Picking up on Loira’s 12th point, she states that Dilma was designated Lula’s successor because he could not run for a third term. Ok, that is the Constitution. We all remember that FHC was able to push through his Constitutional amendment allowing a second term. Be careful what you want because you might get it. Neither Serra nor Alkmin proved worthy candidates against Lula. This was in part due to neither having much popular appeal when compared to the working class hero or the “Man” as Obama described Lula. Dilma was hand picked and vetted by the party. Her guerrilla background convinced those unsure of her PT credentials that she actually came out of the PDT. Once anointed, the party pretty much fell in line. I imagine that Dirceu was chagrined. Dirceu was tainted in his over commitment to PT hegemony and his own personal goal of taking power, a project of course that led to the Mensalao and then to the Supreme Court condemnation of the Mensalao which came unexpectedly as the PT thought they had pretty much loaded the court in their favor.
Loira goes on to say in her 13th point that Dilma manages the government about as well as a lamp post. Actually, Dilma is still held in high regard as a technocrat and indeed that is her style. She has been successful in being able to personally distance herself from all of the corruption scandals and has supervised and managed the almost 40 Cabinet members who are not always competent or successful. Yes, Dilma pays the price and she does not have quite the same Teflon coating that Lula had. But the example that Loira uses is wrong. Foreign capital and foreign direct investment continue to flow into Brazil. In 2013, only China and the US received more than Brazil’s 65 billion in foreign investment. Further, the exchange rate even with unfavorable trade balances has still not exploded. After getting as high as 2.40, the real closed today at around 2.25. I once thought that it would be at 2.70 but it looks like it is not going to happen. Inflation too remains under 7 percent. Not great but more or less in control. So the money has not quite dried up, at least as of yet, and Brazil remains precariously investment grade.
In point 14, the blonde claims that the street protests pointed out the need for greater infrastructure investment and that this could not come about because of the PPP (Private-Public Partnerships) which are little more than subsidies to Brazil’s major builders. Money supposedly flowed from Brazil to Cuba, Africa and to national champions such as the meat industry (Friboi) and the renowned, and now infamous, Eike Batista. Petrobras has been milked and the electric utilities have been told to take a hike. Billions have been and continue to be poorly spent on the World Cup and on the Olympics. The result has been the downward spiral of these stocks both in Brazil and abroad as well as the negative publicity surrounding these mega-events. So is Loira correct? She is at least partially. But Brazil will pull off the world cup and it will be a big party. As for the Olympics, it is more prudent to wait and see.
Loira (items 15-17) talks about real estate, the popular My House, My Life (Minha Casa, Minha Vida) program with increased interest rates leading to increasing levels of late payments and possible foreclosures and thus she anticipates a general crisis with Brazil standing on the edge of the cliff with no place to go. She again accuses Dilma of being the dumb lamppost for failing to see that high interest rates, high inflation and capital flight will lead to investment paralysis and then collapse. While the real-estate market is slowing, this does not mean that deals are not being made. They are. Brazilians say that Sao Paulo cannot stop and the fact is that Brazil does not stop either. So much economic activity is outside the formal sector and there is so much wealth even with major capital outflows, that accumulation and concentration continue. In this scenario, bolsa familia (the popular welfare program) is not that significant except as a lightning rod for the right wing, which claim it leads to indolence.
Number 18 is the biggie as it brings into question Dilma’s reelection and this is very interesting. The newly or recently promoted class C, or middle class, might abandon her if they feel that their gains are at risk and their future of more consumption, more affordable health care, better housing, better infrastructure (public transportation). These are indeed major issues. The new middle class, the 40 some million that came out of poverty and lack of access, want to see the process continue. Dilma promises it will. Her opposition pretty much has to promise the same thing. Aecio talks about corruption and good management but is unconvincing. Campos and Marina come out of Dilma’s camp and really have no alternative project. So if Dilma, supported by Lula, rests simply on her laurels and does not screw up too radically, she will be reelected. Loira hates this and cries out against it. But what is the alternative? I see the next four years as difficult ones and that the defining election for Brazil is not this year but 2018.
At that point, hopefully Brazil will be out of the international limelight and can work as the Mineiros are wont to do – in silence – and make some decent progress starting with basic education, public health (read sanitation) and a possible collapse under its own weight of so much state intervention.
Loira is indeed intelligent as she claims. But her intelligence does not necessarily make the people stupid and I am confident that Brazil will improve by hook or crook or aos trancos e barrancos – as Darcy Ribeiro once said.