Brazil: Are liberal economics and liberal democracy at odds?

Politics is currently no less than a bagunça, a mess, in Brazil.

Former president Dilma Rousseff was removed from office on accusations of breaking budget rules. However, 60% of those who have voted to place her on trial for impeachment — Brazil’s Congress — are themselves accused or convicted of crime. Eduardo Cunha, who as — roughly — “Speaker of the House” prioritized and championed the impeachment petition, is today suspended for accepting millions of dollars in bribes and facing a final vote for expulsion from Congress. Even current acting president Michel Temer is barred from running for reelection in 2018 for violating campaign finance rules, among a flurry of other accusations.

To worsen matters, Temer appointed an all-white, all-male cabinet after succeeding the first female president in a country where more than half of the population identifies as black or mixed-race — the first single-sex ministry since the end of Brazil’s dictatorship in 1985. His science minister is a creationist, his agriculture minister, a soybean magnate, and his health minister lacks any sort of medical experience whatsoever. In a series of leaked recordings, several of Temer’s allies explain the goal of impeachment as to kill the Lava Jato investigation, which has so far convicted more than a hundred politicians and business executives. One month in, the cabinet itself has already lost three ministers to corruption charges.

So it should come as no surprise that Brazilians are furious. In the most recent national poll, only 11.3% of Brazilians surveyed gave Temer’s government a positive rating — hardly higher than Rousseff’s 7.7% at her worst last July. Most favor new elections, leading even Rousseff to promise a new vote should she return in the case impeachment fails.

Despite such clear public sentiments, global media has divided itself into two camps covering Brazil. At one end sit political analysts and democracy advocates, pointing to the apathy (if not support) from Temer’s government towards this mass of corruption. On the other is a good portion of the world’s financial community.

The “Country of the Future” has for decades been just that, a sea of economic and democratic potential, though no more. Economists and market analysts, returning time and time again, have pondered the best path forward for Brazil. Their conclusion, more often than not, has been that the expansion of free trade, privatization of (for now) highly protected public assets, and shrinking of the outsized public sector would unchain Latin America’s largest economy. Temer and his allies aim to deliver that combination exactly.

With that context in mind, anyone can see why business-minded institutions like Bloomberg or The Wall Street Journal would largely ignore the controversy surrounding Brazil’s change of power—who would have thought Brazil, even if at a much less-than-ideal moment, would be promoting free trade?

However, in doing so, they legitimize Temer and his government, offering the opportunity to claim support not only from the ideologically homogenous domestic media — nearly half of the population watches TV Globo daily — but also from outside the country. When Buenos Aires Herald writes, “investors have cheered acting President Michel Temer’s plans to cope with rising debt and contain public spending,” it encourages readers to look away from the experience of the Brazilian people, to see the country quantitatively instead of personally. That same Temer for whom “investors have cheered” now clings to Brazil’s mainstream media, which — defensive and desperate to maintain an already shaken viewer-base — has resorted even to making distracting, extravagant claims. For instance, the Globo-owned magazine Epoca accused the New York Times and its allies of having been payed off by the PT (Dilma’s party), a claim as much laughable as it is sickening.

And sadly, Brazil is not an exception, but rather a continuation of a pattern of exploitation several centuries long. Heedless of the consequences be they not economic, multinationals see an opportunity for expansion in the initial “opening-up” of weaker Brazilian assets and markets — where the real (the national currency) currently rates 3.38 to the dollar. They understand that Brazil, with its fragile middle class and extreme inequality, would never elect these policies, and likely nor will it in 2018. However, Temer and his congressional majority will most probably open a short window for economic annexation which may shift the power balance in Brazil the direction opposite social progress of the past decade.

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