The Peter Zeihan Podcast Series - Is Mexico's New President Just a Puppet for AMLO? || Peter Zeihan

Episode Date: June 5, 2024

The most recent Mexican elections have resulted in the victory of Mexico's first female -and- Jewish leader, Claudia Sheinbaum. She will be succeeding current populist President AMLO, but how much change will this actually bring? Full Newsletter: https://mailchi.mp/zeihan/is-mexicos-new-president-just-a-puppet-for-amlo

Hey everyone, Peter Zion here, coming to you from Vegas, where I had to get up early because it's going to be 180 billion degrees today. Anyway, we're going to talk about the Mexican elections. We've had a sweep by the ruling Rana Party. Claudia Shimbun, who is a woman and who is Jewish, will be the first woman and the first Jew to rural Mexico. There's a long lame duck period, so it's going to be a few months before she's officially in charge. But I think it's best for us to get ahead of this. so you have an idea of what is coming. She's taken over from a guy by the name of Amlowe, who is a populist.

He likes to call himself a leftist. He's really not. He's really just kind of a, well, a really arrogant thug. Think of them as kind of combining the worst attributes of Justin Trudeau and Donald Trump. There are two sides to Amel, one of which is broadly positive, one of which is broadly negative. First, the positive. The way that Mexico has developed, a lot of people have been left behind. has a very high rate of poverty.

It's one of the most unequal economically countries in the world. And he rode the poor people to electoral victory with his election machine, and he's ruled with them in mind. He's basically done huge amounts of financial transfers from the state to the poor, purchasing loyalty, certainly. But he hasn't done it in a way that makes itself sustainable. He's been spending more and more and more money and has not really built out the development possibilities for the places of the country

that are poor. So if the money were to stop for any reason, we basically go back to where we were pre-Amlo. So, you know, maybe an A for effort, or at least an A for intentions, but it hasn't really worked out very well. The other part, which is negative, it has been a disaster. That's been as complete ignoring of any sort of security issues as being security issues, just denying that they exist. And this has allowed the cartels to seize huge swaths of Mexican system. In essence, there's four Mexicos. In the north, the northern states have integrated with Texas primarily in the United States to a lesser degree as part of NAFTA and have done very well economically and have solved a lot of the societal issues that have plagued

the rest of Mexico for the entirety of the history of the republic. Then in the center, you've got the area around Mexico City, which is about half the population, which is this kind of sprawling megalopolis, which has all the pros and all of the cons of such a region. Down in the south, you've got the poorer areas that are not linked into either the industrial heartland of the South or the American link section of the north. And then you've got the countryside, which is not like you would think of the countryside in the United States. Mexico in the south is jungle. Mexico in the north is a desert. All of it is pretty mountainous. So you don't have a really dense population in the hinterlands, just a speckling of small communities. Well, Amlo's choice to

ignore the cartels and ignore the security situation has allowed the cartels to largely take over in the south where the state was weakest and in the countryside where the state was already non-existent. So you're talking upwards of a quarter of the territory of Mexico is now not ruled by Mexico. It's ruled by the cartels. They levy taxes in the form of extortion payments. They provide protection rackets. They've branched out of the drug industry and gotten into agriculture and tourism and property taken over local government in this most recent batch of elections. And dozens of political candidates were shot while they were running for office because the cartel thought that they couldn't control them. They basically have set up a

parallel governing system that the Mexican government has not challenged. And in the best of circumstances, and these are not those, rooting up that sort of alternate system is going to be very difficult, very violent, very time-consuming, and very expensive. Which brings us to the new leader, Shinebaum. She has a better record than Amlo of admitting that security issues are security issues, issues and she's actually been reasonably competent in running Mexico City where she was mayor in terms of beefing up security. The problem is she's not just part of the band. She's a cult leader when it comes to Amlo. She really is a believer in his cause. And Amlo has made it very clear that he has no intention of stepping back from power. He intends to rule indirectly through her, something that

she seems to be broadly okay with. So continuing the transfers of funds to the poor, that makes a certain of sense, especially if she can bring her more scientific acumen into the process in order to actually build out long-term potential for these people to earn money for themselves. But on the security issue, it's a question of how forceful will Amlo be in making what he wants to happen happen. Will he be a quiet ruler behind the scenes or he's going to just treat it like a puppet? We're not going to know that for the better part of a year. But the danger is very, very clear. Amlo is one of those leaders who has definitely left the country in a lot of a worse position than when he took it over and he is now seeking to use unofficial means to

continue his rule that's not great