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Home Publications Blogs Beat the Press Thomas Friedman Gets Lost South of the Border

Thomas Friedman Gets Lost South of the Border

Saturday, 23 February 2013 23:28

In this century Mexico has had the slowest per capita GDP growth of any country in Latin America. It has made almost no progress in reducing poverty and it is plagued by drug gangs and corruption. But Thomas Friedman sees a Mexico that doesn't show up in the data:

"In India, people ask you about China, and, in China, people ask you about India: Which country will become the more dominant economic power in the 21st century? I now have the answer: Mexico."

How does he come to this conclusion? Well one of the big factors in Friedman's story is that wages for workers in Mexico are falling behind wages elsewhere:

"with massive cheap natural gas finds, and rising wage and transportation costs in China, and it is no surprise that Mexico now is taking manufacturing market share back from Asia."

While Mexico might not do well by standard economic measures, Friedman points out that it does very well when it comes to signing trade agreements;

"Mexico has signed 44 free trade agreements — more than any country in the world — which, according to The Financial Times, is more than twice as many as China and four times more than Brazil."

In this same vein, Friedman excitedly quotes the Financial Times:

"Today, Mexico exports more manufactured products than the rest of Latin America put together.”

Let's assume this is true. Much of what Mexico exports are products like cars where it imports most of the parts. These are then assembled in Mexico and exported back to the United States. This assembly doesn't add much to Mexico's economy, but if for some reason you think that exports by themselves are a measure of economic success, you can score big through this route.

After telling readers that people in Mexico use Twitter, Friedman then comments that U.S. companies are investing more in Mexico, "which is one reason Mexico grew last year at 3.9 percent." Friedman apparently doesn't realize that 3.9 percent was not an especially rapid growth rate for Latin America last year. 

Just to ensure a regional balance, Friedman managed to overstate the cost of the war in Afghanistan by a factor of three by telling readers that:

"We do $1.5 billion a day in trade with Mexico, and we spend $1 billion a day in Afghanistan. Not smart."

Yes, the war in Afghanistan may not be smart, but CBO puts the price tag at less than $100 billion in 2013.

Anyhow, it is easy to see why the NYT runs Thomas Friedman's columns. He gives you all sorts of information that you would never find anywhere else. 

Comments (11)Add Comment
written by Chris Engel, February 24, 2013 12:12
I see a book in Friedman's future about Mexico being one of the US' biggest and important trading partners....

...countless years after it has already been the case.
written by Brett, February 24, 2013 12:32
Mexico did slightly reduce poverty over the past decade. And 3.9% isn't bad when you consider that Mexico did it without massive inflation, and when their GDP per capita is already significantly higher than a lot of Latin American countries.
Friedman Rival SNL, Low-rated comment [Show]
written by Mark Jamison, February 24, 2013 1:52
Friedman's column and Russ Duothat's stand together as examples of a mindset that labor costs must always find the least common denominator. They both ought to fly a flag that echoes Mellon, "Liquidate Labor".
When will we realize that paying people as poorly as possible in terms of wages, benefits, work sharing and jobless schemes, safety, and other aspects in the general approach to labor is a zero sum game? A more thoughtful approach to labor might yield the understanding that wages and benefits filter through the economy as a multiplier, particularly when we're talking about consumer oriented economies.
Short changing labor in favor of capital increases inequality which undermines the very premise of an inclusive consumer economy. We've completely lost perspective and balance in this argument. Ultimately this becomes as much a political concern as an economic one. Continually denigrate employment which is exactly what we do when always seeking to lower labor costs will eventually create a permanent underclass.
Friedman Solves Illegal Immigration Problem, Wins Labor Mobility Award
written by Last Mover, February 24, 2013 7:37
It's good to know when millions of undocumented Mexican immigrants in America read Friedman's column there will be a mad dash back to the homeland to participate in the newfound economic bounty, freeing up jobs for unemployed American citizens at the same time.

How else would they know if not for Friedman? Once again Friedman wins the Flat Earth Race to the Bottom Award for Labor.
Mexico & Geography, Low-rated comment [Show]
written by PeonInChief, February 24, 2013 11:55
Clearly Friedman has discovered the column generator, and is getting the stuff here instead of making it up. But you can do it too! See http://thomasfriedmanopedgener...hip+8629d9
written by xxyyxx, February 24, 2013 8:33
the problem here is that in your own IMF link it shows mexico beating Brazil (the B in BRIC) for two years straight and even beating Argentina in 2012 (and is predicted to in 2013), without resorting to using its central bank as a slush fund or lying about inflation like Christina has been.
Empirical Evidence
written by Alex E., February 24, 2013 10:40
The data is all very well and good, but anyone who's been familiar with Northern Mexico before and after NAFTA can just see the difference. It's huge. Northern Mexican cities are booming - they've grown full of factories and industry, shiny new highways, new & modern public transit and infrastructure, gleaming office towers and condos, shopping malls, etc. You can find more and more places that almost look like the US. Meanwhile, people are visibly more prosperous. All that is not to say that serious problems with poverty, inequality, organized crime and violence, etc. don't persist, but that's only part of the story. The positive change is palpable - and frankly astonishing when I compare to just 16 years ago.

Do some Google image searching for Monterrey: the San Pedro district, the Paseo Santa Lucia, etc. And it's in the smaller cities as well.
We Can't Make It Here Anymore
written by TVeblen, February 24, 2013 11:08
My brother is an electrical engineer who used to design bar code scanners until they moved his job to Mexico. He then moved into avionics and guess what? I wish Mr. Slim - Tom Friedman's boss - would switch payrolls for a month and make all those NYTs talking heads live on Mexican wages. Anybody got teens at home? Have a good long talk about what to expect and then cut that dream by 33%. Didn't Frank Zappa say something like: "It can't happen here, it can't happen here... and... they were WRONG!!!
I know little over economics but
written by @chica, February 25, 2013 5:18
Hi Im mexican, I have a master degree from one of the best universities in Europe, my family is not rich at all , we are just medium class people but we are educated people like many other mexicans. Yes there are drug cartels, yes the average mexican is un-educated but a big educated mid class is emerging. I came back to Mexico after my master and started a tech business in IT. Yes we might not be even close to Sillicon Valley but yes there are good engineers in Mexico, world class scientist and engineers and the tech companies are starting to emerge in all the cities of Mexico. Companies that can develop world-class products and YES we start to export to europe our IT solutions, cheap labor, same time zone that the US and quality are some of the thing companies like my company offer. So some of the statements from Thomas Friedman are totally true!

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.