Two visions –a specter perchance?- float through public discussion in anticipation of the beginning of the new administration. One emphasizes and evokes conflict, the differences and the supposed riding roughshod over the democratic process. The other privileges the opportunity to break with the politico-legislative paralysis that has characterized the country in recent decades and to deposit it on the threshold of a new era of growth. Are we at the brink of an insurmountable abyss, or merely facing a difference in perceptions: if the glass is half full or half empty?

The July 1 elections produced three circumstances: a) the need for coalitions for the advancement of a legislative agenda; b) a new source of political conflict, and c) a great opportunity.

The need for coalitions is not something new. The reforms of the eighties and nineties inaugurated a new era of cooperation among parties at the legislative level and this has been the tenor of what has advanced and what has remained fixed in place. The pretention of unanimity and consensus impeded the transcendent initiatives from prospering, but the fact of negotiating alliances now forms an inherent part of the national legislative process. In fact, an enormous number of constitutional decrees has been approved (64 of these since 1997), all the product of multi-party votes, but the overwhelming majority of these initiatives refers to political and social rights. That is, despite the fact that the process functions, the parties have been stubborn about affecting real interests in the political or economic arenas, which is, by definition, the nature of structural reforms in fields such as fiscal, labor, or energy.

The new source of conflict is not so new. Although, at least in concept, some of the claims of the coalition merit serious discussion (and I say in concept because the use of the monies was not confined to a sole party), the law suit presented before the Electoral Tribunal clearly did not concern the rules or the resources. The judicial poverty of the law suit speaks for itself. Despite this, it showed that there are no limits to the damage that these groups are disposed to wreak on the reputations of persons and institutions so as to achieve advancing the cause of the conflict. It is clear that the claim was strictly one of power: it is our turn, period. Rules don’t matter, legislation is the least of it and the conflict will not cease until the result is another. All of this suggests that the incoming Peña government should not waste its time or resources on new political or electoral reforms that could never attend to the nature of the issue. It would do well to concentrate on changing the economic reality of the country in order to accelerate the pace of economic growth but also for this to drive a radical modernization of the Mexican Left.

The opportunity that presents itself derives in part from the election result of this year but is to a much greater a degree the combination of the changing international context and of the changes that the country has undergone, nearly sotto voce, over the past two decades. In terms of internal changes, there have been extraordinary investments in infrastructure, exports have transformed the productive structures, the population is more and more middle class, NAFTA has become consolidated as an anchor of trust for investment and growth, and financial stability has favored consumer growth and secured the credibility of key institutions that are crucial for development. In turn, the gradual decelerating of the Chinese economy has affected its suppliers of raw materials (above all Brazil and Australia), opening a space for Mexico to become a great pivot of growth in the coming years. If the new government deploys the capacities of negotiation and the articulation of alliances –of political operation- that has characterized its party,the transformation potential for the country would be immense.

The key to the next months resides in the priorities that Enrique Peña-Nieto decides to emphasize. It is obvious that action is required on many fronts, but the capacity of any government is always limited. Thus, he must define his priorities and the strategy capable of achieving these. To date, the team of the future government has delineated two groups of themes: those linked with corruption, transparency and the accountability and those relative to the economic reforms. The two are important and both require attention and, even, could be the means for constructing coalitions with distinct legislative contingents. The big question is definition: is the objective one of imitatingLapedusa (whereby everything changes so that everything continues the same) or to carry out reforms that, although these affect interests at the short term, would be susceptible to transforming the population’s and the country’s reality in the course of the next six-year presidential term. No definition is more transcending.

Part of the dilemma that the new government confronts encounters in its world view. There is the risk that it will attempt to advance transparency and accountability, as well as to reduce corruption, by bureaucratic means: more commissions, more regulations, more bureaucracy. The historical experience is transparent; the only thing that heightens efficiency, reduces corruption and compels transparency is the elimination of regulations and impediments. The example of the Mexican Ministry of Commerce and Industrial Promotion (SECOFI) in the eighties is illustrative: with the elimination of the requirement of prior permission to import, export, and invest, bureaucracy ended and corruption virtually disappeared. In regulatory as well as in structural themes, the how is as important as the what. In fact, as the (relatively poor) results of many reforms and privatizations of the eighties and nineties show, the how is on occasion much more transcendent because it is what determines the levels of transparency, competition, productivity, thus the economic dynamism and rate of growth.

The great opportunity for the new government derives precisely from its not being commandeered by an absolute majority in the legislative branch. The main stumbling blocks to the reforms are all PRIist or in close conjunction with the PRI. The need to construct coalitions allows the new president to separate himself from the latter in order to carry out changes of great import that give back to him and to the country.

In contrast to past governments, Enrique Peña is an innate political operator. This is the factor that can set the country loose to begin the transformation that has escaped it for years. Thus the definition that he adopts and the priorities of his political and legislative endeavors would prove crucial.

www.cidac.org

@lrubiof

President (and now presidential candidate) Obama frets about the poor, dislikes big business and believes that the government can solve all problems. And to top this off, he rejects the importance of entrepreneurial creativity, demonizes the creation of wealth and considers social confrontation a useful instrument for advancing his political, social and economic agenda. Every day he reminds me more and more of Echeverría, a president full of good intentions who ended up destroying everything that worked well in Mexico.

On initiating his mandate, Echeverría found himself in an unusual situation for the economy: for the first time in decades, its performance was below 4%. Although this growth rate would be seen as extraordinary in these days, growth in the year 1970 was discernibly inferior to the 6.5% that had been the average during the four previous decades. Like all presidents since then, Echeverría attempted to recover high growth rates. The problem was how he did this and the consequences of his actions.

The Mexican economy had been showing signs of weakness from the mid-sixties. The year 1965 was the last that the country exported corn, one of the many grains and mineral products whose export financed importation of inputs for industry. This fact indicated that the economy required structural changes to maintain its rate of growth and to satisfy the needs of a rapidly growing population. From that point on sharp debate broke out within the government on how to respond and two views materialized very quickly: one, which proposed a process of gradual liberalization that would not place the survival of industry at risk but that would provide it with long-term viability; and the other, which proposed a strong stimulus to the economy through public spending. Echeverría took the lead on the latter view of the world and exploited the 1968 Student Movement to modify the government’s strategy, to subordinate the society and to create a climate of hostility towards the private sector.

