Does Mexico need a revolution?

National Review, Nov 21, 1986 by George Byram Lake

LOPEZ PORTILLO expanded state control of business, and in the closing days of his autocratic regime he acted on one of Lenin's precepts for consolidating a revolution. Without asking anybody, overnight and illegally, he exporpriated, not one bank, but the entire private banking system. His limber Congress made it legal by amending the constitution after the fact.

In foreign affairs, Lopez Portillo was pro-Soviet, pro-Castro, and pro-Sandinista. He was anti-American and anti-capitalist. He left office a billionaire and left his country in crisis.

The bubble burst in mid 1982, a few weeks before Lopez Portillo's strenuous term came to its end. The price of oil fell, and the country found itself strapped for cash. The United States, with no questions asked, rushed to the rescue. It put up $3.3 billion in emergency aid, and the International Monetary Fund soon came along with more. Mexico was saved from bankruptcy for the time being--although it was saddled with the world's second largest foreign debt and had seen its peso shrivel to the vanishing point-- and President de La Madrid was given a moderately hopeful start. Foreign bankers with wishful balance sheets breathed a tentative sigh of relief.

As a cabinet member under Lopez Portillo, de la Madrid was the chief architect of some of the innumerable plans that went awry, but he was not spattered by the corruption that seethed and bubbled all around him. His subdued style contrasted favorably with his old patron's flamboyance, and he promised, as candidates do, to clean house.

Sadly, even the initial mild hopes in him soon faded. There was much talk but little decisive action--mucho ruido y pocas nueces, as the Mexicans put it--and some of his subjects began to regard him as the Mexican answer to Millard Fillmore.

De la Madrid is, in fact, a captive of the PRI system. He follows the hard-left course in foreign affairs set by his two immediate predecessors, including warm hospitality for fugitive terrorists from El Salvador, Colombia, and elsewhere. Mexico continues to cast an almost automatic vote against U.S. positions in that great hall of winds on Turtle Bay. The de la Madrid regime is as hostile to U.S. policies as it dares to be so long as the chance for new loans is still good.

Midway through de la Madrid's term, subsidies for the ill-run state-owned businesses and industrial enterprises are absorbing a staggering 25 per cent of the federal budget. His attempts to curb spending and end his government's big domestic budget deficits have failed as dismally on their smaller scale as have those of President Reagan. As a matter of little-noticed fact, interest payments on Mexico's internal debt soak up more money than do payments on the much-publicized foreign debt. The flight of Mexican capital subsided under de la Madrid--there was much less to fly--but the flight of illegal immigrants to the United States accelerated to 3.5 million a year, according to Border Patrol estimates. Mexico meanwhile has become base and staging point for much of the world's narcotics traffic, compounding the corruption that has spread throughout the society.