("Quid coniuratio est?")
PESO BILL'S BAILOUT PLAN
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Aid For Mexico: Six European countries, uneasy with President Clinton's plan to rescue Mexico's economy, withheld their approval for a $17.8 billion U.S.-backed loan package approved by the International Monetary Fund. Britain, Germany, Denmark, the Netherlands, Belgium and Switzerland say that they were not consulted and that the package for Mexico, largest in IMF history, threatens support for Russia and eastern Europe. [USA Today, 2/3/95]
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[From 700 Club broadcast, 2/3/95 interview with Representative Duncan Hunter, R-California]
What about this split in the GOP over the bailout. Is Speaker Newt Gingrich carrying bipartisanship a little too far?
Well I like to think of it as a split with President Clinton, and I think every Republican has to take his own position.
I've looked at the situation, and a couple of things come to mind: first, there isn't an apocalyptic situation developing in Mexico; they've devalued the peso regularly, over the years, and we haven't had this "the sky is falling in" scenario that Mr. Rubin and others have painted, on Capitol Hill.
Secondly, a lot of the investors who put money in Mexico were very sophisticated investors; they were maaking a high rate of return. They didn't share their profits with the American taxpayers. And now that it appears they're going to be taking a loss, they want to share their losses with the taxpayers.
And lastly, in this scenario... in this time in government frugality when we have passed the balanced budget amendment, and when we are going to be slashing domestic programs across the board -- this is a tremendous amount of money to be exposing. This is twice this country's annual foreign aid budget -- going simply to one country, Mexico.
So I think that this is the wrong time. I think there's not a disaster of apocalyptic proportions developing in Mexico. And lastly, the leadership of Mexico, the 34 or so billionaires who do control politics in Mexico, seem to have less interest in securing the future of their own country than we do! Most of them have their money in dollars, invested in the united States. They have their payrolls in Mexico, so when a devaluation occurs and the peso loses its value, that means (for these big industrialists) the cost of their payrolls has been cut by 30 percent! They like that.
So the Mexican elite thrive on devaluations. And as long as you have that situation, you're going to have a historical trend of devaluations, every 5 or 6 years.
Mr. Hunter, this is Ben Kinchlow, with Newswatch. You obviously disagree with the President's plan. So I guess we would ask you, what is your recommendation? What would you recommend, for dealing with the Mexican economic crisis, since you obviously do not feel that it is an "end of the world" situation?
Well I think that Bill Siedleman(sp?), former chairman of the FSLIC [Federal S&L Insurance Corp.], a very renowned, conservative, economic leader, had it exactly right. He said, "Listen. You had a lot of sophisticated Wall Street investors who made a bad deal. And they made big profits, at first. Now they're on the hook. They're gonna lose some money. And the best way to -- when you have a debtor and a creditor: the debtor being Mexico, and the creditors being these investors around the world that have these bonds that are gonna have to be paid back this year. Let the debtor and the creditor work this thing out between themselves! They don't have to have a government from any side interfering with this. They don't need the united States of America to step in. So let's do it the old-fashioned way: let Mexico restructure its debt, with its creditors, and work this thing out with no interference by the united States."
How can we force them to do that though, congressman?
Well the way you force them to do that is by not stepping in and bailing them out! And as these bonds become due, Mexico will have to... Just like, if you owed money to a creditor, and you wanted to keep your creditworthiness -- you had a bill coming due -- you'd haave to go down [and] sit down with them and work out an arrangement to restructure your debt over a longer period of time!
And Mexico has enormous assets with which they could do that! They've refused to sell off PEMEX (that's their petroleum giant). They've refused to do a lot of things -- take money out of the massive portfolio of the Bank of Mexico and sell these assets or use them as collateral to extend this debt into long-term debt.
So, once again, the elite who run and control Mexico -- the billionaires who control Mexico -- have much less interest in addressing this devaluation of the peso than we do! Which is an ironic situation. They thrive off peso devaluations. They profit off them. As long as that occurs, we're not gonna see these crises... we're gonna see these devaluations in a regular, historic pattern.
I encourage distribution of "Conspiracy Nation."
Coming to you from Illinois -- "The Land of Skolnick"