Lula, Rousseff and narratives

Manuel Hinds believes that narratives sometimes lend themselves, along with good luck, to cover up the misguidedness of bad economic policies.

Lula Rousseff narrativas


Lula recently said that the Maduro regime must be saved from the bad narrative that has given it a bad name. It seems incredible that anyone could be so cynical as to say such a thing, as if a narrative could turn Venezuela's bloody tyranny into a Cinderella story. But it should be remembered that Lula, the doyen of populists, knows what he is saying.

In a few years, the populists of the Sao Paulo Forum used well-wrought tales to resurrect the greatest failure of a power system, communism, in a triumphant march to take over Latin America. Now he is using his "narrative" powers to help Putin, a classic fascist, to re-integrate fascism with the extreme left and right in the region. And he, convicted of corruption, free on procedural grounds, takes great pride in his ability to put together narratives that hide reality.

Lula found his ability to generate narratives by sheer good fortune, as the accompanying graph shows. His narrative, which gave him a lot of prestige, was that he was the leader of the future in Latin America, combining leftist social policies with fabulous economic policies that caused great growth rates.

Certainly, from the moment Lula came to power in 2003, he started handing out money hand over fist and by the end of the year the economy was already growing very strongly, as measured by the Gross Domestic Product in dollars (GDP).

Immediately, Lula was labeled an economic genius and a great statesman, a reputation that has lasted to this day.

Lula's great luck

To me it seemed a bit strange that from the very first moment a president, by his mere presence, increases the national product. There had to be something that was coinciding with his coming to power. The answer was in the attached graph, which shows how in Brazil production increases in direct proportion to the international price of primary products, which constitute the largest part of the dollar income to the economy. As you can see in the graph, the red line (which is the country's production) has tended to move with changes in the prices of these primary products.

Lula Rousseff graph

Note also that from 1994 to 2003, commodity prices trended downward, causing a major recession in Brazil. But then, in 2003, prices began to rise in international markets and production in Brazil immediately went up. That was the year Lula took power. Lula (or any Brazilian or any other president) had nothing to do with the increase in those prices.

But people, and the international press, attributed to him the growth of the economy that these high prices caused. That increase had nothing to do with Lula's policies but with his good fortune.

The graph shows how lucky Lula was. He left power in 2011, so his entire period was covered by the commodity boom, which lasted exactly from 2003 to 2011. As you can see in the graph, there was one year, 2009, when prices and incomes fell but it was because of the great recession of 2008-2009.

Everyone agreed that he was not to blame for that recession. Thus, everyone also thought that Lula was the architect of the longest production boom in Brazil's history. A great genius, a great statesman.

The candidate he chose to succeed him, Dilma Rousseff, won the elections. She was going to implement the same policies as Lula and everyone expected them to be as successful.

Poor Rousseff

Just as Lula had great luck, Dilma Rousseff had the worst luck in the world. As a good student of Lula, she applied the same economic policies. But as the same graph shows, commodity prices and thus Brazil's GDP began to fall as soon as she took office. The last year of growth was 2010. Then, Rousseff was labeled as a lousy economic strategist, even though she had implemented the same policies as the brilliant Lula. Brazil's recession was so big that it was the real reason she was ousted from the presidency. They looked for and found many reasons to kick her out, but the real one was the lousy economic policy. The narrative worked against her.

Now it will be seen who Lula is.

Lula came back to power on his supposed ability to improve the economic situation as a moderate leftist with good judgment. In a very short time, he has shown that he has neither of these qualities. He has chosen the side of Maduro and Putin, has picked fights with those who are winning, and believes that he will solve the problem of his lack of reserves to finance his trade with Argentina and other countries by evicting the dollar from international transactions. And this time he is not having the luck he had in the first decade of the century.

This time, his bad economic policies will be seen in bad economic results, and the people will realize that he is a farce of a statesman. There will be no salvation by narrative.

This article was published originally in Spanish in the El Diario de Hoy (Ecuador).

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