The stunning victory of Mexico’s president-elect Vicente Fox not only ends the 71-year rule of the Tammany-Hall-like insider corruption of the Institutional Revolutionary Party (PRI), it also opens the door to a period of sustained economic prosperity that could carry Mexico into the front-ranks of the information-age global economy.
Even more, the Fox victory in Mexico could well portend a rising political tide of conservative victories in the U.S. and Canada during the next 12 months. Unlikely as it may seem, the Mexican voter message favoring free-market economics, tax reform, downsized government, stock-market ownership, business entrepreneurship, and traditional family virtues could form a Zeitgeist that will carry George Bush in the U.S. and Stockwell Day in Canada to similarly convincing victories.
Mexico’s Fox, a Jesuit-educated rancher’s son, repeatedly invoked the legacy of a group of Catholic insurgents known as Cristeros by ending rallies with the war cry, “If I advance, follow me! If I stop, push me! If I retreat, kill me!” How about that for commitment. The former CEO of Mexico’s Coca-Cola operations is a strong believer in economic growth policies who has already endorsed a 7% growth target for his country. He favors broad-based tax reform and reduction; an end to price controls; new private equity investments in state-run petroleum, chemical, and electricity industries; greater competition in all aspects of economic life; as well as substantial infrastructure spending for the poor southern regions. Fox is also a strong believer in a steady-peso currency to avoid the recurring economic chaos episodes — causing social unrest and economic impoverishment — that plagued Mexico in recent decades. Immediately following Fox’s election, the global investor class cheered by appreciating the Mexican stock market, and the peso, by nearly 5%.
He also favors closer relations with the U.S. Expect a clear foreign-policy tilt toward America in diplomacy, defense, and — perhaps most importantly — trade and immigration. He will also provide greater cooperation with the U.S. in the ongoing war to prevent the spread of drugs.
The backbone of Fox’s electoral support comes from the Maquiadora entrepreneurs based in northern Mexico, along with a surprising vote tally from urban PRI supporters. Also, young voters turned out in droves for Fox.
As the least developed economy in North America, Mexico may appear to be an unlikely incubator for far-reaching political trends. But the cutting edge northern Mexico Maquiadoras should really be viewed as part of the Southwestern U.S. Their culture of ownership, hard work and prosperity is part of the same long-growth-cycle spirit that has infused the U.S. economy in the past two decades. Similarly, the rise of Stockwell Day and the upstart Canada Alliance Party — which has risen from the ashes of Preston Manning’s Western-Canada-based reform party — is really an extension of the technology entrepreneurs, family farmers and small-business owners of the American Northwest.
Stockwell Day is a supply sider who favors a 17% flat tax and a pro-growth agenda to end the brain-drain consequences of Liberal Canadian premiere Jean Chretian, high taxes, pork-barrel spending, Canadian dollar devaluation, and ultra-liberal social policies.
As Day forms a coalition with the remaining forces of Brian Mulroney’s Progressive Conservative Party, electoral victory next year looks increasingly plausible. Meanwhile, the American Cristero, Texas Gov. George W. Bush, continues a double-digit polling lead as he promotes faith-based solutions to social policy, along with broad-based tax cuts, Social Security private investment accounts, and pro-choice solutions for health and education. Each of the conservative leaders — Fox, Bush and Day — have a traditional-values moral agenda. Call it compassionate conservatism, if you will, combined with a pro-market, internet-economy deregulatory zest.
If in fact these three become the heads of state in North America, they will provide more sea-to-sea cooperation then at any time in history. We are looking at the potential for a North American, free-market-oriented, dollarized-common-market trading zone, whose dynamic growth impact will surely move the Latin countries in South and Central America in the same direction.
Should this trend come to pass, the Western Hemisphere will surely be the epicenter of the globalized technology economy — initially outstripping its competitors in Europe and Asia, but ultimately forcing those other regions to follow the same path of political democratization, economic liberty, and long-term prosperity.