November 3, 2010

"Restore Sanity" Beats "Keep Fear Alive"

Dilma's Victory in Brazil

By MARK WEISBROT

Like the rally led by Jon Stewart and Stephen Colbert of Comedy Central that brought hundreds of thousands of people into the streets of Washington DC on Saturday, Brazil’s election on Sunday was a contest of “Restore Sanity” versus “Keep Fear Alive.”

Dilma Rousseff of the governing Worker’s Party coasted to victory against the opposition candidate José Serra, with a comfortable margin of 56 – 44 percent. It was a bitter and ugly campaign marked by allegations of corruption and malfeasance on both sides, and ended with Serra’s wife calling Dilma a “baby-killer.”

Religious groups and leaders mobilized for the Serra campaign and accused Dilma of wanting to legalize abortion, ban religious symbols, being “anti-Christian,” and a “terrorist” for her resistance to the military dictatorship during the late 1960s. The whole campaign was all too reminiscent of Republican strategies in the United States, going back to the rise of the religious right in the 1980s, through the “Swift Boat” politics and Karl Rove’s “Weapons of Mass Distraction” of recent years.

Serra even had a right-wing foreign policy strategy that prompted one critic to label him “Serra Palin.” His campaign threatened to alienate Brazil from most of its neighbors by accusing the Bolivian government of being “complicit” in drug trafficking and Venezuela of “sheltering” the FARC (the main guerrilla group) in Colombia. He attacked Lula for his refusal – along with most of the rest of South America – to recognize the government of Honduras. The Honduran government was “elected” following a military coup last year, under conditions of censorship and human rights abuses such that only the United States and a handful of mostly right-wing allies recognized it as “free and fair.”

But in the end, sanity triumphed over fear, as voters proved to be more convinced by the substantial improvements in their well being during the Lula years.

It is perhaps not surprising that Serra, an economist, would try to find a way to avoid the most important economic issues that affect the lives of the majority of Brazilians. The economy has performed much better during the Lula years than during the eight years of Serra’s party (the Social Democratic Party of Brazil [PSDB] ): per capita income grew by 23 percent from 2002-2010, as opposed to just 3.5 percent for 1994-2002. Measured unemployment is now at a record low of 6.2 percent.

Perhaps even more importantly, the majority of Brazilians had some substantial gains: the minimum wage, adjusted for inflation, grew by about 65 percent during Lula’s presidency. This is more than three times the increase during the prior eight years (i.e. the presidency of Fernando Henrique Cardoso, of Serra’s party). This affects not only minimum-wage workers but tens of millions of others whose income is tied to the minimum wage.

In addition, the government has expanded the Bolsa Familia program, which provides small cash grants to poor families, with school attendance and health immunizations required. The program has been successful in reducing illiteracy, and now reaches about 13 million families. More than 19 million people have been brought across the poverty line since 2003. And a new program of subsidies to home ownership has benefited hundreds of thousands of families, with millions likely to take part as it expands.

Although this brand of Republican campaign strategy was effective for most of the last four decades in the United States, it hasn’t performed all that well as an export. The Brazilian electorate tired quickly of the mud-slinging, and swing voters wanted to know what Serra would do for them that would be better than what the Workers’ Party had done. When he couldn’t tell them, he lost their votes.

On the down side, the mudslinging and “Republican strategy” prevented the campaign from addressing some of the vital issues of Brazil’s future. Brazil’s financial elite, which dominates the central bank, has an influence on economic policy that is at least as bad – and as powerful – as that of Wall Street in the United States. This is one reason why Brazil, even under Lula, has had for many years the highest or near-highest real interest rates in the world. Brazil’s growth performance has still not been on a par with the other BRIC countries (Russia, India, China), and the country will have to move away from some of the neoliberal policies of previous governments in order to achieve its potential.

Capital formation during the Lula years was not much different from during the Cardoso years, and was relatively low compared to many developing countries. Public investment was even lower, although it has recently begun to accelerate. The country will need a development strategy, and one that establishes new patterns of investment and consumption that advance the interests of the majority of Brazilians – some 50 million of whom remain in poverty.

The election has enormous implications for the Western Hemisphere, where the Obama State Department has continued with barely a stutter the Bush administration’s strategy of “rollback” against the unprecedented independence that the left governments of South America have won over the last decade. A defeat of the Workers’ Party would have been a big victory for them.

It also has implications for the rest of the world. In May, Brazil and Turkey broke new ground in the world of international diplomacy, by negotiating a nuclear fuel swap arrangement for Iran, in an attempt to resolve the standoff over Iran’s nuclear program. The State Department was probably more upset about this than anything that Brazil had done in the region, including Lula’s strong and consistent support for the Chavéz government in Venezuela. Serra had also attacked the Iran deal during his campaign.

Outside of Washington, the results of this election will be greeted as good news.

Mark Weisbrot is an economist and co-director of the Center for Economic and Policy Research. He is co-author, with Dean Baker, of Social Security: the Phony Crisis.

This article was originally published by The Guardian.

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