# LIKE A DOG *The Devaluation and the Politics of Admission* Author: Elveander Welfendorff · Category: Power · Date: 2026-10-16 · Place: Warsaw · EW Journal Source: https://ewbyew.com/like-a-dog/ --- In August 1981, by most accounts, the President of Mexico, José López Portillo, told his countrymen he would defend the peso “como un perro”, like a dog. He chose the animal himself. A man who wished only to sound firm had a dozen words available, and he picked the one that does not negotiate, does not read the markets and will go on guarding the door when the house behind it has been emptied. Mexicans had learned to take the number seriously. For twenty-two years, from 1954 to 1976, the dollar had cost 12.50 pesos and nothing else, so that a Mexican of forty had hardly seen the price move in his working life. Then in 1976 it jumped to 19.40, and the president who took office that December would be judged by what the number did next. The oil came soon after, and the banks of New York and London lent against it as quickly as the paperwork could be drawn, in dollars, on the understanding that a barrel of crude could only grow dearer. Earlier in his term he had promised that Mexicans would learn to administer abundance. Then the price of oil began to fall in the summer of 1981, American interest rates stayed high, and a debt written in dollars grows heavier, whenever the peso weakens, in precisely the currency the borrower earns. The dog lasted until February. That month in 1982 the central bank let the peso float after it had been trading at roughly 25 to the dollar, and anyone who owed dollars woke to find the same debt measured in a larger number of pesos. Mexico had company in its trouble, since half of Latin America had borrowed on the same terms and was waiting to see who would blink first, but the Mexican president had the distinction of having announced his position in advance. A government that lets its currency slide is conducting a piece of arithmetic. A government that has promised to defend it like a dog is, when the slide comes, breaking a word. Economists, on the whole, regard a devaluation of that kind as housekeeping, overdue and unpleasant. The public keeps another set of books, in which the only entry is whether the man kept his promise, and the answer is written in ink. Both ledgers are honest. Only the second is ever read again. Kitchens kept the second set. Tortillas, the staple of the Mexican table, doubled in price in the weeks before mid-August 1982, and a longtime foreign observer back from a business trip told a reporter that he had never seen Mexico so economically troubled. Leaders delay, because an early admission costs the vow at once, whereas a late one costs the reserves, which belong to nobody in particular. By August 1982 the finance minister, Jesús Silva Herzog, was telling creditors that Mexico could no longer service its debt, and he announced a moratorium of ninety days. Most commercial banks drew in their lending to Latin America soon afterwards, and a good many short-term loans fell due at once. Savers had done their own reading long before the September speech. By one historian’s count about ninety per cent of Mexican bank accounts were held in dollars, although peso accounts paid more interest, and by July some fourteen billion dollars had gone into foreign banks, with another twenty-five billion in American real estate. On 12 August the government froze bank accounts and converted them into pesos. Some of that money had a face, if a faint one. In San Antonio an estate agent, Gail Gilliam, advertised condominiums in Mexican magazines and hired a Spanish-speaking representative. After the August devaluation and the nationalisation of the banks, she told a reporter, the market “just about died”, and her trade with Mexico fell by ninety per cent. On South Padre Island, another agent said, Mexicans had bought about two condominiums in five. She sent her letters south in plain white envelopes, because her clients believed their telephones were tapped. Buyers could not get pesos out of Mexico to pay what they owed, and in Park City, Utah, one project stood with plywood floors and some sheetrock. By the last day of August the president had decided, and he wrote in his memoirs that he would nationalise the banks, impose total exchange control and announce both the next morning. He did so on 1 September, from the tribune of San Lázaro, at his sixth and final report to Congress. He blamed bankers and the people who carried dollars out of the country, and put the sum that speculators, with the banks’ help, had drawn out of the economy at about fifty billion dollars, against a national product of 120 billion. He said that he was responsible for the helm and for none of the storm. He said that Mexico had been plundered and would not be plundered again, and, according to the accounts, he wept when he asked forgiveness of the poorest. The chamber interrupted him with applause forty times, a record for that occasion, and the applause was for a man who had just announced that his promise had failed. Outside the chamber the reception was colder. The banks stayed shut until the following Monday, and the head of the central bank resigned. Observers in the United States called the nationalisation a grandstand play that might well backfire, and a top official conceded that if it failed to help, at least they could say they had tried. The government was to assume about ten billion dollars of private foreign debt, on top of a public debt of fifty-seven billion. On the black market, on the day of the speech, a dollar fetched almost two hundred pesos. Twelve days later the magazine Proceso printed a story about a hill. It stood in Bosque de las Lomas, on the western edge of Mexico City, and could be seen from the highway to Toluca. The ground ran to some twelve hectares, and on it were going up a cluster of mansions with medieval roofs and colonial windows, a great many chimneys, a lookout, a library-house of three spiralling floors. The president’s family was to live there. The neighbours in Cuajimalpa complained, and the magazine reported that the money had come, allegedly, from the public purse. People began to call the place the Colina del Perro, the Dog’s Hill, after the remark of August 1981. Who said it first I could not establish, and perhaps nobody could, since a nickname of that quality tends to arrive in many mouths at once. For a year the president had said that he was defending the peso. Now Mexicans were being shown where the guarding had been done from. Documentaries later spoke of a library of more than thirty thousand volumes and a dome that served as an observatory, and their experts called the whole affair an act of frivolity and megalomania. The main compound has since vanished, and a residential development stands on the site, with a tower of thirty-four storeys. The last piece of it, the library-house on a lot of 5,200 square metres, was sold in 2013 and had been pulled down by 2018. The remark of 1981 has outlasted every building that the nickname was given to. * * * --- © 2026 Elveander Welfendorff. Quotation with attribution and a link to the source is welcome.