Economic crisis, political problems, institutional conflict or just things as usual in Brazil

There are rumors that the president of Brazil’s Supreme Court is going to resign.  Joaquim Barbosa was a key in the condemnation of the mensaleiros and now the question of sure punishment remains in the air.  Recently, the government had its troops in Congress propose a constitutional amendment that would subject Supreme Court decisions to congressional review.  Obviously, the reference is the guilty verdicts of major figures in the recent mensalao scandal.  The amendment is vindictive and flies in the face of the separation and independence of the three spheres of power but political casuistry and creativity is certainly alive and well in Brazil.

At the same time, Brazil’s economy continues to struggle.  Imports (mainly cheap consumer goods from China) have surged and exports are lagging.  At the same time, manufacturing continues to decline.  Typically, manufacturers have been able to rely on Mercosur (read Argentina) as a pretty good outlet but the crisis of the Kirchner government and gaucho balance of payments has negatively affected Brazilian exports to the south. 

So we have an ongoing institutional issue with conflict between the judiciary and legislature.  President Dilma popularity has not yet been tarnished by the slow growth because employment remains high.  The question is whether the economy can find better footing before unemployment grows. 

What appears to some as the “end of the world” and the bankruptcy of the PT labor model may only be an indicator of the slow process of institution building in Brazil.  The so called new middle class with an income of less than 2000 dollars a month (with a purchasing power parity of more like 1200 or 1300) is too busy trying to pay its bills and enjoy the new opportunities to be too concerned about politics.  However, at some point they will care if their economic gains are threatened and as they see too much favoritism in the system that does not take them into account.  At that point and it will probably still take time, they will start to seek better institutional accountability that is unless they fall under the sway of a new Vargas or Peron like figure.  Could that be Lula in 2014?  I don’t think so but ….if Dilma gets in big economic trouble and Lula feels the call to be the “savior”, it could happen.

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