True. Any positive long-run assessment of Mexican development will have to hinge on rising real wage levels--and a reduction in brutal inequalities. On the other hand, in the absence of the peso support package it is hard to see how real wages in Mexico could have wound up higher than they are today, and easier to see how they could have been a lot lower...
>
>In any case, whether or not Mexican economic growth would resume
>could not have
>been known at the time the US taxpayer was forced to assume Mexico's creditors
>risks against the explicit will of its elected representatives. Do
>you have any
>other evidence that the goal was to help Mexico and not its creditors?
>
Well, my notes say that at the Treasury Department weekly senior staff meeting just after Mexico first devalued, then Undersecretary of the Treasury for International Affairs Lawrence Summers said that three principles should guide U.S. economic policy toward Mexico during this potential crisis:
--that (aside from greater San Diego and other border regions)
a Mexican financial crisis was a small event for the U.S.
economy, and that no one should argue or accept arguments
that any course of action was critical for the short-term
health of the U.S. economy.
--that any steps that could be taken to reduce the magnitude or
the duration of the crisis should be taken in order to
reduce the Mexican economic suffering caused by the crisis.
--that to flinty-eyed realists unconcerned with global prosperity
and growth, we should say that the U.S. could not be
secure without a rich, democratic, prosperous southern
neighbor--and thus that national security required that
the U.S. do whatever it could to rapidly return the
Mexican economy to growth.
Of course, that's just one Undersecretary's view... :-)
Brad DeLong