Why do Mexican Americans refer to Mexicans as "Spanish"? Has "Mexican" become a bad word?

Here in California I have noticed that most Mexican Americans refer to other Mexicans as "Spanish". Why? Just speaking Spanish doesn’t make one Spanish. Being from Spain makes one Spanish. I speak English, but I’m not from England so I’m not English. I almost get the feeling that Mexicans here in California regard the word Mexican as an insult. Why? Being from Mexico makes one Mexican just as surely as being from Italy makes one Italian.

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