Growth of public expenditures didn’t take long to build and by the fourth year of Echeverría’s term was nearly four times that of 1970. With the spending explosion, ministries, public enterprises and government trust funds mushroomed. In addition, regulations were modified and laws were passed, all of which had as their objective that of consolidating the bureaucracy in economic decision-making, limiting the ambit of private-sector activity and reducing the presence of foreign investment to the minimum.

In a few years, Echeverría not only modified the profile of the economy but also that of the society. The growth of spending and of the government was accompanied by two ills that took decades to resolve: the foreign debt and inflation. On the other hand, Echeverría inaugurated a style of rhetoric that had not constituted part of Mexican politics in over a half century: class struggle. As part of this, he modified school texts to incorporate his political philosophy, a factor that sowed the seeds of the confrontation that we have been actively experiencing, literally, to the present day. His permanent confrontational strategy with the business community destroyed the legitimacy of employers and the sole creators of wealth and began perhaps the worst of the evils of his legacy: distrust. The result of his administration was inflation, crisis and a deeply polarized society.

By any yardstick, Obama is having the same effect on his society. Because it is a fully institutionalized nation, the impact of a U.S. president on his country is much less than that of those who were (nearly) omnipotent presidents in Mexico; however, Obama has devoted himself to fomenting the same brand of antagonism and hostility as that of Echeverría in Mexico.

What happens in the U.S. has consequences for Mexico. Our exports to the U.S. are the main engine of our economy. Were the U.S. to weaken its pro-entrepreneurial tradition, Mexicans too would suffer the consequences. Social approval and full legitimacy of the business is critical for wealth creation: without it, nobody would be willing to assume risks in a hostile environment. Mexicans know this full well and have paid dearly for it. It would be a tragedy for the U.S. to fall into the same, self inflicted, path.

Although there is no doubt that Obama stepped into an economic crisis of enormous dimensions, his performance during these four years has been disastrous: instead of attending to the causes of the crisis, he has devoted himself to wasting the resources slated for stimulating growth and feuding with his political opponents, but above all attacking the sole potential creators of wealth: the entrepreneurs.

Part of the U.S. president’s actions reflects his lack of experience as a politician. For example, rather than controlling the use of monies designated for the economic stimulus, he permitted the then congressional leader to get away with doling out a little more than one trillion dollars in funds (the equivalent of 100% of the Mexican GDP) to unions, interest groups and the pet projects of herlegislative contingent. This is neither good nor bad, except that the projects that politicians and special-interest groups typically embrace are neither the most productive nor are they those that, in the words of the economists, exert the greatest multiplier effect. Those defending Obama’s actions say that his not undertaking that amount of spending would have caused an economic collapse.

Since it’s impossible to prove what didn’t happen, U.S. society spends its time disputing a) whether there should be a new stimulus package; b) whether the brutal growth of the public debt should be tackled; or c) whether the entire structure of the economy should be revised. The debate in the U.S. is not very distinct, in concept, from that which has characterized Mexico since the end of the sixties.

As Milton Friedman once said, public programs should be evaluated by their results and not by their intentions. The result of Echeverría’s term was disastrous: decades of antagonism, near hyperinflation, inefficient government and the legitimization of conflict as a strategy of permanent struggle. The result of Obama’s term remains to be seen but I have not the least doubt that he has incorporated a novel element into U.S. politics: class struggle.

For privileged observers such as Lipset and de Toqueville, what has distinguished Americans in their more than two centuries of existence is their exceptional capacity to adapt and assimilate persons and ideas, as well as the belief in equal opportunity that legitimizes their entrepreneurial vitality. Obama is threatening what Echeverría consigned to the graveyard: the credibility of those who can make possible the transformation of their country.

www.cidac.org

@lrubiof

The great deficit of recent decades has been that of leadership. There has not been clarity of course nor ambition for transformation: there has been administration, but not the consolidation of a platform likely to lead Mexico toward a better future. This absence has not only impeded us from seizing opportunities or changing circumstances into opportunities, but has also caused a retraction in the society as a whole: each standing guard over their own and no one developing forward-looking projects. The notion of development virtually disappeared from the map.

We Mexicans have a love-hate relationship with strong leadership in the presidency because the experience has not been benign on that front: a long history of imposition has created enormous resistance to any change, the performance of incompetent leaders has ended in enormous financial crises and excesses of power entailing erroneous decisions with grave economic consequences in the long run. However, in all of these cases, the problem was not one of leadership but the total lack of checks and balances.

Though imperfect, today there is series of checks and balances that while not mainly institutional, indeed has had the effect of checking on the exercise of power. This is not bad in terms of the exercise of the governmental function, but achieving a proper balance would require effective and transparent institutional checks and balances for all. However, none of this changes the fact that the country is avid, and has the need for a leader who is at once strong and effective, but who at the same time is delimited, capable of understanding the context in which he is to operate. That is, one with good judgment. Isaiah Berlin defined good political judgment as “a capacity for integrating a vast amalgam of constantly changing, multicolored, evanescent overlapping data”.

The country that Enrique Peña-Nieto will find is stuck, each of its parts engrossed in its own labyrinth. In the absence of a clear course, the panorama is dominated by forces refractory to any change if not reactionary in the literal, not the ideological, sense of the word. Poised on the brink of an inexistent or marginally clear future, it is natural to take refuge in the known: in the past.

While the phenomenon is particularly visible in some, very specific ambits, the reality is that the space of national life that has achieved disassociating itself from this trend is rare. The Left that has dominated these last years is intent upon reconstructing the seventies; the private sector is pigeonholed in a protectionist model of industrial development; the old bureaucracy conceives of no solution that does not imply greater spending; the foreign office is split, some of its members attempting “not to move anything”, others to returning to the comfort zone of blaming the Americans for our wrongs. The PRI is yet to show its colors, but it is quite obvious that many yearn for the past. The PAN, the governing party in recent years, is discussing a return to its roots. The past offers a refuge, even if only one of perdition.

It’s evident that each of these groups and sectors possesses contingents and leaderships that are not only clear-minded with respect to what is imperative to achieve, but also even concerning what they have been accomplishing in their own ambits of competition: currents, business enterprises, groups and spaces in general. However, all of these leaderships, or potential leaderships, find themselves harassed by the general tenor of the harshness of the context. No one, not those who effectively wield power or the capacity of example, dares to stick their head out. What is excessively visible in the hidden struggle for the future inside the Left is equally true within the private sector, in the PAN and in all corners of the country.

