[Marxism] Irrational Exuberance

Louis Proyect lnp3 at panix.com
Thu Jul 31 08:24:10 MDT 2008

Wall Street Journal, April 14, 1972

Turnabout Nation
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 
women’s underwear.

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.

Full: http://www.nytimes.com/2008/07/31/world/americas/31brazil.html

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