PrintFebruary 27, 2011
Welcome to Brazil: Lessons for the American People to Learn
Recently, Hillary Clinton touted the ways of Brazil as an economic lesson to the world. The economy has consistently grown by 3-6% recently, depending on the estimate, and soon Brazil will display itself on the world stage with soccer's World Cup and the Olympic Games in 2016. But scratch below the surface and you see a different picture.
Brazil's economy actually is growing at a superheated pace, this much is true. It is the B in the BRIC, which together seems to have a controlling destiny in the world economy. After generations of misrule and flirtations with Communism, Brazil seems to have its legs beneath her. The currency is finally stable (with interest rates, however, from 14% and upward) and taxes now just onerous rather than impossible. There exists a growing middle class and considerable upward mobility that never really existed before. The problem is that Brazil still cannot shake its pinko roots.
Politicians in Brazil promise everything to everybody. Its astronomically popular recent president Lula was the original community organizer. What kind of promises? Every Brazilian with a "legitimate" job is guaranteed 30 days of vacation after the first year. In addition, their Social Security system makes the US government look miserly. And once you are hired in a legitimate job, you have to try very hard to lose your job -- public or private sector.
The only problem is that there are far from enough legitimate jobs. As with the unions in the US, the legitimate jobs have priced themselves out of the market. Fortunately for Brazil, the jobs are driven underground instead of to Mexico or China.
So there is a huge underground economy operating on a cash-only basis that keeps Brazil driving, if not afloat. Some estimates offer that from one-third to one-half of the jobs are under the table. If these jobs disappeared, this supposed economic darling would collapse literally overnight.
The same government that supposedly looks out for the Working Man keeps a blind eye to the underground economy because it has to. Legitimate jobs are just not there aplenty including the make-work public sector jobs. If you are looking for a job, one month's vacation and generous social security benefits -- or future meals on the table -- mean nothing compared to food on the table today. This supposedly charitable government locks in the lower class to perpetual poverty by taxing initiative heavily. You can eke out a living in the underground economy or aspire to buy a television or car, but stop right there with your upward mobility unless you play the game.
As you can guess, corruption is rampant. It is one large pay-to-play system with Big Government, in essence, protecting Big Business, an incestuous relationship that will soon befall the entire American social structure. You can operate small but you have to be approved by the powers-that-be in order to rub shoulders with real players.
Saddest of all in Brazil is to see the number of over-qualified people either unable to or discouraged from finding their own way in the world. Although not Soviet-style, they are accustomed to Big Government dictating their way. The joke here is you have to get in line even to die. Brazilians often cannot even dream of starting their own legitimate business and laugh in disbelief when they hear about the US style, or at least former style.
It used to be fairly easy to choose your destiny in the US, a concept once called liberty -- now called a human right, which of course has to be regulated by Big Government.
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If there is a cautionary tale about the Brazilian economy, it is that here one can see the future -- the American future. Not only are huge chunks of the economy being nationalized like in Brazil, but you will find you have to pay to play if you want to get off the ground floor. The dark side to Big Government, no matter how well-meaning in concept, is that it can squeeze anybody it wants at any time it chooses and it squeezes at will if you don't get into line.
Both parties soon will offer everything to everybody in order to buy a vote. We already saw that in the 2008 presidential election when even the leading Republican candidates insanely wanting to "fight for the American people" with more programs and more government. Without immediate correction from Tea Party-types, America and Brazil will soon share the same fate, only they are going in opposite directions toward economic gridlock.
Before extolling the virtues of beat-down market socialism, maybe our politicians should do their homework first, that is unless they like what they see-a people subservient to their will. Good luck, America, with the endless lines like in Brazil and the mushrooming number of incompetent and corrupt politicians and public servants. Get ready, also, for an army of those who think they know better about your life.
This is only one small example of Big Government at its worst. Welcome to Brazil.
Pedro Primavera is an expat living in Brazil.
