Jim Himes and the Democrats are often displaying their compassion for the illegal Mexican and Central American immigrants that have entered our country over the past decades. Yet, no one ever asks why these people – the vast majority who are decent and hard-working – came to the United States. The answer is simple. Jim Himes’ former employee Goldman Sachs, in their infinite greed, destroyed the Mexican economy in the 1990’s.
Mexican politicians, like all politicians worldwide, have discovered that the best way to win elections is to promise services without raising taxes. To fund the resulting deficits, they issue bonds which are purchased by individual investors and institutions such as banks, brokerage firms, corporations and insurance companies. Purchasing bonds from a foreign country such as Mexico carries a certain risk, because the interest and principle payments are made in the country’s currency. If the country devalues the currency, the investors get taken to the cleaners.
This is what happened in December of 1994. Mexican government officials had suckered Wall Street into buying bonds that paid inordinately high interest rates while promising not to devalue the peso. Mexico then reneged, threatening to cost Wall Street and specifically Goldman Sachs a fortune. Then the Wall Street Welfare State did what it does best, whine for a taxpayer bail out. This was not well received, with none other than Vermont’s liberal congressman, Bernie Sanders telling treasurer and former Goldman Sachs CEO Robert Rubin to “go back to your Wall Street friends [and] tell them to take the risk and not ask the American taxpayers.”
But Jim Himes’ cronies and Goldman Sachs were not to be denied. Bill Clinton simply used his executive power to give the money to Mexico where it was then promptly sent to the coffers of Goldman Sachs. There the investment bankers received 7-figure bonuses to be lavished on ostentatious Hampton vacation homes, $3,000 bottles of wine and pre-Castro Cohibas.
The hard working Mexican laborer did not fare as well. Austerity measures were imposed. Inflation skyrocketed to 50%. The peso lost 40% of its value. Unemployment skyrocketed and businesses closed in droves. Since Mexican banks do not make fixed-rate loans, housing payments soared and many lost their homes. Thus, the many crossed into our country looking for work to support their families.
Another side effect was that farmers could not pay back their loans either so they were forced to convert to lucrative crops – specifically cocaine and marijuana. The distribution of these drugs led to the rise of brutal and violent gangs. This unleashed vicious drug wars in which tens of thousands of Mexicans were slaughtered. Some of these gangs spilled into the United States, expanding the drug market and terrorizing poor neighborhoods in Arizona and southern California.
Any discussion of immigration reform in the United States should begin with the narrative of how Jim Himes’ cronies at Goldman Sachs pillaged the Mexican economy and transferred a huge amount of wealth from hard-working Mexican laborers to the hands to a few speculators who rather than get burned, used their political leverage to get bailed out.