Capitalisn’t: Brazil on the Brink

Kate: Hi, I’m Kate Waldock from Georgetown University.

Luigi: And I’m Luigi Zingales at the University of Chicago.

Kate: You’re listening to Capitalisn’t, a podcast about what’s working in capitalism today.

Luigi: And, most importantly, what isn’t.

Kate: For the past few months, we’ve been seeing populist movements pop up around the world, and the latest iteration of this is happening in Brazil, as we speak. This coming Sunday, the Brazilians are about to vote in the second round of a presidential election, which will almost certainly elect Jair Bolsonaro, who is a far-right-wing candidate.

Luigi: And some listeners might say, “What does this have to do with capitalists?” But, in fact, the interactions between capitalists and democracy are very important, and the degeneration that democracy is taking in many, many countries is problematic, not only from a political point of view, but also from an economic point of view.

Kate: So, on today’s episode, we’ve decided to invite Glenn Greenwald, who is a lawyer and journalist in the United States but has also been living in Brazil, and so he has a unique insight into what’s been going on with their political system and their institutions.

Luigi: In preparing this episode, we tried to reach out to both sides of the debate, and we tried to contact both Paulo Guedes, who is the economic advisor of Bolsonaro, and Greenwald, who, in spite of being a famous US journalist, actually lives in Brazil. We’re lucky to get Greenwald. Unfortunately, Guedes did not reply.

Kate: All right, so before we get to Glenn, we want to give you a little bit of context and background for what’s been going on in Brazil’s political history over the course past half-century. Brazil is no stranger to having its political parties overturned, the most salient of which took place in the 1960s, when the military took power and held onto power for 21 years. It was only relatively recently, in 1985, that democracy was restored. During that period, I think it’s important to note that Brazil actually experienced a great deal of economic growth, what some people call the Brazilian miracle.

Brazil’s a large exporter of natural resources, including oil, soybeans, agriculture, and its political cycle is very closely tied to what happens to commodities. So, in periods when commodities prices have been booming, Brazil’s political system has been more stable, but whenever there’s a downturn in commodity prices, it has tended to lead to overturning whoever was in power at the time.

Luigi: In 2002, Brazil elected the first left-wing president, Lula, a leader of the Workers’ Party, called PT in Brazil, and it was the beginning of this commodity cycle. So, at the early part of the Lula government Brazil did very well, and Lula left government after eight years with an 86 percent approval rating. Unfortunately, after that, the economic cycle turned south and Dilma, who was the first woman president elected after Lula, faced the difficulties of that downturn and eventually was even impeached, and Temer became president.

Now, the first thing we need to know about Brazil is the extent of political corruption. In the United States, we complain about campaign financing and how much money’s in campaign financing, but if you adjust for GDP in Brazil, just the legal donations are five times as much as the ones in the United States. That doesn’t count bribes and illegal donations. There is now an investigation going on where more than 16 large companies are involved. These are the best companies in the country. They all paid bribes in a systematic way to everybody who was in power. We’re talking about billions and billions of dollars of contracts and bribes paid.

Kate: The second thing that’s worth noting is that Brazil has been experiencing a serious recession for the past few years. Even though here in the US the economy has recovered ever since the financial crisis, from 2014 to 2017, Brazil has been going through one of the worst economic downturns in recent history. It’s been experiencing stagflation, so the economy, the GDP, was falling while inflation was high and also very high levels of unemployment, particularly among the young.

Luigi: This recession is actually a combination of the bad part of the commodity cycle and, actually, the result of the investigation by being so aggressive in a country that lives off corruption. If you are very harsh against corruption, you might freeze a lot of public work and a lot of work in general. The combination of the two has put Brazil in a very difficult situation.

Kate: All right, so now that you’ve heard a little history, let’s hear from Glenn Greenwald. Glenn is a lawyer, a Pulitzer Prize-winning journalist, and a best-selling author. He’s also a co-editor and co-founder of The Intercept. Glenn is also married to David Miranda, who is a city councilman for Rio de Janeiro. He is a member of the Socialism and Liberty Party, which is a left-wing party in Brazil. Glenn and his husband also have a program whereby they adopt dogs, and so, over the course of this interview, if you hear some dogs barking in the background, that’s why. Glenn, thank you for joining the show.

Glenn Greenwald: Thank you for having me. Happy to talk to you.

