Has Lula Been a Disappointment?

While it may not be happening in our half of the Americas, in our southern half, citizens are taking back their country. This was first led by Brazilian President Luiz Inacio Lula da Silva. And yet he has so far focused on fighting inflation and less on a progressive government program. I think fighting inflation is important to helping everyday citizens. When the prices of basic goods become so high that every day citizens can’t afford them, that is a problem. But they need jobs and opportunity, and the income generated from the declining interest rates and thus how much the government must pay back on its debt should be used to fix some of Brazil’s social problems. He indicated he was on the right track, I hope so. Brazil Leader Is Hearing Calls for a Version of the New Deal After a landslide victory to a second term this week, President Luiz Inácio Lula da Silva faces growing pressure to stray from the conservative economic policies that brought unusual stability for four years to Latin America’s biggest economy. Mr. da Silva spent much of his first term hewing to austere fiscal and monetary policies intended to tame Brazil’s historic inflation and balance the government’s books. The policies succeeded and convinced businesspeople and investors that his left-leaning administration would not resort to the populist, nationalistic agenda that over decades helped him rise to power as a firebrand former labor leader. But the austerity, characterized by high interest rates and reduced government investment in the economy, has restrained annual growth to a four-year average of 2.7 percent, a rate far below rates of most other developing countries in the world. So leftist backers and many Brazilian businesspeople are now urging the president to pursue greater growth by investing his renewed political capital in more flexible economic policies, lower interest rates, and costly, but much-needed public works projects. Their demands amount to the tropical-style New Deal that Mr. da Silva promised but did not deliver on taking office in 2003. They also revive a longstanding debate here that pits defenders of economic stability against proponents of development-focused policies. Encouraged by the president’s strong showing at the ballot box last Sunday, members of the economic development camp in recent days have grown increasingly vocal. Tarso Genro, a longtime stalwart of the ruling Workers Party and Mr. da Silva’s minister of institutional relations, on Sunday told local news media that a second term would put an end to the administration’s “neurotic preoccupation” with inflation at the expense of growth and income redistribution. …Mr. da Silva’s moderate comments in a televised address Tuesday evening: “We have everything from now on to grow more quickly and broaden our social policies. We have everything to boost employment, improve education, health and safety.” “But,” he added, “we’ll do it with great fiscal responsibility and inflationary control.” The country’s benchmark interest rate, though still one of the highest of any major economy worldwide, has fallen by 6 percentage points, to 13.75 percent over the last 14 months. With inflation under control, the rate is expected to continue falling. Because high interest rates are the primary brake on consumer credit — and a crucial cost in the government’s own public debt payments — continued rate decreases should enable the administration to spur private spending and help it invest in social and infrastructure projects. Silva has increased minimum wage and added pension protections, but more is needed. If for anything to prove that Liberal leaders can grow economies and provide to constituents that are ignored by all conservative leaders.