Is Texas a Mess? Jude Wanniski August 21, 2000

To: Karl Rove, Bush campaign manager
From: Jude Wanniski
Re: Those Texas statistics

Watching the Sunday talk shows, I noticed several journalists criticizing Vice President Gore for not “going after Bush” on the job he has done as governor of Texas. I really don’t know much about George W’s performance, except that he was re-elected in a landslide, which means the Texas voters were happy with how he governed. There are, though, various statistics that show declines in health, welfare and education of “Texans” during the last six years. Former Texas Gov. Ann Richards, who was ousted by Bush, has been making much of these numbers, as if to indicate that if Bush were President, the declines would occur nationwide.

What nobody has picked up so far, Mr. Rove, is that Mexico devalued the peso in December 1994. In early 1989, I made a special trip to DC to warn the Bush administration against forcing the Salinas government in Mexico to devalue. I met with Treasury Secretary Nick Brady, Vice President Dan Quayle, White House chief of staff John Sununu, and practically begged them not to demand a currency devaluation -- which the Mexicans correctly were resisting. On the advice of his aides, Brady was threatening to withhold “Brady bond” assistance unless Mexico devalued. I told Brady that if Salinas did what he demanded, the Mexican economy would implode and a million Mexicans would come flooding across the border. Brady relented and the Mexican economy enjoyed several years of rapid, non-inflationary economic growth.

My point, Mr. Rove, is that Governor Bush’s tenure in Texas coincides with the peso devaluation of 1994. Just as I had warned, a million Mexicans came streaming across the Tex/Mex border, in search of jobs. All of the social statistics of Texas have been distorted by this flow of desperate men and women, showing up on the doorstep of the people of Texas and their Governor.

This should be something you can take into account when the assaults begin. Of even greater importance is the background to how Mexico came to devalue the peso. If you take even a casual look at what happened, you will find that Clinton/Gore Treasury Secretary Larry Summers, who was in charge when the devaluation occurred, was part of the gang that pushed the new administration of Ernesto Zedillo into that evil deed. In other words, it was the Clinton/Gore administration that created the mess, and George W. Bush had to clean it up. And now, the Gore team is going to try to make the case that Bush didn’t clean up the mess fast enough that Gore helped make. Of course, Gore will say he had nothing to do with Mexico, and he didn’t in the sense that he did not have a clue as to what was going on, why so many tens of millions of our neighbors south of the border were impoverished. I testified before the House Banking Committee on all of this in early 1995. You should have your folks take a look.