The Problem With Jamie Dimon's Glowing Endorsement of Brazil

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One thing I didn't mention in the earlier post on the annual letter of JP Morgan Chase CEO Jamie Dimon was the letter's glowing endorsement of Brazil. Mr. Dimon wrote:

Brazil is an example of a country that seems to be successfully using pro-growth policies to expand its economy while using the wealth from that economic growth to finance important social programs. Over the last 20 years, Brazil has adopted many policies that dramatically strengthened its economy. It also bolstered its institutions, privatized its businesses, improved the rule of law, left the bulk of capital allocation to the private capital markets and developed world-class companies.

Eight years ago, Brazil elected a left-leaning president, but he continued policies to strengthen the economy. He also used some of the wealth to start a program called Bolsa Familia that gave Brazil's poorest citizens vaccinations, education and $80 a month for food. The lesson is clear: Good policies and economic growth are not the enemy of social progress – they are the fuel for progress.

This passage struck me as somewhat fishy (particularly the reference to wealth as something that exists to be "used" by the government), but I didn't know enough about Brazil to really nail it. The Wall Street Journal's Mary O'Grady does, and she devotes a column to the problems with Brazil. She writes that "the regulatory and tax structure" there "is so stifling that small and medium-sized businesses have had to go underground to survive."

She goes on:

In the World Bank's 2010 "Ease of Doing Business," which measures the tax and regulatory burden imposed by the state, Brazil ranks 129 out of 183 countries, down from 127 in 2009. It is far behind Chile (49), Mexico (51) and China (89). The country gets especially bad grades in the categories of starting a business, paying taxes, employing workers and securing construction permits.

Not that the World Bank is necessarily credible, but it's a yardstick. Ms. O'Grady doesn't mention Mr. Dimon or his letter; instead her news peg is "The Wall Street Journal's 'Invest in Rio' conference." The conference schedule doesn't list Ms. O'Grady as a speaker at the March 31 conference, but it looks as if she might have been a good keynote, or at least a counter to the generally boosterish tone indicated by the titles of the scheduled talks.