San Diego In Mexico City in June of 1994, Pat Nelson took a friend, a Mexican financial consultant, to lunch. "My friend said to me, 'Pat, in '92 and '93 the Mexican government issued short-term bonds that yield 14 to 16 percent.' He went on to explain that foreign banks and institutional investors like Merrill Lynch had bought an astronomical amount of these bonds. The problem was that many of the bonds were about to come due. Mexico was going to have to pay up. Mexico didn't have the money.
"My friend said, 'No one's written about this. Do you want to write about it?' And I said of course I'd write about it, as long as he provided me with all the documentation. He did. I went back to my office at the News, the English-language paper I was working at back then, and I wrote about the short-term bonds in my column, about their coming due. Some months later, the Mexican government announced it was loosening its control of the peso. Everything fell apart. We actually had people calling the paper saying, 'Pat Nelson ruined the peso!' I had to laugh. I responded in my column, saying, 'If only I had that kind of power to influence the Mexican economy. If I did, we wouldn't be in this mess.' I also said it was remarkable that I predicted six of the last four devaluations. They got the joke.
"The '95 devaluation destroyed the Mexican middle class. The short-term bonds story was the biggest story I ever broke."
Nelson, born in Oklahoma, the daughter of a traveling salesman who sold "milking equipment, cream separators, that sort of thing," grew up all over the Midwest. After serving in the Army Air Corps during the U.S. occupation of Japan, Nelson returned to the States hoping to attend college on the G.I. Bill.
"I'd wanted to go to Berkeley or Kenyon. By the time I got back, all the colleges and universities were filled. This Tex-Mex guy who worked with me in Japan had mentioned something about Mexico City College. It'd been approved by the Veterans Administration. I went down to Mexico City and enrolled. I really didn't have any intentions of staying. I ended up spending the next 53 years in Mexico. I guess you could say it was my karma."
In addition to having her tuition paid, Nelson received a $50 monthly stipend from the Veterans Administration. She supplemented her income by teaching English, mostly in Veracruz. When she could, she worked on her degree.
"I'd wanted to study political science, but for a number of reasons I wound up studying economics. Developmental economics. We didn't get much classical or neoclassical economics until I was doing graduate work. I heard a fellow student say the name Keynes. I didn't know who it was. So I went to the library, hit the books, and educated myself. It turns out that studying economics was wise. When I went to Mexico in 1948, President Aleman was in power. The Mexicans referred to him as Aleman and the Forty Thieves. It was understood, it was taken for granted, that Aleman and his cabinet would skim the cream of the Mexican economy for themselves. It was known that they would use their position to become very rich. The Mexican economy has always been unstable and corrupt. The Mexican economy was always going to be a source of news.
"During the Korean War, early '51 to late '53, I was called back into active duty and went again to Japan. When I returned to Mexico, I was very ill. My doctor told me that, between living in Mexico and Japan, I had five different parasites and two kinds of amoebas. He gave me medication and told me I should go to Veracruz to recuperate. It took me a long time to recover. Life in Veracruz was easy. Tennis in the morning. Fishing in the afternoon. I knew I had to get back to Mexico City. So I sat down and wrote three analysis pieces about the Mexican economy. At that time, the government was trying to move heavy industry -- principally the auto industry, which was just about the only heavy industry -- out of Mexico City. Ford. General Motors. Volkswagen. These plants were doing mostly assembly work. The government wanted them to use Mexican materials in the production of their cars. The big boost, you see, would come with all the auxiliary industries.
"But the remarkable thing is that even back then, 50 years ago, the government was aware of the problems attendant to having everything centralized in Mexico City. Fifty years ago the Mexican government began decentralizing its industries. All of Mexico's big problems were evident even back then. The problems were and are longstanding. Everyone wanting to be in Mexico City goes back to colonial times. Everyone wanted to be close to power. That's why you have, for example, the Ministry of Fisheries in, of all places, Mexico City. So, I wrote about the government's drive to get the auto manufacturers out of the city, to have them use Mexican materials. I wrote up these three pieces and took them to the News, an English-language paper that'd been established in 1950. They said they couldn't use the stories but that they did have a job for a reporter in the society pages. Me? Writing for the society pages? I wanted to write about economics. I took my stories to the Mexico City Times, and they bought them. This was in the fall of 1963. I've been writing about the Mexican economy ever since.
"Mexico City was an interesting place to work in. At one time or another, everyone passed through. You met people at cocktail parties. Virginia Hill, Bugsy Siegel's old girlfriend, lived in Mexico City. She had a fabulous apartment on Melchior Ocampo Street. She cut quite a swath through Mexico City's social scene. You met other people. You'd show up at a party and there'd be William Holden. Or you'd see Anthony Quinn walking down the street. For a while, Mexico City was the place to be. Of course, Acapulco was where most of the very famous would hang out.