirm for him that the reality is never like that.

Problems appear at the least expected time, and the government has no alternative but to act. Such was the experience of President López Portillo with the 1976 devaluation and of President Miguel de la Madrid with the expropriation of the banks and the assassination of DEA agent Enrique Camarena; of President Salinas with the explosion in Guadalajara; of President Zedillo with the 1994 devaluation; and of President Calderón with the 2008 financial crisis in the U.S. The problem appears and the government must take action extending beyond its fancies or stances. It is at that moment that what matters is not only legitimacy of origin- perennially put to the test in crises- but also the political capital that the president has accrued in prior times.

The strategy of polarization and discord to which López Obrador adheres, and which contaminates his entire Cabinet and government, does not augur well for the future. Crises call for the best in he who governs and the support of the society; when the society is divided –into the good ones and the bad- governance is difficult and, in times of crisis, impossible. AMLO’s gamble on a strategy of permanent division and disqualification entails the risk on not counting with the society when the easy times evaporate.

The ample legislative majorities that the President has allow him to suppose that the earthly kingdom is his and that no one can curtail his sources of support. But there are two scenarios of which no one must lose sight: the first is that there’s a big difference in the support a candidate can accumulate vis-à-vis the difficulties inherent to the daily exercise of the functions of government. AMLO’s current popularity could easily vanish should things not improve. The second is that, when crises materialize, all suppositions cease being valid: at that moment in time, everyone sees to his own interests and that is as true for the most ordinary of Mexicans as for the loftiest of these.

No government can have the luxury of alienating half of the population (the 47% who voted for other candidates) nor can it presume that their own base is unalterable. As Napoleon once said, “to get power you need to display absolute pettiness. To exercise power, you need to show true greatness.”

Chairman Mao was more direct in his appreciation. When historian Edgar Snow asked him what was needed to govern, Mao responded: “A popular army, enough food and the trust of the people in their governors.” “If you could only have one of the three things, which would you prefer?” asked Snow. “I can dispense with the army. People can tighten their belts for a time. But without their trust it is not possible to govern.”

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@lrubiof

AMERICAS QUARTERLY
BY LUIS RUBIO | JANUARY 16, 2019

The Mexican president’s revolution speeds on, with little regard for the consequences.

Mexican President Andrés Manuel López Obrador has a nostalgic vision of the country he wants to build over the next six years: a return to Mexico’s past in which presidents make decisions while officials and the public simply follow. But after a full month in office, his commitment to that vision – and the lack of care he shows for the risks it entails – have clashed with a country that is far too diverse and dispersed to simply fall in line.

Six years ago, the government of President Enrique Peña Nieto entered office promising wide-ranging constitutional reforms through the Pact for Mexico, an agreement on the PRI’s ambitious legislative agenda that included the then-two largest opposition parties, the PAN and PRD. Though it succeeded in pushing through important constitutional changes, the opposition’s association with the PRI’s history of corruption helped pave the way for AMLO’s rise.

Since his inauguration on Dec. 1, López Obrador has taken a different tack. Rather than negotiating a broad agreement like his predecessor, AMLO is moving by stealthy imposition. He’s advanced at breathtaking speed to remove as many checks on his autonomy and independence as possible – particularly as they pertain to economic regulation. The independent institutions he has not been able to remove or subdue, he has begun to starve by reducing their budgets, as in the case both of Mexico’s national transparency agency and its independent hydrocarbons regulator.

But there are limits to what AMLO can accomplish by these means. The more he pushes forward with a government by imposition, the harder time he’ll have realizing the “transformation” he so desires.

His first budget is a case in point. AMLO is convinced that his government can and should not spend more than it takes in. But there are two problems. First, AMLO’s base, having been promised the sky during the campaign, is ready to collect and won’t just let López Obrador off the hook. Second, business and investment decisions in the 21st century have nothing to do with a president’s wishes.

