Managing Economic Crises; Bill Clinton and the Mexican Peso Crisis

Undergraduate Review Volume 6 Article 8 2010 Managing Economic Crises; Bill Clinton and the Mexican Peso Crisis Liza-Anne Cabral Follow this and additional works at: http://vc.bridgew.edu/undergrad_rev Part of the Speech and Rhetorical Studies Commons Recommended Citation Cabral, Liza-Anne (2010). Managing Economic Crises; Bill Clinton and the Mexican Peso Crisis. Undergraduate Review, 6, 29-34. Available at: http://vc.bridgew.edu/undergrad_rev/vol6/iss1/8 This item is available as part of Virtual Commons, the open-access institutional repository of Bridgewater State University, Bridgewater, Massachusetts. Copyright © 2010 Liza-Anne Cabral Managing Economic Crises; Bill Clinton and the Mexican Peso Crisis LIZA ANNE CABRAL Liza-Anne is a BSC graduate who majored in Communication Studies. This project was funded by the Adrian Tinsley Program and was researched under the mentorship of Dr. Jason Edwards. It was presented at the ATP 2009 Undergraduate Research Symposium, as well as the National Conference on Undergraduate Research (NCUR) in April 2010. T he year 1994 was one of the most tumultuous in the modern history of Mexico. During that year, two major political figures were assassinated, an uprising against the federal government began in the state of Chiapas, and the government attempted to finance its deficit payments with various debt instruments. The political instability caused by the assassinations and the Zapatista uprising, along with continued economic uncertainty within Mexico, caused foreign investment capital to flee Mexico. Because of this capital flight, Mexican President Ernesto Zedillo, decided in December of 1994 to devalue the Mexican currency. Instead of helping the situation, it actually caused more panic from foreign investors. More capital left Mexico and the government was in danger of defaulting on its debt payments. During this time period, President Bill Clinton kept a close eye on the situation with Mexico. Because of NAFTA and other economic agreements, the Mexican and American economies were intertwined more than ever. Mexico’s inability to pay their debts, the increasing political instability, and the downward spiral in the economy worried many in the United States that it would have an adverse affect on a still recovering American economy. On January 11, 1995, President Clinton announced that he was considering a series of economic measures to help the Mexican economy. On January 18, 1995, after consulting with Congressional leaders, Clinton implored Congress to approve a series of loan guarantees for the Mexican government to prop up their ailing economy. On January 31, 1995, because of Congressional inaction, Clinton announced that he was using his executive authority to provide the Mexican government, along with funds from the International Monetary Fund, with billions of dollars in loan guarantees. The president was widely cheered by the international community for his successful handling of the crisis (Walt, 2000). Over the next two months, Clinton continued to talk about the Mexican crisis, providing updates of the situation, holding it out as exemplar of quick action by the American government, and using it is an example for international audiences to discuss international economic regulatory reform. The question that this study seeks to answer is how did Clinton rhetorically manage the Mexican peso crisis? Studying Clinton’s rhetoric surrounding the Mexican peso crisis is warranted on a couple of different levels. First, the study of presidential crisis rhetoric has been a fruitful line of research for scholars for the past thirty years (for BRIDGEWATER STATE COLLEGE 2010 • THE UNDERGRADUATE REVIEW • 29 examples see: Bass, 1992; Bostdorff, 1994; Butler, 2002; Cherwitz, 1980; Cherwitz & Zagacki, 1986; Dow, 1989; Hahn, 1980; Heisey, 1986; Kiewe, 1993; Kuypers, 1997; Paris, 2002; Pratt, 1970; Windt, 1973). However, this literature focuses primarily on how presidents dealt with various military interventions. There is little no scholarship focusing on presidential rhetoric and economic crises. In a survey of the crisis literature, Bostdorff et. al (2008) argued that one of the severe weaknesses of this literature is the lack of exploration of how American presidents tackle tough economic situations. Considering that a president’s discourse on the economy is one of the essential aspects of his leadership (Wood, 2007) and the lack of scholarship on this subject, an analysis of Clinton’s communication on the Mexican Peso Crisis is warranted. Additionally, President Clinton is an important transitional president in the history of American foreign policy. Clinton’s leadership helped America adapt and manage the transition from the Cold War to an era of globalization (Clinton Foreign Policy, 2000). The Mexican peso crisis is an important chapter in that transition. As yet, there has been no extensive study of Clinton and the Mexican peso crisis. Considering that the United States and the world currently face a huge economic emergency, understanding how the 42nd president managed this crisis may lay the groundwork for a larger theory about presidents and economic crisis management, while potentially establish a best practices model for other political leaders to emulate. Thus, studying how Clinton rhetorically managed the Mexican peso crisis has the potential to make theoretical inroads in the larger literature on crisis rhetoric. To that end, this essay proceeds in four parts. First, I provide a brief outline of the literature on presidential crisis rhetoric. Then, I outline the method for this particular study. Thirdly, I analyze President Clinton’s rhetoric on the Mexican Peso Crisis over a two month period. Finally, I draw conclusions from this analysis. Crisis Rhetoric Over the past thirty years there have been a number of studies conducted on the American presidency and crisis situations. These studies have covered events like the Cuban Missile Crisis (Bostdorff, 1994; Pratt, 1970), The Gulf of Tonkin crisis (Cherwitz & Zagacki, 1986), the Dominican Republic (Bass, 1985), the Mayaguez affair (Hahn, 1990), Grenada (Bostdorff, 1994; Heisey, 1986), Somalia (Butler, 2002), and Kosovo (Paris, 2002). In these studies, scholars have focused on three issues when discussing crises: 1) defining what a crisis is; 2) classifying the different types of speeches; 3) discussing the different rhetorical strategies presidents use in managing these crises. When communication scholars focus on presidential 30 • THE UNDERGRADUATE REVIEW • 2010 crises, they argue that they are rhetorical constructions. That is how a president describes the crisis, creates our understanding of the situation as a crisis or not (Kuypers, 2006). The reason for that is that “[I]nternational crises often appear suddenly, are usually complex, and do not allow easy interpretation by the public. Presidential statements act to create a stable context from which to interpr (...truncated)