Brazil: “Squid Sells Out to Evil Corporations!”

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Empty anticorporate cant from the Via Dutra Sutra: Fire in the hole over toll road dole.

Time will tell whether the emergence of the quasi government is to be viewed as a symptom of decline in our democratic government, or a harbinger of a new, creative management era where the purportedly artificial barriers between the governmental and private sectors are breached as a matter of principle. — Kevin R. Kosar, “The Quasi Government: Hybrid Organizations with Both Government and Private Sector Legal Characteristics” (Congressional Research Service, February 13, 2007)

Carlos Sardenberg is a

jornalista, comentarista econômico da TV Globo e âncora da rádio CBN. Neste espaço, comenta e analisa notícias econômicas.

Journalist, economic commentator on TV Globo and Radio CBN news anchor. In this space, he comments on and analyzes economic news.

His Wikipedia profile seems to have been edited substantially by an anonymous contributor from a Grupo Abril corporate network (do a whois on

After working as a state government flack — a Tupi Tony Snow or Bill Moyers (who flacked for LBJ, remember) — in the Montoro administration, he went on to run news operations at TV Band.

I never read the guy. He tends to constantly utter mystifying hogwash on the order of “if the stock market does not continue to rise, it stands a very good chance of either falling or moving sideways. So be very, very frightened!”

Seriously. I am not exaggerating for effect. Much.

His prognostication of severe turbulence and terrifying chaos in the Brazilian capital markets because of exposure to the American subprime-mortgage debacle? It has not happened yet. Quite the contrary, so far. The guy is a prime example of nam myoho renge kyo business journalism, I tend to think.

Still, the Sardenberg blog will serve to introduce an interesting economic debate here in Brazil at the moment, after the federal government auctioned off concessions to operate federal highways to a number of multinational corporations, many of them Spanish, last week.
O Globo and the Estado both ran heavy coverage packages along the lines of “this hypocritically antineoliberal government privatizes even more than the last one did!” Compare:

At the same time, the trade-unionist Hora do Povo is issuing dire warnings that the state government of São Paulo — run by the opposition Toucans of the PSDB — is also preparing another wave of privatizations, having commissioned an asset valuation of state-owned firms.

The cant is almost identical in both cases.

Which leaves you in this peculiar situation in which both extremes in the debate join forces to demonize “privatization,” “public-private partnerships,” and the like.

(The difference being that when you read a trade-unionist newspaper with a big old picture of Che on the cover, you are at the very least not likely to be misled into believing that you are going to get a wholly impartial analysis of the situation. There is, at least, some truth in advertising.)

The interesting and useful perspective on the issue, however, lies in comparing the devils in the details of the deals.

The federal government, for example, argues that the deals it has just cut will produce highway tolls that are substantially lower than similar deals cut in the last decade or so by its political foes, the Toucans, in São Paulo for state highways.

On the other hand, Governor Jose “The Other Bald Toucan” Serra, as I recall, has promised to review all such contracts to see if they reall are providing good bang for the taxpayer beija-flor buck (the local greenback has a hummingbird on the back), and to renegotiate them if necessary to make sure they do.

So call me naive if you like, but this actually looks like the first tentative stirring of a virtuous cycle of political competition based on performance and results.

And as I often say, I am not a Brazilian voter, though I do pay some of the crazy taxes they have around here.

But I do think it would be nice for Brazilians (I generally wish Brazilians well) to have political choices among candidates who all have proven track records for (1) actually getting at least something measurably useful done, (2) not trying to fix things that ain’t broke, and (3) depoliticizing such issues as putting an end to freaking death squads.

For a change.

This, meanwhile, was Sardenberg’s comment on the highway concessions:


“[Privatization as an act of piracy]!

Quer dizer que o governo Lula entrega patrimônio nacional para empresas estrangeiras e não cobra um centavo por isso? De graça, as companhias espanholas vão ficar 25 anos cobrando pedágio e ganhando dinheiro com estradas construídas com imposto pago pelo contribuinte brasileiro!

You mean to tell me that the Lula government is handing over national wealth to foreign companies and not charging a cent for it? For free, Spanish companies are going to spend 25 years charging tolls and making money off roads built with money from the Brazilian taxpayer?

Quer dizer que o governo Lula monta um modelo de privatização que favorece o capital estrangeiro? Só multinacionais, que trazem capital de fora, mais barato, conseguem assumir pedágios tão baixos. Mais ainda: o dólar tão barato, outra proeza de Lula, favorece os estrangeiros, pois a tarifa em dólar fica maior e as companhias gastarão menos reais para enviar seus polpudos lucros aos acionistas lá fora.

You mean to tell me that the Lula government is setting up a privatization model that favors foreign capital? Only multinationals, who bring capital in from abroad, more cheaply, can manage to charge such low tolls, because the dollar rate is higher and the companies will spend fewer reals to send their juicy profits off to shareholders abroad.

Nunca na história deste país um governo foi tão servil às empreiteiras multinacionais. Uma privataria!

