The Center for American Progress (CAP), which is currently run by Neera Tanden, got some coverage in the Intelligencer the other day. The gist of one part of the story, which is paywalled, is that the CAP is actually progressive because one of their proposals is a form of price control. Atrios wrote about this the other day, and I was curious to read the underlying proposal.
I didn’t expect this, but the proposal tries to take a successful program from Mexico and “adapt it” (I’m using that term charitably) to the US political climate. The Mexican program is called PACIC - Package Against Inflation and High Cost of Living. It caps the prices of a basket of 24 basic grocery goods to around $45. I’m no expert on the program, but it includes gasoline, which is capped at 24 pesos/liter, roughly $5.50/gallon. (Gas has generally been more expensive in Mexico than the US in the past few years, at least.) It also includes corn flour for tortillas, which is controversial because the cheap corn that comes across the border undercuts Mexican corn and works against Mexico’s goal of being self-sufficient with basic crops.
PACIC is an agreement between the Mexican government and key corporations:
An official statement from the Ministry of Finance and Public Credit confirmed that the 2024-2025 PACIC agreement had been accepted by 19 food and 11 marketing companies.
Manufacturers that have agreed to the deal so far include baker Grupo Bimbo, poultry producer Pilgrim’s, cornflour maker Maseca and packaged rice and legumes business Verde Valle.
Retailers Walmart, Soriana, La Comer and SuperKompras also agreed to the PACIC terms, among others.
In addition to agreements with food manufacturers and retailers, the Mexican government owns the petroleum company, PEMEX, so they have control there. They are also waiving import tariffs on some of the goods in the basket.
The program has been effective:
That chart is from CAP’s report, which uses Mexico’s success as a jumping-off point for their proposal, which is to reimburse retailers for swipe fees on credit cards if the retailer agrees to cut prices on a basket of goods, lower tariffs and increase SNAP coverage (including doubling up some SNAP benefits for certain foods). There’s also a laundry list of regulatory tweaks on food middlemen.
Notably missing from the CAP report is most of what Mexico did, beginning with twisting retailer and food producers’ arms. When Claudia Sheinbaum came into power, she negotiated a 12% reduction in the cost of the PACIC basket of goods. Current swipe fees are in the 2-5% range, depending on what deal the retailer negotiates with their card processor. In other words, it’s peanuts compared to what inflation has done in the past few years.
Plus, as Atrios pointed out, the bureaucracy of implementing this at the small retailer level would be incredibly complicated. Mexico’s implementation is top down — if you run a little corner store, you’re going to get the goods more cheaply from your supplier because the government has forced a deal with them. Some little tienda in a rural community doesn’t have to prove that they’re lowering prices for their customer to get the benefit.
I also want to note that the CAP report is page after page after page of tedious bureaucratese. It’s the kind of little tinkering that might be something political junkies understand, but it sure as hell isn’t doubling the minimum wage, something that AMLO got done. Since it’s the second anniversary of Claudia’s term, she’s required to give the Mexican version of the State of the Union (English translation). She’s also sharing the progress on her social media:
“Mexico has the third-highest minimum wage in Latin America.” (The salary listed is monthly wage in USD.). There is no mention of minimum wage in the CAP report.
Claudia has a 70% approval rate in Mexico because her government does big things. They don’t tinker at the edges. When Neera Tanden and CAP come up with a program that will let the next Democratic President put stats like these on their socials, perhaps they’ll have earned the right to use Mexico as an inspiration:
“Welfare programs in Zacatecas have benefited 709,000 persons. Honesty and results.” Zacatecas has a population of 1.6 million.
That picture is probably from Claudia’s tour of the country handing out social security cards to women, since one of the changes her government brought about was lowering the retirement age for women to 60. Odd that CAP didn’t pick that policy as an inspiration.
Frankly, CAP should be ashamed. They’re watering down a leftist Mexican program to a homeopathic level, while their leader is part of the establishment that’s gleefully shitting on the left wing of the Democratic Party. They have no intention of following the Mexican example, and the very idea that they would adopt Claudia and AMLO’s slogan, “for the good of all, the poor first” is, frankly, laughable. Perhaps “for the good of donors, and us first” would be a more honest statement of their guiding principles.
