What's Going On In This Country?

May 28, 2018 Edition

Mexico ready with plan B. Frustrated with the slow go on NAFTA talks, and with the perception that President Trump is not negotiating with any sort of parity in mind, Mexican officials are pushing on. Trade delegations have been zipping back and forth to China and to Brazil, among smaller countries, making deals to sell their products there and to import what they need to. Former President Vicente Fox, no fan of Trump, was in the United States on a media tour saying things those currently in office feel would be too indelicate coming from them. Fox, never one to be delicate, is threatening to let drugs flow freely through Mexico to the US. “Why should we care if the United States drowns in drugs?” he asks. “Our people are dying because we’re trying to be good guys and help the US stop the flow of drugs. But if Trump is not dealing fairly, why should we?” He is also describing in detail how Mexican trade talks with other countries are coming along. Mexico is tired of getting kicked around, and we think we don’t need that anymore. It’s time to move on.

I even have a problem with this. And I’m an animal! Mexico will file a formal complaint with the United States over comments by President Donald Trump in which he described some unauthorized immigrants as animals.

Mexican foreign Secretary Luis Videgaray said that Trump’s description was “absolutely unacceptable,” and that the Mexican government would file a formal complaint with the U.S. State Department. Like he cares, sigh.

Trump made the remark and other disparaging comments that portrayed Mexico as a poor ally during a White House meeting with members of his cabinet, lawmakers and local California officials. And the press. 

“You wouldn’t believe how bad these people are. These aren’t people. These are animals. And we’re taking them out of the country at a level and at a rate that’s never happened before,” Trump said, referring to convicted gang bangers.

Inflation. Or not. Mexico’s annual inflation rate in April fell to the lowest level since December 2016, approaching 4 percent. Just for comparison’s sake, The inflation rate in the U.S. was 2% last year

The Mexican central bank has decided to leave the prime rate at 7.5 percent.  Yikes! No wonder there are no good loans to be had in this country.

The prime rate in the US right now is about 3.75 percent. That’s what individual banks lend to their most creditworthy customers and is used to set the interest rate to other loans like credit card and small-business loans. And your mortgage.

Loan for your second home in Mexico? Is that what you want, Bunky? Because your Realtor said you could get one? What they meant was, go home and take out a second on your US home. There is a new company in San Jose that’s puffing themselves up over having mortgage money to loan. At 10%! You might as well do business with the local pawn shop.

This could work. But probably won’t. There is a movement to require anyone who wants to be a state governor to sign a promise not to steal. Well, actually, they are being asked to pledge to combat corruption. It’s an 11 point anti-corruption commitment.

The scheme was first put into practice last year for gubernatorial elections in three states and 19 of 21 candidates signed up. And did it work? Oh, grow up, of course it didn’t.

Nafta nitty gritties. If Mexico raises auto workers’ wages as the United States and Canada are pushing for in the current NAFTA talks, Mexico might lose the entire industry, some analysts warn.

Auto industry expert Mauricio Kuri told the newspaper El Financierothat “there is room to increase salaries” but argued that if that happened, “a lot of auto makers would increase the use of robots and reduce the number of jobs.”

Auto workers in Mexico are paid on average US $3.14 per hour, whereas their counterparts in the United States earn $28.60 and Canada $26.34 per hour. Canadian Prime Minister Justin Trudeau believes Mexico needs to improve salaries and working conditions as part of the modernization of NAFTA.

In order for a vehicle to qualify for tariff-free import from Mexico, the United States wants Mexico to pay $16 per hour. Right now making a car in Mexico is $4,139 cheaper than in the United States. Between 2010 and 2017, Mexico received more than US $30 billion in investment in the automotive industry, so Mexico really wants to keep wages down. And they do.

Before a major manufacturer, (Think Ford, BMW, etc.), even breaks ground to build a new plant, the company has made a deal with the auto union on how much they will pay workers. When the plant opens, the union puts out the word there are jobs, and the people show up. They are then told what they will be paid, and the people accept the $3.14 US per hour or they don’t work.

Mexico catches up. Environmental wise. Lawmakers in Veracruz have unanimously approved legislation banning the use of plastic bags and plastic straws.

The state’s 212 cities will have 180 days to figure out replacement with biodegradable alternatives.

Hey! A single plastic straw — which can take more than 100 years to break down — can kill a pelican or a turtle, while a plastic bag can kill a dolphin or other big animal.

You will need to bring your own tote bag to Walmart and suck your margarita straight out of a glass if you live in Veracruz.

And what about those straw makers, what about them? Most straws are imported from China. Plastic bag people are going to have to find other jobs. Maybe making BMWs for $3.14 an hour.

Bank getting wobbly on you? We mean worse than usual. Banks all over the country are reeling from a 20 million dollar hack. And that’s with some banks obviously lying about not getting hit. Hackers used hundreds of fake orders to transfer hundreds of thousands of pesos to fake accounts in other banks. Then that money was quickly withdrawn through cash withdrawals from the phony accounts in what is now being called a cyber-attack.

The hackers might had inside help since such large cash withdrawals are uncommon and would have been flagged.

A Bank of México official allowed that there had been unauthorized transfers but would not call it a cyber-attack nor would provide information regarding the amount stolen. That’s banking in Mexico. Not transparent at all. Some banks allowed they might have had some “hardware problems.” The industry largely shut down for a few days, with no transfers, and some ATM and bank accounts not functioning right. Only $20 million? Hmmm…. Nobody is believing that.

And last but not least… Our governor seems to have joined the ranks of half a dozen other governors who are currently under indictment or on the lamb. Although he is neither of those in this moment, he has been accused by federal auditors to have played footsie with millions and millions of pesos. He has authorized payments to people and companies that can’t be found, he has not paid those who should have been paid, public equipment has gone missing, and public works projects, (think potholes), have been, um, “mismanaged”.

One of our former governors has been extradited from Guatemala, and one from Italy, will our governor be next to embark on this saga? And more hopefully, at least he’s under investigation. We can only hope that the era of impunity, the system that makes these guys believe they can get away with it, is over. His name is Carlos Mendoza Davis. Remember that in case you see his name and face on the post office wall.