Brazil's Markets Show Resilience
(too old to reply)
Walter Lippmann
2005-07-10 02:34:52 UTC
Poor Lula. He can't seem to satisfy people nowadays.
The rightwingers are leading a campaign to discredit
him with allegations of corruption. Leading members
of his administration have resigned under a cloud of
allegations. And now head of the PT just resigned.

There's talk of a military coup being bandied about:

He showed his face in Castro's Cuba and, instead of
meeting with the freedom-loving dissidents, paid to
be freedom-loving by Washington, he cuddled up to
the regime, defying the Wall Street Journal's most
firm admonitions.

Today, Lula's under intransigent critical fire from
the Brigada Marxmailista Revolucionaria, a recently-
organized supra-terranean posse of correct-liners
whose fierce leadership gives him no quarter at all.

Yet Brazilian trade unionists, five hundred of them,
who aren't happy with some of Lula's performance, are
mobilizing TO SUPPORT him at a public event Monday:

Newly released US government documents are clipping the
wings of Brazil's military and exposing its collaboration
with Washington. The shadow of the military looms over
Lula whenever he contemplates serious moves. Perhaps this
will make them think twice about making a coup.

Brazil's now dumping Microsoft and going for open source:

And now, the Brazilian economy is showing resilience.

What else could possibly go wrong in Brazil?

Walter Lippmann


Brazil's Markets Show Resilience
Political Scandal Presents
Little Risk to Stocks, Bonds,
Currency Since Initial Shock

July 7, 2005; Page C4

S?O PAULO, Brazil -- Despite a spreading political crisis,
Brazil's bonds and other markets so far have been holding
up surprisingly well.

Since early June, the ruling Worker's Party, or PT, has
been battling probes into alleged bribery of lawmakers.
The scandal has led to resignations of the president's
chief-of-staff, two PT party leaders, and yesterday,
replacement of two cabinet ministers. Andre Singer,
spokesman for President Luiz In?cio Lula da Silva, said
more cabinet changes will come tomorrow.

Mr. da Silva has lost support in Congress and seen his
approval ratings fall, potentially affecting his
re-election hopes in 2006.

But the country's financial markets are for the first time
taking political turbulence in stride, and many observers
believe the scandal won't affect the economy, as its market
impact has so far been negligible.

After plunging following the initial accusations, stocks
have recovered most of the lost ground. The Brazilian real
also weakened, but then bounced back to a three-year high
against the dollar last week to 2.335 reals.

Yesterday, the JP Morgan Emerging Market Bond Index Plus
premium for Brazil stood at 4.14 percentage points over
U.S. Treasurys, not so far from the 3.73 percentage points
at the end of 2004. Three years ago, in contrast, the mere
prospect of a PT victory in that year's election was enough
to push the EMBI Plus premium beyond 24 percentage points
over Treasurys as investors worried about the PT's
labor-union roots and socialist past.

University of S?o Paulo economist and former finance
ministry official Roberto Macedo called the initial dip in
some markets "a blip," adding that he was "80% to 90% sure"
the political turbulence wouldn't have long-term economic
implications. He gave much of the credit to Finance
Minister Antonio Palocci, who adopted orthodox economic
policies from the start of his tenure in 2003, winning
praise from investors. [Antonio Palocci]

"Three pillars explain the decline in Brazil's risk
premium," said Roberto Padovani, an analyst at the
Tendencias Consulting Group. "Public accounts, overseas
accounts and international liquidity."

Mr. Palocci is responsible for two of them. Brazil is
outstripping ambitious targets for the federal budget
surplus. As of May, the 12-month surplus was equal to 5.02%
of gross domestic product, already well ahead of the 2005
target of 4.25%.

In overseas accounts, Brazil is headed for a third straight
year of current-account surpluses, with this year's figure
projected to approach $10 billion. It could also break
2004's record $33.7 billion trade surplus.

But some analysts who take a longer view fret about
prospects for important structural overhauls. With Brazil's
Congress paralyzed by investigations, changes will likely
be scrapped until after the 2006 elections. Stalled items
include a tax overhaul to promote industrial production and
exports, a sweeping review of labor laws aimed at cutting
employer costs, and a bill granting greater autonomy to the
central bank.

"Taxes are clearly a burden for the Brazilian economy; they
affect exports and particularly employment," said business
consultant James Mohr-Bell. Brazilians pay the equivalent
of 35% of GDP in taxes.

Mr. da Silva himself may not escape unscathed. "Lula may
have a tougher time getting re-elected than most had
expected a couple of months ago, but I still think he's
favored to win, despite the crisis," said Chris Garman,
chief Latin America analyst at the Eurasia Group.

A June poll by the Public Opinion Research Institute showed
approval for the president slipped four percentage points
from March to 56%.

"The opposition feeds on the government's loss of
credibility," said political scientist Fernando Abrucio.
"That said, the scandals have hurt the PT and Congress more
than Lula himself. It remains to be seen if any allegations
will reach Lula."

U.S. Treasury prices rose. But analysts read little into
the gains, coming ahead of an anxiously awaited U.S.
government report tomorrow on June employment. Longer
maturities outperformed shorter ones, narrowing the margin
between two- and 10-year yields by 0.01 percentage point to
0.31 point.

The rebound snapped a two-session losing streak that had
pushed the 10-year yield up to 4.11% Tuesday from 3.91%
last Thursday. The bond market was closed in the U.S.

"It seems that we are in this holding pattern and that
people are probably waiting for the employment report on
Friday," said David Coard, head of fixed-income strategy at
Williams Capital Group in New York. Economists expect the
Labor Department to report a 200,000 gain in nonfarm
payrolls for June, compared with a 78,000 increase for May.

At 4 p.m., the benchmark 10-year note was up 10/32 point,
or $3.125 per $1,000 face value, at 100 13/32. Its yield
fell to 4.074% from 4.113% Tuesday, as yields move
inversely to prices. The 30-year bond was up 22/32 point at
116 4/32 to yield 4.327%, down from 4.366% Tuesday.

Junk Bonds

General Motors Acceptance Corp. cautiously tested the
Eurobond market yesterday with its first deal since sliding
into junk status in May. General Motors Corp.'s financing
arm raised ?500 million ($596 million) in a two-year deal
via Citigroup and Lehman Brothers. It was said to have been
generated on a "reverse inquiry" basis, or in response to
investor interest.

GMAC managed to hold borrowing costs at the tighter end of
market guidance, 3.375 percentage points over midmarket
interest rate swaps.

--Agnes T. Crane and Martin Baccardax contributed to this
Louis Proyect
2005-07-10 02:58:21 UTC
Post by Walter Lippmann
Today, Lula's under intransigent critical fire from
the Brigada Marxmailista Revolucionaria, a recently-
organized supra-terranean posse of correct-liners
whose fierce leadership gives him no quarter at all.
Flaccid demagogy.
Post by Walter Lippmann
Yet Brazilian trade unionists, five hundred of them,
who aren't happy with some of Lula's performance, are
And 12,000 marched against Lula and for a land reform that is desperately
Post by Walter Lippmann
So is IBM.
Post by Walter Lippmann
And now, the Brazilian economy is showing resilience.
A resilient economy? A rather imprecise term in class terms.
Post by Walter Lippmann
What else could possibly go wrong in Brazil?
Brazil's Markets Show Resilience
Political Scandal Presents
Little Risk to Stocks, Bonds,
Currency Since Initial Shock
Great. I'll call my broker on Monday.
2005-07-10 03:29:33 UTC
Walter, just who is this "Brigada Marxmailista Revolucionaria" strawmen you want
to throw up? What exactly about the Lula gov't do you like?

That, like many of the radical bourgeois regimes they stand up to Washington?
Sure, this is to be applauded. Anything that helps isolate the US in South
American is to be given some sort of support by anyone who opposes what the
imperialists are doing. Fine...but where is your class analysis of this regime
Walter? A regime that gets *endorsements* from it's own financial markets is
one that has been doing the bidding...*BIDDING* of it's own financial
bourgeoisie: keeping something of a hold on imperialism's penetration of
Brazil's economy (to make room for their own capitalists success) while
completely holding back the working class, enacting "labor reform", cutting
pensions, and doing what everyother respectivable bourgeois gov't does...*there
is no difference* Walter, wake up!