Kate: Let’s jump right into the Brazilian election that’s about to take place this Sunday. It’s almost certain that Jair Bolsonaro is going to win, and he is well known for speaking his mind about a number of pretty thorny social issues. Can we go through some of your favorites of the best-worst things that Bolsonaro has said, or what I like to call Bolson-uh-ohs?

Glenn Greenwald: Yeah, I mean, so I generally think of Bolsonaro in two different categories. One are the kinds of comments that he’s made that are inflammatory and offensive by design, similar to the ones that Trump has made, although they’re grounded in a much more serious ideology than Trump’s are. Secondly, the policies that Bolsonaro endorses that show that he really means the things he says. But kind of the highlight, or lowlight, reel of his comments begins with things like explicitly praising the torturers, the most notorious torturers of the military dictatorship. When he stood up on the floor to announce his vote to impeach Dilma, who herself was detained as a dissident under the military dictatorship and was tortured, he went out of his way to explicitly praise the military colonel who oversaw her torture.

He said they should’ve killed probably another 30,000 people. He said in 1989 that he didn’t think elections would ever fix any of the problems, that we needed to use … unfortunately, he said killing people who are a threat to the country, and at the time he even named the elected president, Fernando Henrique Cardoso, who was kind of a center-right figure, as somebody who should be killed. In 2014, he told a female colleague in Congress who had pointed out that he had a history of defending not just torture but rape that was used as a weapon by the military dictatorship. He told her, “Oh, you don’t need to worry. You’re too ugly to deserve my rape.”

Kate: Lovely.

Glenn Greenwald: When he was asked in an interview just about a year and a half ago about his history of anti-gay comments and how he would react if it turned out that his son was gay, he said that, “I couldn’t love a gay son. In fact, I’d rather learn that my son died in a car accident than learn that he was gay.” There’s a lot of racist comments as well. Things of those—

Kate: That’s disgusting.

Glenn Greenwald: Along those lines. He has not just a distant history, but a very recent history of saying all kinds of the most horrific things you could possibly think of.

Luigi: But the shocking thing is not only that people like this exist. Unfortunately, they do exist, but that the vast majority of Brazilians are ready to vote for somebody who explicitly says those things. How can you explain that?

Glenn Greenwald: I think that is the key question given that Brazil is a country, as we should recall, that in the last four national elections has voted for what is widely regarded as a left-wing party but is really more of a center-left-wing party, which is the Workers’ Party, founded by Lula da Silva, and also elected Dilma Rousseff, the first woman president. Why is there this radical shift in ideology all of a sudden?

I think the answer is the same one that explains the election of Donald Trump in the US, and Brexit in the UK, and the rise of extremist parties in places where we thought that it was previously unthinkable to see them in Western Europe, which is that once people conclude that the political establishment or the ruling class has so fundamentally failed them, they will run into the arms of anybody that they perceive is an enemy of that ruling class and is somebody who promises to burn it all down and destroy it. No matter what their own flaws are or their own faults are, the idea becomes, “Well, we have nothing else to lose. It can’t get any worse, and this person is hated by the very people that we blame for our plight.” That makes us think that he’s somebody we ought to dispatch as our agent or weapon against those who have spent the last two or three decades making our lives miserable. That’s a big part of the appeal of Bolsonaro.

Luigi: One of the potential causes of such an outrage is corruption. As people living in America, we are no stranger to corruption, but Brazil is at a different level. You have lived in both places. Can you explain to us how Brazil is so different?

Glenn Greenwald: Yeah, it’s an important point, because it is true that people in Western democracies, when they think about corruption, think about isolated cases of particular politicians who accept bribes in exchange for votes or contracts. Maybe even think about it now a little bit more systemically in terms of, say, corporations who donate large amounts of money to political campaigns or PACs in exchange for their agendas being served, but Brazil is in a completely different universe when we talk about corruption.

Every party in power, far more than ideology or political allegiance, essentially serves the interest of oligarchs who pour money not just into their party but into their secret Swiss bank accounts in exchange for contracts of enormous magnitude. This has been going on for a long time with total impunity, and it was just sort of the way that things worked in Brazil and have always worked in Brazil. It was just assumed that’s how Brazil was governed, and the only thing that changed is that there was this sort of young team of prosecutors who kind of stumbled by accident into a narrow corruption case that opened up this much broader window into this sweeping corruption scandal that has now exposed every major political party, the nation’s leading plutocrats, and exactly how they have engaged in corruption. A lot of them have been hauled off into prison. A lot of them are on the verge of going to jail, and that has obviously destroyed public faith and confidence in all Brazilian institutions except for its military.

