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Brazil a model of recovery for America

 

By Bob King

Anyone looking for a current and dramatic example of how to recharge the U.S. economy and pay down our debt by increasing prosperity and revenues need look no further than Brazil under former President Luiz Ignacio Lula De Silva, affectionately known to Brazilians as "Lula."

Lula, twice elected and leaving office with an 80.5 percent approval rating, was an autoworker and union leader, rising from humble beginnings as a shoe shiner and street vendor to the country's highest position. His policies pulled more than 20 million out of poverty and changed the course of history.

Lula was an autoworker — a lathe operator in a copper factory. He rose through the ranks of union leadership while Brazil was ruled by a brutal military dictatorship that targeted trade unionists. After he led a series of massive strikes, he was arrested and imprisoned.

After a three-and-a-half year sentence — shortened by pressure from Brazilian workers and the UAW — Lula returned to the union and went on to help found the Workers' Party. In 2002, he was elected president.

When Lula became president, Brazil was in bad shape. Its public debt had doubled under his predecessor, it had a huge trade deficit, interest rates exceeding 20 percent and a currency that had lost half its value. Lula rejected austerity economics and enacted policies that aimed to build a middle class and reduce inequality. The results were stunning.

Lula's prosperity economic policies increased the growth rate in Brazil from 1.6 percent to more than 7 percent. Unemployment dropped from 11 percent to 5.3 percent and Brazil created 15 million new jobs while he was president. The minimum wage rose by 67 percent; he initiated a program to provide direct help for poor mothers, greatly reducing poverty and hunger.

Brazil withstood the global economic crisis better than almost any other nation by tightly regulating banks and rejecting the policy of austerity. Lula also rejected privatization of government services and instead invested $250 billion in Brazil's infrastructure so its economy could expand further and faster.

Most importantly, Lula directly attacked Brazil's inequality. Before he took office, Brazil had the fourth worst gap in the world between rich and poor. Once his policies had time to work, incomes of the poorest 10 percent of the population grew at nearly double the rate of the richest 10 percent. Lula's example shows what can happen in a country where workers' voices are clearly heard in the political process.

Lula recently met with workers from Nissan's plant in Canton, Miss., who told him about the threats and intimidation they face for seeking a fair union election process. Lula called it unimaginable that Nissan, which willingly works with unions in its home country and around the world, is denying workers in Canton the right to organize.

He pledged the full support of Brazilian unions to the Nissan workers, leverage that will be applied in one of the fastest-growing auto markets in the world. Stay tuned.

Bob King is president of the UAW. This opinion piece originally appeared in the Feb. 7, 2013 edition of the Detroit News.