Improving inch by painful inch
Dilma Rousseff is running around telling the entire world that she is a victim of a “coup d’état” organized by scoundrels, cads, and kleptocrats. With the exception of the “coup d’état” part, she is correct.
Her claim that she has not been accused of taking bribes, having undeclared offshore banking accounts, laundering money, engaging in tax evasion, and other felonies has so far stood the test of time and the Lava-Jato investigation.
Equally, her claim that those who judged her have been accused of all that kind of stuff is quite correct.
But that should come as no surprise to those who have read or regularly read this blog. I long ago stated that Brazil was in the midst of a War of the Kleptocrats and that the eventual victor would also be a kleptocrat.
Dilma, however, is far from the totally honest broker she claims to be. She ran for re-election in one of the slimiest campaigns I have yet to see. She blatantly lied to the voting public. She “cooked the books” to make the fiscal accounts look better than they actually were.
Now, lying in an election campaign is pretty much standard operating procedure in many places and is not an impeachable offense.
“Cooking the books” might be an impeachable offense under certain terms and conditions and that is currently being analyzed by the government accounting court (TCU) and may yet result in the annulment of the 2014 election results.
We can approach the issue of her impeachment from another angle. The issue to be decided in the Senate is whether she is guilty of an impeachable offense. The charges against her are largely centered on the issue of “cooking the books”. It’s up to the Senate to determine if the charges are sufficient to remove her from office. Full stop!
Calling that a “coup d’état” is an example of nothing more than what I have previously described as “behind-the-looking-glass” logic.
Let’s step from behind the looking glass for a moment and into the real world. What are the options out here? The Constitution specifies that if the President is impeached the Vice-President assumes office. Again, full stop. The argument that the change is no more than six of one, half a dozen of the other or “flour from the same sack” as Brazilians like to say is not correct.
There is a difference. The “incoming kleptocrats” have proven to be better at governing than the possibly out-going ‘neo’-kleptocrats. First of all, the incoming kleptocrats do not espouse one-party rule in perpetuity. Second, they accept the workings (when necessary) of what is known as the “liberal” economic model. History has shown that when the economy gets into trouble as a result of the confiscation of rents by the kleptocrats, they will call a kind of “truce”, correct course, and once that is done go back to their old familiar ways.
This method of governing the country was largely the reason for Brazil’s long history of “two-steps-forward-one-step-backward” pattern of growth. While some refer to the pattern as “boom-and-bust” that exaggerates the situation. Each period of growth resulted in incremental permanent gains as the country lurched from one crisis to another. Brazil did not “bust” back to the status-quo ante, but rather to an incremental advance on the “game board”.
I have argued in the past that the 1964 military takeover was not caused simply by ideology and the fear of Communism. Conversations over the years with many of those associated with the takeover suggested that the Army had become “fed up” with the slow progress of previous pattern of growth and modernization of the Brazilian economy.
During the 25 years of military government, some of the kleptocrats went to ground and a number of them joined the military “project” as “court-sycophants” (Many are still around!)
The military project of development was managed by a “command-and-control” management model that was not consistent with a “liberal” economic model over the long-term and eventually gave way in the late 60s to a much harsher dictatorship. While the economy boomed, the political environment was changing and public dissatisfaction with the military grew.
In terms of the change of Brazil’s economic “structure” the military years can be considered to have been successful. However, the political side of the governance equation had not been.
When the military stepped down in 1985, it had rescinded the two-party requirement that it had initially imposed and the “traditional” kleptocrats returned to power, eventually creating some 36 political parties.
It remained only for the returning kleptocrats to figure out how to confiscate the rents of a more modern economy.
It was a steep learning curve and the experimentation eventually resulted in hyperinflation, numerous failed attempts at economic stabilization, and eventually the impeachment of the first popularly elected president after 30 years.
As I wrote in a previous post, it was not until the Real Plan that the economy was placed on an even keel. For the first time, Brazil’s working class benefitted enormously with the defeat of inflation. It suddenly found itself with more real income and purchasing power.
The Plan had generated what looked like an unstoppable forward inertia and the prospect of sustainable material progress of a previously politically and economically disenfranchised segment of the population.
For the first time, Brazil's working class was able to elect one of its own to high political office and Luiz Inácio Lula da Silva, a much-admired former labor leader who has risen from the depths of poverty, through a job as a factory worker, to politics, was elected President.
For reasons known only to Lula, he ceased to continue the economic reforms of the Real Plan (In spite of a promise to continue them!) and instead created a “new” class of kleptocrats.
The rest you know. You can find a more detailed description of this period in a previous blog post (“It’s all HIS fault” posted on 17 April).
I have alluded in the past to the game of baseball and “batting averages” – i.e. the number of hits by a batter as a percentage of the number of times at bat – and I do so again to emphasize the reasoning behind the question of Dilma’s impeachment.
The best all-time batting average in baseball was achieved by Ty Cobb. His average was .366 or, in other words, he would get a hit some 37 times out of 100 times at bat. That means he failed to get a hit 63 times out of every hundred times at bat.
The alternative expression does not suggest that Cobb was such a great player, no? No matter, he was marginally better than any other player. Cobb was also not such an attractive person. He had a foul temper and was a dyed-in-the-wool racist. But, if your game was baseball, Ty Cobb was the guy you wanted on your team!
A similar line of reasoning can be applied to the question of Dilma’s impeachment. If the “game” is managing the economy of Brazil, the batting average of the traditional kleptocrats is much better than Dilma’s. While they may have failed on numerous occasions to get a “hit”, they would be a “better choice” until someone else comes along.
A recent poll showed that 61% of the population supported the impeachment of Dilma Rousseff. Alternatively, 58% supported the impeachment of Vice-President Michel Temer. Temer is 3 percentage points “less unpopular” than Dilma.
Dilma’s professed “honesty” is admirable, but her ideology seems to get in the way of resolving Brazil’s economic crisis. Brazilians are in the rather uncomfortable position of having to choose the “less bad” alternative solution to the economic crisis.
Ten million Brazilians are now jobless. To avoid the uncertainties of inflation, homemakers have reverted to the past practice of rushing out to purchase their groceries as soon as they have funds available. Underemployment reigns in the economy. University students abandon their studies to help support their families. Tax revenues to the government continue to decline adding to deficit pressures. Simply slowing or halting this “negative dynamic” might provide the relief necessary to initiate a moderate recovery program.
It will be a long haul and progress will be measured in inches rather than yards. But as Economist Herb Stein observed, “Things that cannot go on forever, don’t!”
If impeachment of Dilma will shorten the suffering and is carried out appropriately, Brazil will be strengthened. If she is not found guilty of impeachable offenses, so be it. The suffering is likely to increase but Brazil’s institutions will be strengthened and better able to ensure an end to the suffering when she finishes her term in office.
In short, the issue is not simply Dilma. It’s the resurrection of a new and reformed Brazil and away from kleptocracy. It’s sufficient to unmask and sanction corruption when it appears. No one expects it to disappear. But to continue with “business as usual” will simply ensure that Brazil will get what it always got!
It at least appears that Brazilians want things to be different! Full stop.
