Brazilian Election - Thieves Return to Office

I wrote the screed below about the WSJ editorial as an email to a friend a few days before Brazil's election. Last night the results of Brazil's first round of polling came in. Slippery leftist Lula finished with 48.61% of the vote, just shy of the 50% margin of victory. He will now be forced into a run-off with the second ranked candidate Geraldo Alckmin (41.64%) at the end of October. Lula's fall from some 55% of the vote a week ago has been quite dramatic. Some attribute it to his blowing off a national televised debate. Some say it's a result of a Watergate like scandal that's broken in the past week, in which Lula's close aides were arrested with US$700,000 in unsourced money, trying to buy a dossier containing sleaze and scandal to be used on the opposition candidates. The voters, it is alleged, are punishing Lula for the stench of ongoing corruption.

It would be a truly healthy thing if this were true, but somehow I doubt it. In other returns from last night, Paulo Maluf - the former mayor of Sao Paulo mentioned in the post below, who stole some US$400 million while in office - got re-elected to the federal congress. He got more votes than any other candidate in the country.

The ex-governor of Para state, who stole some US$700 million, also got re-elected to congress last night. As did 7 of the 12 congressmen accused of receiving money in the Mensalão vote buying scandal.

Also returning to office – my personal favourite result – is Fernando Collor de Mello, the ex-Brazilian president impeached and driven from office in 1992 for corruption. The good people of his home state of Alagoas have elected him to the senate.

Brazilian voters don’t punish corruption because after 500 years they have come to expect it as the norm. Even Lula’s PT party, which promised for 25 years to put an end to corruption if they ever achieved power, has proven unable to keep their hands off state funds. So why fight it? Instead, look to elect a corrupt politician who will steer some of the grease your way. Rouba mas faz. Pra mim.

Is Brazil Nuts -- Or Just the System?

By MARY ANASTASIA O'GRADY
September 29, 2006; Page A17

"Corruption is a regular effect of interventionism."

-- Ludwig von Mises
"Human Action," 1949

As Brazilians go to the polls on Sunday to elect a president for the next four years, most pundits are hedging their bets as to whether Luiz Inácio "Lula" da Silva of the Workers' Party (PT) can win re-election in the first round of voting.

A serious allegation of fraud inside the Lula campaign has become the main issue in the race over the past two weeks. Added to a host of other corruption charges implicating PT members close to the president in the past year, this latest scandal has the potential to force a run-off.

Lula may well be innocent, as he claims, of any involvement in the plethora of scandals now swirling around his party. But it is also true that if corruption has blind-sided him, he has only his own politics to blame. It has been the life work of Brazilian socialists -- of which the PT are among the most hardcore -- to empower the state, without limits, as an enforcer of "social justice" through the wholesome work of politicians and bureaucrats. Now they are reaping what they've sowed: a system that breeds corruption by its very nature, as von Mises warned more than a half-century ago.

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A friend of mine who reads the Wall Street Journal sent me this editorial. It's an astonishingly ignorant piece of work - little miss Mary obviously knows Sweet F. All about Brazil, but what is fascinating is how someone with a few facts, no historical knowledge and axe to grind can come to sweeping conclusions that just happen to coincide with their own ideological preconceptions.

Yes, Lula has run a corruption heavy government. That has nothing to do with his brand of highly market friendly socialism, and everything to do with his being Brazilian. For 500 years, Brazil has been run by elites who looked on government solely as a way of capturing the resources of the state and re-directing this wealth to their friends and supporters. In order to keep the social peace, they would usually toss a few bones to the people in the form of some sort of public works – public squares, parks, roads. "Rouba mas faz" is the phrase Brazilians came up with to describe this phenomenon. "He steals but he does stuff".

In the case of the mayor of Sao Paulo ( a right-wing capitalist appointed by a military dictatorship that I’m sure during its vicious years in office met with the full approval of the Wall Street Journal), he stole US$400 million, but built a new road and tunnel under the city. In the case of the free market governor of the Amazon, he stole US$700 million, but pushed the development of farming through the Amazon (seen to be a good thing here).

In Lula's case, his government has mostly stolen for political purposes, to finance the party election coffers mostly, and to buy votes in congress ( At least for the first term. In his second term, I expect him and his buddies to start stealing on their own account -last kick at the can and all that) and as for the 'doing things' part, they have vastly expanded the welfare rolls. Given that most Brazilians are poor (a direct result of 500 years of government by non-socialist, non-honest, thieving but market-friendly elites), this is a good way to get elected.

It has pissed off the middle class, who voted for Lula because he promised to put an end to corruption, but the poor love him. Yes he steals, but at least we're getting some for a change (as opposed to the road builders or soy farmers or other already rich people who traditionally receive government largesse in Brazil). So the only thing that's really different about Lula is who benefits from the theft. If the people voted for the right-wing candidate, would the theft end? They don't think so. They'd just be cut out of the spoils.

And would it be better if nobody stole and the government -right wing, socialist, whatever - just tried to run honest programs and fix the stupid country. Yes, that would be better. But apparently in Brazil that's not an option.