[Marxism] Irrational Exuberance
lnp3 at panix.com
Thu Jul 31 08:24:10 MDT 2008
Wall Street Journal, April 14, 1972
Brazil’s Economy Goes from Mess to Miracle, Grows Over 11% in Year
By Everett G. Martin
Rio de Janeiro—“In 10 years, Brazil will be one of the five great powers
of the world.”
The Brazilian banker’s prediction may sound pretty exuberant. But
businessmen all over this massive country exude such confidence these
days--and not without reason. Brazil, once a monumental economic mess,
now is staging an economic miracle. Indeed, some economists think the
country may have a thing or two to teach the United States, especially
about stimulating growth while sort of controlling inflation.
In the past four years, Brazil has sustained a steady real growth,
excluding inflationary distortions, that averaged a staggering 9.8% a
year. Last year, the rate reached 11.3%--one of the highest in the
world. (In contrast, the U.S. growth rate last year was 2.6%. Due to a
slowdown, even the normally high-flying Japanese economy grew only about
4.5% last year; it is expected to expand about 8.5% this year.) Partly
through vigorous use of tax incentives and other measures, this nation
of 95 million may achieve growth rates averaging 8% or 9% for years to
come, both Brazilian and foreign economists predict.
Today, bustling Brazilian factories export watches to Switzerland,
precision instruments to West Germany, shoes to Italy and computer parts
to the U.S. The nation’s auto plants now use all Brazilian-made parts
and produce 500,000 cars a year--double the level of five years ago.
Ford Motor Co. is building a Brazilian plant that is expected to export
200,000 engines a year for the company’s American-made Pinto model.
Soon, then, Americans will be driving cars with Brazilian engines.
Sydney Morning Herald (Australia), November 21, 1988
Brazil Declines into Grim Despair
ON the rare occasions that Brazil's President, Mr Jose Sarney, appears
in public these days, it is usually at a military function, and he is
normally flanked by the Ministers of the Army, Navy and Air Force. Mr
Sarney was a longtime ally of the military when, in 1985, he became the
country's first civilian ruler in 21 years. But now he has more
immediate reasons to keep close company with his generals. His
popularity has collapsed, his Government appears increasingly unable to
deal with the multiple crises strangling Brazil and growing discontent
among workers and the urban poor is threatening the country's internal
stability and rocking the confidence of its external creditors. Two
weeks ago, soldiers killed several workers while evicting 12,000
strikers from a State-owned steel mill. In last week's local elections,
leftist candidates swept to power in Sao Paulo and Rio de Janeiro.
Despite the once-confident boast of the country having achieved an
economic miracle, Brazil today is an exaggerated version of Latin
America's economic malaise. The country is saddled with an international
debt in excess of $US100 billion ($A116 billion). A quarter of its
workforce is unemployed, inflation could reach 1,000 per cent for this
year and purchasing power has declined by 40 per cent over the past two
years. Three years into the "New Republic" under President Sarney,
Brazil's Government appears tired to the point of inertia. Unable to
juggle the demands of its constituents and its creditors, the Government
has ceded responsibilities to other powerful interest groups. It added
its signature to a recent tripartite social pact on prices-and-wages
control. But the package was initiated by the private sector and
engineered by business and union leaders.
The Government's inability to deal with the country's economic collapse,
together with widespread allegations of corruption by officials, has led
to a disenchantment with President Sarney and doubts about the prospects
for Brazil's fragile democracy. A new Constitution was presented in
October and elections for the presidency are due to be held next year.
But pessimism has fuelled rumours of a coup and an ominous, if not yet
overpowering, resignation about a return to the rule of the generals.
NY Times, July 31, 2008
Strong Economy Propels Brazil to World Stage
By Alexei Barrionuevo
Fortaleza — Desperate to escape her hand-to-mouth existence in one of
Brazil’s poorest regions, Maria Benedita Sousa used a small loan five
years ago to buy two sewing machines and start her own business making
Today Ms. Sousa, a mother of three who started out working in a jeans
factory making minimum wage, employs 25 people in a modest two-room
factory that produces 55,000 pairs of cotton underwear a month. She
bought and renovated a house for her family and is now thinking of
buying a second car. Her daughter, who is studying to be a pharmacist,
could be the first family member to finish college.
“You can’t imagine the happiness I am feeling,” Ms. Sousa, 43, said from
the floor of her business, Big Mateus, named after a son. “I am someone
who came from the countryside to the city. I battled and battled, and
today my children are studying, with one in college and two others in
school. It’s a gift from God.”
Today her country is lifting itself up in much the same way. Brazil,
South America’s largest economy, is finally poised to realize its
long-anticipated potential as a global player, economists say, as the
country rides its biggest economic expansion in three decades.
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