Ricardo Pascoe Pierce
On February 7, 2010, President Hugo Chávez was walking through the historic center of Caracas and noticed a building of a certain elegance. He asked what it was: a building with private jewelry stores. Chávez raised his arm, pointed to the building, and said: “Expropriate it!
According to the Observatory of Property Rights in Venezuela, Chavez and Maduro have expropriated 1,359 companies between 2005 and 2017. Chavez’s act has relevance for Mexico. AMLO is desperate to consolidate his legacy as a ruler of unparalleled historical relevance, considering himself more than Juarez, Madero, and Cardenas combined. Since his imagination cannot go any further, he is convinced that the route to follow is expropriations, so his fame transcends his ephemeral stay in power.
Five months before the end of his six-year term, he is governing as if he had just taken office. He is firing shotguns in all directions, supposing he will have achieved some epic deed that will give him the fame and recognition he longs for.
Of course, for it all to make sense, he has to win the elections next June 2. He will be the one to win the elections; neither Sheinbaum, Morena nor his alliance of parties will win. Said the other way around, losing the elections would destroy the epopoeic fantasy that gives meaning to his political project.
As a consequence of his growing discomfort with the advance of the electoral process, and given certain ominous signs that June 2 is not definite as to who will win and who will lose, AMLO launches himself into a frenzy to legislate, to rant against opponents or against threats that only he sees and to disqualify rulers of other countries. Presidential hyper-activism is an unmistakable sign that “something is rotten” in Mexico (I would say “in Denmark,” but that country has been the object of unjustified mockery).
By managing the crisis with Ecuador, AMLO wants to turn it into another great epic of his and Mexican diplomacy. The rest of the world has not bought the Mexican rhetoric about AMLO’s meddling incident in that country, nor does it accept Ecuador’s security forces’ illegal violation of our embassy’s extraterritoriality. For this reason, it is evident that the Ecuador-Mexico issue will remain just another Latin American anecdote as the months go by.
What really worries the world is the possibility of a military confrontation between Israel and Iran. This is a global problem.
It is in the electoral context that AMLO’s government’s expropriation plans are advancing. This spirit of expropriation covers the issue of the reform of the pension system. This has been the case with so many other cases during this six-year term: the Spanish energy companies, the case of Talos in the Zama oil block, the Texcoco airport, the Liquide Mexico company, and the declarations of “public utility” to corner companies dedicated to mineral extraction, such as Vulcan Minerals, the expropriation threats to private railroad companies, and the violations to the CUSMA/USMCA/T-MEC, to mention only a few.
The case of pensions is the most worrisome so far because it means expropriating private savings. In this case, it does not matter if people who are 70 or older do not immediately claim them. It does not mean that they are barren. The assumption is typical of a government that they say they are with the “old” until they can rip them off. The proposal to expropriate those funds is a scam and theft, open and blatant, by Lopez Obrador. If he had any empathy, the first thing he would do would be an extensive national campaign to call “those of 70 or more” to recover their savings. But he does not do so because he no longer has time: he has only five months left in office. Where could he urgently raise funds without a major expropriation?
Mexico’s economic problem is very serious. Not only has inflation not decreased, but it shows clear signs that it is growing, negating any possibility of the Bank of Mexico reducing interest rates. Therefore, Mexico is condemned to high-interest rates and expensive money for a prolonged period, ensuring no relevant economic reactivation in the short or medium term. That means that public finances, which are severely compromised by the irresponsible indebtedness and public spending committed by this last year of AMLO to win the election by handing out money to the poor, may enter into a bust crisis in the short or medium term.
There is no fiscal cushion to save public finances. AMLO spent everything saved during the four previous six-year terms. They did save, only for AMLO to spend everything saved on pharaonic works and companies that will never be profitable and on increasing social support to unsustainable levels for public finances without resorting to a tax increase. He saved nothing of what was in the public treasury. On top of that, he indebted the country like few others. He desperately wants to leave funds to the next government: something in the till. He took it upon himself to spend everything without qualms and a conception of the future. Immediacy is the sign of the Lopez Obrador government. And the electoral promise is never to raise taxes; they prefer to put the country in debt. It is the worst solution imaginable.
Sheinbaum says she wants to appoint the same Treasury Secretary. That would be a disaster because Ramirez de la O has shown servility in managing public finances, subordination to unrealistic political and economic criteria, and an inability to set red lines in his conduct as a public servant. If he had a drop of honorability, he would resign and explain the serious situation in which he is leaving the public finances.
The reality is that there is growing inflation, and the fiscal cushions are gone. The financial outlook is grave. That is why AMLO wants to usurp the Afores funds. To create an artificial cushion, seeking to prevent an accelerated collapse of public finances compromised by PEMEX, which has become a black hole without salvation, Dos Bocas is a perverse joke. Meanwhile, the military continues to do business under the protection of the National Security Law, which, in Obrador’s interpretation, means a lack of transparency.
Desperation to save himself leads AMLO to plan the expropriation of private savings. He does not care that they are helpless people over 70 years old. With no fiscal cushion to back it up, the government wants to get hold of private funds through expropriation. It will do so if society does not complain because it wants to escape it without assuming responsibility and hiding the hand that throws the stone.
The expropriation of private savings will not save AMLO from his failure as a ruler, and an economic crash may occur at any moment, just as it happened in Venezuela with its expropriations. The economy is on pins and needles. The option of losing the elections is more present than ever. AMLO’s name will be one more black stain in the long history of the Mexican nation.
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