Kate: What does it feel like to be a Brazilian on a day-to-day basis? Do you encounter corruption in your regular life? When you come across the police, for example, do you have to pay them off or is it something that’s more removed?

Glenn Greenwald: Corruption is definitely ingrained into every fabric of Brazilian life. It’s just accepted that if you want bureaucracies to move quickly you need to bribe bureaucrats. If you get stopped for a speeding ticket or a traffic infraction, almost every police officer encourages you to pay them some bribe in order to let you go without a ticket or without points on your license. That’s definitely just a natural part of all aspects of Brazilian culture that date back to the dictatorship and the way that it ran. Because bureaucracy is something that dictatorships use to control populations, and there is a massive residual bureaucracy that’s extremely slow moving and almost impossible to get anything done. Yeah, it’s well known that even petty corruption and bribery is just a daily part of Brazilian life no matter who you are.

Kate: Taking a step back and taking a broader look at Brazilian politics, if corruption is so deeply ingrained, how is anyone ever going to root it out and still maintain democracy?

Glenn Greenwald: Well, that’s an open question whether or not that can really happen. The reality is that, although, as I’ve indicated, this corruption scandal has exposed essentially every political party and every major corporation, in a very fundamental way, only a small fraction of the people who have been implicated have actually gone to prison. In large part because the members of Brazil’s Congress, both the lower house and the Senate, enjoy this kind of legal privilege where they’re immunized from being prosecuted for any crimes while they’re in office, except for prosecutions that are conducted by the Supreme Court, the highest court of the country. You could imagine what that would mean in the US, for example, where the Supreme Court is nine judges and has a very full docket. They can’t really oversee criminal cases, and so that immunity means that they’re essentially fully immunized.

Recently, just to give you a sense for how corrupt this mechanism is protecting people, the right-wing candidate who ran against Dilma Rousseff in 2014 for president, Aécio Neves, with the center-right, establishment-backed party called PSDB, was a senator, and he has now been exposed as not just a corrupt politician who accepts bribes, but he got caught on tape talking about murdering witnesses, including his own cousin, to hide evidence of his corruption. Yet he is still in Congress, and just this year the polls showed that he had no chance of being re-elected to the Senate, so he decided instead to humiliate himself and run for a seat in the lower house just in order to keep his legal privilege and stay out of jail, and just through name recognition he ended up winning.

There is a real question about whether or not the systemic corruption is actually going to really be dented by what had looked like this really monumental investigation. Of course, a big part of Bolsonaro’s appeal is that he hasn’t been implicated by this scandal and intends to clean out all of Brasilia. A dubious promise, but one that definitely has a lot of political appeal.

Luigi: What is funny for me as an Italian is that this Operation Car Wash is almost identical to Operation Clean Hands that took place in Italy in 1992, ‘93. The irony of this is that in Italy, Berlusconi, but all the center-right, was blaming the prosecutors for being communist and claiming that all the investigations of Operation Clean Hands were, in fact, a political agenda to get rid of the center-right and put in a leftist government. In Brazil, it seems sort of the other way around, that all the allegations are that the judges are right-wing. Is there some sort of truth to that claim or not?

Glenn Greenwald: There is some truth to that claim, but I think we have to be a little bit careful about it. It is definitely true that the results of the investigation have disproportionately punished left-wing politicians while right-wing politicians have gone largely unscathed. If you speak to the prosecutors and confront them with that allegation, as I’ve done, what they will say is that, “Well, of course that’s the case, because it’s the left that has been in power for the last 16 years.” Since 2002, the Workers’ Party was occupying the presidency through two terms of Lula and then one-and-a-half terms of Dilma. Dilma herself was chairman of the board of Petrobras, where a lot of the corruption was centered, and so their argument is, “Of course, the politicians who are actually in power are more likely to be involved in corruption, because they’re the ones who can get things done.”

There’s a little bit of truth to that, but the much bigger truth is that even though the Workers’ Party occupied the presidency for those 14 years, they relied on parties in the center and the center-right as coalitions in Congress in order to get things done, and those parties wielded great influence. As I indicated earlier, Dilma’s right-wing partner, Aécio Neves, has been caught on tape ordering bribes and murdering witnesses. The president that they installed once they impeached Dilma, Michel Temer, who is part of this kind of centrist transactional party, PMDB, also got caught on tape that the whole country heard, ordering bribes to silence witnesses, and none of them have gone to prison.

