A Revolution just South of the border?

Communism as an ideology was a failure. Much of the world now sees the ideology of unrestrained free market economies as a failure. Indeed it has turned out to be nothing but feudalistic imperialism with a new name and paint job for much of the world. Paul Krugman explains why today.

Dogmatic views about the universal superiority of free markets have been losing ground around the world.

Latin Americans are the most disillusioned. Through much of the 1990's, they bought into the "Washington consensus" - which we should note came from Clinton administration officials as well as from Wall Street economists and conservative think tanks - which said that privatization, deregulation and free trade would lead to economic takeoff. Instead, growth remained sluggish, inequality increased, and the region was struck by a series of economic crises.

The result has been the rise of governments that, to varying degrees, reject policies they perceive as made in America. Venezuela's leader is the most obstreperous. But the most dramatic example of the backlash is Argentina, once the darling of Wall Street and the think tanks. Today, after a devastating recession, the country is run by a populist who often blames foreigners for the country's economic problems, and has forced Argentina's foreign creditors to accept a settlement that gives them only 32 cents on the dollar.

And the backlash has reached our closest neighbor. Mexico's current president, Vicente Fox, a former Coca-Cola executive, is a firm believer in free markets. But his administration is widely considered a failure. Meanwhile, Mexico City's leftist mayor, Manuel López Obrador, has become immensely popular. And his populist rhetoric has raised fears that if he becomes president he will roll back the free-market and free-trade policies of the past two decades.

An effort is being made by Vicente Fox to have Manuel López Obrador disqualified as a presidential candidate using a little known and little used Mexican Law, Desafuero. The Narcosphere reports that it is not the first time this law has been used in Mexico and that the last time it was used it resulted in a revolution. The Narcoshpere also reports that Mexican public opinion is against using desafuero to disqualify Obrador. U.S. Secretary of State Condoleeza Rice is going to Mexico to meet with Fox. It will be interesting to see if she recommends that Fox take action that will start a revolution on our southern border.