Looking for the Da Silva
Lining in Brazil
by Roger Bybee
Z magazine, February 2003
The recent election of Workers Party leader
Luiz Inacio "Lula" da Silva as president of Brazil,
championing the needs of the desperate and despised, provokes
cries from the U.S. corporate media that he will "undo a
decade of sound reform."
Da Silva won an overwhelming 61 percent
victory promising to produce jobs, food, and health care in line
with a new model of development that rejects "neoliberal"
market fundamentalism. Brazil contains the world's fourth largest
gulf between rich and poor, according to World Bank statistics
(New York Times, 11/8/02), but the unmet needs of the impoverished
have received only token attention from past U.S.-backed Brazilian
regimes-or from U. S.-based media.
Shamefully, major U. S. media accounts
have mostly been framed by one question: To what extent will Lula
be willing to ignore the basic needs of Brazil's desperately poor
in order to satisfy Brazil's creditors at the International Monetary
Fund and major U.S. banks? The implicit consensus of both news
coverage and editorial comment in the major U.S. media is that
Lula's primary obligation is owed to international financial institutions
and investors, not the people who elected him.
Oddly, even people associated with international
finance are increasingly questioning this logic. Former World
Bank chief economist (and Nobel Prize winner) Joseph Stiglitz
observed, "democracy always brings better results than the
policies dictated by the IMF or by investors like George Soros"
(Brazil, 8/02). Soros seems to agree: "If international markets
take precedence over the democratic process, there is something
wrong with the system," he wrote in the Financial Times (8/13/02).
(Or as the global financier put it more sardonically, "In
modern global capitalism, only the Americans vote, not the Brazilians"-Folha
de Sao Paulo, 618102.)
"The Best Thinking Available"
Both in news stories and editorials, a
l9th century neoliberal version of capitalism has become an unchallenged
article of faith. Any departure from the required standard-maximum
appeasement of international corporations and investors at all
times-is regarded as a foolish and dangerous defiance of sound,
universal economic principles.
This neoliberal testament calls for privatization
of public services, elimination of subsidies for basic necessities
like food and water, deregulating the flow of capital and reorienting
the economy towards exports, with subsidies shifted to transnational
firms. The impacts of this strategy-such as below-subsistence
wages, environmental damage and shortages of domestic necessities-have
become largely forgotten concerns for most commercial media in
the U.S. (By contrast, Business Week, with a readership almost
exclusively of businesspeople, freely admits (11/6/00), "The
global economy is pretty much still in the robber-baron age"
and "there's no point denying that multinationals have contributed
to labor, environmental, and human-rights abuses. ")
In line with the neoliberal doctrine,
the typical news analysis treats the demands of Brazil's creditors
and their Bush administration allies as providing tough but ultimately
therapeutic medicine for debtor nations. It may cause agony now
to pay off international debt rather than funding programs that
provide food, clean water, healthcare, and education to tens of
millions. But diverting money from social programs for the foreseeable
future is the only possible choice for the long-term health of
Brazil's economy, media observers almost unanimously say.
"Painful and unpopular as they are,
the economic strategies pushed by the IMF reflect the best thinking
currently available, and over the long run they have been effective
in many countries," declared the Milwaukee Journal Sentinel
(10/20/02). "However much Silva's [sic] instincts and background
may rebel against the idea, conforming to these strategies may
represent Brazil's best hope for sustained economic growth and
Brazil's remarkable level of inequality
occasionally intrudes into the debate, as when a Washington Post
editorial (10/30/02) acknowledged that Brazil's richest 10 percent
controlled a staggering 47 percent of the national income, "compared
with 34 percent in India and 31 percent in the U.S." But
the Post quickly affixed the blame for this appalling concentration
of wealth on Brazil's public sector, absolving policies promoted
by the U.S. government or U.S.-based corporations. "This
injustice has little do with the pro-trade, pro-market policies
that leftists traditionally blame," the editorial informed
readers. "Rather, Brazil's inequality reflects the government's
failure to secure a fair distribution of the things needed to
earn a living-chiefly education but also land." Of course,
the policies prescribed by the Post would make it impossible for
Lula to devote adequate funding to precisely such aims as quality
education or land reform.
