Clinton Should Have Seen The Peso Plunge Coming
The real surprise about the Mexican crisis is that it didn't happen sooner ("Lessons from the peso scare," Editorials, Feb. 13). When a country pegs its currency to that of a stronger country and then maintains an inflation rate twice as high and a chronic trade deficit financed through short-term obligations sold abroad, a financial disaster is bound to follow. The question now is why Clinton, Greenspan, and Rubin, whose competence in economic affairs is well established, waited until the inevitable occurred to take corrective action. Having put $50 billion of international funds at risk, I believe that they owe us an answer.