November 1, 2018


How Bolsonaro Happens: Seven points about the Brazilian Presidential Election (Andre Kenji de Sousa, 10/26/18, Ordinary Times)

#3) When it comes to the economy, Bolsonaro is much more similar to the 5 Star Movement/Lega Nord coalition in Italy than with Trump.

There are several comparisons between Trump and Bolsonaro, and lots of political observers saying that Trump would enact a "Brazil first" economic policy.

A big part of the problem here is that Brazil is already a pretty closed economy.  Brazil basically uses tariffs and taxes to force manufacturers to produce goods locally. If you buy a smartphone in Brazil, it's a smartphone assembled in Brazil to avoid import duties of 60%. Basically, when Trump says that if Apple wants to avoid taxes, then they should assemble their iPhones in the United States, he's saying that the United States should be more like... Brazil.

Brazil already has lots of tariffs, and they are not that popular because... surprise, they make everything more expensive. (It's not a coincidence that Foxconn is building a plant in Wisconsin after building two plants in Brazil.)

In some sense, Bolsonaro resembles the Lega Nord / 5 Star Movement in Italy.  Brazil, like Italy, needs to do unpopular reforms: the country spends too much on pensions -- something close to 11% of the GDP -- and spends too much on government workers (too many people doing administrative tasks, and too many people being too expensive for those administrative tasks). Like with the coalition in Italy, Bolsonaro's coalition wants things that do not necessarily add up.

Bolsonaro's economic guru is Paulo Guedes, a Chicago Boy who was always popular among free market libertarians in Brazil. On the other hand, another of his lieutenants, Major Olimpio, now a senator-elect, almost ran as the running mate for the gubernatorial candidate of Lula and Dilma in São Paulo. One of Olimpio's issues with Lula and Dilma is that he thought that both were too conservative on pensions.

The truck drivers' strike that happened in May is also a sign of problems to come: oil prices are increasing, and that means inevitable increases on diesel prices, unless fuel subsidies are increased. The same increases that helped to bring about the truck drivers' strike.

This fragile alliance between people that like the status quo and those who want free markets might be a problematic marriage.

#4) There is not so much of a pro-Bolsonaro vote as that there is a Anti-PT vote.

The PT, the Workers' Party, was founded in 1981 by a coalition of union leaders and intellectuals. Lula, one of these union leaders (who would become a President), became a kind of legend as the leader of a sequence of strikes among steelworkers (particularly auto workers) in 1978-80.

Lula's rhetorical style is a mixture of Jesse Jackson in the 80's and Bill Clinton. Lula, who never finished the equivalent of Middle School, does not care for speaking with perfect grammar nor for using fancy words. Lula gives speeches like a working-class dude talks in the bar. One of the reasons why Lula gets so many votes in rural areas in the Northeast (one of the poorest regions in Brazil) is a local version of the bubba vote: there is a cultural identification between Lula and low-income people in the Northeast.

That also meant that Lula was an easy target. People in the middle classes outside the Northeast always saw Lula as an uneducated ignoramus.

The fact that the PT was not only the party of labor unions but also the party of academics created a perfect mix for cultural wars.

The dynamics of Brazilian elections since the 80s have been a push-pull between people voting for the PT on one side, and people opposing the PT on the other side. That allowed center-right parties to win elections with completely mediocre candidates, just because they were not the PT.

Polls show large rejection for Bolsonaro, but they also show even larger rejection for the PT. It's the most common dynamic in Brazilian politics.

The idea of a candidate from a pretty small party with little political experience winning the Presidency because of the anti-PT vote is not exactly new. In 1989, Fernando Collor (then a first-term governor of Alagoas, a small state in the Northeast) was elected President.

The fact that PT has held four consecutive mandates doesn't help either. Additionally, Dilma Rousseff was a clumsy politician, who created lots of unnecessary problems in the economy, and the country faced a huge recession under her watch.

#5) Without Dilma's Impeachment and Lula's arrest, it would be very difficult to imagine Bolsonaro being elected.

