A short note on Brazil’s present political predicament

This Wednesday, O Globo, one of the newspapers of greater audience in Brazil, leaked information obtained by the Federal Policy implicating president Michel Temer and Senator Aécio Neves in a corruption scandal. Temer was recorded supporting a bribe for former congressman Eduardo Cunha, now under arrest, so that Cunha would not give further information for the police. Aécio, president of PSDB (one of the main political parties in Brazil), was recorded asking for a bribe from a businessman from JBS, a company in the food industry. The recordings were authorized by the judiciary and are part of the Operation Lava Jato.

In the last few years Oparation Lava Jato, commanded by Judge Sérgio Moro and inspired by the Italian Oparation Clean Hands, brought to justice some of the most important politicians in Brazil, including formed president Luis Inácio Lula da Silva. However, supporters of president Lula, president Dilma and their political party (PT) complained that Moro and his team were politically biased, going after politicians from the left, especially PT, and never form the right – especially PSDB. PSDB is not actually a right-wing party, if we consider right wing only conservatives and libertarians. PSDB, as it name implies, is a social democratic party, i.e., a left wing one. However, since the late 1980s and especially mid-1990s, PSDB is the main political adversary for PT, creating a complicated scenario that PT usually explores politically in its own benefit. In any way, it is clear now (although hardcore Lula supporters will not see this) that Operation Lava Jato is simply going after corrupt politicians, regardless if their political parties or ideologies.

With president Michel Temer directly implicated in trying to stop Operation Lava Jato, his government, that already lacked general public support, is held by a string. Maybe Temer will resign. Other possibility is that the Congress will start an impeachment process, such as happened with Dilma Rousseff just a year ago. In one way or another, the Congress will have to call for a new presidential election, albeit an indirect one: the Congress itself will elect a new president and virtually anyone with political rights in Brazil can be candidate. This new president would govern only until next year, completing the term started by Dilma Rousseff in 2014. There is also another possibility in the horizon: the presidential ticket that brought both Dilma Rousseff and Michel Temer to Brasília is under investigation and it is possible that next June Temer will be declared out of office by the electoral justice.

Politicians from the left, especially REDE and PSOL, want a new presidential election with popular vote. In case Temer simply resigns or is impeached, this would require an amendment to the already tremendously amended Brazilian constitution. This new election might benefit Marina Silva, virtual candidate for REDE and forerunner in the 2010 and 2014 presidential elections. Without a solid candidate, it is possible that PSOL will support Marina, or at least try a ticket with her. A new presidential election with popular vote could also benefit Lula, still free, but under investigation by Moro and his team. Few people doubt that Lula will be in jail very soon, unless he escapes to the presidential palace where he would have special forum.

Temer already came to public saying that he will not resign. Although a corrupt, as it is clear now, Temer was supporting somewhat pro-market reforms in Brazil. In his current political predicament it is unlikely that he will be able to conduct any reform. The best for Brazil is that Temer resigns as soon as possible and that the Congress elects equally fast a new president, someone with little political connections but able to run the government smoothly until next year. Unfortunately, any free market reform would have to wait, but it would also give time for libertarian, classical liberal and conservative groups to grow support for free market ideas among the voters until the election. A new presidential election with popular vote would harm everyone: it would be the burial of democratic institutions in Brazil. Brazil needs to show the World that it has institutions that are respected, and to which people can hold in times of trouble, when the politicians behave as politicians do.

Brazil six months after Dilma Rousseff

Six months after President Dilma Rousseff’s impeachment, Brazil remains plunged into one of the biggest crises in its history. Economically the outlook is worrisome, with little chance that the country will grow again anytime soon. Politically the government of President Michel Temer has little credibility. Although brought to power by a process whose legitimacy cannot be questioned (even if groups linked to the former president still insist on the narrative of the coup – although without the same energy as before), Temer has no expressive popular support and is attached to oligarchic interests difficult to circumvent. In other areas, the crisis is also present: urban violence is increasing, unemployment, especially among the young, remains high, and education is among the worst in the world, among other examples. It is surprising that Brazil, considering its GDP, is one of the largest economies on the planet.

As I predicted in a previous article, Dilma Rousseff’s departure from power, however just and necessary, would not be the solution to all Brazil’s problems. Rousseff, although president of the country, was far from having a leading role in the Brazilian reality. As local press often put it, she was just a pole put in place by former President Luis Inacio Lula da Silva hoping to one day return to power (which he never completely left). Today, however, Lula is the target of several corruption investigations and is expected to go to jail before he can contest new elections. Meanwhile, the government of Michel Temer offers little news compared to the previous.

Michel Temer is a lifelong member of PMDB. PMDB was formed during the Military Government that lasted from the early 1960s to the early 1980s. It was the consented opposition to the military, and eventually added a wide variety of political leadership. Leaving the military leadership period, some tried to keep the PMDB united as a great democratic front, but this was neither doable nor desirable. Keeping the PMDB together was not feasible because what united its main leaders was only opposition to the military government. In addition, the party added an irreconcilable variety of political ideas and projects, and it was not desirable to keep them together because it would be important for Brazilian political leaders to show their true colors at a moment when internationally the decline of socialism was being discussed. After a stampede of many of its most active leadership to other parties (mainly to the PSDB), the PMDB became a pragmatic, often oligarchic, legend and without clear ideological orientation, very similar to the Mexican PRI.

Being a party of national expression, the PMDB had oscillating relations with all Brazilian governments since the 1980s, but with one certainty: the PMDB is a party that does not play to lose. Eventually a part of the party leadership understood that the arrival of the PT to the presidency of the country was inevitable and proposed an alliance. This explains the presence of Temer as Rousseff’s vice president. But it would be wrong to say that the PMDB simply joined the winning team: the PT was immeasurably benefited by the alliance, and probably would not have reached or remained in power without the new ally. The alliance with the PT also showed that, despite the ideological discourse, the PT had little novelty to offer to Brazilian politics.

Although he has waved with reforms in favor of economic freedom, Temer has done little that can considered new so far. The freezing of government spending, well received by many right-wing groups, does not really touch the foundations of Brazilian statism: the government remains almost omnipresent, only without the same money to play its part. The proposed pension reform, similarly, does not alter the fundamentals of the state’s relationship with society. Finally, Temer put the economic policy in the hands of Henrique Meirelles, who had already been President of the Central Bank of Lula. Meirelles is one of the main responsible for the crisis that the country faces today, and its revenue to get around the problems remains the same: stimulus spending. In other words, do more of what brought us to the current situation in the first place.

A positive aspect of the current Brazilian crisis is the emergence or strengthening of right-wing political groups. Although the Brazilian right still is quite authoritarian, there are inclinations in favor of the free market being strengthened. Of course, strengthening a pro-market right annoys the left, and this is perhaps the best sign that this is a political trend gaining real space. While it is still difficult to see a light at the end of the tunnel, the 2018 presidential election may be the most relevant to the country since 1989.