There is this very valid left-wing critique of the prosecutors that they seem to be much more interested in going after left-wing politicians. If you think about Brazilian society, that’s not surprising because the society is so stratified that the people who become prosecutors, who become lawyers, who become judges, come from rich families, and there’s lots of things that these judges have done that, we can go into detail if you want and I can give you examples, but that do suggest a very politicized bias where they’re far more interested in punishing politicians and others on the left than they have been on the right.

Kate: When we think about moneyed interests in the United States, most people are concerned about Wall Street and the big banks, to some extent there is concern about pharma and big oil. Who are the moneyed interests in Brazil? I mean, in the case of the Workers’ Party it seems like a lot of the corruption scandals revolve around Petrobras, the state-owned oil company. Are there different interests backing Bolsonaro, or is it the same set of oligarchs as you mentioned earlier?

Glenn Greenwald: Well, obviously, oil is a major industry, and Petrobras is one of the world’s major oil companies and is a state-owned oil company that has funded a lot of other social programs and has lifted people out of poverty under Lula’s presidency. But they have a lot of construction companies that are adjacent to Petrobras that do a lot of the building of the infrastructure that Petrobras uses but also that the country uses.

Then, there’s a very large financial and banking industry that’s linked to hedge funds and international capital. For a long time, those interests were very skeptical and wary of Bolsonaro. Much like the kind of classic Wall Street, Silicon Valley billionaires and plutocratic class in the US supported Jeb Bush or Marco Rubio and most certainly not Donald Trump, because they perceived Trump as this kind of anti-establishment outsider who was going to bring instability. Eventually, what Bolsonaro did that was actually quite shrewd was he hired as his kind of economic guru Paulo Guedes, who is kind of one of the classical neoliberal privatizing economists.

Kate: He was trained at the University of Chicago.

Glenn Greenwald: Out of the University of Chicago school. Exactly. In the most notorious sense, the kind that ran Chile under Pinochet, and Bolsonaro just came out and said, “I know nothing about economic policy. That’s not my interest. I’m an army captain. I’m going to focus on cleaning Brazil up and getting rid of its criminal elements and getting rid of its left-wing communists, and I’m going to turn over economic policy to Paulo Guedes.”

Kate: Can you compare and contrast the economic plans of Bolsonaro and his rival Haddad?

Glenn Greenwald: One of the really interesting things about Bolsonaro’s economic policy is that he, in his 30 years in office, has never really demonstrated any real interest in economic policy, and to the extent that he ever opined on it, it was as an interventionist, as somebody who believed that the state should play a significant role in regulating the economy. In order to kind of lure Brazil’s oligarchical class and financiers that wield a great amount of power, Bolsonaro has basically said, “I’m going to have very little to do with the economy and economic policy. I’m going to just simply turn it over to Paulo Guedes, who’s going to implement this kind of libertarian, right-wing, highly privatized, focused economic approach that will eliminate state-owned industry, sell off all of our assets, and make certain that businesses are freed of regulation.”

On the other hand, you have Haddad that comes from ... He actually got his PhD in Marxist economics, although he’s now regarded as a kind of technocrat and moderate. He governed as mayor of São Paulo for four years, the largest city in Latin America, and really was not even a left-wing figure. He was just sort of this kind of Hillary Clinton-type centrist. Probably not nearly as moderate as she. I mean, he was definitely still a Workers’ Party candidate, but definitely in the Workers’ Party universe, he’s kind of a moderate. But the Workers’ Party has always had its origins, as its name indicates, as shifting resources away from the richest to the poorest. There is a very stark contrast in economic policy between the two, but because Bolsonaro is just such a kind of singular, aberrational figure in Brazilian politics, much like Donald Trump was, the election really hasn’t focused very much on things like economic policy and instead has been very Bolsonaro-centric. Just like the 2016 election was all about Donald Trump.

But the economic programs and ideologies that they would usher in really couldn’t be more starkly different. I mean, I should say that the Workers’ Party, despite how it likes to market itself, actually was very closely aligned with the nation’s oligarchical class during the rule of Lula and Dilma. They did very, very well and got very comfortable with the Workers’ Party. That was part of their strategy for staying in power. They definitely moderated their economic ideology, but compared to the ideology of Paulo Guedes, the difference is quite vast.

Kate: They both want to invest in infrastructure. That’s the one thing they have in common.

Glenn Greenwald: Yeah, sort of like Bernie Sanders and Donald Trump both had that in common, but other than that it’s very difficult to find commonalities.

