December 27, 2013

You Laughed at South Park!

Mexicans may have to build a fence to keep us out!

On the serious side, we get a little despondent around here, but I'll enter the new year content that our neighbors to the North pulled back from überprogressivist Trudeauism without millenarian bloodshed. (well, a couple clerks in Ottawa got paper cuts but they were treated without cost).

Now comes remarkable word (holler if you want me to mail out of Rupert's paywall) that freedom and prosperity are breaking out down south. Bold reforms of privatizing energy and telecommunications, plus locking up the head of the Teachers' Union [ed: Viva!] have pushed the Mexican economy beyond the BRIC darling to her Southeast:

Not only is Mexico's per capita GDP back above Brazil's, according to International Monetary Fund data, but over the past five years investors in the Mexican stock market have enjoyed nearly three times the returns of those who put their money into much-hyped Brazilian equities. Jobs are being created so fast in Mexico--more than two million since early 2010--that the problem of illegal immigration to the United States may soon be history.

And all it takes is bold leadership -- oh wait, we're screwed!
The democratic world today is so lacking in Mr. Peña Nieto's kind of strategic leadership that the visitor is rather taken aback to encounter it.

Good policy, freedom, leadership, growth. It worked in Canada and Mexico; what are the odds we could try it here?

Over/under at least?

UPDATE: Sorry, I've got excerpting fever! More cowbell!

Modern technology will take time to install. But thanks to the North American Free Trade Agreement--the fierce critics of which have gone silent--cheap U.S. natural gas will soon be flowing down north-to-south pipelines. This will make Mexican industry, which is already beating China on labor costs, even more competitive. That will in turn support a growing Mexican middle class.

The government has not lost sight of income inequality and low productivity. But Mr. Peña Nieto's key insight is that attacking the mere symptoms of economic underdevelopment is not the answer. It is rare indeed to witness a president talking about "raising family incomes for all Mexican families through elevating and democratizing productivity," as Mr. Peña Nieto said during his state of the union in September. If social ills like drug violence stem from a lack of opportunities, then successful economic reforms should reduce them. Almost all measures of violence have fallen during Mr. Peña Nieto's first year of government.

Immigration Posted by John Kranz at December 27, 2013 2:24 PM

"... attacking the mere symptoms of economic underdevelopment is not the answer." Oh, like extending unemployment benefits to ninety-nine weeks?

Any word on tax cuts? Is President Pena Nieto more concerned with the "fairness" of tax policy than its efficacy, as is his counterpart to the north?

Posted by: johngalt at December 28, 2013 9:50 AM

Alas, the news on that front seems no so bueño. Tax reforms have not been what Señor Laffer has proffered.

But I'm not sure marginal tax rates is the problem. Looking at the Economic Freedom Index (Mexico ranks 50) confirms my hunch that taxes, property rights, and limited government look good. Corruption and regulation (but I repeat myself...) hold them back. I think some wealthy Americans would dream of their top rates.

The wake of Spanish colonialism contains catholic-populist-socialism while the remnants of British Overlordship is rule of law. Too bad you cannot choose whom to be conquered by.

But even with the mixed tax reforms, the point holds that the new not-so-communist PRI is pulling a nation out of a deeper hole than we're in. It can be done.

Posted by: jk at December 28, 2013 11:54 AM | What do you think? [2]