In Brazil, a Pre-Olympics Folly

Hardly anything about the Olympic dream these days is feeling particularly dreamy. The Rio de Janeiro games, some are charging, have already turned into “a large-scale catastrophe,” with everything from massive evictions and expenditures billions over budget to doping scandals and degraded environments.

Have the Olympics become, asks veteran sportswriter Sally Jenkins, anything more than a “an unwieldy cash-and-corruption-engorged monster that descends on the host country with a ravenous maw and leaves a swathe of human and economic casualties in its wake”?

My, how things have changed since 2009, the year Rio celebrated winning the hosting rights for this summer’s games. The 2016 Olympics, Brazil’s proud leaders figured, would amount to a spectacular “coming out party” for the world’s newest economic powerhouse.

The political party that back then ran Brazil — the Workers’ Party — appeared to have hit some magic economic sweet spot. Incomes were steeply rising. The nation’s poverty rate was steeply falling. Business was booming.

That magic has now long since disappeared. Brazilian household incomes are shrinking. In 2016’s first quarter, the nation’s official jobless rate nudged almost to 11 percent.

What went wrong? Hosting the Olympics has certainly turned out to be a folly of the highest order.

But the two top leaders of the Workers’ Party — the president elected in 2002, Luiz Inácio Lula da Silva, and his successor Dilma Rousseff — have committed a far greater folly than inviting in the Olympics. They’ve let their already rich and powerful accumulate considerably more wealth and power.

Instead of confronting their deeply unequal nation’s most privileged, Lula and Dilma have winked at them.

This winking, to be sure, did initially have a certain logic to it. Lula and Dilma simply felt they had no choice.

Their Workers’ Party had initially roared onto the Brazilian scene in the 1980s as a vital insurgent force, the political expression of the innovative social movements then challenging the lockgrip Brazil’s wealthy held over Brazil’s economic and political life.

In Brazil’s biggest cities, those wealthy filled luxury high-rises that overlooked desperate, overcrowded shantytown favelas. The rich had their own desperation. Kidnappings had become so common that some plastic surgeons were specializing in treating ransomed wealthy with sliced ears and severed fingers.

The Workers’ Party came at all this inequality — the world’s worst — with a verve that caught the progressive world’s attention. In localities like Porto Alegre, activists gained municipal power and launched innovative experiments in participatory democracy. Average Brazilians began collectively deciding, in neighborhood assemblies, how to spend their city’s budget dollars.

Out in the countryside, movements of the landless occupied and began cultivating the unused acres of sprawling latifúndios, the vast estates of Brazil’s wealthiest landowners.

Amid this social ferment, Lula himself made his first run for Brazil’s presidency in 1989, falling short only after Brazil’s media monopolies manipulated a last-minute abortion scandal against him. He would run two more unsuccessful races in the 1990s, each time staggeringly outspent.

Lula and his party would evolve in the wake of these successive setbacks. Exit Lula the class warrior, enter the honest modernizer who pledged to battle poverty and let privilege be. Brazil’s financial industry and corporate powers, Lula made plain, had nothing to fear.

In 2002, the new approach would pay off. Lula would gain Brazil’s top office. But real governing power remained elusive. To make any legislative progress that might help the poor, Lula and the Workers’ Party had to cut deals and engage in the everyday corruption of Brazilian political life.

For a while, the strategy worked. China’s grand entrance onto the world market had significantly upped the demand for soybeans, iron, and other basics that Brazil could in great bulk supply. Booming commodity sales, in turn, kept government revenues soaring, and Lula put the cascading revenue to good use.

His most striking new departure: the Bolsa Família, a program that gave poor families a basic cash grant large enough to make a meaningful dent on extreme poverty. Minimum wages rose, too.

But Lula and the Workers’ Party would go little further. They would leave Brazil’s utterly regressive, rich people-friendly tax system in place. Subsidies would continue to pour into large Brazilian corporations, at double the cost of the new cash grants for Brazil’s poor.

Brazil’s rich would, in the process, see their fortunes swell. Bankers enjoyed the largest rate spread between deposits and loans in the world. Private equity and hedge fund managers had easy pickings, too.

And Lula, at the same time, made no move to mobilize and actively engage Brazil’s poor. The participatory democracy of Porto Alegre would never be scaled up. Schools and other public goods that might help build a sense of social solidarity went undeveloped. An intense, individually focused consumer culture exploded instead onto the social scene — and left households deep in credit debt.

And then things really started to unravel. Commodity process worldwide tumbled. Corruption scandals engulfed Workers’ Party lawmakers and officials, fanned by a media oligarchy that never warmed to Lula no matter how nonthreateningly he might try to behave.

Dilma, after succeeding Lula as president, would scramble to find a way out of the expanding crisis, even at one point adopting the austerity policies that Brazil’s elites demanded, policies that left these elites unscathed and poor families squeezed. Dilma would become, in the polls, one of Brazil’s all-time most unpopular politicians.

This past May, hostile lawmakers took full advantage. They impeached Dilma on trumped-up corruption charges. Now suspended from office, she won’t see her trial completed until this fall. In the meantime, the Workers’ Party run has ended. Among those who saw that demise coming: the British historian Perry Anderson.

“By the time Lula won power,” he wrote this past spring, “the party had become essentially an electoral machine, financed overwhelmingly by corporate donations rather than – as at the beginning – by members’ dues.”

That tilt to the top has always struck Lula as the only politically realistic move he could have made.

“To help the masses,” as Anderson puts it, “he sought harmony with the elites.”

Now Lula, Dilma, and their Workers’ Party have accomplished neither. The new government that has replaced Dilma has announced budget cuts that will exclude 36 million of Brazil’s poor from the Bolsa Família.

And Brazil’s rich? The Bloomberg Billionaire Index has the fortunes of Brazil’s ten richest rising ten times faster over the past year than the overall fortune of the world’s 400 richest.

Institute for Policy Studies associate fellow Sam Pizzigati co-edits His most recent book: “The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900–1970.” Follow him on Twitter @Too_Much_Online.

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