How Carlos Slim, World`s Richest Monopolist, Provokes And Profits From The Mexodus
The Main Stream Media`s normal lack of interest in
Mexico, our southern neighbor, was briefly interrupted
last week. There was a
flurry of news reports that
Bill Gates has been dethroned as the world`s richest
man by a fellow with an improbable name:
Carlos Slim Helú, the Mexican telephone monopolist.
After those six weeks of hearing from the MSM that
Mexico was unutterably poor and that illegal immigration
is the only hope Mexicans had, this
Richest-Man-In-The-World-Is-Mexican story seemed a
bit off-message. No wonder the press went right back
to ignoring Mexico.
It`s not that there aren`t colorful, in fact downright lurid, stories to be covered south of the
border. For example, have you ever heard of
Jorge Hank Rhon, who in 2004 was elected mayor of
the big border city of
Tijuana? It`s as if
Phil Spector was chosen mayor of San Diego. Known to
his constituents as Genghis Hank, this demi-billionaire
father of 18 children by four women has a private zoo
holding 20,000 animals in sickening squalor.
You might think
that a hereditary plutocrat`s minion murdering a Mexican
few miles across the border would interest American
And they might also
find it interesting that Hank`s brother had been the
primary shareholder in the
controversial Laredo National Bank of Texas, whose
Gary G. Jacobs, contributed
$85,000 to George W. Bush`s two campaigns for
But you would be wrong. The truth is that the American
press tends to find Mexico an awkward combination of
comic and depressing. Stir in
political correctness about Mexican immigrants ("Will
reporting on Mexico play into the hands of those
evil immigration restrictionists?"), plus the
modern media personality`s tendency to both admire and
fear the ultra-rich (with good reason in this case: the
Hank family sued the tiny Mexican-American muckraking
El Andar for
$10 million for covering them), and it`s best just
to drop the whole subject.
Thus there`s almost no important American voice calling
repeatedly for reform in Mexico.
So, who is Carlos Slim? And why does he have
Slim isn`t an out-of-control maniac like Hank. The only
scandals clinging to Slim`s name are business-political,
not personal. He embodies the
Mexican ruling class at its best.
Which still isn`t so hot.
Although not an innovator, Slim is a competent
businessman and manager. He
likely would have gotten rich in even the most
honest country. He`s a bit like
baseball slugger Barry Bonds, who was the best
baseball player of the 1990s, even though he avoided
steroids through the 1998 season. But once Bonds
combined his natural gifts with performance-enhancing
drugs, he quickly turned into the
greatest hitter in history. Similarly, mix Slim`s
financial skills with Mexico`s
crony capitalism and you get the richest man in the
"Public life could be defined as the abuse of power
to achieve wealth and the abuse of wealth to achieve
power." It`s worth examining how the
master plays the game.
The Mexican-born son of a prosperous Lebanese Christian
merchant originally named
Yusef Salim Haddam, Slim made his big move in 1990
President Carlos Salinas` corrupt
privatization binge (which was
enthusiastically endorsed by the elder President
Bush). He bought the
government`s telephone monopoly. Interestingly,
Slim`s telephone monopoly was written into NAFTA,
negotiated during Bush I, granting Slim a decade without
"Salinas offered their
buyers sweet regulatory deals… he offered them … a
series of behind-the-scenes government favors that would
guarantee the profitability of the new owners`
Oppenheimer goes on:
spectacular tariff increases without demanding
corresponding improvements in the telephone service. In
1991, Telmex was allowed to increase telephone rates by
247.4 percent, while wages that year were allowed to
rise by 18 percent."
Of course, such a deal came with a price tag. On
February 23, 1993, President Salinas invited Slim and
the other 29 richest men in Mexico to dinner, where
he shook them down for campaign contributions to the
ruling PRI party of 25 million American dollars each—$750
Slim wasn`t fazed by the demand, merely suggesting that
there was a more discreet way to do this. Oppenheimer
Slim … supported the motion, adding only that he wished
the funds had been collected privately, rather than at a
dinner, because publicity over the banquet could `turn
into a political scandal.` In a country where
half the population was living
under the poverty line, there would be immediate
questions as to how these magnates —many of whom had
been middle-class businesspeople until the recent
privatization of state companies—could each come up with
$25 million in cash for the ruling party."
PRI has been out of power in Mexico City since
2000, but Slim has kept his monopoly. The New
York Times reports that Slim "used his influence
over the government to fight off attempts by
competitors—including MCI and AT&T—to get a piece of the
Mexican market." [Prodded
by the Left, Mexico`s Richest Man Talks Equity,
By Ginger Thompson, June 3, 2006]
The Economist`s 2006 survey of the Mexican
"Telmex still [has]
94% of landlines, 78% of mobile services and 70% of the
broadband internet market … If Mexico were the United
States, Telmex would have been broken up years ago. But
Mexico is Mexico. Telmex is merely one of the more
egregious examples of the widespread rule of oligopoly."
Slim`s accumulation of $3,000 for every family of five
in Mexico has sapped the country`s economic growth.
Connecting more people via telephones is perhaps the
surest way to grow a
backward country`s economy. But Slim`s monopoly
price high by world standards:
reported that the average monthly phone bill for a small
business in Mexico is $132, compared with $60 in the
In the NY Times article noted above, Ginger
Thompson noted that Guillermo Ortiz, head of the Bank of
Mexico, estimates that due to monopolies like Slim`s:
"Economic growth is one
percentage point less than it could be with real
competition. There are not enough jobs to keep workers
from migrating to the United States and investment is
being driven to countries like
"Had America grown one
percentage point less per year, between
1870 and 1990, the America of 1990 would be no
richer than the Mexico of 1990."
(I have my
differences with Tyler, but he`s right about this).
So, Slim, personally, is the cause of many of Mexico`s
underemployed swarming into America—an historically
unprecedented influx that has been dubbed the “Mexodus“.
But don`t worry, he`s figured out how to profit off the
illegal immigration he`s helping provoke.
Larry Luxner reported in 2002:
"In August 1998,
Telmex launched `Mexico En Linea`—a program that allows
expatriate Mexicans living in the United States to
purchase phone lines for
family and friends back home. … Telmex USA has
received around one million applications for phone
lines, of which 70% are generally approved."
Slim is publicly adamant about keeping the flow of
illegals heading north so they can send
remittances back to his captive customers in Mexico.
In his March
article about Slim, VDARE.COM`s man in Mexico,
Allan Wall, noted:
"At a press conference
before Bush`s arrival, Slim slammed the border fence,
`illegal" and "absurd.`"
In fact, as someone said, “bring it on”.