Washington's criticism's of Lula (after years of open endorsement of him by C.
Rice, et al) is to be expected if Lula veers from his *promised* course of
being South America's biggest broker between racicals in power and the US.
Brokering Chavez's deportation of 5 FARC combatants to Colombia (By now
resigend Deciue), sending troops to Haiti (interesting article today on the
role these troops are playing in attacking Haiti's poor), providing sancturary
to Ecuador's last 'radical' (and friend of Lula) run out of Quito by the
"Brigada Marxmailista Revolucionaria" no doubt (meaning the entire population
of the city).

Walter, Lula is not a revolutionary. Even you would admit this. This means he
*has no choice* but to balance between the different social classes in Brazil
while staying within the parameters of capitalism and doing what he can to
*avoid* social conflict and revolution.

You know, you posted this piece about several thousand union members supporting
Lula. I thought, to be honest, that this was a pathedic attempt to show that
Lula has working class support. Of course he does and into the millions, but
one that is shrinking everyday. The CGT, which called that rally, was the
leftovers of the old Brizola corporatist "yellow" unions of the 1950s and
1960s. They were supported for years, also, by the Brazilian Communist Party,
especially against the nacent CUT Lula himself organized to break the
stranglehold (as written into law) of the CGT (laws that were in place even
under the Dictatorship).

The CUT is divided and fracturing under Lula' assault on its former hegemony
over the working class, while he attempts, via the new "Labor Forum" of Brazil
to NGOidze the unions away from the CUT s(and, I might add, the PT!) historic
program for socialism and class struggle. So yes, he has support among the CUT,
too, partly for our old friend, "lesser evilism", but also because a wing of the
CUT is *bought off* by the gov't and bosses.

If you were in Brazil, Walter, you'd have a hard time standing on both sides of
the fence. I'd like to think you'd stand with the working class against the
bosses. I know you would. But, I also know that you'd end up having to stand
against Lula too if you were being consistant.


This message was sent using IMP, the Internet Messaging Program.
Walter Lippmann
2005-07-11 14:51:50 UTC
David Walters' contribution advances our discussion
on Brazil. This is in response to his contribution.

His full comments were posted:

The "Brigada Marxmailista Revolucionaria was nothing
more than a bit of levity (with a touch of sarcasm).
It did seem to garnered some attention, so maybe it
was useful to that extent. So what was the point?

It really referred to the dominant trend of thinking
around here. Apparently, only Juriaan and I find much
to see favorably looking at the government of Luis
Inacio "Lula" Da Silva. Our position (which he and I
have never discussed between ourselves) is more or
less "against the [prevailing] current" on Marxmail.
Those who are expending so much effort here on this
list to revile Lula have nothing to replace him with
on the ground in the real world of Brazil at present.
They counterpose a non-existent abstraction to real
life movements and struggle in contemporary Brazil.

Among the numerous positive characteristics which the
government of Lula has are the fact that it is headed
by a worker, a former steelworker. How many other gov-
ernments in the world today are headed up by workers?

Even the CUBAN government isn't headed by a worker,
but Marxists ought not to be in such a hurry to attack
the one government that IS headed by a worker. It's
sad to the rage with which so many Marxmailistas
denounce Lula. Why does it evoke such visceral anger?

The fact that Lula's government gets kudos from those
in the financial markets seems to bother some voices.
It doesn't prove that Lula is helping or hurting the
capitalist class. Nor does it prove he's hurting or
helping the working class. It only means that, as
long as economic trends for Brazil are positive, his
opponents (to the right) will have a harder time in
opposing him than they would if things were getting
worse. The commodities Brazil sells internationally
are doing well. So Lula has more room to maneuver.

Venezuela is blessed with a rise in international
petroleum prices. China and Vietnam are blessed to
have massive and growing markets for the products
of their manufacturing industries as well. This
doesn't stop the dominant voices on Marxmail from
denouncing China. Toward Venezuela and China they
are more circumspect, but if approval by financial
markets means Marxists should feel anxious, silence
on Vietnam and caution on Venezuela is curious.

Among the Marxmailistas, however, Lula's government
has been indicted, charged, tried and found guilty
of the crime of betrayal. David Walters admits that
MILLIONS of workers continue to support Lula. They
do so, despite all of the negative moves dutifully
chronicled by David (and Emir Sader and others).
David offers no explanation for the fact that Lula
continues to have strong working class support in
the face of so many betrayals.

I'm not aware that he has any opponents on the Brazilian
left. Among the militants of Marxmail, on the other hand,
Lula is generally held in rather low esteem. Those in
Brazil who have supported Lula's government, and who have
solidly revolutionary credentials, such as Emir Sader and
Frei Betto, aren't campaigning against Lula as the Militants
of Marxmail appear driven to do. Read Frei Betto explaining
to the journal of the MST, the landless movment, why he
resigned from Lula's administration. Note the soft tone:

The Bolivarian government of Venezuela also gets good
marks in financial circles. Readers will recall that
Hugo Chavez' successful defeat of last year's recall
election caused a general sigh of relief among those
in Wall Street. His administration, despite the coup
and the bosses strike, which disrupted oil production,
has been one in which oil continues to be drilled,
refined, sold and delivered with relative stability.
Financial markets like stability. What's not to like?

In Cuba, too, capitalists make good money because the
conditions under which some of them invest are favor-
able, the commodities they seek (I'm thinking first
of all of nickel) are in plentiful supply, and its
price on the world market is rising. All of this is
to say that Sherritt International is making good
money out of the deal, and Cuba is also making good
money out of the deal. Some people think there is
something wrong with Cuba AND a capitalist company
both making money. It seems to me like pretty much
of a win-win situation. Now if this kind of economic
tie is, in some way, holding back the Canadian prole-
tariat from advancing toward the seizure of power,
the critics might have a case. But I'm not aware of
any such restraint rooted in Sherrit's Cuban business.

Here's a recent Prensa Latina report on how ending the
blockade would create jobs in the United States and be
good for business in the United States. That's how the
Cubans are pitching an end to the blockade to those in
the United States who could materially benefit from it:

The United States' addiction to oil gives Chavez a
certain leverage in dealing with the United States.
25% of US petroleum consumption comes from Venezuela.
And with the price of oil continuing to rise on the
world market, US oil companies want to have as much
certainty, and as little uncertainty as possible as
far as receiving their oil comes. They're hooked.

No one on this list, including myself or Juriaan have
claimed Lula was or is a revolutionary. So there's no
point in arguing it since we're agreed on this fact.
He came to office after several previous unsuccessful
runs for the top position, and after having never
held elective office before. He hasn't been able to
restrict or limit the power of Brazil's military, a
force of considerable power, which booted out what
modicum of capitalist democracy Brazil had before.

Lula's government is criticized for protecting the
interests of the Brazilian bourgeoisie, which has a
stake in limiting the penetration of foreign capital
in the country. Venezuela's government has also taken
steps to support the private sector in the country.

Of course, in Venezuela, the predominant sector of
the national economy (oil) is in public hands. That
isn't the case in Brazil, and isn't about to be, but
that's not Lula's fault. He has far less economic
leverage than Chavez does. But these things cannot
be declared by issuing a government proclamation.

Marxmailistas in search of additional arrows for their
anti-Lula campaign literature can find plenty here:
THE MILITANT itself, which has been leading the anti-
Lula gaggle from the first moment he assumed office.
A single typical example among the dozens published:

There's a marvelous book which I read back during my
days as a child protective services social worker for
Los Angeles County, where I worked for 31 years. It's
Jungian analyist named Adolf Guggenbuhl-Craig. It's
a book about therapists, ministers, social workers
and others in the "helping" professions. The author
explains how, confronting the deep frustrations we
who think of ourselves as caring, sensitive people,
we find ourselves momentarily powerless to change
the broader society in which we live. It's this
society and its culture which, at root, causes the
problems we try to address in our professional
capacities. While we're unable to change society
at a macro or structural level, we certainly can
make our patients, clients, parishioners or etc.
tow the line! Sometimes it seems that the extreme
frustration expressed on the internet reflects the
dismay felt over the slow pace of the social and
political struggle. It can't be speeded up by the
issuance of declarations. What's needed is massive
agitation, education and organization. I don't see
Lula standing in the way of that. There hasn't been
a revolution in Brazil. There ought to be one but
that remains to be accomplished.

Keeping a realistic sense of what can be achieved
through electronic discussions can help Marxmail to
improve our understanding of phenomena like Lula's
government in Brazil and what it can and can't do.
David Walters' contribution was in that spirit and
that's why I've spent so much time responding in
such detail. I hope readers find this useful.

