(10 am – promoted by ek hornbeck)
“You can’t imagine the happiness I am feeling,” said Maria Benedita Sousa.
Sousa is an American success story. She has pulled herself up by the bootstraps in one of the poorest areas of the country and now owns her own business. Sousa now employs 25 people that produce 55,000 pairs of women’s underwear a month. Not only is she a small business owner, this mother of three has bought and restored a home for her family and is helping pay for her daughter’s schooling to become a pharmacist. When she graduates from college, she’ll become the first in the Sousa family to do so.
“I battled and battled, and today my children are studying, with one in college and two others in school. It’s a gift from God,” she said.
Proof positive the American dream is alive and well… in South America – Brazil to be precise.
Ms. Sousa and her fellow Brazilians are benefiting from six years of economic stewardship by Brazil’s leftist President Luiz Inácio Lula da Silva according to a story from NY Times, a Strong Economy Propels Brazil to World Stage.
I find it fascinating and informative to compare six years of leftist economic leadership to that seven years of conservative ‘leadership’ on the economy as carried out by conservatives such as George W. Bush and former and current Federal Reserve chairmen, Alan Greenspan and Ben Bernanke.
Here’s the state of the U.S. economy from the news today. Well the Washington Post is doing its best to spin positive: U.S. economic growth improves over first quarter.
The U.S. economy grew at a healthy pace in the second quarter, the government said today… Gross domestic product rose at a 1.9 percent inflation-adjusted annual rate in the April through June period, far above what forecasters would have expected just a few months ago. It was boosted by strong exports resulting from the lower value of the dollar and rising consumer spending by Americans, who benefited from government stimulus checks.
Rah-rah-rah! The problem is that this assessment is more Bush administration “cook the books”. The NY Times reports a tad more closer on the real shape of the U.S. economy: G.D.P. grows at tepid 1.9% pace despite stimulus.
The economy grew less than expected from April to June despite a huge booster shot of tax rebates, the government reported on Thursday, dimming the outlook for a quick recovery. And more bad news may lie ahead: new claims for unemployment benefits jumped to a five-year high last week…
The article went on to point out that “the government’s tax stimulus package, which put billions of dollars into consumers’ pockets, led to only a modest rise in consumer spending, and many businesses were caught off-guard by the slowdown in sales.” No idea why businesses were surprised by this, unless they are all run by Republicans, because I suspect nearly everyone who got a stimulus bribe is using it to buy gasoline or pay bills.
But the real news comes from Bloomberg News that reports a U.S. Recession May Have Begun in Last Quarter of 2007.
The U.S. economy may have slipped into a recession in the last three months of 2007 as consumer spending slowed more than previously estimated and the housing slump worsened, revised government figures indicated.
The U.S. economy “contracted at a 0.2 percent annual pace in the fourth quarter of last year compared with a previously reported 0.6 percent gain, the Commerce Department said today in Washington… The government also said incomes grew less than previously thought” too. The Bush administration got the numbers wrong? Amazing!
And course the Federal Reserve is still claiming there is no inflation because they “prefer” not to include the skyrocketing cost of food and fuel.
Now compare Bush’s seven years to Lula’s six years in power and weep America. According to the NY Times, Brazil is riding “its biggest economic expansion in three decades. That growth is being felt in nearly all parts of the economy, creating a new class of super rich even as people… lift themselves into an expanding middle class.”
And despite investor’s fears of Lula’s “leftist bent” –
He has fueled Brazil’s growth through a deft combination of respect for financial markets and targeted social programs, which are lifting millions out of poverty, said David Fleischer, a political analyst and emeritus professor at the University of Brasília.
The infamous gap between rich and poor in Brazil has shrunk by six percentage points since 2001, with gains not coming at the “expense” of the wealthy. The top 10 percent Brazilian earners’ income rose 7 percent between 2001 and 2006. While even more impressively, the bottom 10 percent skyrocketed by 58 percent! All the while Brazil has been “outspending most of its neighbors on social programs” and other public spending.
Now, of course, some of Brazil’s economic gains can be attributed to booming growth in the country’s agriculture at the expense of the Amazon rainforest. The gains have also been propelled by significant new offshore oil and gas discoveries, which has led to investment and a construction boom. These are natural resource gifts we Americans have already largely exploited domestically, but that’s not all Brazil has going for it economically. If it were, I wouldn’t be writing about it.
No, Brazil has also a “greatly diversified” industrial base, a strong currency, and has kept inflation mostly in check. The U.S. industrial base is rusting and rotting away with the machines and know-how being shipped to overseas factories. Our dollar is pathetically weak and inflation, when the cost of food and fuel are taken into account is making life for most Americans painful.
So while Brazilians are spending their new wealth on Brazilian-made goods and services, Americans are spending their “stimulus” checks on gasoline and credit card bills. And don’t expect the looming U.S. stagnation or recession to deflate Brazil.
In fact, because Brazil’s economy has become so diversified in recent years, the country is less susceptible to a hangover from the struggling United States economy.
Brazil’s exports to the United States represent just 2.5 percent of Brazil’s gross national product, compared with 25 percent of G.N.P. for Mexican exports, according to Moody’s.
“What makes Brazil more resilient is that the rest of the world matters less,” said Don Hanna, the head of emerging market economics at Citibank.
The strong, diversified Brazilian economy has been shepherded by Lula’s deepening of the country’s many social programs. Maria Benedita Sousa underwear factory was made possible by loans she received from “a government-financed bank that has awarded microloans to 330,000 people to develop businesses”.
Brazil’s approach seems to be the opposite of the U.S. Republicans’ trickle down approach to our economy:
The bottom-up nature of such social programs has helped expand formal and informal employment as well as the Brazilian middle class. The number of people under the poverty line – defined as those earning less than $80 a month – fell by 32 percent from 2004 to 2006…
Brazil’s government has a program, Bolsa Familia, that help 45 millions of poor Brazilians to buy food and other essentials and, according to the NY Times, this program has been more successful at reducing poverty than raising the country’s minimum wage. In fact, “many families have bridged the gap to the middle class by using Bolsa Familia to meet basic needs, and then applying for small loans to start businesses and escape the informal economy.”
Now Brazil isn’t the United States and the South American country is taking advantage of natural resources we have already exploited here. Plus Brazil isn’t waging two wars of choice in Asia, but then Brazil hasn’t been lead by Bush for the past seven years either. But, when the bottom-up economic policies of Brazil are compared to the tired, failed conservative policies of wealthy Republicans like Bush and John McCain that have severely damaged America’s economy, then the results are pretty damning.
Brazil’s bottom-up approach with diversified agriculture and industry trumps America’s trickle down approach with financial schemes and service jobs. Maybe it’s time we start investing in Americans and our country? We owe it to ourselves.