While the courting of left-wing intellectuals proved successful, Mr. Echeverría stuck to his former violent methods against the more radical left. Small, armed guerrilla groups were routinely suppressed by torture and assassination. Between 1971 and 1978, more than 400 people “disappeared.”
Under President Echeverría, relations between government and business reached their lowest ebb in decades.
The number of state-owned corporations mushroomed from 86 to 740. Taxes on corporate profits and personal incomes rose sharply. So did public spending on education, housing and agriculture. Between 1970 and 1976, the federal deficit soared by 600 percent. Inflation leaped by more than 20 percent a year. The balance of payments deficit tripled.
Business confidence was shattered. Billions of dollars fled across the border into real estate, banks, stocks and bonds in the United States. Shortly before Mr. Echeverría finished his term, the peso was devalued by more than 50 percent, bringing to a close 22 years of stable currency.
Upon taking office in 1970, Mr. Echeverría had vowed to “reduce the gap between the powerful and the unprotected.” Six years later, inflation and recession had widened the gap.
As the economy soured and public opinion turned against him, Mr. Echeverría’s behavior grew erratic. Previous presidents accepted lame-duck status and a lower profile during their final months in office. But he seemed more combative than ever, setting off rumors that he intended to stage a military coup and keep himself in office despite having already picked José López Portillo as his successor.