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Peso Crisis - II Reactions from Wall Street & Mexican Govt Actions

Discover the aftermath of Mexico's peso crisis, including reactions from Wall Street, Mexican government actions, bailout terms, resulting depression, and the political dimension. Learn about the economic austerity measures, political repression, and the impact on the working class and Zapatista communities.

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Peso Crisis - II Reactions from Wall Street & Mexican Govt Actions

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  1. Peso Crisis - IIReactions from Wall Street & Mexican Govt Actions

  2. Wall Street Bloodthirst--the Chase Report • Jan 11: Riordan Roett at CSIS Seminar says Mex govt must “resolve” Chiapas conflict to regain investor confidence • Jan 13: Roett’s Report to “Emerging Market Investors” • Mex govt must “eliminate” the Zapatistas • Mex govt should perhaps commit election fraud • questions how much pain Mex “working class” will take

  3. Chase Report Revealed • Feb 1: Counterpunch publishes story on Roett/Chase report & Roett’s talks • Feb 10: Counterpunch faxes Cleaver who puts story on the Net • Feb 14: Cleaver posts entire Report on Net • Feb 14: Perot et al pick up story & spread it • Feb 14: Chase denies responsibility, blames Roett (and subsequently fires him) • Feb - March: Anti-Chase demos E & W

  4. Reaction in White House: BAILOUT • mid-Jan ‘75: faced with peso crisis & threat of more general financial crisis, Clinton asks Congress for bailout legislation, wants $40b • Old NAFTA lobby mobilized on Hill • Jan 31: as Congress stalls, Clinton acts: • $20b from US Exch.Stabilization Fund • $17.8b from IMF, biggest IMF loan ever • $10b from Bank for Int’l Settlements • Bailout not of Mexico, but of speculators

  5. Terms of Bailout • Pledge of oil reserves as collateral • Tight money policies raising interest rates •  privatization, sell off Mex firms, 100% foreign ownership •  G, decreased govt spending, esp. that supporting consumption, wages • Stiff fees for borrowing • In short: dramatic austerity plan for Mex

  6. Results in Depression • All these measures produced a deep depression in Mexico, • a fall in GNP (total output) • dramatic layoffs • rising unemployment (100s of thousands) • bankrupcy for many firms • Most dramatic economic crisis since 1982 debt default

  7. Political Dimension • Economic austerity accompanied by just that police and military repression called for in Chase report • Mexican govt: • unilaterally broke of peace talks • sent 50,000 troops against Zapatista communities in Chiapas • arrested people accused of being Zapatistas, some released, some sentenced, e.g., Elorriaga

  8. Arrests • Those arrested were tortured: • tied, blindfolded & beaten • stripped naked, pawed, threatened with rape • electro shocked • kicked • pistol whipped • All this documented by human rights groups & defense lawyers with doctors

  9. In the Countryside • People in “Zapatista Zones” fled into the mountains to avoid torture, rape & murder they had experienced a year before • Flight into mountains & jungle brought sickness & death • dehydration, malnutrition, salmonella, diarrhea, sunstroke, bloody swollen feet, cholera, etc • Military wreaked havoc in villages

  10. Economics & Politics • “Economic austerity” & “political repression” revealed as two forms of same thing • Economic austerity originated in political crisis of which peso devaluation was byproduct • Both austerity & guns aimed at attacking those responsible for instability (workers & peasants)

  11. --END?--

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