Ashes & Diamonds
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the executive, personal control over alloca- ASHES & DIAMONDS tion of resources in the economy, a scrim Piggies at market: By Alexander Cockburn of populist rhetoric. When Brazil's most dis- tinguished newspaper, the Folha de Sao The Brazilian their holders in twelve monthly install- restrictions on imports, which will further Paulo, featured a picture of Collor in mili- ments, thus tying up the confiscated funds erode Brazil's domestic economy. tary rig, the newspaper's offices were in- paradigm for over two years. What has Collor's program meant in the vaded the next day and its directors seized Whom did this confiscation affect? Most short term? There have been huge layoffs, by the military police, at which point the Privatization, launched in the First World bank accounts are held by Brazil's less with more than 20,000 workers idled in less by Margaret Thatcher and her British team Folha featured a similar photograph of Mus- wealthy—shopkeepers, unionized laborers, than a month. Up to 90 percent of the auto solini. of "free market" theocrats, is now raging cab drivers, small businessmen, etc. Those and machine capacity of the state of Sao through Latin America and Eastern Europe, Collor's economic strategy is reform by with more cash generally invested in Paulo—the economic core of Brazil—has dismemberment, the model presently being i at precisely the moment Thatcher's popu- Brazil's "overnight" market in speculative closed down, and more than 10,000 govern- \ larity plummets to record lows in the United essayed in Poland and nervously heralded bonds and currencies that yielded rates ment employees are soon to be laid off. earlier this week in Moscow by Gorbachev's ! Kingdom and Britain's economic "revival" well above inflation. Virtually all large cor- Banks and businesses have failed by the I turns out to be hollow. economic adviser, Leonid Abalkin. The plan porate groups held their millions in the dozen. outlined by Abalkin and reported in the I From Mexico to Argentina to Poland, econ- "overnight" or overseas. Well-publicized arrests of jewelers, super- omists trained in the United States are now Western press on Tuesday similarly looks Collor and his economic team froze the market and business executives, charged to the shutdown of state enterprises, un- pushing through drastic deflationary on- "overnight" in a manner quite different from with various economic crimes, have bur- slaughts on old structures of state ownership trammeled foreign investment, mass un- the confiscation of checking and savings nished Collor's populist image, while the employment and the annulment of workers' and employment, on subsidies and public accounts. Twenty percent of the assets in country spirals into depression and its as- patronage, and even on private assets. rights as the only way forward. Call that a given "overnight" account could be re- sets are thrown on the international auction fascism too, or perhaps Market Stalinism, The "free market" onslaught was promot- claimed, while 80 percent would be confis- block. Collor's popularity is running at 75 with "market discipline" imposed by dic- ed in its most disastrously naked guise in cated into the Central Bank for eighteen percent approval. The little guy says he has tatorial fiat—the worst of both systems. Bolivia, where Harvard's Jeffrey Sachs, now months. As the Brazilian economy went into the same bank balance—$1000—as the So the newly emerging world model is on retainer in Poland and Czechoslovakia, shock and prices crashed, those with any richest man in Brazil, ignoring the matter not the national "free market" but author- urged a scorched-earth assault on hyperin- cash at all—notably the 20 percent availa- of the "overnight." This popularity is ter- itarian capitalism as dreamed of by leaders flation. Under his direction, the state simply ble to "overnight" account holders—were rorizing Brazil's Congress, which, with elec- from Santiago and Buenos Aires through Lon- closed down, with about half the labor force in a relatively good situation to take advan- tions in the fall, is being compliant, with don to Beijing. For Thatcher an answer turned out on the street and much signifi- tage of such opportunities as a stock mar- the fierce exception of the Workers Party. came, violently, last week in the form of cant economic activity ceasing altogether. ket that lost 60 percent of its value or to protest against the poll tax. For the leaders Inflation stopped, but so did everything Brazil's powerful unions, who led the as- to purchase state enterprises for sale at 30 sault against the military, now find them- in Beijing, an answer came in