Walter Lippmann

Sherritt International Increases
Profits from Cuban Operations

Havana, Jun 2 (Prensa Latina) The Canadian group Sherritt
International reported higher profits in its oil and gas
activities to 16.9 million dollars during the first quarter
of 2005, mostly from their Cuban operations.

A company report on the results for the period quoted by
the Ministry of the Basic Industry portal in Internet,
indicates such figures represent a 21.3 per cent rise in

The document indicates the high prices of fuel compensated
for lower production volumes that reached 39,219 barrels of
oil per day in the blocks Sherritt operates in the island.

That quantity excludes production of block 7 in the Santa
Cruz del Norte field, in western Cuba, for not having been
declared of commercial relevance.

After the initial promising results of that exploring well
in December, 2004, with a flow of 1,300 barrels per day
(b/d), Sherritt started drilling two evaluation wells in
that field, says the source.

If initial results are favourable, the commercialization of
that field is expected to begin by the end of the current
year, with substantial crude reserves of 18 degrees API oil
with associated natural gas.

Sherritt International kept active during the first quarter
four drilling platforms, in which a total of seven
development wells and one exploratory well were opened.

The Canadian company sells to Cuban enterprises all the
heavy oil obtained in the island, generally at prices based
on 79-83 per cent of that reference residual number six
crude of the coast of the Gulf of Mexico.

In spite of lower production, Sherritt expects this year an
average 20 thousand b/d compared to 2004, which requires a
gross production around 43 thousand b/d, according to
specialists. This figure is nearer the real crude pumped
and can be maintained for the rest of the year.

According to calculations made, it is expected that the
development of drilling operations will bring about gross
production volumes, which should be notably increased by
the beginning of 2006 when the evaluating wells start

Sherritt has some oil operations in Spain, but most of its
oil income comes from the Cuban fields of Yumuri, Varadero,
Canasi and Puerto Escondido, in the north coast between
Havana and Matanzas provinces.


Lula Highlights LatAm Left

Sao Paulo, July 4 (Prensa Latina) The Brazilian president,
Luis Ignacio Lula Da Silva, highlighted advancements
reached by Latin American progressive forces in recent
years and their role at Sao Paulo Forum, already
celebrating its 15th anniversary.

This group of more than 70 parties and leftist and
progressive movements of the continent was organized due to
an initiative of the Workers? Party in 1990.

With the presence over the weekend of participants at the
12th Encounter, the Sao Paulo leader and founder said goals
reached throughout these fifteen years are ?not everything
people wish, if we look towards the ideal future we want to
build, but really have been outstanding if we analyze a
region where military coups prevail and democracy is

President Lula went on saying ?We are now a continent in
which left forces definitively gave an extraordinary step
to democratic struggle,? nevertheless he recognized
difficulties are faced everyday.

With respect to the political crisis caused here by the
oppositional right from denouncements made on supposed
corruption, he outlined ?it would be unthinkable for me to
govern this country for a four year term and not face

Lula reiterated that ?corruption is one of our continent?s
disgraces? and that ?we will have no mercy with adversaries
and allies believing they can go on using public money to
become rich.?

He remarked on advancements reached with the consolidation
of Hugo Chavez?s government in Venezuela, with Tabar?
V?zquez?s election in Uruguay, with Argentina?s achievement
of having a president with a tremendous personality as the
case of Nestor Kirchner, and the fact that Chile is about
to elect its president for the fourth time after all that
country went through.

He also mentioned how the democratic process in Ecuador and
Bolivia was not halted, in spite of their presidents?
dismissals and emphasized ?we need to work on our
processes? consolidation, in order not allow any backtrack
on these conquests.?

Lula provided some self reflection, saying, ?The Lula you
met 15 years ago is older but more experienced and aware of
the role we have to play within South American politics, as
well as Latin American and Africa, and the new concept of
politics in the whole world.?


"Walter, just who is this "Brigada Marxmailista
Revolucionaria" strawmen you want to throw up?
What exactly about the Lula gov't do you like?"

and several other good questions.
David concluded:

"If you were in Brazil, Walter, you'd have a hard time
standing on both sides of the fence. I'd like to think
you'd stand with the working class against the bosses. I
know you would. But, I also know that you'd end up having
to stand against Lula too if you were being consistant."


(Louis's discussion with Lee Sustar on Counterpoint's
website provided a good example of how to carry on a
useful exchange of views. It provides a positive model
which could certainly be well emulated on Marxmail.
Louis often says he'd like subscribers to write more
extended comments in essay form. I agree about that.
Louis Proyect
2005-07-11 15:14:44 UTC
Post by Walter Lippmann
I'm not aware that he has any opponents on the Brazilian
Of course you are--assuming you read your hometown newspaper. You just
discount these reports because they appear in the bourgeois press. In your
peculiar worldview, this is because the bourgeois press seeks to divide the
left as if the editorial board of the LA Times et al care what people like
us think.

Los Angeles Times, January 26, 2005
Brazil's Leftists No Longer See President as Their Champion
by Henry Chu, Times Staff Writer

Shortly after his inauguration as this nation's first left-leaning
president, Luiz Inacio Lula da Silva garnered rapturous applause from a
massive convocation of international social activists here when he promised
to take on the capitalist world order and strive to end hunger in poor

What a difference two years makes. This week, the leader of Latin America's
largest country is again scheduled to address the World Social Forum, which
opens today. But this time, jeering may replace cheering as many of his
once-ardent supporters accuse him of betraying the pledges of his campaign.

From environmentalists to human-rights advocates, urban workers to the
rural poor, left-wing activists are disappointed or downright furious with
the man they believed would finally put their causes high on Brazil's agenda.

Instead, they say, the former labor leader and leftist firebrand has
pursued policies identical to those of the center-right administration that
preceded him. Disaffected supporters are upset about his moves to maintain
a more austere budget than even the International Monetary Fund had
demanded, to expel radicals from his Workers' Party, to allow deforestation
in the Amazon and to only marginally increase the minimum wage.

"You could use the phrase that [Fernando] Gabeira coined in late 2003: 'I
was dreaming the wrong dream,' " David Fleischer, a political scientist in
Brasilia, said, referring to a left-wing politician who abandoned the
Workers' Party in disgust. "A whole lot of movements felt their time had
come, but it hadn't."

Lula's aides insist that their boss remains committed to reducing Brazil's
social inequality, where 1% of the population owns about half the land. But
structural changes require more than the two years he has been in office
governing through an often-fractious coalition, they say.

The president and his advisors say Lula has had to act pragmatically to
keep foreign investors from fleeing Brazil and to ensure that the country
remains competitive through a series of tax and pension reforms. Those
policies are bearing fruit, they say, noting that the economy recently
posted its fastest third-quarter growth rate in eight years. Overall growth
in 2004 could be the highest in a decade.

But some critics wonder at what cost the economic recovery has been
achieved and which sectors of society have benefited.

Despite the country having one of the world's most unequal distributions of
land, the government has yet to tackle agrarian reform or strengthen the
rights of indigenous, rural people.

Detractors also say that Lula has favored developers over the environment,
leading to the destruction of vast tracts of rain forest. Last year's loss
alone amounted to an area the size of New Jersey.

To create more efficient distribution routes, the government has decided to
pave a highway through the heart of the Amazon basin. Lula's environment
minister, a committed conservationist, has been defeated or overruled so
often that many see her as a figurehead.

"There is also the housing shortage. The country has a deficit of 6 million
homes," said Maria Luisa Mendonca, director of the Social Network of
Justice and Human Rights. "The government has focused its attention on the
Zero Hunger project and limited its action to assistance programs, rather
than structural changes."

Brazil's many favelas -- slums where millions of people live without
reliable access to clean water, basic sanitation or electricity -- continue
to expand. Violence is endemic.

Some of the harshest denunciations of Lula come from members of Brazil's
Landless Movement, which has staged property invasions, takeovers and other
protests to draw attention to the plight of the rural dispossessed.

Lula wooed their votes with promises to find homes for hundreds of
thousands of families but is nowhere near being on track to fulfill that

"The elected government promised to settle 430,000 families in four years
and have only settled 60,000 in two," said Valquimar Reis, one of the
movement's national coordinators. "It is a moral debt Lula's government
owes the landless workers.

"We believed in Lula's presidency because of his history of struggle," Reis
said, adding that they had been disappointed. "Lula lacked the courage to
confront the economic interests of the bankers, industrialists and
exporters. We have waited very calmly for two years, but now our patience
is exhausted."

