What if Lopez-Obrador becomes Trump's secret admirer?
Down in Mexico, "Presidente-Electo" Andrés Lopez-Obrador is singing a conciliatory tune. I think he understands that the other 47% of the people who split their vote among three centrists are concerned that he meant what he said during the campaign. Words matter, as we say up here.
According to the Yucatan Times, the early signs may mean trouble for Mexico and "El Presidente-Electo," who won't assume the presidency until December 1:
Initial euphoria over Andres Manuel Lopez Obrador's landslide victory soured as the dollar's gain jolted investors back to the reality that the country's first leftist president in recent times may alter its economic model.
The peso declined as much as 1.3 percent after results of the Sunday elections signaled his Morena party was set to enjoy broad support in Congress.
The victory came with a commanding lead for Lopez Obrador, showing a strong mandate for his policies. Stocks also slipped, along with the country's dollar-denominated notes.
It may be an insignificant early reaction, but the peso fell. It may stop falling, so let's not overreact, but a falling peso is always traumatic for Mexicans who remember 1976, 1982, and 1994, the big three devaluations of recent memory.
My guess is that "El Presidente-Electo" knows that his presidency can't take much peso erosion.
I lived in Mexico in 1982, when the pre-1994 peso went from 26 (to a U.S. dollar) in August to 150 by the end of the year. I learned a big lesson: Mexicans will always bet against their currency or exchange their pesos for dollars.
To be honest, Mexico is better prepared for peso erosion today because they've let the currency float since the late 1990s. Nevertheless, nothing scares the Mexican middle class more than the peso losing value.
In other words, President López-Obrador will need a stable peso and economy. He cannot accomplish that without a strong U.S. economy. Mexico's new president will need for President Trump's economic plan to succeed across the board. He may be a public Trump critic but deep inside he will become his secret admirer.
Trump's economic success will mean Mexico's economic success. President López-Obrador cannot deliver a single promise unless Mexico's economy grows.
Guess who will be cheering on President Trump! Mexico's "Presidente Electo"! Suddenly, he needs Trump to succeed!