Speech Given at The Board of Fondo Mexico, Spring 1999

  1. Every 12 years Mexican and US election cycles coincide. The last time was 1988 when George Bush defeated Jimmy Carter and Carlos Salinas defeated Cuahutemoc Cardenas. Mexico - the world - has changed dramatically since then and no aspect of Mexico has changed more than its politics.

  2. It was always easy to see the differences between our two countries' politics.
    - Except in the landslide years of Johnson, Nixon, and Reagan when their opponents were extremists, US elections have always been more competitive.
    -The converse is that Mexican elections have always been more predictable. Think back six, twelve, and eighteen years when you more or less knew by now who would be the PRI candidates and certainly knew which party would win the election.
    - Parties historically mattered more in the US than Mexico. And, since the parties moved in and out of power, the country was able to develop a profound social consensus which overcame the challenges of civil rights and then Vietnam.
    - In Mexico, parties really did not matter much until recently. The PRI was so broad and so dominant, that it was more political movement - with the result that the social consensus which existed was more imposed than debated.
    - And, of course, even more in myth than in fact, US elections have always been more transparent and democratic. Although, since I learned to vote in Chicago when the elder Mr. Daley was nearing the end of his tenure, I know something about the myth.

  3. Fast forward to the 1999-2000 cycle.
    - The Mexican presidential election has become uncertain and unpredictable. Not just in the sense of who will be the next President - but more fundamentally in that the basic rules, written and unwritten, are unknown.
    - The US social consensus is stronger than ever - because the unprecedented economic boom has benefited more Americans than ever. (Rising black family income.) But the Mexican consensus - again, more imposed than assumed - could be at risk. The rejection of the technocrats, the appeal of populism.
    - Newly empowered Mexican political parties are competing at least as aggressively as their US counterparts. The PRI has lost its control of the Chamber of Deputies, of the federal district, and of many states and cities. Coalition politics have become essential to daily political life, but few know how to play that game.
    - The party competition is not just over who will win which office, but over how the parties will relate to each other and what those parties will be.
    - Obviously, the whole issue of the Alliance, to which I will return.
    - But, who or what is the PRI? Is it the party of Salinas, Serra Puche, and Aspe or the party of Roberto Madrazo?
    - The PRD and the PAN, even with the luxury of less pluralism than the PRI, are at least as confused about their core identity. Is there life for the PRD after Cardenas? Does Fox really represent the accountants, small businessmen, and religious right that have been the PAN's core?
    - And what of all the homeless politicians - the Camachos and Porfirios of the world - who are either dramatically ahead of or behind the political power curve?

    In short, there has been a role reversal: US politics are increasingly boring and Mexican politics are increasingly exciting. Of course, the Chinese curse about interesting times comes to mind - especially for those who are trying to run a Mexican mutual fund.

  4. However, there are going to be new similarities, largely ones that - for better or worse - Mexico seems determined to import from the U.S. These include:

    - American political consultants - more in a moment
    - Expensive campaigns - notwithstanding that Mexican candidates have always known how to spend money, let me give you one number: total expenditures in the 1995-96 US federal election cycle were on the order of $2.4 billion in a race which featured not much in the way of primaries. (Another: Governor Whitman of New Jersey just dropped out of the race for the Senate because she did not want to raise the $10 million or so that she would have needed to run in a state of ___ million people.)
    - The dominance of television
    - Electoral politics that are more about personalities than positions and much more about getting elected than about getting ready to govern

  5. In a sense, the driver of these, the people who I think will have an enormous impact on how Mexican politics are actually conducted, will be the US political consultants and pollsters.

    - Fox, Labastida, and Madrazo have all hired both strategists and pollsters. Names like Jim Carville, Dick Morris, Stan Greeberg, Penn and Schoen, Sergio Zyman, Scott Miller. Most of these worked for Clinton at one time or another, all are deeply experienced in running tough political campaigns, they know each other and each other's tactics, even if they do not know Mexico.
    - They believe that their craft is as portable as that of a lawyer or of an investment banker. After all, democracy is democracy and most Americans firmly believe that their brand works best.
    - And these guys are good. In Israel, Barak beat Netanyahu in part because of Carville's ability to turn the election into a referendum on the economy instead of the traditional debate about security. Remember, it was Carville who told Clinton that it was, "The economy, stupid," which had a lot to do with making him president.

  6. What do these people do? The models differ only slightly, so it is worth running through that used by one of the teams already working here. Their approach is organized around nine principles:

    - One. Take the offensive and play to win.
    -Two. Start yesterday: front runners tend to win.
    - Three. From the start, answer the core question, "What is this campaign really about?" Resolve this from the voters' perspective.
    - Four. Know your competition, yourself, and your market. Research is the key to success.
    - Five. Organize for the fight ahead with 3 key teams: brand building, reaction/competition, and targeted research/marketing.
    - Six. Control the debate. Define what is winning in each fight; define yourself before others define you; define the issues; define your target.
    - Seven. Let no attack go unanswered. Keep your competition on the defensive. Drive your message even when responding to attacks.
    - Eight. Run a highly targeted campaign. Maintain your base. Identify swing voters and make them vote.
    - Nine. Set and manage expectations based on research. Know what is winnable and what is not.

    If this sounds to you more like waging war or selling detergent, than like choosing a leader of a great nation, you are starting to get the point.

  7. I am a communications consultant, although not a political communications consultant. Nevertheless, the issue is not only the advice, but whether the client listens to the advice. Which means we must talk about the candidates.