Luigi: Whether we like it or not, we are all part of the elite and in some way of the establishment. What can we do to avoid this deterioration in Brazil, in the United States, around the world?

Glenn Greenwald: I think that there’s one very important requirement to prevent more Marine Le Pens, or Brexits, or Bolsonaros, which is that people who have been a part of the ruling class for the last 20 to 30 years need to engage in a serious self-critique and self-reckoning about what the effects of things like globalization and other free-trade policies have been or the cultural rift that has emerged in Western democracies that has made a huge portion of the country feel as though they have zero investment in what happens in distant capitals that rule their lives. Because until that happens, until there’s some sense of responsibility assumed by the establishment of the world’s leading democracies, the resentment and the anger, a lot of which is valid, that is now bubbling to the surface and being exploited by demagogues is only going to intensify. That will only result in the empowerment of exactly the people who are best able to exploit our worst human instincts, because once people conclude that their futures are grim and that they have no hope, they’re willing to roll the dice on anything that is new and different.

Kate: Bringing this back to the United States, where are we in this process of recognition and soul searching, looking for a candidate who will fix everything? Is Brazil trailing the US or is the US trailing Brazil at this point?

Glenn Greenwald: I think there’s been this attempt by Western media to understand Brazil with reference to the US, because that’s the way that Western journalists can think about things and call Bolsonaro Brazil’s Trump. As we’ve discussed, I think that Bolsonaro is a far more extremist figure and his election is far more dangerous, in part because Brazil’s democracy is so much younger and its institutions much more fragile. But I do think there are similarities in the dynamic.

In particular, just as is true of Bolsonaro, there are some elements of Trump’s electorate that voted for him because of the racism, and the misogyny, and the xenophobia that he spewed, but a large number of people voted for him despite all of that, because they watched their manufacturing jobs and their opportunities to stay in the middle class disappear over the last 20 to 30 years, as both parties presided over policies that destroyed the economic security and the future of a huge portion of the country with utter and seemingly aggressive indifference towards their plight. That’s why there are a lot of people, despite the media narrative, who voted first for Obama when he promised the ideology of change, to go and change who Washington works for, and then who also voted for Trump because they were just looking for anyone who seemed like an outsider figure, somebody who was going to go and be an enemy of Washington and the factions that rule it.

I think the same dynamic that’s driving Bolsonaro largely, which isn’t his racism and homophobia and misogyny ... That’s a big part of it but not the biggest part. The biggest part is this anti-establishment anger that has a lot of legitimacy and validity to it is also driving a lot of the political currents in the US. What you’re seeing actually, what you saw in Brazil in this last election, is the disappearance of the center.

Kate: I have a personal question for you. We started out the episode talking about Bolsonaro’s support of torture and his praise of the use of murder extrajudicially. This is a man who is nostalgic of a time when there was military rule, has hearkened back to it, wants to reinstate it, and this military rule was extremely oppressive of free speech. As a lawyer and a journalist, when Bolsonaro is elected president, as he is almost certainly going to be in a few days, are you thinking about leaving?

Glenn Greenwald: Well, I mean, I guess I would add to that the fact that obviously given my work as a journalist and my husband’s work as an elected official in the same left-wing party that Bolsonaro blames for his near-fatal stabbing a month ago ... Bolsonaro attacked me personally on Twitter about six months ago when he used an epithet for gay people against me on Twitter. My husband is currently demanding the removal of Bolsonaro’s son from the city council, where they serve together, because he posted some pictures that were intended to glorify torture and threaten protestors with murder. We’re definitely a pretty high-profile target for Bolsonaro and his movement.

I’d be lying if I said that we didn’t actively think about the risk that we might face, but at the same time, we’ve adopted two children here who are Brazilian. We consider Brazil our country. No, I don’t intend to just run away the minute that things get a little bit difficult, or risky, or dangerous. I don’t intend to engage in pointless self-sacrifice, but I think there’s going to be a substantial resistance because even though the democracy is young, there is a whole generation of people who have spent the last 30 years inculcated with the idea that democratic values matter. I think there’s going to be a lot of resistance to any steps that he intends to take to reinstitute the kinds of oppressive measures that were seen during military rule, and I intend to participate to the best extent that I can using my public platform as best I can as part of that effort.

Kate: Glenn Greenwald, I wish you the best of luck. I hope for your safety and the safety of your family, and thank you for joining us on the show.

Glenn Greenwald: Thank you for having me. I really enjoyed the conversation.