With the movement threatening more protests and land occupations, Lula paid
a visit Friday to one of their encampments, in northern Brazil, for the
first time since taking office.

He reminded listeners of his humble origins and exerted the force of his
charisma, which can still convince ordinary folk that he's one of them.

"I know where I came from, who my true friends are from yesterday, from
today," he said. "I have a vivid awareness that, in life as in death, we
always return to the place from where we came."

From the beginning of his presidency, Lula has invoked his charm to help
him walk a political tightrope, gingerly balancing the demands of former
comrades, Wall Street investors and the various political parties he has
had to cut deals with to push legislation through.

In some ways, Lula has succeeded in differentiating his administration from
that of his more conservative predecessor, in areas such as foreign policy.
Lula is turning out to be one of Brazil's most widely traveled presidents,
jetting around the Third World to assemble a bloc of poor nations capable
of standing up to the developed world.

Supporters note that Brazil successfully led opposition to the demands of
rich nations in global trade talks, lambasting countries such as the United
States whose subsidies for farmers give their crops an advantage over those
of developing nations in the global market. The informal alliance of poor
countries, including Brazil, China and India, helped precipitate the
collapse of World Trade Organization negotiations in fall 2003 in Mexico.

From the World Social Forum here in Porto Alegre, Lula will fly to Davos,
Switzerland, for the World Economic Forum to hobnob with the international
political and financial elite, an event that he once shunned as a rich
man's club but embraces now as a place where he can try to sow progressive

But Lula's decision to attend the Davos conference rankled the left in
Brazil, as did his plans to make the journey in a new $57-million luxury plane.

The price tag outraged workers and public employees who have been lobbying
for pay raises and another boost to the minimum wage, which is less than
$100 a month. Last year's increase was about $7 per month.

"He is not fulfilling his campaign promises," said Otto Pereira Neves of
Sindicep, a union of federal employees. "We need to pressure him to tend to
the people and not just to bankers."

Despite all the dissatisfaction, no other left-leaning candidate has a
chance of winning next year's election, polls show.

Environmentalist Adriana Ramos and others have learned that having a
supposed friend in the nation's top office is no guarantee of success for
their causes.

"Now we see that the onset of power by a political [ally] is not enough,"
she said ruefully. "We have to find ways for civil society to contribute to


Louis Proyect
2005-07-11 19:59:59 UTC
Post by Walter Lippmann
The influence of the conventional media on forums such as Marxmail
is not hard to see. Discussions and debates here often reflect the
selections, the tone and the attitude laid out in the capitalist
media. For example, China-bashing has become very common in the
US media, since the ruling class is somewhat split over whether or
not to accept or reject expanded Chinese influence in the economy
of the United States of America. Counterposed tendencies publish
their views seeking support among the public. This is surprising?
China Labor Watch: Shoe Factory Workers Still Live in Humiliation

Dear friends,

Mei Xing Shoe Factory is one of the production facilities of the
Taiwan-invested Kingmaker Footwear Holdings Ltd. (which was listed on the
Hong Kong stock market: SEHK 1170) in Zhuhai City, Guangdong Province,
China. The factory manufactures footwear products for several
multinational shoe companies, including popular brands

Clarks and Skechers.

Thousands of workers at the Mei Xing are still working in humiliating
conditions, illegally and invasively searched by security guards at the end
of work every day.

Xiao Ping, a 17-year-old female worker from Sichuan Province, told China
Labor Watch?s investigator that she and her fellow workers are searched by
female security guards every day when they leave the workshop. She feels
this is a great humiliation to her, but she just found this job a month ago
and has not received her first month?s wages yet. She has no other choice
but to tolerate this mortifying experience.

A Xin, a 24-year-old worker from Guangdong Province, has been working at
the factory for two years. She reports that she still feels extremely
uneasy by the degrading way that those male security guards look at her
while she is being searched by the female guards. She said she cannot quit
because she needs the job to support herself and her family.

After China Labor Watch released its investigation report in June 2005,
several media outlets followed up with the stories. However, when
questioned about the body searches, the factory management denied that they
were conducting illegal searches, stating that they were merely trying to
prevent shoes from being stolen from the factory. China Labor Watch
believes that there are ways to prevent workers from stealing shoes other
than by intrusive and humiliating body searches. Dear friends, body
searches are illegal and a serious violation of workers? basic human
rights, but this is what thousands of workers at the Kingmaker Zhuhai
factory have to face every day. This violation must be corrected
immediately. Please write letters and make phone calls to Clarks, Skechers
and Kingmaker urging them to stop this illegal practice and improve working
conditions at factories that manufacture their products. Please also
contact the Zhuhai Labor and Social Security Bureau to seek their help.
They may not listen to the workers, but they will listen to you. Their
contact information is below

Skechers USA, Inc.
ATTN: Robert Greenberg, CEO
228 Manhattan Beach Blvd.
Manhattan Beach, CA 90266
Tel. 310-318-2982
Fax: 310-318-5019

Clarks Companies, N.A.
ATTN: Peter Bolliger, CEO
156 Oak Street
Newton Upper Falls, MA 02464
Tel. 800-425-2757
Fax: 617-243-4300

Kingmaker Footwear Holdings
17th Floor, Empress Plaza
Hong Kong, Hong Kong
Tel.: 852-27232060
Fax: 852-27231858

Zhuhai Labor and Social Security Bureau
66 Kangning Road
Zhuhai, Guangdong Province
Tel.: 86-756-2128484

For more information about the Mei Xing factory, see China Labor Watch?s
report at:


Li Qiang Executive Director, China Labor Watch


The Kingmaker Company's Factory in Zhuhai, China: Stolen Wages, Unfair
Labor Practices Contents

I. Introduction
II. Work Hours
III. Wages
IV. Living Conditions
V. Meals
VI. Labor Intensity and Price of Labor
VII. Fines and Abusive Treatment
VIII. Holidays and Benefits
IX. Hiring Policy
X. Work-Related Injuries and Occupational Diseases
XI. Monitoring and Inspections

I. Introduction

Kingmaker Footwear Holdings Ltd. (Chinese name: Xin Xing Ji Tuan) is a
Taiwan-invested company that produces infant, fashion, casual and rugged
footwear. It operates 35 production lines in China and Vietnam, and these
production lines employ about 20,000 total workers. In 2003 it invested
over USD $60 million in new production facilities. Its largest customers
include multinational footwear manufacturers like Skechers, Clarks, Stride
Rite and Wolverine. This investigative report concerns the Kingmaker Zhuhai
factory (Chinese name: Mei Xing Xie Chang), which is one of Kingmaker
Footwear Holding Ltd's production facilities. Kingmaker Zhuhai is located
in the Xiangzhou Cuizhu Industrial Zone of Zhuhai City, Guangdong Province,
China and employs a total of 14,000 workers. Our investigation was
conducted in Plant 1 of the Mei Xing factory (hereafter referred to as
"Kingmaker Zhuhai"), which employs about 7,000 workers." Kingmaker Zhuhai
manufactures footwear products for several shoe companies, including Clarks
and Skechers. This brief report is intended to document several instances
in which factory operators violate workers' legal rights. Such violations
must be corrected immediately.

II. Work Hours

Work hours at Kingmaker Zhuhai are from 7:30 to 21:00, with lunch break
from 11:40 to 12:40 and dinner break from 16:40 to 18:00. However, the
factory employs a staggered break system in which groups of workers start
their breaks at three different times, but return to work at the same time.
Thus, mid-day rest shifts begin at 11:40, 12:00, and 12: 20, but all
workers return to work at 12:40. Evening breaks begin at 16:40, 17:00, and
17:20 pm, and all workers return at 18:00.

There are different total work hours for workers in different departments.
Because factory policy stipulates that workers cannot receive more than 3
hours of overtime pay, any overtime hours beyond the normal three are
calculated as part of the regular 8-hour workday, i.e. the worker is not
paid for them. Nonetheless, occasionally, when there are many orders,
workers are required to work overtime until 1:00 or even 2:00 am,
effectively losing many hours of pay. If a worker puts in this kind of
overtime, he or she will work up to 18.5 hours in a day.

In addition to work hours, workers are also required to attend work-
related morning meetings and do workplace cleaning every morning from 7:00
to 7:30 without receiving any compensation. In addition, workers are not
allowed to punch their time card when working on Saturdays, even though
they are paid for their Saturday hours. Workers work 6 days a week with
only Sunday off, but they get Saturday off as well when the factory does
not have many orders. Workers are not allowed to leave the factory during
lunch break, when they have to take their rest on the shop floors, though
they may leave the factory during dinner break if they choose.

