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  1. #1
    Senior Member zeezil's Avatar
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    US Economic Slide Threatens Mexico

    US Economic Slide Threatens Mexico
    by Rick Wolff

    Deteriorating economic and social conditions in Mexico have generated mounting social problems. Private enterprises in Mexico and the government they control cannot manage, let alone solve them. Huge demonstrations are rocking the country with more to come. One chief cause of Mexico's problems is the turmoil and decline in the US economy. Rising US unemployment lessens its appeal for poor Mexicans seeking to escape their country's gross economic inequalities and lack of opportunity for a decent life. Cash that Mexican immigrants in the US send back to their families -- "remittances" is its formal name -- has stopped growing and begun a significant decline. What were major offsets to Mexico's disastrous economic conditions -- sending able-bodied workers out of the country and then siphoning part of their US earnings back into it -- have changed into their opposites: threats to destabilize Mexican society.

    For many years, the US official policy towards Mexico was based on choosing between Mexican economic and social instability and allowing Mexican immigration into the US. Republicans and Democrats alike consistently chose immigration. It solved the economic problems of a Mexican capitalism that was and remains extremely unjust in its distributions of wealth, income, and well-being and extremely inefficient in utilizing its labor force. First, migration to the US gave desperate Mexicans, and especially men, a way to escape that country's failure to provide decent jobs or incomes to millions of its citizens. Mexico thus exported what might otherwise have become a politically dangerous mass critical of Mexican capitalism. Second, it generated those remittances back into Mexico that kept afloat an economy that would otherwise have provoked social unrest and revolutionary movements among those unable or unwilling to emigrate to the US. Both mass emigration and massive remittances kept the Mexican economic disaster from becoming an active social crisis on the US border.

    Immigration likewise suited US businesses by providing millions of new workers (especially those immigrants fearful about their illegal status) willing to accept lower wages and benefits than were the US norm. All sorts of gains accrued to US employers of Mexican immigrants (in agriculture, construction, retail, and beyond). Vast profits were made by the US financial companies through whom Mexican immigrants sent their remittances home. A recent World Bank report found that banks and other agencies (such as Western Union) charged an average of 4 to 8 per cent of each remittance as payment for transferring the money from the US to Mexico (a trivial and nearly costless electronic transfer process). Such employers made sure that anti-Mexican immigrant policies were never effective.

    There were the usual hyped public relations gestures by politicians pandering to US movements against Latino immigration. However, business interests, the immigrant communities themselves, and liberal groups prevailed against those movements. The inflow of Mexican immigrants and the outflow of remittances to Mexico were not stopped by political means. It has been US capitalism's credit meltdown and its consequences that have changed the economic links between Mexico and the US.

    The dependence of Mexico's extremely unequal capitalism on emigration and remittances is stark. In the most thorough study to date, the World Bank's Raul Hernandez-Coss found that in 2003, remittances were a much larger inflow of money into Mexico than both total tourist expenditures inside Mexico and total foreign direct investment in Mexico.





    SOURCE: Raúl Hernández-Coss, "The U.S.-Mexico Remittance Corridor: Lessons on Shifting from Informal to Formal Transfer Systems," World Bank Working Paper No. 47, 2005, p.4

    That has remained the case through 2007. Only oil and other exports brought in more money. And the prospects for Mexico's future oil production are declining while those for many other Mexican exports are being dimmed by devastating competition from Chinese and other Asian exports.


    SOURCE: "U.S. Slowdown Hits Mexico as Remittances Drop," Wall Street Journal, 30 July 2008

    Remittances grew many times faster -- peaking at $24 billion in 2006 -- than gross domestic product in Mexico over the last decade, thus becoming an ever more important support for an otherwise increasingly dysfunctional economy. The consensus estimate of researchers is that 20 per cent of Mexican families -- many among the nation's poorest -- now depend significantly on remittances for their basic incomes. Since many transfers are made through illegal and other channels not counted by the gatherers of statistics, it is certain that all official estimates are in fact underestimates of the actual remittance flows and their importance.

    On July 30, 2008, the Mexican central bank reported a 3 per cent drop in remittances this year. As jobs shrink in the US economy -- initially in the construction and housing industries and then spreading to the retail and other industries that employ many Mexican immigrants -- immigration into the US is slowing and remittance flows to Mexico will shrink further. Either alone is a threat to Mexico; both together may explode its economy and society.

    Already the signs of explosion are proliferating. Drug traffic and the vast network of employment opportunities it generates in Mexico are growing far faster than the Mexican government can manage. Crime is so widespread and the corruption it generates is so deeply entrenched among business leaders and government agencies that mass demonstrations demand increasingly basic change just when economic flows steadily worsen Mexico's social situation.

    Globalized capitalism is a chain as strong as its weakest link. The economic crisis that began with the subprime mortgage collapse in the US has since spread via the globalized credit and trade system to the rest of the world. Its terrible economic and social costs and consequences will soon expose the currently weakest links in the chain. Mexico may prove to be one of them.

