Tag Archives: Dilma Rousseff

Have sympathy for the political chaos in Brazil. It could happen in America.

Summary: Street protests and loss of support in parliament have brought down Brazil’s government through quasi-legal impeachment, without the bother of elections. Could this happen in America? The preconditions — the tinder — already exist here, awaiting only a spark. This analysis by Prof Perry Anderson of shows how quickly a seemingly strong and powerful political regime can unravel; the similarities to America are obvious. The results will be ugly for Brazil; as they will they be for us should US elites follow Brazil’s example.

View of the renewed Christ the Redeemer

AFP PHOTO/VANDERLEI ALMEIDA.

Excerpt from “Crisis in Brazil” by Perry Anderson

London Review of Books, 21 April 2016
Posted with his generous permission

Half-hidden, the roots of this debacle lay in the soil of the Workers’ Party’s {PT} model of growth itself. From the outset, its success relied on two kinds of nutrient: a super-cycle of commodity prices, and a domestic consumption boom. … Compounding the end of the overseas bonanza, domestic consumption hit the buffers.

Throughout its rule, the core strategy of the PT had been to expand home demand by increasing popular purchasing power. That was achieved not only by raising the minimum wage and making cash transfers to the poor – the Bolsa Família – but by a massive injection of consumer credit. Over the decade from 2005 to 2015, total debt owed by the private sector increased from 43 to 93% of GDP, with consumer loans running at double the level of neighbouring countries. By the time Dilma Rousseff was re-elected {as president} in late 2014, interest payments on household credit were absorbing more than a fifth of average disposable income. Along with the exhaustion of the commodity boom, the consumer spree was no longer sustainable. The two motors of growth had stalled.

In 2011 the aim of Mantega’s new economic matrix had been to kick-start the economy by lifting investment. But his means of doing so had diminished. …Offering preferential rates to leading companies that added up to a much larger subsidy than outlays to poor families, the ‘Bolsa Empresarial’ cost the treasury about double the Bolsa Família. Favourable to large commodity and construction firms, this direct expansion of public banking was anathema to an urban middle class in an increasingly violent anti-PT mood, with the local media – amplified by the business press in London and New York – vituperating the dangers of statism.

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