When President Clinton sought congressional support for his plan to help prop up Mexico's peso, he soon found himself hobbled by outcries that arose against pledging taxpayers' money to bail out Mexico and to bail out Wall Street investors.
Members of Congress, alarmed by floods of calls to radio talk shows, trashed what had seemed to be an agreement between Mr. Clinton and the Republican leaders of the Senate and House.
When the president resorted to executive action, some analysts suggested that America was turning inward.
Does the peso experience suggest that a less internationalist America might be a less credible partner in international markets and trade? Will there be any impact on America's role in the world?
I. M. Destler
Acting Dean,
School of Public Affairs,
University of Marylandat College Park
One of the first lessons of politics and policy is that politicians need to find ways to do things that are politically unpopular, whether it's the Panama Canal treaty or dealing with the peso crisis. Both of those issues produced a series of very strong outcries in politics that made it very difficult to conduct public policy.
Although it is impressive that the president found a way to go ahead, it is not good news that the Congress was so concerned about the talk-show circuit that the president and the legislative leaders were unable to reach a consensus.
Unless members of Congress find a way to deal more effectively and responsibly with these controversial questions, it will be very hard for the United States to maintain a position of leadership in the world.
M. David Testa
Chairman,
Rowe Price/Fleming International
The whole peso experience is a useful reminder that the president does not push a button and get instant action in our governmental system. It was not the first such experience and it will not be the last. From the market's viewpoint, it is unfortunate to have a breakdown in what had appeared to be an agreement between the president and the congressional leadership.
Does it mean anything to the dollar? Probably no more than a lot of other political incidents.
But the attitudes demonstrated by the public definitely show a turning inward of American opinion. It suggests that even when our most important neighbor, one of our most important investment and trading partners, needs shoring up, we cannot take action without getting caught up in a lot of demagoguery.
That is not the kind of situation markets like to see.
Barry Brownstein
Professor,
International Economics,
University of Baltimore
In fact, at the same time, we are seeing growing support in the polls for free trade agreements. I think what we saw in the peso issue was the public, as reflected in the Congress, resisting the idea of interfering in the workings of free markets. There has been a growth in belief in free markets and a growth in suspicion of the old ways of doing things -- a suspicion of government and a suspicion of many forms of government subsidies.
The public has come to distrust the old institutions, subsidies for markets, subsidies for the defense industry, subsidies for specific businesses. So when the public resisted the president's plan to subsidize the peso, that was entirely consistent with the public's growing distrust of subsidies and other government interference in free markets.
But it by no means suggests that the U.S. public is turning inward. To the contrary, overall support for free international trade is growing, and that means a more internationalist America.
Mickey Levy
Chief financial economist,
NationsBank Corp.
I don't think you can take this experience with Mexico and generalize from it to know how the United States might proceed in some comparable situation with some other country.
Certainly the way this was resolved, although perhaps unusual, appears to have been successful and accepted.
Mexico always occupies a unique position in U.S. policy and U.S. politics. That is due to historical factors in the relationship and to the fact that today Mexico is one of this country's top three trading and financial partners. But should a similar incident arise with some other important partner, I don't think this experience in dealing with Mexico tells us anything about the way the United States would deal with it.