COMMENTARY The Fed rate cut is a reminder to keep promoting autonomous central banks in Latin America — but Tua Tagovailoa's concussion crisis argues against exporting football there.
The U.S. sells more than half a trillion dollars’ worth of goods and services to Latin America and the Caribbean each year. Which is great. Maravilloso.
But sometimes it’s the intangibles we export to the developing world next door that matter as much if not more than the microchips. And this week offers a snapshot of the sort of socio-cultural bienes we as the developed neighbor should — and should not — keep shipping south.
I’m talking about (just hear me out here) independent central banking and … football.
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The U.S. Federal Reserve’s handling of the inflation crisis, culminating in Wednesday’s half-point interest rate cut, once again affirms for Latin America how important an autonomous central bank is to any economy, developed or developing.
And I bring it up because I worry the leaders of the region’s second- and third-largest economies, Mexico and Argentina, don’t really get that.
Meanwhile, Miami Dolphins quarterback Tua Tagovailoa’s concussion crisis seems just one more reason we shouldn’t be exporting football — American football — to Latin America.
And I bring that up in the wake of the first National Football League game ever played in Brazil, the Philadelphia Eagles-vs.-Green Bay Packers matchup earlier this month in São Paulo.
This week's buzz about Fed cuts and football concussions offers a snapshot of what cultural bienes America should, and shouldn't, push to Latin America.
We shouldn't forget just how badly the lack of autonomous central banks used to wreak havoc in Latin America. We’re approaching the 30th anniversary of the chaos I watched up-close in Mexico in 1994 — when the peso crashed because the Banco de México played politics instead of policy.
It was an election year, and the ruling, authoritarian Institutional Revolutionary Party needed to keep the currency grossly overvalued to prop up the Potemkin Village of a First World Mexico.
It collapsed under the weight of that scam, hurling Mexico into one of the worst financial abysses in hemispheric history. That finally seemed to teach the country and the region what Washington had long preached: that placing a central bank under the sway of an executive branch was a sure way to put an economy out on a snapping limb.
Spooky cracks
In fact, in the 21st century, Latin America’s central banks sometimes embrace that lesson even more ardently than their yanqui counterpart. After the COVID pandemic, for example, they were quicker than the U.S. Fed to confront inflation and raise interest rates.
Still, I spy spooky cracks in the Latin America façade, especially in Mexico City and Buenos Aires.
The Banco de México once again looks less than autonomous after cutting interest rates last month — at the urging, say critics, of authoritarian left-wing President Andrés Manuel López Obrador — in spite of the country’s stubbornly high inflation rate.
In Argentina, erratic right-wing President Javier Milei got elected last year promising to outright abolish the central bank. If he ever does, it would tear down the most critical firewall against autocratic control of monetary policy. That’s something macro-economically dysfunctional Argentina needs about as much moldy yerba mate.
That’s why the independent actions of the U.S. Fed and chair Jerome Powell — from necessary rate hikes that disregarded the political hits to President Biden, to a necessary rate cut that disregards the political howls of former President and Republican presidential candidate Donald Trump — is such a necessary example.
A positive export.
But I can’t say the same thing for football.
I was once one of the biggest football fans you’d ever meet — until convincing evidence of the sport’s brain injury reality smacked me like one of the bell-ringing helmet-to-helmet hits I remember taking as a high school player.
Like so many folks, I’ve come to realize that football, like boxing and its toxic mutation MMA, is an American game we probably should not be playing or promoting. The fact that we as a society this week are huddled around the cave fire debating whether a young man — in this case Tagovailoa — should continue flirting with long-term cognitive damage only deepens that concern.
I’m just as worried that in Latin American countries like Brazil and Mexico, where not just football spectating but participating is gaining popularity, they’re even less mindful of the medical truth that no helmet in the world is going to protect their young men’s midbrains from that kind of trauma.
A kind of trauma that shouldn’t be exported.
