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US Jobs and the Mexico Trade Proposal
Fast Track, Fast Shuffle: The Economic Consequences of the Administration’s Proposed Trade Agreement with Mexico
In Southern California during the 1960s, twirling the AM radio dial could be an adventure. In addition to the mainstream stations, like KNX and KFI, broadcasting at the normal “clear-channel” power of 50,000 watts, every now and then you would hit a station so powerful that it could make the whole radio shake, like a boom box before its time. When this happened, it meant that you had encountered the “Big X,” a station that blasted English-language programming from towers in Tijuana to the huge market north of the border. There must have been some schedule and regularity to the Big X’s broadcasts, but at the time it seemed that they would show up at unpredictable hours and positions on the dial, drowning out stations that were normally there. In its heyday the Big X had featured the legendary disk jockey Wolfman Jack, who was later depicted at a station in central California in the movie American Graffiti.
I took the existence of this station as an early lesson in the difference between what governments can control and what technology can achieve. The US Federal Communications Commission had its master plan for keeping order on the airwaves, by assigning positions on the broadcast spectrum, limiting emission power, and even classifying call letters by region. (The familiar regional scheme generally has “W” stations east of the Mississippi and “K” stations west of it. The Big X’s very name seemed to be a mockery of this system, or perhaps an extension of its riverine logic, with “X” stations south of the Rio Grande.) The FCC’s writ did not reach across the border to Tijuana, but the Big X’s signals easily reached back the other way.
The sensible way to deal with the Big X, of course, would have been through some kind of cross-border agreement, so that each country’s stations would abide by common rules and not blow each other off the air. A grander version of such logic lies behind proposals for a US-Mexican free-trade agreement, toward which the Congress took the first step last spring.
The impetus for such an agreement actually came from the Mexican side. After his election in 1988 at the age of forty, President Carlos Salinas de Gortari began a series of economic reforms that were in their way as remarkable as the economic changes in Eastern Europe at the time. He sold state-owned industries to private investors; he had a famous showdown with a corrupt labor boss who had in effect run the state petroleum industry; he reduced government spending, lowered tariffs, and generally applied market-style reforms like those he had studied at the Kennedy School at Harvard. Shortly before Salinas took office, the Mexican inflation rate had been 200 percent per year; this year it is about fifteen. Eight years ago, the Mexican economy was one of the weakest in Latin America; now it is probably the strongest.
Salinas is far from solving Mexico’s endemic problems of …
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