Above all, Lula must avoid giving any
offense to transnational banks and corporations. He certainly
needs to forget his past as a "union boss." The "boss,"
with its connotations of corrupt, dictatorial rule, hardly fits
Lula as a central player in freeing his nation from brutal military
domination, yet CNN. com, MSNBC, BBC, and many other outlets freely
applied that label. Above all, Lula must "escape the vicious
cycle of anti-business rhetoric, capital flight, factory closings
and rising poverty rates that has doomed other Latin American
leftist leaders," as Miami Herald columnist Andres Oppenheimer
The Washington Connection
The media vision of a vicious cycle self-inflicted
by Latin Americans' "anti-business rhetoric," leaves
out one vital element in the cycle: the role of the U.S. government.
In Brazil, the pivotal role of Washington virtually disappears
in media discussions of the 1964 coup against democratically chosen
President Joao Goulart, which put Brazil on a 21-year path of
brutal military dictatorship. While the heavy hand of U.S. officials
is well-documented (see, for example, A.J. Langguth, Hidden Terrors),
recent major media uniformly fail to explain that the overthrow
of democracy was at least U. S.-supported if not conducted with
extensive assistance from Washington (e.g., New York Times editorial,
10/30/02; Washington Post editorial, 10/30/02; BBC, 10/4/02; AP,
10/26/02; CNN.com, 10/26/02).
To summarize some of the evidence press
accounts leave out: U.S. officials had foreknowledge of the coup;
the U.S. bankrolled Goulart's opponents; the U.S. Sixth Fleet
moved into position offshore as a signal of support; and, finally,
military leaders trained at the U. S. School of Americas conducted
the coup. Brazil then became a favored recipient of U.S. aid and
more than two decades of savage military rule ensued (Lula was
among the thousands imprisoned for illegal labor or leftist political
As for present-day Brazil, the potential
for a fundamentally different model of development, oriented toward
the needs of the impoverished, remains unthinkable for U. S. media.
The Chicago Tribune (10/8/02), Christian Science Monitor ( 10/29/02),
and Washington Post all called for massive doses of free trade
for Brazil through the proposed Free Trade Agreement of the Americas.
The Post has promoted Mexico in the post-North
American Free Trade Agreement era (since 1994) as a splendid model
to emulate, pronouncing, "Mexico's success is largely due
to its free trade agreement with the U.S. and Canada" and
is thus "growing steadily richer"(editorial 10/5/02).
While Mexico now has many more billionaires than before the signing
of NAFTA, other aspects of "success" are hard to find.
Mexican workers' wages have fallen sharply, thousands of domestic
firms have gone out of business, Mexican environmental protections
have been overturned, and it is now leaking jobs to even-lower-wage
However, the actual outcomes of the Mexican
experiment with NAFTA have left no imprint on the minds of major
U.S. editorial writers, who only heap praise on "free trade"
practices in Mexico and Brazil, and unwaveringly call for its
expansion to the entire hemisphere through the FTAA. The only
worry, as the Washington Post warned (10/30/02): "There is
a danger that a decade of sound reform could be undone by the
kind of anti-trade populism that Mr. Da Silva and his Workers
Party have traditionally expounded." Instead, the Post and
other major media sternly warn Lula to stick to the neoliberal
path of "sound reform. "
Much Pain, No Gain
In Brazil, following "the best thinking
currently available" has not exactly produced "sound
reform." Cardoso scrupulously worshipped the "free-market"
formulas mandated by the IMF and its main controllers at the U.S.
Treasury Department: high interest rates to fight inflation, privatization
of public resources and financial "liberalization."
The disastrous consequences: Income growth for ordinary citizens
has averaged just 1.3 percent since 1994, while the external debt
has ballooned to some $264 billion. This debt soared from 29 percent
of GDP in 1994 to 62 percent currently, so debt repayment threatens
to choke off Brazil's economic air supply and force a renegotiation
of its debt.
