Inflation is going up and the government is going down. Pure words of self-praise and comparisons with other nations, not to admit that efforts to contain the spiral and get down to serious work have been insufficient, but to underline that other countries are worse off, which is relative, but they keep people entertained and looking the other way. Since May, when the anti-inflationary plan was announced, the pocket economy has continued to deteriorate. In April, inflation stood at 7.68%, and in August it had gone to 8.62%, the second highest record of the century. The increase was due to the rise in food and energy prices, which they were supposed to control.
When the plan was announced in early May, President Andrés Manuel López Obrador stated that inflation affected the entire economy, but more so to people with fewer resources. Noble phrase, but tricky. The central concern of the president is not to prevent the cost of living, as the phenomenon describes, but rather the impact that it may have on next year’s elections and neutralize his campaign to intimidate the PRI, since in 2023 the governorships in his office will be at stake. power in the state of Mexico and Coahuila.
The anti-inflationary plan is centrally motivated by electoral politics, and the president’s concern is growing rapidly. For more than two weeks the issue of inflation has been the subject of discussion at the National Palace during regular cabinet meetings, which are rarely publicized. The president is increasingly upset that what he has instructed has not been carried out. Ironically, it’s his fault. The disarticulation in the cabinet was caused by himself with his transversal instructions, removing secretaries of state from their spheres of responsibility, and blaming whoever took them away for not complying with them.
It is quite schizophrenic what happens in the National Palace with the erratic directives of López Obrador, who, however, does not register that the source of the disorder is him, not the others. Some of them have already begun to express their annoyance with the president in some meetings. The most important, that of the Secretary of the Treasury, Rogelio Ramírez de la O, whom he took in the morning at the beginning of August to announce that the anti-inflationary plan that the president had said days before would be reinforced.
Ramírez de la O has been upset for several weeks because the president included the Secretary of the Interior, Adán Augusto López, in the preparation of the anti-inflationary plan. Officials in the Ministry of Finance maintain that there is no disagreement from the secretary, but collaborators of the president have ratified the information about the disagreements. López Obrador’s idea of incorporating the Secretary of the Interior, he says, is because since the negotiation with companies is political, he should be the one to lead it. These negotiations, however, were not carried out centrally by the head of the Treasury -although he had margins to do so-, but by the head of the Ministry of the Economy. Government did not participate.
This way of disrupting functions led to the fact that about two weeks ago, when the president complained to Ramírez de la O that he had not yet presented the plan, the Secretary of the Treasury replied that it was not requested of him, but of the Secretary of the Interior. . López Obrador, federal officials revealed, was upset that he had been ignored in the cabinet, saying the plan had been asked of both of them. López Obrador did not remember what he had done. When his collaborators began to ask about what Ramírez de la O had said, the Secretary of the Economy confirmed what the Secretary of the Treasury had said, explaining that the Secretary of the Interior, when they were jointly preparing the plan, abruptly ended a meeting of work and did not summon them again.
López Obrador urged, through his collaborators, that they work together to present it… last week. But what happened is that instructions were changed again and the Secretary of the Economy, Tatiana Clouthier, and the at-large presidential adviser, Alfonso Romo, began to be critically involved in negotiating with the businessmen. Several of the largest companies in Mexico have expressed their willingness to contribute to contain inflation, but there has been no articulated strategy presented to them.
The distracting speech is also wearing thin. The government can no longer presume that inflation in the United States is higher than in Mexico, since it fell to 8.5% in July, and although inflation in Europe is higher than that of Mexico at 9.8%, the variables that affect that continent they are totally different: the war in Ukraine that impacted the supply chains of grains and cereals, and the economic sanctions on Russia that affected the supply of gas and oil to Europe, which depends on 40% of its hydrocarbons. This environment has not been altered by the political determination of the West to continue to cut Russian funding sources for the war.
The red traffic lights are on in the National Palace due to the cost it may have for the president and Morena at the polls. His popularity rating remains high and the electoral polls favor his party, but they have not yet passed the test of scarcity in the country, which will deepen this year. The Consumer Confidence Index is a snapshot of the near future. Of the five questions that compose it, the most important is how they see his personal economic situation in 12 months. Confidence fell 0.8% from the previous month, but the drop compared to the same period last year was -3.%.
Those who are most affected by inflation are the lower-income sectors, where the majority of López Obrador’s voters are found, today affected by schizophrenia in their decision-making and their forgetfulness about what instructs whom.
#Lost #control