Brazil Has Had Enough

By Kevin D. Williamson

Thursday, September 01, 2016

The Brazilians may not know how to run an Olympics, but they are just aces at impeachments.

Americans should take note.

After a lengthy period of deliberation, the Brazilian parliament has formally removed from office President Dilma Rousseff, the corrupt left-wing populist who has been trying to do for Brazil what Hugo Chávez and his epigones did for Venezuela.

The entire Brazilian political class has been in bad odor of late, with a wide-ranging corruption scandal at the state-owned oil company reminding the world why sensible people do not think much of state-owned enterprises, petroleum-oriented or not. Brazil was riding high for about five minutes there while commodities prices were unusually strong, but President Rousseff’s anti-business, anti-trade, anti-investor, welfare-statist agenda — which differs from the current Obama-Clinton-Sanders-Trump economic vision mainly in aggressiveness rather than substance — did what it usually does. Unemployment and inflation took off, and public-sector spending increased radically, resulting in an unbalanced fiscal position that caused Brazil’s government debt to be downgraded to junk-bond status.

As with the food riots in Venezuela, the Left in Brazil and internationally has whispered darkly that this represents a “coup” against a populist progressive who angered the world’s corporate bosses and free-market fundamentalists. “Corruption is just the pretext for a wealthy elite who failed to defeat Brazil’s president at the ballot box,” the Guardian sniffed. The truth is that Brazilians are not eager to go back to being the country in the Western hemisphere that people cite to illustrate what India used to be like.

What is of note is that Brazilians have made the connection between corruption and poverty.

Rousseff’s corruption, at least that which has been persuasively documented, is pretty small stuff by Brazilian standards — indeed, by U.S. standards. It is “pedaladas fiscais,” what we might call “creative” public finance. Brazil has state-run but notionally independent banks and pension funds, whose coffers were raided through a series of loans to the Brazilian government in order to hide the fact that the government’s finances were such a complete and total shambles that payments otherwise could not be made to popular programs such as cash handouts to the poor and housing assistance — the stuff that politicians such as Rousseff and her party use to buy loyalty. In the United States, that sort of thing is just standard operating procedure for the federal government when it comes to things like Social Security, and for local government when it comes to public employees’ pensions: magical accounting.

In Brazil, that’s a crime.

Good for Brazil.

About $18 billion was misappropriated through the pedaladas fiasco, most of which was paid back. By way of comparison, the U.S. government made at least $72 billion in improper payments in 2008, mostly through the major entitlement programs. A 2014 audit found that a U.S. government-transparency program (!) failed to account for at least $619 billion in spending from 302 federal programs, and the data that the government put forward to a rightly skeptical public was, in the words of USA Today, “wildly inaccurate.”

We have seen the future. At least Brazil has some nice beaches.

Corruption leads to poverty. It leads to poverty in Brazil, in Chicago, in Detroit, in Philadelphia, in Los Angeles, in Upstate New York, and in the Rio Grande Valley. Capitalism — the awesome productive capacity of free people — can bear many burdens and defray many costs, but it can be perverted and misdirected, too. From the state-run enterprises in Brazil and Venezuela to the green-energy fantasies of U.S. progressives, we see that the real threat to capitalism is not domination but seduction.

Brazil seems to be hearing that gospel. We refuse to listen. 

In November, the people of the United States almost certainly are going to elect Hillary Rodham Clinton their next president. Like Dilma Rousseff in Brazil, she will be the first woman to hold the office. Like Dilma Rousseff, she is an old-fashioned party-machine pol who is deeply and consistently corrupt, habitually dishonest, funny with money, and prompt to dismiss any and all efforts at holding her to some basic standard of decency and accountability as — remember the words, which could have been Rousseff’s — “a vast right-wing conspiracy.”

We had to impeach the president the last time we had the poor national judgment to send a member of this hilljack crime syndicate to the White House, and Mrs. Clinton already has been acting as a one-woman crime wave when it comes to the laws that regulate how sensitive government information is handled and how official communications are archived for the purposes of accountability and oversight. Mrs. Clinton has argued that this all stems from her being too stupid to understand how to operate a mobile phone: “I used one device,” Mrs. Clinton lied. (She used many and has a talent for nesting lies within her lies.) “Maybe it was because I am not the most technically capable person and wanted to make it as easy as possible.”

Poor Huma Abedin doesn’t have one person in her life who knows how to handle an iPhone.

Mrs. Clinton’s personal corruption is worrying, and it is almost certain that we will spend some non-trivial part of the coming Clinton administration unraveling her self-serving lies about her dealings with everyone from pushy petro-sheiks to Hollywood moguls to Russian oligarchs.

But what is truly more worrying is that we have for the past several decades been establishing a series of precedents that give American presidents and legislators the power to do legally that which would in most ordinary circumstances be a crime, or at least a dereliction of duty. It bears keeping in mind how quickly this sort of thing can escalate: In 2008, Senator Obama was bemoaning the PATRIOT Act, which allegedly empowered our spooks to sneak at peak at your library card; by 2011, President Obama was ordering the assassination of American citizens abroad. For years, Obama insisted that he did not have the power to unilaterally suspend enforcement of U.S. immigration law — “I am not a king,” he said. At some point in the following years, he apparently acquired a crown and did just that.

Does anybody think that when (to take one likely example) unfunded public-sector pension liabilities torpedo Democratic strongholds in Illinois and California, President Clinton will resist the urge to engage in a little pedaladas fiscais of her own? What do you imagine the conversation will be like in Washington the day before the first Social Security check bounces? Will Washington respond to a newfound commitment to probity and rectitude, or with shenanigans that would make a Third World potentate blush to contemplate?

In impeaching Rouseff, the Brazilians have taken one small step toward building a better and more prosperous society, one with a truly accountable government. We should consider taking similar steps.