III. Wages

The factory implements two types of wage paying practices: hourly wages for
workers in the warehouse and sample rooms and piece-rate wages for workers
in the production departments. In other words, workers who produce items
are paid by the number of items they produce, whereas workers who work in
other departments are paid by the hour.

The standard hourly wage is 27 yuan for an 8-hour workday, i.e. 3.375
yuan/hour. However, the overtime rate is 2.5 yuan per hour, even lower than
the regular rate. In addition, the factory uses the wage structure above
for regular and overtime hours on rest days and statutory holidays in
violation of China Labor Law, which mandates that a 50% premium be paid for
overtime during regular work days, 100% for overtime on rest days, and 200%
for overtime on statutory holidays.

Workers who are paid a piece-rate wage are paid according to the number of
products they produce. These workers also receive a base wage of 510 yuan
per month, but only if they complete their monthly piece quota. This is
extremely burdensome for piece-rate wage workers during the slow season
because if the factory has very few orders, the worker may not receive a
base wage due to failure to complete the quota. One worker in the stitching
department said that she received only 24 yuan in March, 2005.

For this reason, many workers feel it is preferable to get an hourly wage
instead of a piece-rate wage. Production workers who have a good
relationship with the supervisor of their department are sometimes paid an
hourly wage instead of a piece one. Workers report that their wages are
becoming lower and lower each year. Organized by some managing staff
members, workers were on strike for three days in April 2004, but as a
result only managers' salaries were raised, leading one to believe that
perhaps that was the original intent of the managers. . Workers at the
cutting department went on strike on May 2, 2005, but they were told that
if they are not satisfied with their wages, they could switch to other

Workers receive their work payment at the end of each month. According to
factory policy, workers get a month's pay at the end of the following
month, i.e. they receive their wages one month in arrears. If a workers
wants to quit the job and get the last month' s pay, he or she must give
the factory 15 days' notice and get permission from his or her group
director, team director, department director and finally the factory
director. The worker will not be allowed to quit with pay if any of the
directors does not agree with his or her decision to leave the factory.
Therefore, many workers choose to quit without notifying the factory and
thus lose one month's payment.

Workers receive pay stubs each month. From an analysis of 5 pay stubs from
one worker over a five-month period, one can see that a worker's income at
Kingmaker Zhuhai varies drastically from month to month. Here are net
incomes for this worker during the five month period:

Nov., 2004: ?1152 (about $139)
Dec., 2004: ?900 (about $108)
Jan., 2005: ?754 (about $91)
Feb., 2005: ?278 (about $34)
Mar., 2005: ?853 (about $103)

The photo below shows two of the pay stubs cited above, viz., November 2004
and December 2004. Looking at the various figures printed on the pay stub
for December 2004, we can see in the left column that the base salary is
510 yuan, while the actual net income taken home by the worker is 900 yuan.
This 900 yuan is arrived at after adding per-piece wage

In the middle column, the actually given piece rate, a combination of base
wage and per-piece compensation, is 975 yuan. Below that, per-piece
compensation is 515. At the bottom of the middle column, we see two
numbers, 30 and 20, that correspond to miscellaneous compensations and
compensation for food purchases, respectively. In the far right column we
see fees and deductions totaling 125. First, there is a monthly fee of 80
yuan for use of the canteen. There is also a cleaning service fee of 1
yuan, and retirement insurance of 44 yuan. The factory simultaneously gives
workers 20 yuan for food while also charging them 80 yuan because the 20
yuan is considered to be a kind of monthly benefit for anybody working
inside the factory. If we look again at the pay stub, we see that this
worker had take- home earnings of 900 yuan in December, in November the
figure was instead 1152 yuan. While the base wage of 510 yuan is the same
for both months, the piece-wage rate was higher, indicating that the worker
produced more pieces in November than December.

The fact that the worker receives a piece-rate wage on top of his or her
base salary indicates that the worker earns a piece wage, not an hourly
wage. This means that, no matter how many hours the worker is at the
factory, he or she will be paid only for the number of pieces produced.
(Conversely, workers who are paid an hourly wage are paid without regard to
the number of pieces they produce.) Despite this, however, as mentioned
above, a worker who works in a department that normally pays by the piece
(such as a production department) may be paid by the hour instead if he or
she is on good terms with the department supervisor. In general, workers
prefer to be paid by the hour because the income is comparatively stable.
By getting paid by the hour instead of by the piece, a worker's income will
generally be the same regardless of whether the factory has many orders or not.

IV. Living Conditions

There are two dormitory buildings in the factory compound. Each dorm
building has 7 floors with over 20 rooms on each floor. There are 5 sets of
double-tiered bunks per room, i.e. there are 10 workers per room. Two fans
are placed in each room, and each worker gets his or her own clothing
cupboard, but there are only two bathrooms/shower rooms per floor, meaning
that these two facilities on each floor are shared by over 200 people. Each
worker is charged 70 yuan (previously 46 yuan) for living in the dormitory,
and there are strict rules enforced. It is not uncommon for managers to
throw workers quilts, shoes and clothes into trashcans if they are not
properly arranged. Workers' belongings are often stolen, and there is a
general feeling of non-safety. For all of these reasons, some workers
choose to live outside of the factory dormitory, but the standard of living
is low because few workers can afford a decent place.

V. Meals

The factory canteen is located on the first floor of the worker dormitory.
Previously the factory charged each worker 80 yuan per month for food, but
as of May, 2005, the figure has skyrocketed to 180 yuan (about $22).

Moreover, this 180 yuan is deducted regardless of whether a worker eats
dinner at the factory canteen or not. Each meal provided consists of 3
dishes of vegetable or meat and one soup, and workers report that while
there is a decent amount of oil in the food, it is flavorless. Food
provided is in general of poor quality and little quantity, and there have
been reports of dead rats found in food

Therefore, many workers choose to have dinner outside the factory or cook
by themselves even though they are still forced to pay for canteen use.
Food provided to workers who work overtime after midnight are daytime

In the past, meat dishes for workers in fact consisted only of the skins of
the meat. Meat itself was not put in the workers' food and was given
instead to management. However, this situation seems to be improving
because more money is being charged. Because the food is of such poor
quality, workers rarely feel full after eating. Moreover, because workers
are not free to leave the factory compound at lunchtime, they do not have
the choice of eating outside the factory.

VI. Labor Intensity and Price of Labor

The models that this factory is currently manufacturing include Clark's
11319 and 11313.

The piece rate is different for different departments. A worker in the
cutting department can finish 13,000 pairs within 8 hours and get paid
0.0025 yuan per pair, i.e. 32.5 yuan for an 8-hour workday. Each production
line in the molding department can manufacture 2000 pairs of shoes and
workers are paid 1.2 to 1.8 yuan per pair; and the rate in the stitching
department is 2 yuan per piece. In other words, for producing one pair of
shoes that is sold for dozens or hundreds of dollars in the retail market,
the cumulative wage for workers in all three departments is less than 5.2 ?
5.8 yuan, which is equivalent to 63 to 70 cents.

There are many pregnant workers on the production lines, but the factory
has taken no protective measures. They are required to work the same hours
as other workers.

In order to speed up production, supervisors often verbally harass workers
in the factory by calling them "pigs", cursing their parents, and sometime
even beating workers.

VII. Fines and Abusive Treatment ? Monetary fines exists in the
factory: the standard is 30 yuan for a "minor offence" and 90 yuan for a
"major offence", which is determined by the supervisors ? Three days'
pay is deducted for being absent for one day ? 30 yuan is deducted for
losing one's factory ID ? Workers are required to purchase work
uniforms: 28 yuan per article of winter clothing, and 15 yuan per article
of summer clothing ? Illegal body searches. Sometimes security guards
will search workers if shoes are found missing, and they do not apologize
if nothing is found

VIII. Holidays and Benefits ? Workers are allowed to take days
off without pay for Labor Day and National Day, which each allow for three
days off with pay under the law

? No paid maternity leave, wedding or bereavement leave

? Monthly bonus of 30 yuan for full work attendance provided the
worker is not late or absent and did not ask for time off.

? Annual bonus of 100 yuan for workers who have worked 1-3 years; 150
yuan for those who have worked 3-5 years; and 200 yuan for workers who have
worked over 5 years.

? All other benefits, such as housing compensation, food compensation,
medical compensation, etc. have all been cancelled since the factory
started to purchase retirement insurance for workers.