Ironically, without two controversial political events, Brazil would probably be having an election with two normal, boring politicians.

In 2014, Dilma Rousseff was reelected by a relatively small margin. She was elected in a coalition with PMDB, a center party that was then the largest party in Brazil. It was mostly a marriage of convenience, where Dilma would get the votes from the PMDB in Congress, and PMDB would name people for the ministries.

By that agreement, the PMDB named the vice-president, Michel Temer.

When Dilma's approval rating soured after a strong recession, Temer and his allies began to articulate the idea of Dilma's impeachment. The idea, which was supported by a lot of people on Wall Street, was that Temer could pass the "reforms" that Lula and Dilma could not enact.

Sure, you put in as President a guy that was not elected to be President, who will then enact a program of reforms that were rejected on the previous election. What could go wrong? To make things worse, Temer was not really used to dealing directly with voters. He was basically a parliamentary leader in the Lower House of Congress. He had other politicians as his main constituents, and he was also was married to a woman that was 43 years his junior. Plus his party was far from clean when it came to accusations of graft and corruption.

In the end, surprise, Temer was incredibly unpopular.  So unpopular that he became toxic to the parties that supported Dilma's impeachment -- basically all the major parties on the center-right.

That situation created a vacuum that favored Bolsonaro. It was not that different from what happened in the 90s in Italy, when Operation Clean Hands devastated all the major parties and created the opening for Berlusconi, previously an outsider to Italian politics.

Brazil has a golden opportunity to make the reforms it requires democratically.

The Dictator (John Lee Anderson, Apr. 11th, 1998, The New Yorker)

Augusto Pinochet, all quibbling about definitions aside, is that rarest of creatures, a successful former dictator. According to Chilean opinion polls, roughly a quarter of his fellow-citizens revere him. He has few modern parallels, except perhaps Francisco Franco. (Pinochet was the only foreign head of state to attend Franco's funeral, in 1975. Ferdinand Marcos sent his wife, Imelda.) Like Franco, Pinochet is an ultra-conservative Catholic nationalist, a military officer with an unremarkable personality who suddenly rose to prominence. Both men imposed their power through violence, and used security forces to maintain it. And, over time, both transformed their societies and built strong modern economies. Pinochet knows that he is frequently compared to Franco, and he is cagey about the analogy. "There is an appropriate leader for each country," he said guardedly. "Franco was necessary for Spain." [...]

Pinochet climbed up through the officers' ranks, and in 1971 he was made commander general of the Army's Santiago garrison. He was by then the author of several books on military geography and on geopolitics. In August, 1973, Salvador Allende, who had become President three years earlier, appointed him Commander-in-Chief of the Chilean Army. Mrs. Pinochet says she couldn't believe it when her husband told her the news; she thought he was joking. Then, less than three weeks later, the Army staged a coup and Allende killed himself during the attack on La Moneda, the Presidential palace. Her husband would rule Chile, and she would become the First Lady. "My husband had taught me that in a normal career he'd get to be colonel. Anything above would be good fortune and a bit of luck. He became a general because of politics. They call me messianic for saying so, but I believe it was divine Providence that he got to be President."

He stayed in power for seventeen years. Upward of three thousand people were killed or "disappeared" while he was in office, and tens of thousands more were imprisoned or fled into exile. The new constitution, which was passed in 1980, gave Pinochet an eight-year term as President, but he was so confident of his popularity that in 1988 he held a referendum proposing that his tenure be extended for another eight years. To his surprise he lost, and stepped down from office two years later. A civilian, democratic government was reëstablished, and a Christian Democrat was elected President. Next year is an election year, and the man widely tipped as the winner, Ricardo Lagos, is a former Allende aide and a Socialist.