The budget, presented and approved by Congress in December, was an attempt to appease both constituencies. In the immediate, it seems to have worked: financial markets broadly – though not universally – approved of the proposal without forcing AMLO to compromise on his promises to increase social spending on the young and the elderly and fund pet infrastructure projects. But this is unlikely to hold.

That’s because while the budget didn’t break the parameters of sound macroeconomic management, danger looms if it’s implemented as planned. The budget holds the seeds of an ambitious program that is unlikely to satisfy the same financial markets in the future: investments in a new and economically questionable new refinery, infrastructure projects that will rely heavily on government funding, and a rapid growth in transfers to AMLO’s favorite constituencies, all of which provide disincentives to the growth of private investment or productive employment. In addition, the disbursement of these transfers will be made based on a roster of beneficiaries that was built by AMLO’s own teams, ignoring the official, professional institutions in charge of such activities.

Even then, AMLO’s coalition is so diverse and complex that, one way or another, he’ll soon be forced to accept trade-offs that are inherently contradictory to what markets are hoping for.

Beyond the actual allocation of funds, the process of putting the budget together itself shows why AMLO’s vision of tight presidential control is bound to clash with the reality of governing a modern, dynamic economy. That process was political, full of symbolism and catering to his base and vision. He purposefully reduced allocations to a series of programs and institutions in order to exact their allegiance. The case of Mexico’s universities is extraordinary: university presidents submitted to his wishes and rhetoric, and funding that seemed to have been taken away was immediately reinstated. The point was made very clear: whoever submits to the president wins. Indeed, AMLO’s aim seems to be to recreate the old ideological and political hegemony that characterized the PRI era.

AMLO despises technical considerations; for him everything is political. His recent attempt to thwart rampant gasoline theft is another example of this. AMLO’s top-down, improvised decision, and its amateurish implementation, led directly to scarcity and long lines at gas stations that affected millions of consumers. It’s not clear what he’ll learn from the experience, but one thing is apparent: the real world is different from what he imagines or wants it to be. And yet, so far, he’s enjoying broad popular support for his actions.

This has been the pattern of AMLO’s first month and a half in office. A clear idea of what he wants to do, but a lack of planning and care in execution. Mexicans are paying attention. Despite AMLO’s tight control of his base, the general public is not the submissive crowd of the 1960s. Protests, jokes, memes and demonstrations have marked AMLO’s first days in office, especially during his gasoline debacle. AMLO’s base has already shown fractures; as time goes on, the new president will not only face greater opposition, but the need to spend much more time, energy and resources appeasing his followers.

https://www.americasquarterly.org/content/why-amlos-attempt-centralize-power-comes-cost

ABOUT THE AUTHOR

Luis Rubio is chairman of the Mexican Council on Foreign Relations. He writes a weekly column in newspaper Reforma,and is the author and editor of dozens of books. His most recent book is A World of Opportunities, published by the Wilson Center.

Luis Rubio

In the historical vision of the Left, the government was not the product of an election but rather as the result of a revolution or, in any case, as a takeover. The objective was power and the means for acquiring it were least in importance: assumption of power to change the world. The conduct of the Morena party in the Mexican Congress during recent months leads one to think that its contingents do not yet note a difference: for many of these groups (or tribes, as the they were known within PRD), what is important is to possess the power to effect a radical change and not that of governing for the entire citizenry, as would be expected of a government in a democratic system. The question is where this new government is to be found: in the democratic rules or in the revolutionary ones.

There are three angles that can be observed: first, the overwhelming victory and its implications for those who as of a month ago formally hold power; second, the inherent complexity in such a diverse coalition, so disperse and with opposite rationalities; and, finally, the most ambitious vision that President López Obrador has outlined for his government. Each of these elements entails its own dynamic that, when combined, as could be seen in the gasoline disaster, has a high propensity for producing great discord.