Everyone knows that the old arrangements that continue to exist, as well as the old economy or the old ways of conducting foreign policy, to continue with the same examples, do not offer us opportunities to get ahead, but no one wants to risk their own skin within a context in which success continues to be penalized and the cost of erring, or of a failure, is incommensurate.

Another way of saying all of this is that the country has enormous capacities ready to transform itself, that the leadership reserves are vast and that, different from Europe or the U.S., our structural situation (economically speaking) is much stronger and promising, however urgent the diverse reforms and adjustments are. The country is ready to step out for a walk but no one dares to take the big step. That’s the deficit of leadership.

The status quo ends up being convenient for all but good only for the most encumbered interests. This paradox can only be resolved with the presence of two simultaneous circumstances: on the one hand, effective leadership; on the other, enlightened leadership, which understands the dynamic characterizing the world and that is capable of developing competent strategies for achieving success. The country urgently needs clear leadership that draws strategic lines and, above all, that facilitates the rise of all this potential that has been accumulating throughout two or three decades but that has not yet seen the light of day.

The Mexico of some decades ago would allow for and favor the nearly unipersonal exercise of power. Today domestic as well as the international circumstances make this scenario much more difficult, if not impossible. One core characteristic of the Mexico of today –and of the global economy- is decentralization of power and productive activity. The central controls are no longer functional and, in myriad cases, possible. What the country requires is clarity of course for development, which implies, paradoxically, rendering possible the multiplication of sectorial and functional leaderships.

With clarity regarding the nature of the challenge, the incoming president will have the exceptional opportunity of achieving two things that have been impossible in the last two decades: breaking through the paralyzing inertia and constructing lasting institutions. This can only be attained through a broad agreement that is susceptible of attracting the citizenship.  The mixture of the two is key: unstick what is stuck employing the leverage of all this accumulated potential and, at the same time, constructing the institutions that grant a space to all of the groups and political and productive forces. The former is indispensable but, given the conflict level, it would perhaps be impossible without the latter.

Benjamin Disraeli, one of England’s great prime ministers of the end of the XIX Century, said that “Circumstances are beyond the control of man; but his conduct is in his own power”. The opportunity is immense and the complexity of the moment makes it that much greater.

www.cidac.org

@lrubiof

In The Stranger, Camus tells the story of a man alienated from the world who kills an Arab in Algiers simply because the sun was bothering his eyes. Meursault,the leading character, is condemned to the guillotine and in his cell begins to meditate on the absurdity of existence. Something like that happens to me with the commissions, councils, and other economic or political regulatory institutions that have come to be created in the country during recent years and, above all, on the insistence of making these into entities of “citizens”.

No society is born with all of its problems or contingencies sorted out. Rather, time comes to compel it to adjust laws, modify practices or construct forms of interacting that allow a society to achieve stability. In fact, during their process of development, all societies over time construct mechanisms, processes and institutions whose purpose is to revolve problems, confer continuity on the things that they prize, limit bureaucratic excesses, avoid abuses, in short, institutionalize.

The submission of kings to the Parliament in monarchic systems is a form of institutionalizing power, in the same manner as the adoption of rules for the continuity of the governmental expenditure when the legislative body fails to arrive at a budgetary agreement in time was a way of stabilizing the functioning of a government. What in England took seven hundred years and in the U.S. two hundred, in Mexico has necessitated construction in a very brief time lapse to a great extent because the authoritarian system obviated any need (or possibility) for institutionalizing the country.

The politico-legal framework that was constructed throughout the XX century in Mexico was one of absolute arbitrariness. The authorities possessed enormous latitude for deciding on any issue: the laws established cumbersome requirements, but always had bestowed upon the former vast bureaucratic powers to justify any decision, these usually responding to the political interest of the leader in office or to the pecuniary interest of the functionary him/herself. The political and economic transition that Mexico has experienced has obligated the marking off these faculties, but an enormous potential for abuse persists.

I understood this some years ago when I had the opportunity to observe the way the United States Securities and Exchange Commission (the SEC) works. The faculties of this entity are not only vast, but also it enjoys a brutal margin of discretional powers. However, in the process at which I was present, I detected one thing that appears simple but that is in radical contrast with our reality: this entity has discretionary attributions but is never arbitrary. The reason for the difference is that its resolutions (each a brick upon a brick) explain its decision, but also why this was arrived at and how it modified the existing precedents. In Mexico’s case the Federal Competition Commission (CFC), for example, issues its resolutions in a letter with no explanation, conferring no certainty to those that are regulated and opening a vast sea of possibilities for changing course the next time around, all without an explanation. That’s the difference between discretion and arbitrariness.

The objective to institutionalize can be seen in the creation and development of entities and institutions as diverse and dissimilar as the North American Free Trade Agreement (NAFTA) and the Human Rights Commissions, the economic regulatory commissions (in Competition, Communications, Hydrocarbons and Energy) the Federal Electoral Commission (the IFE), the Federal Institute of Access to Public Information (the IFAI) and the Institute for the Protection of Bank Savings (the IPAB). These institutions have come to join up with previously existing ones such as the National Banking and Securities Commission (the CNBV).

The construction of institutions and political agreements is a crucial component of the civilizing process of any society and constitutes a benchmark, a gauge, of the development process itself. No one, except for those preferring governmental arbitrariness, could object to this type of body and structures of regulation, supervision and surveillance.

Of course, the group of entities and processes with which I attempt to illustrate the phenomenon constitutes a cornucopia of dissimilar things, many of which have nothing to do with the nature or the concept of the others. For example, NAFTA is a commercial and investment arrangement; however, one of the primordial objectives in its conception was that of furnishing guarantees for investors on the thrust of economic policy and, in this sense, constitutes a mechanism thought for institutionalizing the economy. Human rights commissions were created to monitor the authorities, above all the judicial authorities, in order to avoid abuses in these underworlds. Regulatory commissions exist to oversee the functioning of the markets. Each of these instances has its instruments, processes, and ways of being. Some comprise in reality decentralized mechanisms of the government to act as the authority, while the purpose of others is to exercise moral suasion on diverse actors or authorities.

