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The little devils in the details

17 October 2009

Sean Goforth, Foreign Policy Association Mexico Blog has been uncovering interesting material this week. It’s the second time I’ve found something for the MexFiles on his site in as many days.

He has been something of a cheerleader for the Calderón Administration, but the surprise takeover of Luz y Fureza de Cento (LyFC) has him asking WTF

… Mexico is in the midst of its worst recession since the “lost decade” of the 1980s, and, unlike Brazil, it isn’t clear the end of the recession is at hand. No matter the size of the severance package, such a move is brashly pro-cyclical. The government should mark time, or even hire more workers to help address Mexico’s unemployment. Inefficiency should be targeted once the economy is growing again. Keynesianism is enjoying a revival elsewhere, why not in Mexico?

This blog has been largely supportive of Calderón. Recent news warrants serious circumspection. Laying off state employees in times of recession requires gumption or lunacy. Or maybe this is just a move of sage politics. Having lost Congress to the PRI in July’s election, Calderón’s can now spread the blame if recovery is delayed or tepid. Mr. Calderón is right to pursue economic modernization, but does he have to do so right now?

The same mind set that sacrifices working class jobs rather than look at efficiencies at the top is at work in the renewed attack on “diablitos”.

In an unsigned editorial in the weekend edition of The [Mexico City] News quotes Augustín Carstens (who might take references to bloated management structures personally) as claiming:

…stolen electricity amounts approximately to $25 billion a year.

He said that now, without the Union of Mexican Electricians to protect the vendors, new management company the Federal Electricity Commission (CFE) will make it an objective to “eliminate irregularities” and bring increased income to the financially-strapped company.

The most common method of stealing electricity is making a direct connection, popularly known in Spanish slang as “diablitos,” a word that literally translates as little devils.

… Just walk down any Mexico City street where street vendors peddle their wares and you’ll notice hundreds of wires connected to the nearest electricity pole and all the sales people listening to blaring radios or televisions, light bulbs lit up all night ..and all of it for free.

Left unsaid, of course, is that diablitos are everywhere, not just in Mexico City, and not so much “protected” by LFyC employees as “protected” by everyone, While a lot of consumers have diablitos (a friend of mine lived in room built on top of a house in an ejido that, surrounded by wealthy colonias, supplemented their income by building irregular “all electric” apartments on the roofs of houses and rented them to a motley crew of slightly irregular foreign teachers, though how much electricity was stolen from the rich to power a couple crock pots and TVs was nowhere near enough for the folks down the hill to even care about), most are powering micro-businesses (taco stands, little puestos in informal markets, and the like) that are marginal businesses at best, but do create employment. They also create those great heroes of conservativism, the ownership class. You know, people that invest in their communities and their families, want their kids to grow up educated, and have a stake in safe streets. People with middle-class values.

It was, ironically enough, the “dangerous populist” Andres Manuel Lopez Obradór who tackled the diablito problem — or at least put a dent in it — during his tenure as Jefe de Gobierno in the Federal District. Responding to complaints both from LyFC and from tourism-related business owners about the aesthetics and safety of those irregular connections, his administration killed two birds with one stone: they replaced the jerry-built newsstands that dotted the Zona Histórica with kiosks that answered the aesthetic demands, and included power connections, lights and, a METER. The kiosks have a bank of all weather outlets, and the news vendors could work out payment arrangement with their neighbors (or through their unions) to tap into the safer source.

“Stolen” electricity is a sort of government subsidy, and that’s not exactly the best way to foster enterprise, which may be what conservatives really want: a free market for those that already have the capital to invest; limited consumer choice; and — perhaps most important of all — workers with no alternative source of income).

And, of course, those small merchants don’t generally vote PAN. Higher priced power to the people.

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