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The Middle Class Revolt

El Barzon (the yoke) takes it's name from the revolutionary saying, "the yoke is broken, but the ox goes on". Unlike the indigenous and campesino stalwarts of the Zapatistas, El Barzon is a movement of the middle class. Its members represent a wide variety of interest groups, whose one common defining characteristic is overburdening debt.

In December 1994, as you may recall, the Salinas government, at the urging of the IMF, the World Bank and others, allowed the peso to "float" against the dollar. In the debacle that followed, the peso sank like a stone. By March 1995, the peso settled at just about half its previous value.

When Mexico's money was devalued by half, Mexico became half as rich. Because its debts to foreign banks and countries are in Dollars, it became twice as much in debt. Practically overnight, Mexico lost over half of its billionaires (see this column, "Where Do All Those Billionaires Come From?"), when peso holdings are measured in dollar terms.

Mexican banks, desperate to rebuild their hard currency reserves, raised the interest rates on credit cards, mortgages, and business loans. At one point in the spring of 1995, it had gotten so bad that one bank took out big ads in the national newspapers to advertise a "new low rate for credit cards" of "only" 67% per year (some cards were costing 97%).

Well, you say, that's simple: people can refuse to use credit when it is that expensive. The problem is, almost all credit in Mexico is issued as "adjustable". So what happened is that people who were ALREADY in over their ears (having borrowed at, say, 35%) were drowning in almost-100% interest rates on already-borrowed debt.

While personal bankruptcies have reached epidemic proportions (see this column, "Welcome To Los Angeles"), it is the wave of business failures that has pushed the Barzonistas into the forefront of Mexican consciousness. Begun in 1994, well before the devaluation, in the State of Zacatecas, El Barzon was a self-help organization of small landholders and farmers. Unlike the Zapatistas, they insisted that the government must be reformed, not replaced. They are not socialists. They are not native-ists. They are against armed conflict. Many are members of the ruling Party of The Institutional Revolution (PRI), but many are not. As in other movements of social conscience, they have many factions, some of which do not always get along. They argue about being "too political" or "too confrontational" or "too conciliatory", etc.; but at the core there are certain demands that they all share.

El Barzon sees the banks as the enemy of the people, at least in the short run. It demands that the government force the banks to declare a moratorium on foreclosures. It demands that the government mandate a restructuring of all current debt to make repayment affordable, and it demands a voice in that restructuring plan. It demands an immediate halt to seizures of tools and machinery (without which there is no income). Depending on the faction, it demands debt relief by suspension of all interest payments (repay capital only); restructuring of debts for 12 to 15 year repayment with the first five years interest free; return of all previously seized property and equipment; and jail sentences for bankers who charge "usurious" interest rates.

Whatever part of the political spectrum they come from, the various groups who refer to themselves as "Barzonista" now include the National Credit Card Holders' Association, the Mexican Bank Debtors' Association, the National Confederation of Small and Micro Businesses, the National Union of Agricultural Producers, and others. Some work only in the National Chamber of Deputies seeking legislative reform; some seek relief of usurious debt through the courts; some seek indictments against bankers through the National Human Rights Office; some take their cause to the streets outside the banks and government buildings.

While in Mexico City on the day President Zedillo presented his first State of the Union address, I witnessed many demonstrations. The Barzonistas were there, blockading the street in front of the National Bank of Mexico. Hundreds of enthusiastic supporters filled the small plaza. The Barzonistas are a force to be reckoned with. They are already national (if decentralized). They encompass a diverse cross section of economic sectors within the middle class. They have little left to lose. And let's face it: bankers don't have much sex appeal, know what I mean?

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