Despite the diversity of these entities and institutions, a call is frequently issued, by the society as well as by the politicians, to construct “citizen” institutions or to convert the existing institutions into “citizen” ones, presumably stocking their councils with persons emerging from the civil society and not from the government. I beg to differ. Although there are entities in which it is the citizens who should be the lead voices because their objective is that of exercising moral suasion (as is the case of the human rights commissions), the regulatory commissions, beginning with the economic and following with the electoral ones, should be entrusted to upright, professional public functionaries, experienced and with records that demonstrate competency, honesty and commitment to public duty. If one observes today’s panorama, the difference is very simple:  those who are career civil servants do not seek the public spotlight and solely devote themselves to their work. Those who are “citizens” in these functions only cover their backs and engage the media to slake their own conceit.

A modern society requires solid institutions and entities, many of these autonomous, but all administered and presided over by honorable functionaries, professionals in the area, whose sole interest would be the due functioning of the activity and the sector. Thus, these entities require very well structured checks and balances that oblige commissioners and/or board members to abide by the norms and comply with their function not on center stage but rather with results.

A fundamental challenge confronting the country is that of constructing an efficient system of checks and balances that consolidates all of these regulatory entities, but in such a way that it eliminates all vestiges of arbitrariness. This is a job for professionals, not for citizens without experience in matters of the State.

www.cidac.org

@lrubiof

The PRI victory engages many possible explanations but, beyond the specific situation –the performance of the last two administrations and the extraordinarily well organized Peña campaign- there is an angle that merits more profound analysis: that of the political culture that this party built throughout the past century and that, judging by the result, could still be imprinted in the Mexican’s genetic code.

Looking back, the central characteristic of the PRI regime of the XX Century was its capacity to administrate and maintain power accompanied by its incapacity to construct a State. This is not a play on words: the key to the PRIist structure was unipersonal power that, although not absolute, conferred enormous powers upon whoever occupied the presidency. As Roger Hansen wrote, the great success of the PRI was that of reproducing the PorfirioDíaz regime but tailored into a six-year presidential term of office. To maintain that power, “the system” constructed a cultural hegemony that not only legitimatized its own power, but that also allowed it to construct a system of fealties and a credibility that far and away transcended the strictly political ambit.

Will it be this cultural hegemony of yesteryear on which Enrique Peña-Nieto was able to capitalize? Doubtlessly, Peña capitalized on the notion that the country used to work well (under PRI management), that things were working out and that afterward (who knows when or why) they stopped working (under PAN), and snowballed to the point of becoming an revealed truth, comparable only with the observation of a former PRI governor in the sense that “we may be corrupt but we know how to govern”.

In a less praiseworthy or benign take, Robert Conquest, one of the greatest historians of the Soviet Union, affirmed that “one of the most difficult things to convey to a young audience is how disgusting the rank and file of the old Soviet ruling class really were –how mean, treacherous, shamelessly lying, cowardly, sycophantic, ignorant”. Which PRI returns, the one that constructed the scaffolding of a modern country or the one that milked it until nearly finishing it off?

What I have no doubt about is that there is indeed a PRIist gene and that this is more penetrating and omnipresent that it is recognized. My impression is that there are two possible explanations: one is that, in effect, it is a cultural phenomenon that underlies everything else. Some scholars from past decades attested to that the PRI had achieved capturing the nature of the Mexican and had converted it into its own raison d’être: that is, that the PRI and the Mexican were one and the same. I tend to have doubts about this way of seeing things because, for example, if one reads the press of the first PRI decades, until the end of the forties, the country was much freer in terms of written expression than it was in the following decades. Media censorship began in the fifties and worsened until it began to subside, but it only disappeared with the defeat of that party in 2000.

From this perspective, it’s not so much that the PRI has mimicked the nature of the Mexican, but rather that it possessed an extraordinary capacity to construct an entire history and culture that the Mexican adopted (by whatever method it was). Thence the official truth and the sole truth that very few dared to doubt. Thus the importance of the official (and only) text book for school children and control of the media. An Interior Minister of that era once observed that “in Mexico anything can be thought, some things can be said and very few may be written”. Anything to maintain control –and the myth.

The other explanation for the phenomenon is perhaps more pedestrian but no less significant: despite the alternation of parties in government, the old PRI system remained intact, was never reformed nor did a new regime ever come to life, meaning by this a new institutional structure that would redefine the relations among the branches of government and among the political parties, that would confer real power on the citizenry and that would guarantee accountability by civil servants. The system stayed the same, except that the president stopped being so powerful when the PRI ceased being an integral component, a permanent component, of the presidential political apparatus. However, given the absence of a true institutional reconstruction, the result of this “divorce” was a dysfunctional system of government, a weak president and a very poor governmental performance. Beyond the individuals, the persistence of the old system under inexpert administrators produced poor results.

Maybe the first conclusion of these disquisitions is that democracy has not penetrated the institutional structures and the culture of the Mexican and that, what the citizen craves is an effective government that makes things work. Without disdaining their achievements in matters of transparency, availability of mortgages and the fight against organized crime, the PAN Presidents didn’t change the political system nor did they strengthen their historical base and its raison d’etre: the citizenry. They maintained economic stability, but they did not resolve the problem of competition in the economy –above all in energy and communications- and they did not change the direction of the country for the better. In addition to this, they were highly incompetent and limited governments, but they surely did adopt many of the PRIist vices.

In view of this, the rational thing for a voter was to move toward an administration that offered the same but with a proven record of delivering. That is, it’s not so much that the PRIist culture continues to be so dominant, but rather that the Mexican simply wants an effective government. That’s what Peña promised and that’s what apparently swayed the electorate. Peña’s first steps have shown unusual pragmatism that contrasts with the dogma of his opponents. Time will tell.

There are two similar cases in recent global history that afford us a comparative perspective: Russia and Nicaragua. In both cases the dominant party lost power but eventually ended up returning for similar reasons: because the people wanted order and assurance concerning the future. It’s not that the Russians wanted to return to Stalinism or that the Nicaraguans missed the Sandinistas, but that the interim governments turned out to be more benign in terms of freedoms, but so incompetent that they ended up tiring everyone out.  Perhaps the explanation for Mexico is no more complicated than that. But the unrelenting question is whether Mexicans will suffer from the privations of freedom, controlled media or systematic attempts of imposition that have characterized those two regimes.

If it’s an effective government that the Mexican wants, then that’s what he or she will surely get. Will the efficacy be accompanied by all that Robert Conquest summed up so well: form above substance, control above rights, the steamroller above the freedoms? Overriding Talleyrand, will the new administration demonstrate that the PRIistsdid learn something from their past?