IX. Hiring Policy

The majority of workers are from Hunan, Sichuan, and Jiangxi provinces. At
least 90% of the workers are women. Male workers have to pay at least 1000
yuan to be hired.

The factory subjects new workers to a health inspection for which workers
have to pay 55 yuan (50 yuan for the inspection, 5 yuan for
transportation), whereas it costs only 35 yuan to get a health inspection
at a hospital. New workers are provided no training before they start.

The factory management signs a contract with workers around September of
each year and the contract is valid for one year. There is only one copy of
the contract and it is kept by management. Workers state that there is a
great discrepancy between the content of the contract and what is practiced
in reality. All they do is sign their names; there is no room for
negotiating with management.

X. Work-related Injuries and Occupational Diseases

Work-related injuries are not uncommon in the factory. Management provides
no monetary compensation except for that which comes from the insurance
company. A toxic, corrosive and malodorous chemical is still being used in
the molding department. Workers often faint due to the unpleasant smell
even when they wear surgical masks.

XI. Monitoring and Inspections

When questioned, workers state that there is no trade union at the factory.
The factory has suggestion boxes for workers' complaints. However, workers
said that they seldom make any use of the boxes, because the management
would not address the issues they raised. The factory also coaches workers
on how to speak to compliance teams or human rights monitoring staff who
visit the facility. It also threatens workers by telling them that if they
say anything to the monitoring teams, they will have to leave the factory
once the compliance team is finished.

Li Qiang

Phone: 1-917-257-8589
China Labor Watch P.O. Box 4134
Grand Central Station
New York, NY 10163-4134



Fred Feldman
2005-07-11 16:05:13 UTC
Walter wrote:
"Among the numerous positive characteristics which the
government of Lula has are the fact that it is headed
by a worker, a former steelworker. How many other gov-
ernments in the world today are headed up by workers?"

Well, Walter has aroused my anti-workerist fanaticism. The last 100
percent former worker to be president of a nation, to my knowledge, was
Lech Walesa in Poland. A worker, the leader of a genuine trade union,
someone who had even, in my opinion, led class battles that had a
progressive class character. (Not going to get into a debate about
that.) So Lula's presidency registers progressive social and cultural
change that is a fact of life, just as the discussion of Condoleeza Rice
becoming the next US president registers progressive cultural change.

Such emergences are often signs of certain kinds of cultural progress,
breakdowns of historic social barriers, victories of the working class.
But a worker who serves the interests of the imperialists and/or the
national bourgeoisie (I place Lula primarily in the latter category,
although such phenomena are almost always mixed) is a lot less part of
the working class than the world-class intellectual Fidel Castro or the
former army officer Hugo Chavez.

There were actually three rough positions in the debate, although Walter
now amalgamates them.

One was the "majority" of contributors that Walter referred to who tend
toward, in my opinion, sectarian positions rather characteristic of the
Euro-American far left.

Second was those like myself (and I think I was fairly close to Nestor
and Carlos Rebello on this) who see Lula as basically serving the
Brazilian rich, not primarily the poor and oppressed, but who see the
shift toward a more nationalist foreign policy (closer ties with
Venezuela and Cuba, open-ness to Latin American unity moves, and the
emergence of this oppressed nation as more of a player on the world
scene, and indeed the coming to power of the Workers Party in general as
a significant strategic shift that is worth fighting to preserve. That
is how I see the first signs that the working people of Brazil are
beginning to rally around Lula. They have a deep interest in preserving
this shift, which opens the door to winning more.

I think the US left has always exaggerated the imperialists' commitment
to Lula. They, like we, tend to go with him until something better
comes along. Their goal right now is to pressure him into making
Cardoso's party more part of his government machine, and splitting or
destroying the workers party. We should be opposed to this.

At any rate, I agree that any illusions that the workers were going to
storm heaven with Lula at their head have evaporated, and the workers
and peasants are realizing that their struggles must continue
independent of him -- but not with the goal of removing him until they
are strong enough to do so in their interests.
As for the left, Walter ignores, among other things, the section of the
Fourth International which supported the Workers Party and Lula in the
election, and even had a member in his cabinet. They have split over
his course -- some of the measures aimed at keeping his support in
Washington and the financial markets. Of course, the left wing may have
a sectarian response and shift from being Lula-philic, with illusions
about "storming the heavens" in a country where there is no broad mass
mobilization and no pre-revolutionary type situation or revolutionary
process taking place, to be Lula-phobic in the style of the European
left which probably has influence among them.

Combining real political independence with the right strategic approach
in this conflict will be a big challenge for the Fourth
Internationalists. Hopefully they will achieve a breakthrough from a
narrow un-national way of viewing the popular movements.

I am beginning to think the workers will rally to Lula to prevent the
right from winning -- the situation is not favorable enough yet for a
sharp turn to the right, probably even including by Lula, whose openness
to aspects of neoliberalism goes back a long time but whose regime
cannot survive giving up the nationalist course in some fields.

Chavez and Castro will endorse this trend, supposedly because of narrow
aid-and-trade considerations (I think their concerns are
revolutionary-strategic and in the interests of Brazilian workers and
peasants.) The US left will scream "You are fools! He betrays you!" But
the workers, who have no vast revolutionary illusions about Lula, will
probably be making the right strategic move for the moment.
Fred Feldman
Louis Proyect
2005-07-11 16:34:16 UTC
Post by Fred Feldman
One was the "majority" of contributors that Walter referred to who tend
toward, in my opinion, sectarian positions rather characteristic of the
Euro-American far left.
Really? I take my cue from Counterpunch, not the Euro-American far left.

Here's a snippet from an article by Norman Madarasz titled "The Choking of
Brazil's Worker Party" that appeared this weekend. Madarasz is a philosophy
professor from Canada working in Brazil who has zero connection to Trotskyism.

"President Lula met with PT rank and file last Friday. He also held a
behind-closed-doors traditional St. John's June party with his cabinet the
following day. Apparently on the agenda was the cabinet reshuffling forged
with the PMDB. The shuffle has long been requested by the coalition parties
but is now being snubbed as too little to late. At least that was case
until Tuesday afternoon.

"Then on Wednesday, just prior to Lula's departure to attend the G8 summit,
the presidency announced three new ministerial positions for PMDB members,
negotiated with the former and current Senate leaders. Immediately, a board
of PMDB State governors and the party president rejected the agreement, and
threatened to excommunicate the three new ministers from the party.

"What is more astonishing, however, is that instead of seeking qualified
members from civil society to fill in the portfolios, Lula negotiated the
ministries with the same type of crooks who have gotten him into this mess
in the first place."

full: http://www.counterpunch.org/madarasz07092005.html


1970-01-01 00:00:00 UTC
Walter acknowledges Davids's contribution, advancement of the discussion, and then
spends the next 1500-2000 words studiously ignoring those contributions, that
advancement, responding only to the strawmen he himself established earlier.

Let's try and make this simple: Some, myself among them, conclude that the Lula
government has taken actions that weaken the working class and strengthen the rule
of capital. Such actions include increased debt servicing; indifference to death squad
and reactionary attacks on the MST, rural workers, and indigenous people; military
support for the occupation of Haiti; attacks on the independent working class organizations;
declining wage rates; support for Petrobras against the Bolivian workers; tax incentives
to international corporations at the expense of the general population.

Walter answers none of these concrete issues, instead parading about a sort of
workerist patriotism-- Lula is the one worker the actual head of a government.

And it gets worse. We get the patriotic, no ecclesiastic analysis from Walter,
that Vietnam and China are "blessed" to have growing markets for their manu-
factured goods. Blessed? That would make the bourgeoisie of theUnited States,
Japan, the EU, and ASEAN countries, divine, I guess as those are the countries
and class dispensing the blessings to China and Vietnam. And what blessings
those are. I would ask Walter if he has examined the real changes to social
welfare brought about by these blessings in China and Vietnam? The real
increases in unemployment, rural dispossession, agricultural relations, not to
mention the abuse of the workers, sexual and physcial abuse of the mostly
female workers employed in the textile, RWG, electronics sectors that have
been such a focus of investment?

Is Walter aware that these blessings are owned for the most part by the advanced
capitalist economies, including Taiwan? So where Fred Feldman sees imperialism
as the main enemy, Walter sees imperialism as the provider of blessings. Manna
from the heaven of Wall Street, the City, and Taiwan Semiconductor.