The triumph of Morena was so overpowering that it surprised even its own adherents. Describing the composition of its bench at the San Lázaro Legislative Palace, a Morena delegate mentioned that they never imagined such a scenario, to the degree that many of the new representatives clearly were not suitable for their new responsibility. But beyond the persons themselves, the win has not been recognized by the Morena followers themselves as the fruit of a democratic vote: in fact, to date recognition has not come forth for the National Electoral Institute, for the Electoral Tribunal, or for the democratic procedures regarding this AMLO’s and Morena’s electoral triumph. For many of its members, it comprised not an election but the takeover of the government or, at best, a recognition of their power. The practical difference may appear to be insignificant, but in reality it is more than transcendent because it determines the nature of the political game: will it be a government that complies with the rules of the civilized political game or will it attempt to change the reality, sweeping away the whole political structure, imposing its law as if this were the Old West.

The coalition that Morena built will be without doubt the most complex part of the AMLO government.  The coalition includes persons and retinues ranging from the Extreme Left to the Extreme Right, passing through former guerrillas, intellectuals, base groups, former members of PRI, PAN and PRD, shock groups, businesspeople.   Each of these coteries or tribes retains its own aims and many are not only incompatible with the others, but also contradictory. For many AMLO is a superior being, but for others he is a mere instrument for advancing their agendas, with or without him. It is a rare day that some do not attack others from the rostra of the two legislative chambers. Administering the conflict inbred in this coalition will be as difficult and tedious as the properly enunciated governmental function.

In addition to the latter, AMLO and his cohorts seem to view last July’s election as an immoveable and immutable milestone: the 53% who voted for AMLO is point zero and everything after that is up. If one were to observe any country in the world, highs and lows are normal and, ever more frequently, the lows. We must remember that at the beginning of 2018 AMLO entertained only a 30% preference, suggesting that the additional 23% is more volatile than he imagines. Many citizens voted for AMLO because they saw no alternative or because they expected rapid and effective solutions; if the latter do not materialize, his support will begin to erode. The way AMLO makes decisions will not help him: should he pursue his current way of acting, his support will vanish, quickly.

All of this is only the jumping-off point. AMLO has proposed an extraordinarily zealous vision for the development of his government. The vision is not accompanied by a plan, but instead by a series of objectives or agendas of his own or of his group -many of these obsessions- which do not contribute to the construction of that vision, the very one that in many respects requires the reconstruction of an idyllic past that has in no case ever existed and one that is impossible to recreate. This implies that there would be many individual projects, some emanating from the Executive Branch, others from the Legislature, that would not be markedly coherent among themselves but that would respond to the objectives and agendas of particular groups or of ideological conceptions, without there being an evaluation to measure their consequences in terms of the growth of the economy or of their impact on the distribution of income, something easy to argue but very difficult to impact in practice.

AMLO was never a legislator and appears to view legislative power as pure and simple rubber stamp; however, it is there that he will be confronting the complexity and dispersion of his own coalition. More importantly, on ignoring the opposition, he would incite confrontation, nearly sure to gnaw away at his own legitimacy. The paradox is that it may be in the legislative power that his government will consolidate or collapse.

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Luis Rubio

The sum of the expectations, demands and needs of the population do not allow the new government much leeway. A month after his inauguration, Andrés Manuel López Obrador is now formally in charge and is responsible for the daily and the long-term comings and goings of the country. Now it is his responsibility and on him depend not only the satisfiers that the citizenry presses for, but also the change of perspective that he promised.

The paradox of such a resounding win is that there is no mincing of words in terms of the responsibility involved.  When a government emerges from a plurality of votes, as has been the case from the time the millennium began, the president knows that there is a majority citizen contingency that did not vote for him; however, with such an overwhelming triumph, the responsibility is integral and, in fact, absolute. The government of AMLO is responsible for what ensues and this does not make it freer, but precisely the opposite: it has to produce lasting results. In contrast with minority governments, the expectations are virtually infinite, and in a 6-year government, the short-term achievements must subscribe to the final result: there is no margin for error nor anyone else to blame for what goes wrong.