    - Labastida has all the benefits and all the costs of incumbency. The positives are the PRI's structure at the district level which still tends to respond to central control, media access, the healthy economy. The negatives are the warped distribution of benefits of economic growth, Mexicans' apparent preference for change and modernity, his own image as slow moving, formal, almost old, and the links to President Zedillo, whose popularity - like Clinton's - is clearly non-transferable. In my view, his campaign was in trouble the moment that Emilio Gamboa and his team began colonizing it: everyone was behaving like this was an old style campaign where the spoils of war could be divided practically before the battle began. The outside advisers are going to have trouble; more importantly, Labastida is going to have trouble figuring out the new rules.
    - In contrast, Madrazo has all the benefits and costs of insurgency. Mexicans will root for the bull sometime, especially if he shows determination, strength, and surprises someone who is supposed to win. He began his campaign as though he were following the script I described a few minutes ago: he defined himself, he defined his opponent, from the start he went on and has stayed on the attack, he has managed to blunt the corruption issue, he has been disciplined. He seems to understand that the more he attacks the President, the smaller the room for maneuver Labastida will have. His biggest problem—other than the fact that his analysis is largely wrong and his new image largely manufactured - is his lack of support among the party apparatchiks. Also, the rules are designed to his disadvantage.
    - Fox did everything right while he went about eliminating his opponents within the PAN, but in the process has done what a good brand manager from Coca-Cola should never do: he has let the product get stale, overexposed, a little boring, its image fuzzy around the edges. He has said to many different things to too many people; he has been running too long. But he knows how to follow advice, he is disciplined, and he is now blessed by the onset of a real PRI fight. Even with the alliance negotiations this will allow him to lower his profile, reorganize for the general election, and reposition himself. And, most importantly, let Labastida and Madrazo expose each other's weaknesses. But he does not have a real party structure behind him, which would be a disadvantage vis a vis a unified PRI.
    - Finally, Cardenas, whom I have always thought of more as a mystic than as a politician. I have 2 specific mental images of him. The first time I met him, he was in exile during the Salinas presidency; he received a small delegation of international investors which I brought to his office seated under a portrait of Fidel Castro. A picture is always worth a thousand words. Another time I was at a very upscale fundraising dinner organized by the private sector to restore one of the great buildings downtown. The dinner speaker called on the Mayor to endorse the cause; he remained seated, refused to respond, passed up the opportunity to seduce an audience that wanted to be seduced - something I had never seen any other politician do. But Cauhutemoc has what the others all lack: he believes he is destined to be President. And he could become the populist candidate if Madrazo fails, which is the obvious political space to command.

  8. Now the Alliance. The Argentines succeeded in creating the Allianza between the Radicals and Frepaso because they were united in their desire to drive Menem from office. They believed the only way to beat him or a surrogate was to combine, submit their respective candidates to a primary, and unite behind the winner. The result is that Fernando de la Rua, their candidate, will almost certainly be elected President.

    Here the problem is

    - First, Zedillo is no Menem;
    - Second, the candidate who cannot win—Cardenas—does not believe it and the candidate who can win - Fox - does not trust his putative partner to run a clean national primary.

    It has always sounded to me like a stalemate. If it is broken through a political convention of some kind, then the PRI instantly becomes the party of democracy and the Alliance the party of the political elite. That would be perfect for Madrazo, harder for Labastida.

  9. So what are the scenarios?

    - Labastida beats Madrazo, but is wounded in the process. The technocrats stay, but some of Madrazo's supporters leave or are pushed out of the party into the PRD. That makes for a very close three way race. This is the only chance for Cardenas who gets to run both against the ghost of Salinas and against capitalism. But he would have to run a profoundly more modern race than even the one he finally won.
    - Same outcome, but the PRI more or less holds together. Cardenas runs like he used to and the anyone-but-the-PRI vote splits. Labastida wins.
    - Madrazo beats Labastida. The technocrats leave to minor parties or, perhaps, to Fox. Most other elements unite behind Madrazo. Cardenas runs weakly, but what swing support he draws he takes from the PRI who are competing for the same type of voters. Probably the best scenario - short of a two way race - for Fox, since he has a chance to find the center of what is apparently still a fairly conservative electorate.

  10. Regardless of the specific outcome, the one thing you can be sure of is that the political process will be noisier, more confusing, more aggressive, and more uncertain than ever. In a world of rising US interest rates, Y2K, Ecuadorian default, Russian political problems, emerging market angst, etc. the odds must be that Zedillo's bulletproofing is likely to be sorely tested.

    Finally, a word about US politics. The country is fat, dumb, and happy - and I mean that as a compliment. Assuming nothing changes, the most likely candidates are Bush and Gore, with much of the political excitement next year over their choice of running mates (even though every bit of political research says the vice presidential candidates have virtually no impact on the outcome). Bush then beats Gore in a close, low turnout election. The Democrats, however, succeed in retaking the House, but not the Senate.

  11. There are only three interesting variations:

    - Bush wins the Republican nomination and Buchanan and other right wingers leave to mount a third party challenge focussed on social issues. Probably raises the turnout, but does not change the outcome.
    - Bush repeats the mistake of his father and blunts this challenge by moving to the right. Gore wins.
    - Bradley loses to Gore, primarily because of Clinton's ethical baggage. Bradley then does a better job of (a) defining himself and (b) of revealing Bush's core weakness - his complete lack of preparation for the presidency. (A recent poll showed that 12% of the people who view him favorably - and he has very strong ratings - think he is his father.) If the economy is still ok, Bush can still win. If it is faltering, Bush is in trouble.

  12. But that would go against my principle that US political campaigns - and what is about to happen here - have much to do with the morning after the election.

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