Mexico’s Most Critical Problems are Also Our Own

September 25, 2010  |   Mexico Politics and Policy

August 15, 2010 By Paul Crist  Mexico’s once growing middle class is under attack from above and below, and the stress is showing up in the shrinking numbers who can claim middle class status.  This trend predates the current economic crisis, but has been greatly exacerbated by it.  Middle class Mexicans face a political and economic system stacked in favor of the super-rich above them, while from below they face kidnappings and robbery by desperate and angry criminal poor. Predation from Above: Despite modest progress, entrenched crony capitalism where bribery is the rule and who-you-know counts for more than knowledge, hard work or risk-taking, remains the order of the day in Mexico.  Leaders from across the spectrum of Mexican politics must accept the majority of blame, although there is culpability north of the Mexican border as well.  Progress toward political transparency and economic liberalism has been incremental in some areas, nonexistent in others.  Privatization of formerly government-controlled industries have enriched a handful of wealthy and politically connected Mexicans, as well as a fair number of politicians.  As a popular Mexican saying goes “un político pobre es un pobre político,” (“A poor politician is a poor politician”). Mexican consumers pay higher prices for a lower quality of service and reduced availabil­ity of goods.  The state-corporatist system of price supports, subsidies, and special-interest tax exemptions gives an unfair advantage to wealthy and well-connected businessmen while restricting competition and obstructing eco­nomic growth.  Of course, the most critical result of anticompetitive policies for Mexican


U.S. Trade Policy and Declining Manufacturing: Where do we go from here?

September 25, 2010  |   Economics & Trade Politics and Policy

The U.S. economy and the manufacturing sector in particular, face both short-term and long-term challenges.  There is debate about whether government can or should play a role in addressing those challenges, and if so, what are the fiscal, industrial, regulatory, and trade policies that would benefit the stakeholders, which essentially include all U.S. citizens in one way or another. I should acknowledge at the outset a bias toward thoughtfully considered government interventions to guide the economy and trade in ways that benefit American workers and allow them to participate in the gains that accrue from their labor.  There are economic reasons for my bias that have nothing to do with either socialist or altruistic impulse.  That bias in no way means that I favor protectionism or a retreat from global trade, or that government intervention in the economy is always desirable, but there are, I believe, issues and stakeholders that get too little consideration and solutions to structural economic problems that are given short shrift in the name of conservative ideological orthodoxy. There is ample evidence that without adequate and well-designed regulatory intervention in domestic and global markets, capital and political power tends to migrate upward and become concentrated at the top of the economic ladder. We see that phenomenon in country after country, most recently in the U.S.  Concentrated wealth becomes problematic when it undermines social cohesion and a sense of shared purpose.  The wealth/income gap is at the core of social and political stress and instability in most


Are Bailouts for the Super-Rich Inevitable? Ask Paul Krugman

April 3, 2010  |   Paul Crist

Are Bailouts for the Super-Rich Inevitable? Ask Paul Krugman “There’s every reason to believe that this will be the rule from now on: when push comes to shove, no matter who is in power, the financial sector will be bailed out.” Paul Krugman, 3/29/10 “The recovery of big banks not only benefited bankers. It also created huge paydays for hedge fund managers, with the top 25 taking home an average of $1 billion in 2009.” New York Times, 4/1/10 Paul Krugman, the Nobel Prize-winning economist and influential New York Times columnist, says Wall Street institutions have become so big and powerful that they will never be allowed to fail. The only hope he sees is to regulate them thoroughly. He greatly prefers the stricter rules now being offered by Barney Frank in the House to the softer ones coming from Chris Dodd in the Senate. (Neither bill truly tackles the derivatives casino.) Krugman criticizes Senate Republican leaders who portray proposed bank regulations as just another Wall Street bailout. In fact these hypocritical leaders are doing all they can to thwart the Obama administration’s modest reforms and befriend Wall Street, hoping to net some cold, hard political cash from the bankers. Unfortunately, when Krugman says bailouts are inevitable, he’s handing the government haters another round of ammunition. “See, the liberal/pinkos are going to just keep on bailing out Wall Street,” they piously intone. But, why isn’t Krugman calling for an end to all financial bailouts for the wealthy, instead of announcing


Corporate Consolidation: Some Facts and Figures

April 2, 2010  |   Paul Crist

 Time to enforce, and strengthen, antitrust laws! Corporate Consolidation:  Some Facts and Figures By Spencer Windes on Feb 09, 2010 There has been a frightening trend towards corporate consolidation in the last few decades. Here are some troubling facts. Agriculture: From thousands of seed companies and public breeding institutions three decades ago, 10 companies now control more than two-thirds of global proprietary seed sales. The proprietary seed market (that is, brand-name seed subject to exclusive monopoly – i.e., intellectual property), now accounts for 82% of the commercial seed market worldwide. From dozens of pesticide companies three decades ago, 10 now control almost 90% of agrochemical sales worldwide. Biotech: From almost 1,000 biotech start-ups 15 years ago, 10 companies now account for three-quarters of industry revenues. Pharma: The top 10 pharmaceutical companies control 55% of the global drug market. In 2009 Merck and Schering-Plough merged to create Merck-Schering-Plough (a $41 billion cash and stock deal), just weeks after Pfizer bought Wyeth for $62 billion, maintaining its position as the #1 drug company in the world. The remaining big players (Roche, Johnson & Johnson, Sanofi Aventis, Glaxo) will most likely be forced to buy up smaller firms or seek mergers if they want to compete. Food: In raw foodstuffs, mergers among the nation’s largest grain firms — including Cargill’s acquisition of Continental Grain, and ConAgra’s purchase of Peavey and Standard Milling — contributed to giving four firms control over more than 60 percent of the nation’s grain business. In meatpacking, ConAgra’s acquisitions