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@lrubiof

Polls were a leading figure in the past presidential election. However, instead of being an instrument of measurement and a source of trust in the results, they acquired an unusual and highly destructive transcendence. They ended up being means that manipulated the election and impeded conferring certainty on it. In the light of this, it is evident that calls will be issued to regulate the service. I beg to differ: what are missing are opening, transparency and competition.

Is it possible to manipulate an election with polls? According to the Dictionary of the Royal Spanish Academy, to manipulate means “to intervene with clever and, at times underhanded, means in politics, in the marketplace, in information with distortion of the truth or justice, and at the service of special interests”. The key element of this definition is the conscious seeking of a determined objective: to distort. The evident question is whether it is possible to utilize polls to manipulate the voter. According to Edward L. Bernays, an expert in propaganda, “the conscious and intelligent manipulation of the habits and opinions of the masses is an important element in democratic society”. In other words, this is an exceedingly subtle issue in which the crucial factor lies in the objective: if this is about intentionally distorting the information, we find ourselves before a case of manipulation; however, if it concerns attempting to exert an influence on habits and opinions, it does not. The main point is not, therefore, whether the polls influence the voters’ behavior, but rather whether they were utilized consciously and deliberately by those who produced or published the polls with the express objective of altering or inducing perceptions among the citizens.

There are two key issues here: the difference between the last pollspublished before the election (there is a five day ban prior to election day) and the final result; and the manipulation that the polls may have been used for. These are distinct themes that merit a differentiated analysis because they are not the same.

One great myth of the election resides in the assumption that the margin of advantage of the leading candidate with which the process initiated would be maintained until the end. Anyone who has observed elections around the world knows that elections always narrow, generally between two contenders. The exceptions to this rule have perfectly obvious explanations. One exception was the election, in the second round, between Jacques Chirac and Jean-Marie Le Pen in France in 2002. Instead of the traditional Left-Right confrontation, the election ended up being between the Right and the Extreme Right, which led to the Left voting for the Right. Chirac swept through with more than 80% of the vote. Another similar case was that of Eruviel Ávila in the State of Mexico a year ago: there the PAN as well as the PRD were over-confident, supposing that the PRI would nominate someone within the close circle of the then Governor Peña-Nieto and thus they did not construct a candidacy of their own. In fact, they essentially bet that Eruviel himself could be the candidate of an opposition alliance. The result was not as overwhelming as that of Chirac, but nearly.

All elections close in the end and many of the polls do not achieve capturing the evolution that these register in the voter in the last days prior to the election. This year’s election ended up defining itself by the anti-PRI vs. the anti-López-Obrador vote and this led to the PAN’s falling much below what the polls had said: this is a typical pattern and has nothing to do with any manipulation. The voters adjust their preferences according to their wishes but also according to their fears, factors that clearly modified the final results with respect to the last polls published before they were legally banned.

Much more complicated than this is the issue of the allegedmanipulation. In Mexico there are many types of polls, many financed by parties and candidates, which are published as if they were a science, when on many occasions they reflect sampling frameworks constructed ex profesoto promote their clients. Others simply reflect the lesser quality and technical skill of the pollsters. The way that the pollsters treat the undecided and non-responders has great influence on the way the results are presented. The point is that the diversity of availablepolls makes it easy to see them as similar and comparable, when in reality many clearly are not. That is, some constitute expressly designed attempts to manipulate the voter.

The great novelty of this presidential race was the appearance of a daily poll, something that had never been present before in Mexico and that, as far as I know, does not exist elsewhere in the world. A daily poll that shows as many as eight-percentage-point shifts in just one day is immediately suspicious. The poll can be technically impeccable, but its appearance every single day lends itself to all kinds of interpretations. Worse still when the way of presenting the daily news in the same newspaper and, on some cases, the opinions of their columnists, coincides with the poll’s results, all of which generates an inevitable sensation that there is something fishy behind it and undivulged connections between one and the other.

The question is what to do about this. It is impossible to determine whether there was an express attempt to employ the polls as a means of manipulation. However, the issue is quite serious in a country that has yet to achieve the basic elements of the democratic process, i.e., recognition of the election result, which is why the theme will inexorably return to the political discussion.

In the face of this, I anticipate that the typical summons will be issued to prohibit or regulate polls, sanction the media that publishes these or, in whatever case, continue deepening the prohibitionist regime that is so harmful for the development of a democratic country. And worse still because nothing would be achieved, as has been demonstrated in the case of the campaign finances.

Another answer, very distinct, would consist of obliging the pollsters to publish their historical record, that is, to make public in each poll the comparison between their predictions in previous elections and the final result. The electoral authority could emulate the way in which the consumer is warned by the health authorities about cancer in cigarette boxes with a clear and unmistakable label with a caption such as “this poll was off by X number of points in the last election”. With these data, the voter would have the necessary information to be able to discriminate between the polling professionals and crass connivers.

There is no perfect solution but the degree of conflict that Mexico is experiencing compels us to think of creative means that will lend certainty to the process. Competition is the only possible solution and this entails opening and transparency. This would also helpto advance toward electoral processes that are completely legitimate, exposing the charlatans and professional string pullers.

www.cidac.org

@lrubiof

Alice in Wonderland, the novel by Lewis Carroll, was written by a professor who also wrote a book on symbolic logic. So it is not surprising that Alice encountered not only strange behavior in Wonderland, but also strange and illogical reasoning –of a sort too often found in the real world and of which a logician would be very much aware. In this context I ask myself what would happen if Alice were to visit the world of interpretations that today characterize Mexico’s politics: because not all are as logical as they seem.

A good example of schizophrenia is the contrast between the two nations: in Mexico as well as in the U.S. there’s talk of great political polarization and of a dysfunctional government. But the causes are not the same and the comparison is enlightening.

To begin with, the presidential system, which we adopted from the Americans, was designed to make any change difficult. Its structure was conceived of by the authors of The Federalist Papers as a system tailored to avoid the excesses and abuses of one branch over another. This fact has led many scholars and opinion pundits to conclude that the parliamentary system –designed to be flexible and to adapt with ease to the winds of change- is superior in terms of quality of government. The reality is that these are systems with very distinct logical dynamics. As Ferdinand LaSalle stated in his famous book on constitutions, each constitution reflects the concrete political reality, each system is in a dead heat with its society. The Americans did not construct a democracy but rather a republic because they wished to avoid potential abuses by private interests or the masses. That is what Mexico adopted in 1824 and thenceforth.

