How to fix an economy, Lula/Brazil-stylee:

[AP]

Here are two Reuters stories about how the Brazilian economy is improving. I'm not sure I trust their interpretation of what's going on, but they are, nonetheless, interesting. Ie, the second story seems to argue that tax cuts across the board are going to make the economy better, but the one example they give seems to suggest that the issue is more about the allocation of the tax burden, rather than simply one of "tax cuts."

The first story seems to be arguing that because Lula didn't enact a bunch of social welfare programs, and instead focused on building an economy which created wealth, he as engaging in "conservative" economic policy. However, I think what he's doing is more liberal. He's building an economy which (1) creates wealth, and then (2) delivers that wealth to the masses (in the form of jobs, wages, and domestically consumed, reasonably-priced consumer goods). Once there's wealth in the economy, some of that wealth can then be used to create a social safety-net and an infrastructure that will then help even more people participate in the economy.


"Brazilians see signs Lula's "growth track" is real"
Friday July 23, 3:10 pm ET
By Andrew Hay

BRASILIA, Brazil, July 23 (Reuters) - Financial markets and big firms have talked about Brazil's economic recovery for months. Now surging retail sales and record industrial production are being felt on Brazil's streets as unemployment falls and salaries rise.

The stronger-than-expected rebound from the nation's worst economic downturn in over a decade came just in time for President Luiz Inacio Lula da Silva.

...

Lula says he has put in place three pillars upon which to build sustainable growth that has eluded Brazil for two decades.

Economists say two pillars -- low inflation and balanced fiscal accounts -- are a continuation of former President Fernando Henrique Cardoso's policies. The third -- strong foreign accounts -- began with Cardoso's 1999 devaluation of Brazil's real currency.

A competitive real, combined with strong global commodity prices and weak domestic demand, have exports soaring. They are set to drive half of the 3.5 to 4 percent growth expected in 2004.

..

"We're going back into the domestic market," said bikini maker Julio Cesar Orfali, who had switched his entire production to exports in recent years.


http://biz.yahoo.com/rf/040723/economy_brazil_1.html

BRASILIA, Brazil, July 23 (Reuters) - Brazilian tax cuts will reduce government revenues by more than 2.5 billion reais ($820 million) a year but should boost the economy, Finance Minister Antonio Palocci said on Friday.

Among the measures was the introduction of a 100 reais tax exemption on monthly salaries, which will deliver the greatest benefits to Brazil's poor.

http://biz.yahoo.com/rf/040723/economy_brazil_taxes_1.html

[redqueen]

1. Maybe there's a good reason for this, but...

why do the 'economists' cited say that the policies (pillars) are NOT Lula's?

Also... I love how the tax cut Lula made were to benefit the POOR!

Thanks for this post. :)

[Maine-i-acs]

2. Tax cuts for the POOR

what a concept! Muito obrigado Lula!

[TrustingDog]

3. that commie out to be taken out for treasonist acts as that. /sarc

[tom_paine]

4. Yep. Altough Lula is far down on the list. Chavez is next for the

Imperials.

Lula better watch his ass, though. The Busheviks aren't finished with his Liberal Ass, not by a long site.

[TrustingDog]

6. Chavez has gargantuan balls... n/t

[AP]

5. Judging from this article, Reuters is trying a diff't strategy:

"that commie is really a right winger! He's cutting taxes and doesn't care about social welfare as much as he cares about making Brazil attractive to the investing class."

[AP]

7. kick