CIA director Porter Goss wasn't kidding when he put Mexico in with Venezuela, Haiti, Bolivia and Nicaragua as the most unstable countries in the hemisphere. Right now, the potentially dangerous development is political, and may affect us very tangibly in the U.S.
 
Here is the political rundown:
 
Like much of Latin America, there is a terrible leadership deficit in Mexico. One thing's for sure — the next President of Mexico probably won't come from President Vicente Fox's PAN party in the 2006 presidential election. Fox has been nothing but a disappointment to Mexico's voters — 'meet the new boss, same as the old boss' — is a common assessment among Mexicans.

Fox won the election five years ago promising to change Mexico, but has done very little to change anything. Few free market reforms were undertaken, scant new jobs were created, and in the grating dynamic of "reforms" as they are executed by such 'third—way' regimes, GDP went up in low single digits, based on the production of a few big companies and government spending. New small companies were never formed. The renewed mercantilism — or, in Latin America, the term is 'corporate state' — in turn made the rich richer and the poor poorer.

And angrier.

There were some bright spots in Mexico's economy for the already—rich or skilled during the Fox years, but most poor Mexicans remained shut out of the system. Lip service was paid to reforms, but new opportunity for the poor was not the focus, and the jobs were not delivered to those who needed them most. In Mexico, that group comprises the majority.
 
As a substitute for reform, Fox encouraged Mexicans to skip over the border to the U.S., to take up life as illegal aliens — and send dollars back to Mexico. Ten percent of Mexican voters now live in the U.S. legally or illegally, but they account for fifty percent of Mexico's purchasing power. And they send home enough billions in foreign exchange to make the government in Mexico very comfortable indeed. The  Interamerican Development Bank says they sent home $16.6 billion in 2004,  up from $10.5 billion in 2000,  the year Fox was elected. Fox has called these people 'heroes' — encouraging U.S. banks to accept Mexican identification cards to ease money transfers in 2002 and permitting his government to print out booklets advising Mexicans how to get over the border illegally but safely by 2005.
 
But it's no life to be an illegal alien. If you have ever seen the movie El Norte about the plight of Guatemalan illegal aliens in Los Angeles, you will understand why. The poverty, the exploitation by the migrant rackets, the permanent underclass status, the ease with which aliens can lose everything they've worked to build if they are apprehended by law enforcement is heartbreaking. These people are helpless.

Not only that, in the case of Mexico, there are whole villages whose only residents are women and children — all of the men have gone to the U.S. to work illegally — so the children grow up fatherless. This is a huge price to pay just to get a job. No one should be driven by circumstances to do this. And to have a cynical government encouraging this kind of life so it can benefit by the dollar remittances, which beef up foreign exchange reserves and permit the government to finance itself without having to worry about growing the tax base, is an outrage.

So what do you do if you are a Mexican voter, soon to be offered a choice of three candidates for election, one from the old discredited PRI that ruled and ruined Mexico for 70 years, one from the disappointing new third—way PAN that openly wants you to flee your homeland, abandon your family and send home dollars, or one from a third party in the wings, the ultra—left PRD party, which has a charismatic mayor of Mexico City running for election on a "stand up for the poor" platform of soup—kitchen spending and sticking it to the U.S.?

Meanwhile, there's nobody comparable to an American Republican. There are no wealth—creators, no Reagans; there are only these three socialist candidates as your presidential choices.
 
It shouldn't surprise anyone that you pick that third candidate if you are a Mexican.
 
And this reality makes everyone — the other two Mexican parties, the U.S., and the rest of Latin America blanch. For Mexico, the high welfare spending should kill off all potential job growth for everyone except party bureaucrats. For the U.S., there's a potential Hugo Chavez on its border, one who's already talking about an oil alliance with Venezuela. Oil supplier number three teaming up with oil supplier number four to stick it to the gringos sounds like $105 a barrel oil already. For Latin America, there's one more demagogue ready to retard the region's growth by destroying Latin America's largest economy.  The danger is obvious to everyone.
 
But so is the solution. Right now, Mexico's two other parties, PAN and PRI, have conducted legal maneuvers to knock this third—party leftist Mexican mayor out of the presidential race. They are prosecuting him over some road violation, a very trivial technicality. And that's pushed his popularity from 27% to 37% in the three—way race already.

They just may succeed in torpedoing his candidacy, but they aren't fooling anyone into thinking it's just because they are interested in law and order. By behaving this way, they are making Mexico's bitter, fed—up population even angrier. It amounts to an insult to democracy and contempt for their wishes. It may easily lead to civil unrest, something which may be even worse than a Hugo Chavez at our border.

What happens when a political establishment tries to poison its Yushchenko? Exile its Dalai Lama? Jail its Lech Walesa? The reality is, he comes back stronger. That's what's about to happen in Mexico. Be warned.