The discussion in the U.S., not very different from ours, boils down to: why its system worked before and doesn’t any more. The main similarity lies in the polarization that characterizes the two societies and that, despite manifesting itself in very different ways, has the effect of paralyzing legislative decision-making. The parallels are overwhelming. But the reality is less so.

Two likenesses explain the American reality. On the one hand, if one analyzes the opinion polls, far from being characterized by great polarization the citizenry of that nation experiences a normal distribution, as the statisticians would say, in which the majority is concentrated in the center and a few are polarized at the extremes. That is, the society is not undergoing any polarization, at least not extreme. If the society isn’t, why are there such a flap in the media and such paralysis in Congress?

There are two explanations or hypotheses for the phenomenon. One argues that President Obama’s management has been very ideological and that has generated enormous reaction. Those sustaining this position exemplify it with how the economic stimulus package was implemented, that it did not focus on areas of great economic impact, or with his decision not to accept the Simpson-Bowles Commission’s budgetary recommendations. According to this rationale, the Tea Party Movement, which produceda legislative majority to the Republicans in 2010, was none other than a reaction of the society to Obama. That is, the polarization is caused by what Obama has done.

The other explanation is of a structural nature. According to this view, the polarization derives from the way the legislative districts are assigned and that, thanks to gerrymandering, from the eighties, has exacerbated. Each state is distinct but, typically, it is the state legislatures that define the districts and every ten years, in response to the Census, these are reconstituted. A district in Georgia is 69 miles long and on occasion not more than a few meters wide, all this to ensure that a certain party remains there permanently. This logic has propitiated growing extremism from the right as well as from the left. The best proof of the latter is that this year new districts begin to function, the product of population changes registered in the 2010 Census: a powerful (and for some extremist) congressperson from Massachusetts, Barney Frank, decided not to seek reelection because his district was modified and he was not certain of winning. The system rewards extremism or, expressed in other terms, the source of polarization in the U.S. has to do with the manner in which electoral districts are assigned and not with a fundamental change in the reality of its society.

The great difference between the U.S. and Mexico resides in the strength of their institutions. Although the U.S. Congress is polarized, presidents come and go and the system endures come what may. The checks and balances are so solid that they impede abuse on the part of any individual. The price paid for this is that it is difficult to carry out relevant changes but, it could be said, that comprises the ultimate objective of its system.

On Mexico’s case the situation is very distinct. There the problem could be resolved with a redesign of the rules that determine the Congressional composition. In Mexico the problem is that there is no arrangement on how political power should be organized and distributed. There it’s a problem of structure; here it’s one of essence. There it could be corrected with a legislative decision; here what’s required is an institutional construction that resolves the problem from the beginning. These are very distinct orders of magnitude.

Mexico has a post-dictatorship hangover: years of excesses without institutional development. Different from the U.S., Mexico requires an enormous exercise of political interaction that joins together efforts for and submits ambitions to a common project. In the U.S. all they have to do is agree on something functional: their hangover is one night, Mexico’s is one of two centuries. With this I don’t mean to suggest that it’s easy there and difficult here: in fact, both entail an enormous challenge. What’s relevant is that the task awaiting us Mexicans is that of constructing the foundations of a functional political system and this implies the capacity and disposition for uniting wills, abandoning all-or-nothing positions and constructing a new arrangement of power.

The mission for Mexicans is one of transformation, not of continuity or retrospective. Whoever claims something distinct in not living in the real world. And what is in the wings can be nothing other than violent if it implies returning to the past, or intense if it implies moving on toward the future. Neither will be pleasant.

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@lrubiof

I seemed to be seeing the past and the future galloping head to head without end. A recent visit to India made me realize the so very dramatic contrast between two social and political realities that lie behind contrasting economic results. India and Mexico show that it is not only economic policy that determines growth: perhaps as important, if not more, is the recognition or social rejection to the creation of wealth.

Mexico resolved many essential issues of infrastructure many decades ago and, nevertheless, got stuck along the way. The grand highway construction and electrification programs began in the last century during the thirties. In India, these have been an issue of the last twenty years. While it is rare for a Mexican town not to have electricity and even telephone service, in India this was the norm until only two decades ago. Independently of the manner in which one wishes to evaluate the success of Mexican development programs, I have no doubt but that during the last century there was a clear attempt to take infrastructure to the remotest nook and cranny.

In India, the extreme poverty that characterizes the society (which only a few years ago had a per capita income less than 10% of Mexico’s) was the product of a failed strategy inspired by Soviet socialism. As soon as it started to free itself from those ideological and bureaucratic bonds, its economy began to grow in a sustained and accelerated fashion. In only twenty years, India achieved quadrupling its GDP per capita.

Today India confronts the type of dilemma that has plagued our process of development in the last several years, but it finds itself with a much better capacity to deal with these. Although attacking essential problems such as poverty is difficult in all nations, it is infinitely easier within the context of an economy that expands, because that fact alone generates favorable conditions. But perhaps the great difference between India and Mexico does not reside in the economy itself, but in the attitude of its people: even in the midst of crushing and lacerating poverty, Indians maintain a “can do” attitude rather than a “why it can’t be done” one.

For a population that had never before known economic opportunities, the priority is to generate income and an environment of accelerated growth produces one opportunity after another. Despite the lack of government programs devoted to attending to problems of poverty and economic informality, the population acts: its incentive is to break the vicious circle in which it lives and its responses are not foreign to us: those who can, send their children to the best school, not to the one that corresponds to them; what’s important is to generate activity, which Indians seek until they find it, an attitude that has procreated millions of small businesses in all ambits. Some of these grow, others disappear, but living standards rise one family at a time.

An Indian university professor mentions that the most popular language is not English, but “Windows”, because that’s how many perceive their ticket to ride toward the future. For those who have had access to the technical schools that proliferate throughout the country, a degree in Engineering changes life in a millisecond. India illustrates how a regulatory framework that propitiates entrepreneurial activity (by design or by default) can be unbeatable. In this respect, China and India are contrasting in that they have followed models of development that emanate from their very distinct social as well as political characteristics.