The problem for AMLO is that he does not control all of the variables that will affect his performance, and even those that are found within his sphere of influence, at least in principle, are subject to factors outside of his control. In terms of the former, the Mexican economy is implanted into the world and its main source of income derives from exports, which entails the enormous virtue that the internal errors (of vast transcendence with a coalition so complex and diverse as that which led to the win) are minimized but, at the same time, constitutes a factor of uncertainty about which the government possesses null influence.

The U.S. economy has been in an expansion period for more than ten years after its last recession and, in recent years, has been growing at rates superior to those of its historical average, which has generated a growing demand for our exports. The problem is that no expansion is perennial and this one shows all the signs of a recession in some months or at the beginning of next year. In addition to this, the U.S. central bank, the Federal Reserve, has started to raise interest rates, due to lesser degree to some inflationary threat than to the rapid growth of corporate debt of that country.  Both factors –the potential recession and the rise in interest rates- imply a strong dollar, that is, a devaluated Mexican peso, and lower economic growth due to fewer Mexican exports.

On the other side, in the upcoming months we will see a perceptible growth in the transfers that the governments makes to the so-called “ninis,” young people who neither work nor study, as well as to older adults. This would involve a source of satisfaction for its beneficiaries and higher consumption, but not more economic growth. Independently of what happens outside, internal expectations will improve, at least for AMLO’s base.

Where expectations will not improve will be in the support platform that swept AMLO into power. In a growing and vigorous economy, the government has at hand many means to parcel out benefits to the diverse groups comprising its coalition, as transpired in the seventies with the oil boom and as undergone by countries such as Brazil and Argentina with the accelerated growth in the demand for their merchandise (grains, meat, steel) from China in the past decades. However, once that exceptional situation was over, the accounts payable reverted and, on not having invested in future growth, the recession ended up being inevitable. That’s what happened in the seventies in Mexico and could well happen again.

The point is that we have at our door a year that should be benign for the Mexican economy, but great thunderheads at the end of this period. The colossal question is how the brand-new government will confront the panorama that presents: will it seek to create conditions for a more accelerated growth in the future, or will it devote itself to identifying guilty parties for a situation that is quite obviously predictable.

Even more important, how will the coalition behind AMLO react: Will it be willing to adapt itself to a complex environment or will it call for immediate satisfiers, benefits and public expenditure?  Faced with the inexistence of options, will it exact radical actions from the government? The scenario, easy to foresee, obliges thinking about potential conflicts or, at least, about the huge complexity in political management on the part of the government.

The essence of politics is the imperative of being able to choose. Galbraith said this in a manner beyond compare: “Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.” The problem for AMLO is, as illustrated by his party’s conduct in the Congress, his followers are not on board with the plan of accepting what is difficult to digest: rather, they are characterized by an absolute intransigence and a total indisposition for understanding the complexity of the exercise of power. In this context, Will AMLO behave like a statesman or like an activist, adding or alienating?

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@lrubiof

            Luis Rubio

To my dear Gaby and Rafael in this terrible hour

Every year the same thing happens: one year ends and another begins, like the normal cycle of life. On this occasion, Mexico is starting a new ear, under the promise of a radical change regarding what Mexicans have lived through in recent decades. Like all changes, there is a sense of expectation and worry, anxiety and delirium. However, none of this deprives us of the celebration of the year that is ending and the hopes for the one about to begin.

Each quarter Lapham’s Quarterly devotes its space to exploring the history, meaning and perspectives of topics such as rivalries, time, fear or discovery. An infinite variety, all rich in content and learning opportunities. The first issue of this year was about the rule of law, a subject that I am passionate about and that I have devoted a lot of time to studying, as well as looking for ways to advance it in the country. Here are some of the most interesting quotes I found in this volume.

