A Government Has Its Way

Former president Donald Trump still resembles the “Bleak House” character about whom Charles Dickens wrote: “When he has nothing else to do, he can always contemplate his own greatness. It is a considerable advantage to a man, to have so inexhaustible a subject.”--will

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A Government Has Its Way

Mexico has a lot of problems with the U.S. but its practical importance has no real philosophical reflection. This is from O'Grady in the WSJ.

"Capital has been fleeing the country. On June 1 it cost 16.95 pesos to buy a U.S. dollar. Now it costs 19.7 pesos. The carry trade, which captures the interest-rate spread between the two countries, is one reason the peso has held up during the López Obrador government. But that alone can’t support the currency. Ms. Sheinbaum’s first budget is due Nov. 15 and she will be under pressure from financial markets to bring the 6% budget deficit down to 3% or 3.5%.

Increasing uncertainty about property rights may be her bigger challenge. Last week AMLO effectively expropriated the American-owned Vulcan Materials quarry and port in the state of Quintana Roo by declaring its investment a natural protected area. The Alabama company bought the land in the 1980s and 1990s and built the only deepwater port on the Yucatán Peninsula. It operated for decades without trouble and in full compliance with regulations. It even won recognition for its environmental record.

But then Mr. López Obrador set his sights on the property. He didn’t want to pay the company for its multibillion-dollar operation. So in May 2022 Mexico suspended Vulcan’s permit for the Sac Tun limestone quarry and for the port. That was an indirect expropriation. Now the government has declared the property permanently unusable for the company."