[News] Brazilian Coup Threatens Democracy and National Sovereignty

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Fri Apr 15 10:59:08 EDT 2016


  Brazilian Coup Threatens Democracy and National Sovereignty

Mark Weisbrot - April 14, 2016

Brazilian President Dilma Rousseff is now threatened with impeachment, 
but there is no evidence that she is linked to the “Lava Jato 
scandal, or any other corruption. Rather, she is accused of an 
accounting manipulation that somewhat misrepresented the fiscal position 
of the government — something that prior presidents have done. To borrow 
an analogy from the United States, when the Republicans refused to raise 
the debt ceiling in the U.S. in 2013, the Obama administration used a 
number of accounting tricks to postpone the deadline at which the limit 
was reached. Nobody cared.

The impeachment campaign — which the government has correctly labelled a 
coup — is an effort by Brazil’s traditional elite to obtain by other 
means what they have not been able to win at the ballot box for the past 
12 years. Former president Lula is accused of receiving money from 
corporations for speeches, and for renovations to a property that he 
claims he did not own. But even if these accusations are true, there is 
no evidence of a crime or even a link to corruption. The alleged events 
took place after Lula left the presidency — and again, as in the U.S., 
former officials can legally get paid for speeches. Yet Judge Sergio 
Moro, who is leading the investigation, has led a well-executed smear 
campaign against Lula. He had to apologize to the Supreme Court for 
releasing wiretapped phone conversations between Lula and Dilma, Lula 
and his attorney, and even Lula’s wife and their children.

Of course the Workers’ Party would not be vulnerable to this coup 
attempt if the economy were not mired in a deep recession. But here too, 
the media is patently wrong, agitating for further spending cuts and 
high interest rates that only worsen and prolong the downturn. To the 
contrary, Brazil needs a serious stimulus to jump-start the economy. 
Fortunately, the country has about $353 billion in international 
reserves, and is therefore not constrained by the balance of payments.

The main obstacle to recovery is the power of the big banks, which are 
like Wall Street in the U.S., but on steroids. Brazil is paying nearly 
seven percent of GDP in interest on its public debt — more than Greece 
at the height of its debt crisis. But Brazil has no debt crisis, nor any 
significant threat of default. Its usurious interest payments are a 
result of the political power of its own banks, who currently enjoy a 
record-breaking 34 percent spread between their borrowing and lending 
rates. Just reducing Brazil’s public debt service to its level of a few 
years ago would allow for a major stimulus — about 3.5 percent of GDP — 
that could pull the country out of recession.

The U.S. government has been quiet about this coup attempt but there is 
little doubt here about where it stands. It has always supported coups 
against left governments in the hemisphere, including — in just the 21st 
century — Paraguay 
in 2012, Haiti in 2011 
and 2004 
Honduras <http://cepr.net/publications/op-eds-columns/top-ten-ways> in 
2009, and Venezuela 
in 2002. President Obama went to Argentina to lavish praise on the new 
right-wing, pro-U.S. government there, and the administration reversed 
its prior policy of blocking multilateral loans to Argentina. It could 
be a coincidence that the scandal at Petrobras followed a major NSA 
spying operation 
that targeted the company — or not. And within Brazil today, the 
opposition is dominated by politicians who favor Washington. It would be 
an added shame if Brazil lost much of its national sovereignty, as well 
as democracy, from this sordid coup.
Mark Weisbrot <http://cepr.net/about-us/staff/mark-weisbrot> is 
co-director of the Center for Economic and Policy Research 
<http://www.cepr.net/> in Washington, D.C., and the president of Just 
Foreign Policy <http://www.justforeignpolicy.org/>. He is also the 
author of the new book “Failed: What the ‘Experts’ Got Wrong About the 
Global Economy 
(2015, Oxford University Press)./

/This op-ed was originally published in Portuguese by Folha de Sao 
Paulo, Brazil’s largest-circulation newspaper, on April 14, 2016./

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