The more corrupt the state, the more numerous its laws,Tacitus c110

Law is a flag, and gold is the wind that makes it wave. Russian proverb

If we do not maintain justice, justice will not maintain us. Francis Bacon, 1615

When you break the great laws, you do not get liberty; you do not even get anarchy. You get the small laws. G.K. Chesterton, 1905

The development of our laws has gone on for nearly a thousand years, like the development of a plant, each generation taking the inevitable next step, mind, like matter, simply obeying a law of spontaneous growth. Oliver Wendell Holmes

The law is established from above, but becomes custom below. Su Zhe, c 1100

Petty laws breed great crimes, Ouida, 1880

Under the Draconian code almost any kind of offense was liable to the death penalty, so that even those convicted of idleness were executed… Plutarch c, 46

The benefits of the Code Napoleón, public trial, and the introduction of juries, will be the leading features of your government. And to tell you the truth, I count more on their effects, for the extension and consolidation of your rule, than on the most resounding victories, Napoleon Bonaparte, having established the Kingdom of Westphalia in 1807

David Frost: Would you say that there are certain situations where the president can decide it’s in the best interests of the nation, and do something illegal? Nixon: Well, when the president does it, that means it’s not illegal.

There’s a delightful image in Plato that explains why a sensible person is right to steer clear of politics. He sees everyone else rushing into the street and getting soaked in the pouring rain. He can’t persuade them to go indoors and keep dry. He knows if he went out, too, he’d merely get equally wet. So he just stays indoors himself and, as he can’t do anything about other people’s stupidity, comforts himself with the thought: “Well, I’m all right anyway”. Thomas More, Utopia

One law and one justice protects the man of property, the man of wealth, the foreign exploiter. Another law, another justice, silences the poor, the hungry, our people. Ngugiwa Thiong’o, 1976

Anarchism urges man to think, to investigate, to analyze every proposition… Anarchism: The philosophy of anew social order based on liberty unrestricted by man-made law; the theory that all forms of government rest on violence, and are therefore wrong and harmful as well as unnecessary. Emma Goldman, 1906

Laws, like houses, lean on one another, Edmund Burke, 1765

It is perhaps impossible to review the laws of any country without discovering many defects and many superfluities. Laws often continue when their reasons have ceased. Laws made for the first state of society continue unabolished, when the general form of life is changed. Parts of the judicial procedure, which were at first only accidental, become in time essential; and formalities are accumulated on each other, till the art of litigation requires more study than the discovery of right. Dr. Samuel Johnson

The law of the land was vital to civilize society; but it could be a cumbersome and unfair thing. Richard Cohen

The law is like rain –it can’t fall the same everywhere. The person if falls on grumbles, bit it´s a simple matter- the laws like a knife, it doesn’t hurt the one who handles it. Jose Hernandez. The Return of Martin Fierro

There is something of ill omen among us. I mean the increasing disregard for law which pervades the country; the growing disposition to substitute the wild and furious passions in lieu of the sober judgement of courts: and the worse than savage mobs for the executive ministers of justice… There is no grievance that is a fit object of redress by mob law… Abraham Lincoln

End and beginning: what’s gone is gone; now comes the time of opportunities, if we know how to grab them.

Happy New Year!

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@lrubiof

                                                                                    Luis Rubio

                                                                                    Luis Rubio

A taxi is driven along one of the main arteries of the city, until, suddenly, it stops in its tracks. From a distance it can be seen that traffic at the junction with the branch of one of the city’s “expressways” is practically not moving. The taxi driver looks to the left and observes that, on the other side of the avenue, there is an entrance through which one automobile after another is entering the street. The taxi driver thinks fast and decides to recklessly make the turn and shave a few minutes off his trajectory. The cars coming the other way sound their horns at the driver, reminding him of his maternal ancestry but, in a few minutes, the taxi driver gets his way and handily returns the insult. The taxi driver behaved as many of us do time and again every day when we double park, beep our horn outside a hospital, go down a one-way street in the wrong direction, drive over the speed limit, etcetera. We do it and think we are very smart.