The country that the new democratic leaders inherited is prosperous, forward-looking. Santiago, the capital city--where one in every three Chileans now live--sprawls in a fertile bowl of land beneath the Andean cordillera_,_ its air amber-colored with smog, the surrounding snowcapped mountains no longer visible most days. Blue- and black-tinted glass-and-marble office blocks are displacing the villas that used to make up the city's poshest neighborhoods; vineyards are being plowed up to make way for shopping malls and American-style subdivisions. At the intersections of the traffic-clogged roads, huge billboards advertise credit cards, cell phones, and laptop computers. Santiago is a Latin-American beachhead of the thrusting, free-market ethos that transforms urban areas everywhere into mosaics of industrial parks, freeways, office complexes, and suburban sprawl. In this new Chile, the modern, fortresslike American Embassy enjoys a prominent position in a walled compound situated between the Mapocho River--an odoriferous gray flow of water that bisects Santiago--and a shining outcrop of office blocks and hotels known locally as Sanhattan.

"All of this is new. All of it! What was here before . . . was chalets, bungalows. It was beautiful, but it was . . . something different," General Julio Canessa says. "And all of this was done by the horrible Pinochet." Canessa is being theatrically sarcastic. He believes that Pinochet suffers from the same unfair criticism that taints Franco's place in history. "If it hadn't been for Franco," Canessa says, "Spain would still be part of Africa."

Chile's vaunted economic miracle was brought about by the so-called Chicago Boys, a group of Chilean disciples of the American economist Milton Friedman, who were given free reign to put their theories into practice in the mid-seventies. They encouraged generous incentives for foreign investors and the privatization of businesses that the Marxist Allende had nationalized. This resulted in an average annual economic growth rate of seven per cent for the past fourteen years, a rate three times the over-all Latin-American average. A recent United Nations study of life expectancy, salaries, access to health services, and educational standards rated Chile higher than any other Latin-American country.

This performance brought Augusto Pinochet many admirers among conservatives, including Margaret Thatcher, who sent an aide to Chile to spend six months studying Pinochet's economic reforms before she embarked on her own in Britain. [...]

The chaotic, three-year attempt by Salvador Allende to take Chile on the "road to socialism" was opposed by a large portion of the Chilean population. Allende was elected with only a third of the vote, but after he took office he moved quickly, nationalizing the copper mines and other industries, conducting large-scale land reform, and increasing government spending on social-welfare programs. He alienated the armed forces, the private sector, and traditional political parties, including the Christian Democrats. As some members of his Popular Unity coalition government pushed for more radical changes, right-wing militants responded with bombings and killings, and leftists prepared for a civil war. When the coup finally came, not many Chileans were surprised, and many middle-class citizens openly applauded it, although they could not have known that Chile would soon become a proving ground for the grisly anti-Communist dirty wars that were waged in Latin America during the seventies and eighties. If Radovan Karadzic can be given authorship of "ethnic cleansing," then Augusto Pinochet can probably be credited with adding los desaparecidos--"the disappeared"--to the modern lexicon. [...]

Pinochet's most substantial claim to being a good leader is that he oversaw the Chilean economic miracle. With Congress closed down, and political parties and union activity outlawed, there were no obstacles to the implementation of Milton Friedman's program of a free-market "shock treatment." Drastic cuts were made in public spending to cure a hyperinflating economy. Banks were deregulated, interest rates freed, and import tariffs slashed; state-owned enterprises were sold off. In response, the junta obtained lenient refinancing for Chile's foreign debt and munificent loans from the World Bank, the Inter-American Development Bank, and other financial institutions.

Pinochet made sure that the armed forces received some of the benefits of the flourishing economy. By law, the military receives ten per cent of the profits from the copper industry, Chile's main export earner, which is still under state control. The nationalization of copper was one Allende measure that was popular across the political spectrum. Copper had been controlled by United States mining interests for decades and was a contentious national-sovereignty issue.

Aside from one major financial crisis in the early eighties, caused by bad investments and overspending, Chile's economy has grown rapidly. Along with the new foreign investments came credit cards and a robust stock market. Private, employment-linked schemes began to replace state-provided social-security and health-insurance programs; new private schools and private universities were built. Chile today has the largest middle class in Latin America, estimated at sixty per cent of its population; a ninety-five-per-cent literacy rate; low infant mortality; an average life expectancy of seventy-four years; and declining poverty levels.

Posted by at November 1, 2018 4:15 AM