Tiananmen else, and soon Bolivia's government was percent of their value. Square. Gorbachev awaits the response of urgently seeking advice elsewhere on how selves under direct threat. Their gains had Furthermore, people with substantial for- been most palpable in the state-controlled the Soviet working class. In Latin America, to get things going again. The Poles should tunes taken by the government are already moving from military fascism to market fas- take notice of this sorry tale. steel and oil industries. But state corpora- making arrangements for getting their tions—notably Siderbras, the state's steel cism (or enduring both simultaneously), A rather more ominous story is unfolding money back, negotiating for lucrative con- the fate of these strategies will similarly be in Brazil, which, in contrast to the Bolivian industry—will soon be for sale, with new cessions and so forth. In this sense Collor's and hostile ownership in view. settled in the streets. • economy sustained mostly by coca cultiva- seizure of assets has amounted to economic tion, is the eighth largest in the world. Collor's program amounts to a form of hostage-taking to consolidate his political fascism: abrupt concentration of power in Distributed by the LA Weekly. In December, at the climax of a desper- base. ately tight race between the socialist Work- The more than $100 billion now concen- ers Party candidate, Lula, and the former gov- trated in the Central Bank fund is at the ernor of Alagoas, Fernando Collor de Mello, disposition of Collor, who will decide which victory was snatched by Col lor. who had been companies get their money back and on denouncing state corruption and who had what terms. This of course creates a tre- seized some of Lula's lightning by a populist mendous potential for corruption. City/State/Zip message to Brazil's millions of homeless, If Lula—or Chile's Allende—had tried such Send my first gift to: abandoned and desperately poor. a program, the military would have moved No sooner had Collor taken office in at once, and the international press would NAME March than he announced a savage pro- , have echoed with denunciations of "totali- gram of retrenchment and deflation. His tarian" tactics. But no one who matters is plan entailed one of the most abrupt at- mistaking Collor for a radical or someone City/State/Zip X1990A tempts at centralization of power in politi- who is more than rhetorically wedded to G $34.95 one year D $ 18.95 for 29 issues cal memory, designed to give Collor and the dreams of Brazil's descamisadas. f ] New order Cl Renewal his advisers discretionary powers over Collor has also struck down barriers to Send my second gift to: state and private assets undreamed of by foreign investment, permitting interna- the military regime that had controlled tional investors to pick up tempting por- Brazil for a generation. tions of Brazil's crumbling economic mason- Address Collor's deflationary plan, enacted on ry, as well as mineral concessions, at bar- March 16, one day after he took office, was gain-basement prices. An unconfirmed re- City/State/Ztp X1990A to freeze all bank accounts and to change port in the Journal do Brazil recently had U $24.95 one year U $ 16.95 for 29 issues the currency. All funds over $1,000 would Japanese investors agreeing to assume re- Cl New order H Renewal revert from the accounts in which they had sponsibility for Brazil's external debt in ex- Send my third gift to: been lodged to named accounts in Brazil's change for rights to all the gold reserves in Central Bank, where they would remain for the Amazon. NAME eighteen months and then be paid back to Simultaneously Collor has cleared away Qty/Stale/Zip X1990A MARIA SCALZiTTi LJ $ 19.95 one year LJ $ 14.95 for 29 issues r MATERNITY WEAR D New order LJ Renewal CHILDREN'S CLOTHING LJ Payment enclosed. NURSERY FURNITURE D Bill me later. TOYS. BOOKS. CAR SEATS f D Charge my MOVisa ETC. # __________ exp. date. Or call our toll free number 1-800-435-0715. In Illinois | . call 1-800-892-0753. 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Morris, IL 61054 $33.00 for one year IN THESE TIMES APRIL 25-MAY 1, 1990 17 LICENSED TO UNZ.ORG ELECTRONIC REPRODUCTION PROHIBITED THE ARTS / woke up this morning the disc's only funny track, where Bent on destruction you can't even leave your house In my ivory tower without a hassle: "I took a little drive On the sunny side of the street down the miracle mile/ Cop looked I'm the last jet pilot at me with the cutest smile/ Said get With twenty-twenty vision on the floor, pancake style/ I'm And mind bending power gonna take you downtown to cool On a mission from God off for a while." There's no hope at -The Screaming Blue Messiahs all.