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

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

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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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