A sharp observer of India explained that comparisons between India and China were logical but not very useful. These are two nations that share a region of the world, but radically opposite circumstances and characteristics. The only thing that they appear to have in common is that, after a long period of paralysis, they suddenly woke up, becoming important economic growth engines. In China everything is order, in India disorder; both believe in celerity, but their sources of growth are very distinct: in China there is much foreign investment and big local enterprises, essentially governmental; in India there is an enormous and vigorous entrepreneurial class and a government that, over recent decades, has withdrawn and favored the development of self-starters at all levels. The disorder in India reflects a democratic system that is complex in the extreme, which is in contrast with the order emanating from an authoritarian government in China.

Returning to Mexico, it seems to me that the main lesson shown by the transformation in India of recent decades is that the key does not dwell on having a perfect regulatory framework, with all of the reforms that would be desirable or with a hyper competent government, though all that would obviously makes success more likely. What’s critical is to have an environment that makes economic growth possible. What appears to enliven the success of this Asian nation has more to do with the milieu of freedoms, a contentious political system that generates checks and balances, and above all, social appreciation of the economic boom and of personal enrichment. When individuals identify success with enrichment, their incentive for investing, assuming risks, and viewing the future with optimism ends up being irrepressible.

In Mexico we lost our way at the beginning of the seventies in the past century (fifty years ago!) and, however numerous the significant advances have been, our disputes are not about how to govern us better or how to promote growth, but rather how to come into power and stay there. Compared with India, we have everything to be successful, and we had it many decades before they could even have imagined it. This makes one think that the great difference between the economically successful years of the 20^th Century (1940-1970) and the present has less to do with the specific economic strategy than with the legitimacy that the society grants to those responsible for generating wealth.

Nations that during the last several years became emblematic in economic terms follow development strategies that are so dissimilar that it is impossible to attribute success to a single factor: more or less investment or expenditures, the existence (or absence) of a strategy against poverty or the exact nature of private-sector participation. All these obviously matter. But China, India, South Africa, Indonesia, Brazil, and other nations that have grown at a brisk pace do not share any common economic strategy: each of these nations follows its own rationality. Each has achieved high growth rates thanks to a significant political change.

A long time ago Aesop said that “Men often applaud imitations and hiss the real thing”. It seems that he understood our dilemmas better than we do.

www.cidac.org

@lrubiof

The budget, said Schumpeter, is “the state stripped of ideological pretensions”. True to this principle, in Mexico public budgets serve private interests. Only a new federal-fiscal pact would correct this.

Today’s budgets are not like those in the past. Until the mid-nineties, the federal government decided how to collect and how to distribute and spend public funds. At present, tax collection continues to be essentially federal, but government spending is mainly in charge of the states and municipalities. This creates perverse incentives and begs the question: Are we precipitating a European-style crisis?

Although the European crisis features many dimensions, its heart lies in a fundamental problem that Alexander Hamilton had already anticipated 200 years ago: there can be an alliance among sovereign entities, or there can be a government that governs the citizens of these sovereign entities. What there can’t be, said the Secretary of the Treasury of the then-nascent American Union, is the “monster of a government of governments”. In financial terms, the latter model implies that there is no built-in mechanism that supplies funds to pay the debts that these governments incur.

In Europe, every country has its government that collects taxes and spends these, but 17 dissimilar nations share a common currency. Each country has conducted its affairs to the best of its understanding.Thus, while Germany dramatically increased its levels of productivity in the last decade, Italy fell in arrears. In a world of independent currencies,Italy would have ended up devaluating its currency to compensate for these differences. However, thanks to the existence of the euro, the common exchange medium, Italy cannot resolve its situation by means of devaluation. In addition, through a decision of the Bank for International Settlements (BIS, the central bank for central banks), all debts of euro-zone countries were considered sovereign (guaranteed by their governments), therefore risk-free. This decision, more political than economic, led to European banks cheerfully lending without building up reserves were someone not be able to pay them.

Is this situation akin to Mexico’s? Uses and abuses of public funds here are legendary. In Mexico no one is surprised when a governor utilizes public treasury monies to upgrade his image or that public funds are dispensed in the most awkward ways without anybody blushing. Although governors cannot print their own money, recent experience (e.g., Coahuila) shows that through deceit and the manipulation of information, a state government can get itself into unlimited debt, something similar to having their own currency.

The use and distribution of public funds is serious to the extreme. To begin with, perhaps one of the main reasons that public spending in Mexico has very little capacity to stimulate economic growth pertains to its peculiar fiscal system.

The federation collects and the states spend. Given the political power that governors have accumulated in recent years, their expenses are taboo, and, for all practical purposes, they are not accountable to anyone. From an economic perspective, many, perhaps the majority of projects promoted by governors, have little impact because their logic is frequently more political and electoral than economic. Of course they build roads and other services, but not necessarily those that generate the greatest economic impact.

Without the desire of proposingto return to the centralized system of the 1950s and 1960s, it is important to understand the difference. During that era, the Mexican Ministry of Finance had enormous “pots” of money that it devoted to development projects. With a small army of economists, the Ministry evaluated the cost-benefit of each project to determine the highest multiplier effect. In this manner, one year they allocated these money pots to electrification of the Southeast and another to constructing Cancún or the highway to Querétaro. The basic objective was to achieve a high rate of economic growth.

The current rationale of the governors is very distinct. Above all, they conceive of themselves as future presidents and view the expenditure as a personal marketing tool. Second, even among those more modest in their individualpretensions, few have a team with the analytical capacity to determine the most salubrious use of the expenditure. In addition, the “money pot” aggregated at the federal level is not the same as 32 disperse state budgets.

To all this we must add the “European element”: the governors do not collect taxes, they only spend. This is more convenient for them, but terrifying for the growth of the economy. This scheme denies the right to the citizenry to upbraid the governor: their faculty of exacting accountability. The governor is delighted for the money to be collected from afar, thus having no need to explain anything to the local citizenry. But the consequence is that the country has lost economic dynamism in good measure due to the current distorted fiscal system.

Facing forward, one of the principal priorities must be the fiscal structure of the country. The phenomenon retains many rough edges and one cannot be resolved without the others being affected. Today, a significant part of the federal budget is financed with oil money, the latter ending up in the states with no control or planning. The citizenry is not of a mind to pay more taxes, at least partly because it is well aware of how these funds are spent.