And then as if patriotism and religion weren't enough, we get advice from a
Jungian therapist's guidebook. Enough is too much. There are real issues of
class struggle involved. There is a real left wing opposition to Lula. Patriotic,
religious, and therapeutic distractions to the contrary notwithstanding.


-----Original Message-----
From: Walter Lippmann <walterlx at earthlink.net>
Sent: Jul 11, 2005 10:51 AM
To: marxism at lists.econ.utah.edu
Subject: RE: [Marxism] Brazil's Markets Show Resilience

David Walters' contribution advances our discussion
on Brazil. This is in response to his contribution.
1970-01-01 00:00:00 UTC
This, I promise, will be my final remarks on Lula, but not my final remarks
on the "national bourgeoisie," "colonialism," "imperialism," main or secondary
enemies... but we're at the point where direct responses to direct questions are
simply not forthcoming,

But the issue Fred raises, and endorses (incorrectly in my evaluation) is of
critical import.

Fred states:

"Second was those like myself (and I think I was fairly close to Nestor
and Carlos Rebello on this) who see Lula as basically serving the
Brazilian rich, not primarily the poor and oppressed, but who see the
shift toward a more nationalist foreign policy (closer ties with
Venezuela and Cuba, open-ness to Latin American unity moves, and the
emergence of this oppressed nation as more of a player on the world
scene, and indeed the coming to power of the Workers Party in general as
a significant strategic shift that is worth fighting to preserve. That
is how I see the first signs that the working people of Brazil are
beginning to rally around Lula. They have a deep interest in preserving
this shift, which opens the door to winning more."

To his second I offer the following firsts: first Fred says that Lula is basically serving
the bourgeoisie, but it is the national bourgeoisies. In reality, the distinction between
national and international bourgeoisie is meaningless. Has been meaningless. Is
meaningless. Will always be meaningless. Can somebody show me where Lula's
service to the national bourgeoisie has weakened, structurally, the economic
penetration of Brazil, or any country in Latin America, by the advanced capitalist

Second Fred talks about a more nationalistic foreign policy. Well, first there is scant,
scant evidence of a nationalistic foreign policy that counters the moves of international
capital. There is evidence of just the reverse-- a foreign policy that furthers the
moves of international capital-- in Haiti and Bolivia.

But most importantly is this: As I stated earlier Fred has turned
the singular, and critical contribution of Trotsky in analyzing capitalism as
an international system not just upside down, but also ass-backwards.

Trotsky perceived in Russia an uneven and combined development that doomed
the prospects for "classic" capitalist development, and a classic capitalist class to
still birth, thus passing those tasks and that development unto the working class,
which in turn could only meet that responsibility as part of an international revolution.

Feldman now regards the very penentration of a less developed country with its
stunted domestic bourgeoisie as a reason for the working class to give itself over
to that class, to the positives of reinforcing that rich domestic bourgeoisie. No matter
how much he protests that such is not the meaning of his position, that is exactly
what it proves to be in the practice of the politics he supports in Lula.

This is more than just an error, a misapprehension, a theoretical mistake-- it is class
suicide as been shown numerous times in numerous struggles-- from China in
the 1920s to Bolivia in the 50s-- to the disaster unfolding in South Africa right now.


-----Original Message-----
From: Fred Feldman <ffeldman at bellatlantic.net>
Sent: Jul 11, 2005 12:05 PM
To: marxism at lists.econ.utah.edu
Subject: RE: [Marxism] Brazil's Markets Show Resilience
Walter Lippmann
2005-07-11 19:00:42 UTC
This 54-word response to my 1300 word commentary is appreciated,
despite its flip and dismissive tone. In fact, I was in Cuba and
don't catch as many items which appear in the print edition that
I read when I'm here in Tinseltown. Confession: I normally just
look at Cuba stuff on the LA Times website when I'm on la isla.
Thanks for sharing that old article with readers.

Such reports aren't to be discounted. More than a few Brazilians,
like more than a few combatants here on Marxmail are frustrated
by the pace of change in Brazil. Me, too! Thus, protests are
understandable and the more the better. Juriaan's report of the
enthusiastic attitude a Brazilian parliamentarian adopted toward
the protest added to our understanding of the facts on the ground.

The role of the capitalist media is, contrary our critic's opinion
below, consciously to divide the public and to give their readers the
idea, first of all and above all that, whatever problems exist in
society and our world, nothing fundamental can be changed. That is
to say "you can't fight City Hall and win", as the conventional
mantra goes. This is not restricted to the left, whether organized or
not, and in whatever form. There isn't much of a left in the United
States. But the mass media very, very much have a role in providing
disinformation and diseducation to the public. After the selling of
commercial advertising, that is one of its most important roles.

The idea that the Editorial Board of the Los Angeles TIMES sits down
and thinks it has to intervene in discussions on Marxmail would be
indeed somewhat inflated and self-indulgent. But the notion that the
capitalist media doesn't think consciously of its role in setting
the tone for such politics as exist in this country would be, well,

The influence of the conventional media on forums such as Marxmail
is not hard to see. Discussions and debates here often reflect the
selections, the tone and the attitude laid out in the capitalist
media. For example, China-bashing has become very common in the
US media, since the ruling class is somewhat split over whether or
not to accept or reject expanded Chinese influence in the economy
of the United States of America. Counterposed tendencies publish
their views seeking support among the public. This is surprising?

The role of the mass media in capitalist society was described well
by an earlier contributor to discussions about the media:

"The creation of consent is not a new art. It is a very old one which
was supposed to have died out with the appearance of democracy. But
it has not died out. It has, in fact, improved enormously in technic,
because it is now based on analysis rather than on rule of thumb. And
so, as a result of psychological research, coupled with the modern
means of communication, the practice of democracy has turned a
corner. A revolution is taking place, infinitely more significant
than any shifting of economic power.

Within the life of the generation now in control of affairs,
persuasion has become a self-conscious art and a regular organ of
popular government. None of us begins to understand the consequences,
but it is no daring prophecy to say that the knowledge of how to
create consent will alter every political calculation and modify
every political premise...It has been demonstrated that we cannot
rely upon intuition, conscience, or the accidents of casual opinion
if we are to deal with the world beyond our reach.

Public Opinion, by Walter Lippmann (Free Press, 1965; first
published in 1922), page 158

The lesson is, I think, a fairly clear one. In the absence of
institutions and education by which the environment is so
successfully reported that the realities of public life stand out
sharply against self-centered opinion, the common interests very
largely elude public opinion entirely, and can be managed only by a
specialized class whose personal interests reach beyond the locality.
This class is irresponsible, for it acts upon information that is not
common property, in situations that the public at large does not
conceive, and it can be held to account only on the accomplished

Public Opinion, by Walter Lippmann, page 195


Brazil's Real Climbs to 1-Week High on Record Trade, Deflation

July 11 (Bloomberg) -- Brazil's currency rose to a one-week high on
expectations record trade flows and declining inflation will increase
demand for the real.

The currency rose as much as 1.2 percent after the government said
Brazil's weekly trade surplus reached the highest since at least 2000
in the July 3-10 period. Booming exports and consumer price indexes
signaling deflation in South America's No. 1 economy should see the
real extend gains, said analysts such as Pedro Tuesta at 4Cast Inc.

``We have strong exports and capital inflows and inflation
expectations are decreasing significantly,'' said Tuesta, a Latin
America strategist for the Washington D.C.-based consultancy.

The real rose 1.1 percent to 2.3480 per dollar at 11:43 a.m. New York
time from 2.3749 late July 8, increasing its 2005 gain to 13.1
percent, the best performance against the dollar of the 16 major
currencies. It last traded at a stronger level on July 4 at 2.3395
per dollar.

Brazil's Development, Industry and Trade Ministry today announced
that the July 3-10 trade surplus reached $1.33 billion, the highest
at least since the week ending Jan. 9, 2000, and exports on the week
reached $2.68 billion.

The government on July 8 reported that Brazil's consumer prices fell
in June for the first time in almost two years, with the IPCA index
falling 0.02 percent. Earlier today, the Getulio Vargas Foundation in
Rio de Janeiro announced that its IPC-S index rose 0.06 percent in
the week ending July 7.

Graft Probe

Indications that the government of Brazilian President Luiz Inacio
Lula da Silva is responding to formal congressional probes of graft
within the ruling coalition should help the currency, said Tuesta.

``Lula is also trying to move on after the scandal, and the market is
perceiving that as a positive,'' he said.

