T
he
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” (
Brazzil
, 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
, 6/8/02.)
“The Best Thinking Available”
B
oth
in news stories and editorials, a 19th 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 prosperity.”
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 advised (10/20/02).
The Washington Connection
T
he
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 activity).
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 China.
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
I
n
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 1990s,
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
T
he
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.