Never in the history of Brazil has a government been so servile to multinational contractors! It is [privatization as an act of piracy!]

A standard joke about Lula is that all his stump speeches tend to begin with “Never in the history of Brazil …”

Which, as Homer Simpson [I think Homer cribbed this from George Carlin, or maybe it was Lenny Bruce] says, is funny because it’s true. Squid does say that a lot. Political communication is generally based on simplicity and repetition.

I repeat: Keep it simple, stupid, and keep repeating it.

KISS + repetition = message control.

(Not to mention the notorious “We are going to teach people how to find the G-spot” sex-education speech during the Pope’s visit. No personal disrespect to President Squid — by all accounts a happily married man, with a pleasant and attractive wife, to the extent that this is any of our business — but the very idea of this stumpy, bearded, big-eared, gravelly-voiced, vaguely gnome-like sexagenarian (pun intended) showing you the G-spot does kind of naturally bash you in the funny-bone.)

That said, however, this is an incredibly boneheaded and disingenous “analysis” of the situation. It consists almost entirely of hysterical shrieking and fuzzy factoids.

What it may reflect, however, for the superior risk manager, is that (1) the polls here show that multinational corporations have a stink-to-high-heaven bad reputation at the moment, and (2) the forces of gabbling political marketeering are falling all over themselves to claim they are even more anti-multinational than thou. Whether they mean it or not.

The same goes for BINGOs and GONGOs and QuaNGOS. You are about to see a CPI of NGOs here — a parliamentary commission of inquiry — the coverage of which will, I expect, feature a lot of beside-the-point demonizing of NGOs in general in order to avoid the question, “just what is the difference between a well-governed public-private partnership and unfettered Jack Abramoffery?”

The wisest thing I have heard anyone say all year on the subject was this observation by historian Elio Gaspari [I gist]:

The folklore of corruption is good business — for the corrupt.

Rather than studying issues systematically, identifying problems, and legislating [with teeth] to prevent their recurrence, you see these massive hysterical virginity campaigns — promoted by the likes of Sardenberg — to identify a few putatively guilty parties and lynch the hell out of them in the court of public opinion.

The public is supposed to be appeased by the sadistic spectacle of heads rolling, but in the end, nothing actually changes.

I need to study this highway concession issue more myself — if only because most Brazilian business publications (some of them who feature, without any apparent irony, a regular “business astrology” column. Seriously!) refuse to do me the service of explaining it for me so I do not have to do all that work myself.

But the general principle known as NMM Maxim No. 6 applies:

Don’t dumb it down; smarten it up.

Because, I mean, there are “privatizations” and then there are “privatizations.” The interesting thing to watch is how those deals get structured, why, and whether those deals actually produce the desired results in the middle to long term.

In São Paulo, for example, there is, I think, a very plausible argument being made that restructuring state-owned enterprises, in a way that would prevent them from being used as political-patronage and slush-fund factories and help them do what it is they are supposed to do — finish up the Rodoanel and the Aguas Espraiadas sewer project (“half-sunk, a shatter’d visage lies …”), for example — might be an extremely good thing.

Those deals may or may not have a “privatization” element to them, but still, I think my trade-unionist friends may be jumping to conclusions on this point. Why should a state executive not try to discover the actual value of state-owned firms before deciding what to do with them?

It’s actually quite a respectable, global think tank-endorsed theory. And not just by gabbling, Ayn Randy neocon shock therapists, either.

Will it work?

As a local resident, I admit it, I tend to hope so. Whether it is a Toucan that gets credit, or a Squidist, or the true sons of the PSOL or PCdoB, or Mangabeira Unger’s Republican “party of the future,”or some combination thereof, I really do not think many people here really care all that much. As long as it gets done.

As a Martian anthropological observer of these things, on the other hand, I just find it plain fascinating, and would really like to know: Can such deals be structured in a way that they really do produce the efficiencies often attributed to outsourcing public services to the private sector, while providing an effective, but not excessively bureaucratic and self-defeating, degree of public accountability?

It’s an open question. See also

Various tribes of Tupis are testing some theories on the subject in the field, under some rather remarkably rugged conditions. It is extremely interesting to watch. The great minds of Harvard — the Veritas 1.0 contingent, at any rate; the “what is truth?” contingent seems to be sticking to the faith-based approach — even (say they) think so:

So stay tuned.

But not to Globo.

It’s like sniffing model airplane glue, or huffing spray paint.

It destroys brain cells.

Content pipeline operators: Boil this sludge before consuming.
“Toucans show their hand and clear the way to privatize everything in São Paulo!” The alert — the analysis aside, the trade-unionist tabloid is the only news source that I can find reporting this interesting story about asset valuations of state-owned firms, by the way — depends on the proposition that “Serra is just like Geraldo ‘I am not responsible’ Alckmin and Cardoso.” But The Other Bald Toucan tends to suggest that he is not. And there are some observable differences, I think. So it will be interesting to see how true that turns out to be, in practical terms. I have no violent objections to the Toucan worldview as professed, per se, but it seems to me that they really, really need to purge the Moonies from their midst.


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