In July, the real is down 0.7 percent, the fourth-best performance,
after three senior members of Lula's Workers' Party and his Cabinet
chief, Jose Dirceu, stepped down as a joint congressional committee
probes government graft allegations.

The yield on the country's benchmark 11 percent bond that matures in
2040 rose for the fifth day in seven, rising 4 basis points, or 0.04
percentage point, to 9.28 percent from 9.24 percent yesterday,
according to JPMorgan Chase & Co.

The price fell 0.45 cent on the dollar to 117.75. The bond has
declined 2.40 cents in July.

``The political scandal is limiting and will continue limiting gains
-- no matter how big the inflows and export proceeds are. The
situation isn't that clear and there is a lot for congress to dig
into in terms of the scandal,'' said Tuesta.

Of course you are--assuming you read your hometown
newspaper. You just discount these reports because
they appear in the bourgeois press. In your peculiar
worldview, this is because the bourgeois press seeks
to divide the left as if the editorial board of the
LA Times et al care what people like us think.
Carlos Eduardo Rebello
2005-07-11 19:55:29 UTC
Message: 1
Date: Mon, 11 Jul 2005 12:05:13 -0400
From: "Fred Feldman" <ffeldman at bellatlantic.net>
Second was those like myself (and I think I was fairly close to Nestor
and Carlos Rebello on this) who see Lula as basically serving the
Brazilian rich, not primarily the poor and oppressed, but who see the
shift toward a more nationalist foreign policy (closer ties with
Venezuela and Cuba, open-ness to Latin American unity moves, and the
emergence of this oppressed nation as more of a player on the world
scene, and indeed the coming to power of the Workers Party in general as
a significant strategic shift that is worth fighting to preserve. That
is how I see the first signs that the working people of Brazil are
beginning to rally around Lula.
Alas, Fred, the political scene here in Brazil shows no sign of "working
people of Brazil beginning to rally around Lula"; what anyone who can afford
cable TV is doing now is to sit glued to the TV-set and watch TV Senado (The
Brazilian equivalent of C-span) in order to be treated to the hearings of
the various parliamentary inquiry commisions, as more and more increasingly
sordid revelations are unravelled (lastly we had the PT cadre linked to the
now former Party President Genoino who was caught in the S.Paulo airport
with some R$200,000 -roughly US$ 100,000- in a briefcase, plus an additional
US$ 100,000 tucked into his underwear... Things are headings towards a
plunge into generalized apathy and cynicism.

But let's put things straight: I actually favor the progressive traits in
Lula's foreign policy, I stauchly oppose the grey coup that would be to
accept members of Cardoso's party into Lula's cabinet, and were impeachment
to be in the forthcoming agenda, I favour a constitutional solution, i.e.,
having Lula's Vice-president Alencar taking office.The question is, however,
that, whenever Lula's term comes to an end, the Left as a whole will have to
face a wasteland, there's no doubt about that. There's _no_ Left in Brazil
whatsoever; a new one must be built from scratch - in that I fully agree
with Nestor.
Walter Lippmann
1970-01-01 00:00:00 UTC
It is difficult to carry on a discussion with someone who
declines to write his own words. Has an unaccustomed shy
side now been brought to light? This isn't what we're used
to, if past experience is any guide to future performance.

LOUIS PROYECT posted over six thousand words but NOT
ONE SINGLE WORD was his own. We already know that
he thinks "things in China are bad", and the six thousand
words don't give us any reason to change our estimate:
that in his opinion, "things in China are bad."

David Walters writes detailed discussion in response to
my detailed discussion. We don't agree, but at least we
are in communication. But when someone else posts lots
of words, but writes nothing of their own, it's not possible
to use that silence as a basis for discussion. It's not my
responsibility to extrapolate what Louis means from what
he posts but hasn't written. That's outside my capability.

Walter Lippmann
Walter Lippmann
2005-07-12 18:01:27 UTC
David Walters sets a good example for this discussion when
he explains that he's not relying on the NYT or WSJ but on
sources available to the left on the internet. David also
sets a positive example, not followed by all contributors
to Marxmail, in maintaining a calm tone, explaining what
his viewpoints are, providing arguments and details which
buttress his viewpoints. One can conduct a serious dialogue
on such a basis. Political differences may not be resolved,
but if we can agree on what the facts are, a basis for the
clarification of disputed areas can be laid. Let me start
by saying simply that I don't agree with David's suggestion
that I think there are only two sides: pro-Lula versus
European Marxist anti-Lula. In fact, there is a much more
nuanced approach, recognizing positive and negative sides
in the Lula experience. What I object to so much is the
one-sided anti-Lula attitude expressed by many writers.

David describes to us one of the valuable sources on which
he relies. This source is a follower of the French Lambert
tendency, a Trotskyist tendency over sixty years old. He is
also interviewed by Alan Woods, a leader of the British
Trotskyist Grant tendency, also a long-standing group.

Regardless of how much time any of these people have spent
in Brazil, we know that these political tendencies they have
a preconceived idea the process of political and revolutionary
development in the world in general and in Brazil specifically.

My experience reading the works of the Grant group is that
they are often extremely detailed and filled with facts, but
not always are they based on reading primary sources on
the subject about which they write. I've had occasion in the
recent past to read material by the Grant group due to their
connection with Celia Hart, whose writings on Cuba and on
other matters I've had translated for an English-speaking
public. I wanted to know something about the folks with
whom Celia Hart was associating. Last year they put out
a large format pamphlet with about 40 pages of analysis
on Cuba. None of it was based on reading any original
material. It's primary literary basis was Hugh Thomas'
monumental 1700 page Cuba: The Pursuit of Freedom,
published in 1971. Not a single Cuban document was
cited in the Grant group's principal document on Cuba.

Both the Grant group and the Lambert Group are from the
traditional Trotskyist world. They argue in one or another
way that the Cuban revolution is in need of reform, in need
of a multi-party system, and much more.

These are groups which are themselves committed to the
familiar Trotskyist notion that no revolutionary progress
can be made without the construction of what they would
consider to be a Revolutionary Marxist Party of the type
that they see themselves building, a Trotskyist Party.

Theirs is a faith-based approach, since the conception of
party-building they have is one which can be described as
a universal imperative. It's applicable in all times and all
places. It is THE model, against which other revolutions
and revolutionaries are to be judged. That is why they find
fault with the Cuban Revolution, because it did not fulfil
their preconceived preconception of how they should have
made the Revolution that they made.

This problem of models, and specifically of using the Russian
Revolution of 1917, as they conceptualize it, as the model
against which subsequent revolutions are to be judged and
found deficient. Unlike these people, I have only a general
idea of what kind of instrument is needed in each and every
country of the world. What impresses me so favorably about
the Cuban Revolution is that it was so profoundly national,
rooted in its own history, language, culture and traditions,
while being internationalist as well. I wish we could find
a way to match THAT ASPECT of the Cuban experience here.

David said he would continue the discussion, and that this
was only a comment about sources. It's true that I rely on
the NYT WSJ and others for many things, but I try to keep
in mind their pro-capitalist bias at all times.

Walter Lippmann


I have to first thank Walter for his detailed, polite and extensive
reply to mine and others comments. I think rr is right that much of
what I said was not addressed by Walter and I will, tomorrow if the
thread continues respond more in a detailed.

I developed my critique not based on what I read in the NYT
or WSJ but on sources availble to the left in the internet,
from Brazil, and others who are THERE involved in all the
fights. One such source, Serge Goulert, is someone I met
while at a Lambertist organized conference years ago in
Europe when I was close to that tendency. Serge is someone
who has been up and down the line inside the CUT and PT
from leadership positions all the way down to the factory
floor. He was recently interviewed by Alan Woods on the
www.marxist.com site where Goulert represented the
Organization of Brazilian Occupied Factories, as their
National Sect'y, at the World Solidarity Conference with
Venezuela a few months ago.


My point on all this, Walter, is that most of my sources
are *Brazilian* sources and reflect *Brazilian* concerns.
My criticisms are *politie* so-to-speak, the Brazilians,
not so polite, but then they are there and I'm not. There
has been and continues to be a HUGE, and I don't know how
to emphasize this, division inside the union movement
specifically and the broader working class movement over
Lula's backtracking, the virtual destruction of the PT as a
militant party of the Brazilian working class, and so on.

One cannot function on this list believing there really are
only two sides to the debate: the Lula side and some
mythical "American/European left criticism" from the
"outside" and that somehow you position yourself on the
more indigenous "Brazilian" side. You could not be further
from the truth.

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