Behind the taxi driver there was another driver on his way to work and who observed the same scenario but who opted to remain in his lane until arriving at the junction, complying with the rules to the letter of the law. The taxi driver gloated over his bad behavior and made fun of the fools waiting in line to merge, while the man in the car behind him got to work late. It turned out to be expensive for the driver who chose to adhere to the traffic rules. This story is not different in any way from that of the exemplary citizen who goes to pay the yearly excise tax on his automobile within the established time limit, while their neighbor puts off going to pay until the last day. The citizen who pays on time later finds out that the local government has awarded a special discount to those who put off their payment. The one opting to follow the rules loses out.

In Mexico compliance with the law is optional, for governors as well as for citizens. Public functionaries decide to either apply the law or change it without the bat of an eye; the worst that can happen to the man-in-the-street for not complying with the law is paying a bribe and later observing, “I got out of it cheap”.  Those who observe the law get there late, pay more and complicate their lives. He who complies with the law is a loser.

In Mexico’s governmental system the law is an instrument that is used when it is convenient for the system: when it satisfies the objectives, usually political, of the functionary-of-the-moment, the law is THE LAW and must be complied with. When a government functionary dislikes what the law exacts, the public servant has two possibilities: one is to ignore it (the most frequent); the other, above all if it is the President or a high-level functionary, is to proceed to modify the law or to promote a new law that adheres to the objective being sought. When President-Elect López Obrador responded to Carlos Slim on the matter of the new airport, his point of departure made it evident that he sees the law as an instrument to adapt to the circumstances: without flinching an eye, he took it upon himself to decide whether he would apply the law or grant Slim the airport as a concession, as if it were his to give. It is not necessary to hold a bidding process, nor for Congress to revise the law or for the process to be transparent. The decision of a sole individual suffices.

None of this is novel or especially revelatory, but it does portray the clash between Mexicans way of being and their pretensions. Not long ago I watched a highly indignant driver, sounding his horn and shouting at a lady who had parked on Reforma Avenue, a main thoroughfare in Mexico City, creating an enormous bottleneck. One cannot just stop like that on Reforma as if it were a private parking lot. The interesting aspect of this was that just two blocks ahead, the same driver who had done the shouting did exactly the same thing. The driver stopped on a dime, clicked on his emergency blinkers and got out of the car to buy a newspaper. When someone beeped the horn at him, as he himself had done a few moments earlier, his body language was challenging and then threatened: “Want a fight?” He appeared ready to whip out a gun. Mexicans are indignant when another violates the regulations but it appears wholly natural to each of them to repeat that very action when convenient or when it serves their purpose.

Skipping over the procedural hurdles is part of Mexicans’ DNA and they do it every day. The case of the transit issue is perhaps one of the most conspicuous cases or, at least, the most visible, but it is merely a sample of the way we are. On one occasion I attended a session of the U.S. Congress with various Mexican legislators. The police officer at the entrance had a list of the visitors and requested an ID from each of us to check against his list.  One of our group moved up close and, with a tone of authority, told the officer, “I am a Senator of the Mexican Republic”, as if this mattered at all to the official responsible for who enters and exits. In English, the police officer answered in the most natural but unmistakable manner: “If you want to enter you must show your identification.”

The most successful and developed countries stick to the rules and do not dwell even for an instant on the alternative: the rules and the laws are not optional: they are obligatory. Those countries’ public servants have no doubts that the law is what lies within the code and that compliance is obligatory without the uttering of a word: it is not something optional. That is what renders equity and development possible. Someday, we Mexicans will have to decide whether we want a country that is developed and what that implies, beginning with complying with the law and making it be complied with. In the meantime, only the fools (there are better words for this) will comply with it.

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@lrubiof