Where's the love for consumerism?
We constantly hear about what the U.S. needs to do to regain a stronger leadership role in Latin America. A quote from Brazil is a reminder that the U.S. is losing ground when it comes to economic policy. Has there ever been a time when U.S. style consumerism has been mocked by governments that are not so far away ideologically?
That concern was repeated by former central bank President Arminio Fraga, who said on the Charlie Rose television program that Brazil is focusing too much on consumption and not enough on saving and investing. That "American" style of consumerism could lead to a credit crisis within the decade, Fraga said.
Of course, this comes on the heels of the U.S. employing bailout strategies that it pressured Latin American governments not to employ in the 1980s.
6 comments:
I would also point out that much of the spending takes place outside of Brazil, especially by those with means. It's still much cheaper for a Brazilian family to pay for visas, fly to New York, stay in a decent hotel, and shop for electronics., clothing and other items than it is to buy them in Brazil.
Chances are if you're in a subway in NYC and see some tourists with a number of shopping bags, they'll be Brazilian.
I would also add that Brazil's position for years has been to push for a weaker real against the dollar, primarily to maintain a healthy trade surplus.
I would also add that Brazil's position for years has been to push for a weaker real against the dollar, primarily to maintain a healthy trade surplus.
Which means --according to economic theory-- that there should be less shopping trips to the U.S. by rich Brazilians, as a weaker real would raise the cost of such trips and encourage such Brazilians to shop more for Brazilian-made products at home.
Has there ever been a time when U.S. style consumerism has been mocked by governments that are not so far away ideologically?
I think there's a bigger ideological gulf between the Brazilian and U.S. governments than you think. Both the Brazilian and U.S. governments operate under huge constraints from their respective business communities, which means that their economic policies won't look so different. However, Lula is a socialist at heart and even said as much in his interview with Fareed Zakaria. While U.S. officials are clearly brainwashed by the ideological residue of Friedmanite economics, Brazilian officials are not. Brazilian officials are also under no illusion that "free trade" is the panacea that U.S. ideologues dress it up to be.
Justin,
The problem is that Brazil has siginificant tariffs on electronics and even when the real was 4 to 1 against the dollar, there were still significant trips to the US to make purchases. A $500 laptop here will cost about 3,000 reais in Brazil.
In addition, most electronics (which are the source of a lot of purchases by visiting as well as cameras/video equipment) manufactured in Brazil are usually off brands. I always knew Sansui made speakers, but never knew they made televisions until I went to Brazil.
The problem is that Brazil has siginificant tariffs on electronics and even when the real was 4 to 1 against the dollar, there were still significant trips to the US to make purchases. A $500 laptop here will cost about 3,000 reais in Brazil.
In that case, it would make sense that the rich would still come to the U.S. to buy stuff, provided that they can somehow get the stuff around Brazilian customs with relative ease.
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