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Brazil Should Look Twice at Privatization

October 20, 2002

"Lula Will Need Ties to U.S." (editorial, Oct. 16) states that the presumed president-elect of Brazil should not go back to an era of "protected markets, state monopolies and government-managed industries." The editorial vaguely states that those measures "wouldn't help." Be advised that the fine folks at Enron were big movers behind Brazil's privatizing its electric utilities. The Brazilian people were promised that their electric bills would plummet by privatization -- and then their rates actually increased. Ring familiar? Service also became spotty with the change, and this contributed to the weak production and deficits highlighted in your editorial.

To compound the coincidence, Enron and other companies were the new owners of Brazil's utilities; these same folks brought "deregulation" to our California utilities.

You tiredly drag out the "free market" answer to Brazil's problems, when the U.S. has been built into the richest nation in history by a highly regulated, public-private mixed economy that emphasized worker protections and relatively high wages through union representation. When no less than free-market huckster President Bush has signed off on significant subsidies for American farmers, tariff protections for our steel industry -- and ignores federal deficits to reduce corporate taxes -- how can the U.S. expect Brazil to do any different?

Robert Blankenship

Los Alamitos

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