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    http://mrzine.monthlyreview.org/wolff010908.html
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  2. #2
    Senior Member WorriedAmerican's Avatar
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    Re: US Economic Slide Threatens Mexico

    Deteriorating economic and social conditions in Mexico have generated mounting social problems. Private enterprises in Mexico and the government they control cannot manage, let alone solve them. Huge demonstrations are rocking the country with more to come. One chief cause of Mexico's problems is the turmoil and decline in the US economy. Rising US unemployment lessens its appeal for poor Mexicans seeking to escape their country's gross economic inequalities and lack of opportunity for a decent life. Cash that Mexican immigrants in the US send back to their families -- "remittances" is its formal name -- has stopped growing and begun a significant decline. What were major offsets to Mexico's disastrous economic conditions -- sending able-bodied workers out of the country and then siphoning part of their US earnings back into it -- have changed into their opposites: threats to destabilize Mexican society.
    This is GREAT NEWS for American people! ATTRITION WORKS!
    How are they going to like about 30-40 million illegals dropped back in there! Mexico is rich! Just stop the Big Businessmen corruption and you will survive.



    It solved the economic problems of a Mexican capitalism that was and remains extremely unjust in its distributions of wealth, income, and well-being and extremely inefficient in utilizing its labor force.


    First, migration to the US gave desperate Mexicans, and especially men, a way to escape that country's failure to provide decent jobs or incomes to millions of its citizens. Mexico thus exported what might otherwise have become a politically dangerous mass critical of Mexican capitalism.

    No More will you suck us dry and take our jobs! hahahah


    Second, it generated those remittances back into Mexico that kept afloat an economy that would otherwise have provoked social unrest and revolutionary movements among those unable or unwilling to emigrate to the US.
    I could care less about that. I care about Americans who live here.

    Both mass emigration and massive remittances kept the Mexican economic disaster from becoming an active social crisis on the US border.
    Oh really!!! I don't think so Bud. We already have "an active social crisis on the US border."

    Immigration likewise suited US businesses by providing millions of new workers (especially those immigrants fearful about their illegal status) willing to accept lower wages and benefits than were the US norm.
    Yes, American government and Big Business screwed us so they could get slave laborers. NO MORE!!!

    All sorts of gains accrued to US employers of Mexican immigrants (in agriculture, construction, retail, and beyond). Vast profits were made by the US financial companies through whom Mexican immigrants sent their remittances home. A recent World Bank report found that banks and other agencies (such as Western Union) charged an average of 4 to 8 per cent of each remittance as payment for transferring the money from the US to Mexico (a trivial and nearly costless electronic transfer process). Such employers made sure that anti-Mexican immigrant policies were never effective.
    Go ahead and gloat for hurting us!

    The inflow of Mexican immigrants and the outflow of remittances to Mexico were not stopped by political means. It has been US capitalism's credit meltdown and its consequences that have changed the economic links between Mexico and the US.
    As long as it happens, I could care less why! I hope the economy gets worse and worse till only United States Citizens are left! I'm willing to go that far.



    In the most thorough study to date, the World Bank's Raul Hernandez-Coss found that in 2003, remittances were a much larger inflow of money into Mexico than both total tourist expenditures inside Mexico and total foreign direct investment in Mexico.

    I find that to be sickening news. The money train is leaving and you are left at the station, GET USE TO IT Mehico!






    And the prospects for Mexico's future oil production are declining while those for many other Mexican exports are being dimmed by devastating competition from Chinese and other Asian exports.
    There you go! Get your butts to China and India.

    Either alone is a threat to Mexico; both together may explode its economy and society.
    That's the same thing they are doing to Americans. Turn about is fair play! Protest your own corrupt government and stay there and "fix Mexico."


    Crime is so widespread and the corruption it generates is so deeply entrenched among business leaders and government agencies that mass demonstrations demand increasingly basic change just when economic flows steadily worsen Mexico's social situation.
    We have our crime to take care of and we are sick of our money going to your crime. We have enough of it ourselves. It's just not as heinous as your daily criminals. We have a couple of heinous ones a year. You're sick criminals are killing and kidnapping our innocent people.


    Globalized capitalism is a chain as strong as its weakest link.
    Oh, you mean all our corrupt business groups like, The CFR, The NAFTA crap, The SPP, and the Bush Regime? I hope it comes crashing down and we rebuild America, from the people up to the War Criminals.
    If Palestine puts down their guns, there will be peace.
    If Israel puts down their guns there will be no more Israel.
    Dick Morris

  3. #3
    Senior Member crazybird's Avatar
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    Globalized capitalism is a chain as strong as its weakest link.
    Exactly......and the links have been weak. In alot of ways. They keep saying our cheap goods, but frankly, my prices have never decreased, but the quality has surely sunk. Lost jobs and high cost and worse products doesn't equal "better" to me. They have gotten some jobs....but at slave wages and it seems all it's done is make the rich excessivly rich, and everyone else doing a massive nose dive. Our poor can't carry the poor of any other country. You can't support other families when you can't support yourself.
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  4. #4
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    It's past time we cut mexico's umbilical cord with our country! They have proven time and again to be an ungrateful neighbor who's only recourse has been to make even more demands of our country!

    Enough is enough!
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