Inevitably, if we want to recover the growth capacity of the economy, we will have to construct a new fiscal structure in such a way that the taxes collectedmatch with federal- and well as with state-level expenses. The federal government will be required to free up significant resources to Pemex for the company’s growth, and state and municipal governments will have to collect taxes at the local level, above all property taxes. Such a change in the rules will demand extraordinary political capital.

At the same time, with respect to tax collection, changes such as these will only be possible inasmuch as the citizenry observes a new power relationship with its governments at all levels. In these times better tax collection is impossible without improving the use of the money and performing responsible checks and balances thereupon. This is the quandary of our fiscal reality at present.

Power in Mexican society has been decentralized in such a way that it has generated more veto capacity than creative opportunities. The solution does not reside in an impossible recentralization of power but rather in a new federal equilibrium: a novel political arrangement between the federation and the states and municipalities that incorporates rules and incentives for public monies to join forces in a sole objective: to generate greater economic growth.

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@lrubiof

“The Prince”, wrote Machiavelli, “ought to be slow to believe and to act, nor should he himself show fear, but proceed in a temperate manner with prudence and humanity, so that too much confidence may not make him incautious and too much distrust render him intolerable”. President Calderón is a decent, responsible, and serious person who has presided over a government in turbulent times without a clear sense of direction and with an enfeebled team. An old saying suggests that difficult times generate natural leaders; unfortunately for Mexico, this was not the case.

This six-year term of office began with turbulence and is ending in disorderly and even chaotic fashion. We owe Felipe Calderón for having impeded the destructive threat represented by a return to populism, but his government did not have clear objectives, a sense of direction or a well-thought strategy. Combating organized crime, a praiseworthy objective, is not a substitute for strategy nor can it be the cause of a government. Despite this, this presidential term concentrated on a sole objective at the cost of all others. The result is that the country finds itself reeling and, once more, expecting someone who is at least not worse. His failure can be gauged by the fact that the election was about those against the PRI versus those that were against Lopez Obrador. Calderondidn’tevenexist.

The decisive factor of the term has been the personality of the president himself: distrustful, obsessed with the PRI, incapable of recruiting professional personnel, he was content with a fundamentally mediocre –but supposedly loyal- team that little by little displaced –and inflicted harm on- the few public officials who excelled in capacity, as well as those who came aboard his project from outside the PAN sphere. Certain of understanding the Mexican with clairvoyance, he devoted himself to imitating, perhaps unconsciously, an old version of the PRIistpresidentialism, privileging the cult of personality above his administration’s performance. In the final analysis, his conduct was that of a PRIist but without the ability (and malice) of the latter and without leaving the nation in better conditions than those in which he found it.

If one characteristic defined the administration it was, indubitably, distrust, and at an overwhelming cost: he alienated his counterparts; he made it impossible to negotiate relevant legislative reforms; it meant the presence of opaque and incompetent functionaries; and was always characterized by a sick obsession to make everything and anything necessary in order to avoid the PRI’s winning the Presidencywhich, as he demonstrated this week, is his real nature. In this search, he undermined his own team, reigned despotic over his own party, ventured into alliances without rhyme or reason and, one by one, destroyed every vestige of an institutional order. Distrust of some translated into immoderate confidence in others who did not justify this with their capacity or maturity. His lack of understanding of power prompted him to be very decisive in some themes (above all those related with narcotrafficking) but detached and distant in others.

As occurs with all gamblers, President Calderón ended up with a bad deck. He associated himself with corrupt union leaders who never made good on their promises; he privileged conflict, rather than cooperation, with his only possible legislative ally; turned a blind eye to opportunities in fronts distinct from security –such as education, judiciary reform, and foreign policy-; and finally left in his wake unprecedented levels of violence and insecurity without a shimmer of resolution. In a word, he bet and lost.

Organized crime did not come into being with President Calderón. Rather, as a responsible person, he understood the magnitude of the challenge to the State represented by the criminal organizations and forged full steam ahead to combat these. His strategy can be arguable, but the fact of fighting such a brutal enemy is indisputable. The problem is that the strategy adopted has consequences and, on not having convinced the population of its need and potential benefits and on not having won their support from the start, when the violence began to ascend and the impact of criminality jarred Mexican families, the President was left with nothing.

Now that the sunset of his term approaches, the President continues to persist in his own obsessions, abandoning the historical legacy of the PAN comprised of the causes of the citizenry. Worse yet, paradox of paradoxes, as concerned of a PRI triumph as he was, he abandoned his party’s candidate and failed to construct an institutional and economic scaffolding to contribute to a more favorable electoral result. Instead of being a factor of unity, conciliation, and institutionality, the President has inclined toward conflict and animadversion. Instead of striving for his party to win the presidential race, he ended with the scenario that most obsessed him.

One PRI ex-governor says that it would be detrimental if his colleagues and those of the PRD were to underestimate the destructive capacity of Felipe Calderón when he persists in advancing his objectives, even if he leaves nothing after the fray. Given the election result, he placed himself in the worst possible position: as the example of what a president ought not to be and, thus, as the likely whipping boy of the incoming administration: to show a stark contrast. He bet against the PRI but did nothing to avert its victory. Calderon will end up as the PANist who made PRI’s return possible, as the reason for its recovery.

Presidents assume their mandate certain of possessing a universe of time to organize and transform the country. However, as their term advances, time runs out and very soon they find themselves in the home stretch. From the beginning and up to this moment, they try everything that occurs to them and some of these come out well. But when the final moment arrives, there is no longer any possibility of attempting new things. Time runs out and the typical question concerning the president’s legacy becomes irrelevant. The only thing left is to try to avoid a crisis and to come out as unscathed as possible.

His government’s liabilities are well known and it is not necessary to go into these here. But there are also assets that have not been exploited in good measure because all of attention has been focused on unachievable objectives. Instead of the antagonisms that tend to characterize him and that could easily turn him into the laughing stock of the next administration, it would be better for him to strengthen the assets that he did create, explaining the logic and strategy of the fight against organized crime and constructing agreements for the protection of the army.

Obsession, noted Norman Mailer, is the single most wasteful human activity. Obsessions with achieving something not in his power are futile and, worse yet, fraught with danger. Felipe Calderón ends like he started: without a project, without a party and without direction. The only thing that remains is to trust that the next administration thinks more about the future rather than attempting to rebuild the past because only then will he have something to be remembered by with bonhomie. Buttrustingisnot his thing.

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@lrubiof