The Peter Zeihan Podcast Series - If You Think Mexico's New Government Is a Problem, Wait Until You See Its Solutions || Peter Zeihan

Episode Date: October 9, 2024

This video was originally released on Patreon 1 week ago. If you want to see the videos as soon as they come out, join the Patreon here: https://www.patreon.com/PeterZeihan Mexico's newly elected president, Claudia Sheinbaum, is settling into her new digs. Despite her qualifications and experience, will her leadership actually look all that different from former President Andrés Manuel López Obrador (AMLO)? Full Newsletter: https://mailchi.mp/zeihan/if-you-think-mexicos-new-government-is-a-problem-wait-until-you-see-its-solutions

Everyone, Peter Zion here coming to you from a very damp North Carolina. Today we're going to talk about changes going on in Mexico. Claudia Shinebon is the present elect. She took office on October 1st, which is Tuesday. Tuesday, yeah, you're seeing this Wednesday. She is, of the people who have run for office in North America in recent years, probably the most qualified. Unlike Justin Trudeau, she wasn't a kindergarten teacher.

She actually was a mayor of Mexico City, no less. And unlike Trump, she wasn't a marketer, she had a real boy job. And unlike folks like Harris or Biden or Obama, she wasn't a senator. She was actually responsible for people and getting the trains to run on time. So in terms of expertise in managerial skills, she's clearly the top of the heap. The question is whether or not she's going to show any independence. The outgoing presidents, Andres Manuel Lopez Obrador, is going to go down in history as one of the worst leaders in Mexico, the fact that he's leaving on relatively a popular point. He was an ideologue who wanted to punish

most of the other factions that are responsible for policymaking in Mexico. And in doing so, he dismantled a lot of the country's institutions. In fact, in his last couple months in office, he basically gutted the judiciary. So if you're an American, imagine that your most popular, hated presidential candidate wins. And then he or she goes through and changes the way the judges are appointed. So instead of going through Congress, it just goes through party caucuses, like that person's party caucuses. Some version of that is basically what Mexico has now, which is going to make it very difficult for the country to recover and have any sort of judicial independence and any sort of multi-party system. The question now, of course, is whether Shinebom is going to be part of the problem or part of the solution. And considering that she considers herself Lopez-Auberdore's protege, I can't say that the prognosis is particularly good here.

We also have another reform that has just been pushed through. The lower house of Congress just approved the folding in of the National Guard into the military writ large. It's already passed the upper house or is the upper house just passed it. Anyway, it's already passed both houses of Congress. It now goes to the states where they need 17 states to ratify it. And considering that Lopez Obruners and Scheinbaum's party controls 20 of the state legislatures, that should be a pretty straightforward process. It then comes back to Mexico City of the present form.

stamps it becomes law. Now, why does that matter? Well, the National Guard was set up a few years ago because the military was so horrendously corrupt and Mexico City needed a new semi-military operation that could fight the cartels. Now it's just getting folded back in in order to guarantee central control by the president. So we're looking at the tools of violence of the state being consolidated under one party and we're looking at the judiciary being consolidated under one party and using elections, that one party has already dominated most of the political conversations of the country. Now, this was done without a coup. This was done through the ballot box. One of the downsides of the Mexican economic models, it's grossly in equal. And because the country is so difficult to

manage, because it's so difficult to build, it's a mountainous issue. Most of the country is mountainous in the north, it's desert mountainous. In the south, it's jungle mountainous. And in the middle, it's just mountainous. And so you get a lot of oligarchs who basically take control of their local cities, and this is how it's been since independence back in the 1800s. And so Lopez Obrador, to his credit, sees this to degree as a problem, and he wants to rest power away from these local oligarchs, or could be those, if you want to use the banished term, and give power to the people. And so instead of having the most economically unequal state in the world, which is how Mexico was when he came in, he's been redistributing resources from the states to the federal government,

and the federal government has been giving them primarily to the poor. And that is one of the reasons, primary reason, why Lopez Orbador, despite wrecking the country, is leaving on a high point because you have a lot of people who have never had anyone speak for them. The challenge moving forward is we're now looking at a situation where the security situation in Mexico is going to degrade massively. We've got a civil war going on among the Sinaloa cartel, which used to be. be the most powerful one in the country. And we have now security in the country is the responsibility of the military, which is corrupt. And for the last five years, Lopez Orbador has refused to move

against drug cartels. So they've basically taken over many, many aspects of everyday life, including in the Mexico City central region as well. So Shinebaum has her work cut out for her, and we will find out whether this relatively pragmatic governor is going to be able to ditch the ideology and rule like a normal person or whether she's going to make it worse.