Mark Weisbrot of the Center for Economic
and Political Research, who closely studies Brazil, observes an
almost-unvarying three-part formula in major media coverage of
Lula's election. "First, the basic framework of the major
media is that Lula must follow the prescriptions of the past,
or he's in trouble. Yet these are clearly failed policies that
yielded little growth and heavy debt.
"Second, Lula is held responsible
for the Brazilian currency tanking even before he got elected.
Third, the markets unquestionably know best what's good for a
nation like Brazil."
The conventional media frame is clearly
evident in Newsweek's article (11/11/02) on Lula and the new crop
of populists in Latin America. Lula and "instant-gratification
populists" across the region are promoting a "feel-good
populist platform of more jobs, higher wages, bigger pensions
and better healthcare," Newsweek reported. The article includes
a warning about what Latin America will not be allowed to do:
"The leaders of the populist backlash blame just about all
their countries' woes on the market reforms of recent years. But
they can't turn back now. No one has the money to bring back the
days when bloated central governments controlled prices and protected
local companies in a cocoon of tariffs. "
This formulation makes it seem like what
Newsweek calls "the laws of economics" have dictated
Brazil's choices, almost like the law of gravity. In fact, the
policies that Brazil and other Latin American countries have adopted
(willingly or not) seem to have had a large impact on these nations'
economic environment. Weisbrot's CEPR documents that Latin Americans'
per-capita Gross Domestic Product grew 75 percent in the two decades
from 1960 to 1980 while generally following policies aimed at
nurturing local industries and boosting domestic wages and buying
power. But then growth plummeted to 7 percent during the 1980s
and l990s, as governments followed the dictates of foreign bankers
and neoliberal economists (American Prospect, 1/1/02).
Still, Newsweek and other U.S. media observers
fervently cling to the neoliberal faith; "Brazil's government
simply doesn't have the money" to decisively take another
direction. The idea of not paying back all the money that was
largely borrowed and spent by dictatorships is denounced by Newsweek
as "leftist follies," and prompted then-Treasury Secretary
Paul O'Neill to demand reassurances from Lula "that he's
not a crazy person.
Ignoring Washington's Role
The assumption in the media is that the
basic needs of Brazilians cannot take priority over paying back
high-interest loans. While the 10 largest banks operating in Brazil-including
Citibank and BankBoston-earned 22 percent there compared with
12 percent globally (NACLA, 10/30/02), they evidently cannot be
expected to be content with lower payments and lower profits.
Continued suffering must be endured by Brazilians denied food
subsidies, schools, healthcare, and clean water. The risk of the
high-profit loans to Brazil will continue to be assumed by the
U.S. taxpayer, who largely financed the $30 billion IMF bailout
announced this summer.
Even a largely sympathetic editorial (Baltimore
Sun, 11/1/02) portrays Lula as having no choice but to cater to
financiers. "Mr. da Silva has to recognize the importance
of boosting investor confidence-he can't afford not to.... He
has to reassure the financial world that he has indeed changed
(from the leftist firebrand of the 1970s) as has Brazil and will
work to promote stability at home and in the region. "
Da Silva certainly faces daunting challenges
in seeking to uplift impoverished Brazilians while holding off
the pressures of the international banks. But major U.S. media
compound the barriers faced by Lula and Brazil when they contribute
so little insight into the extent and sources of Brazil's poverty,
the failure of neoliberal policies in Brazil and elsewhere, and
the shameful role of the U.S. government in crushing democracy.
With this framing of Lula's election by
major U.S. media outlets, how can American citizens be anything
but mystified by Brazilians' overwhelming support for a new, people-focused
alternative to market fundamentalism?
Roger Bybee is a Milwaukee-based writer
and activist with the Wisconsin Fair Trade Campaign. He wishes
to thank Noam Chomsky, Jim Naureckas, Mark Weisbrot, and Steve
Watrous for helpful comments.