We’ve been looking this week at Brazil, where, under Luiz Inácio Lula da Silva, who served as its president from 2003 to 2010, the country’s economy boomed. Then his chief of staff, an apparatchik named Dilma Rousseff, was elected to succeed him – and everything started going down the drain.

Not that Rousseff is fully to blame for this decline. It’s clear that its seeds were sown under Lula, when the president and his ideological allies managed to convince themselves that Brazil owed its new prosperity to their welfare programs, rather than to a massive increase in trade with China. But it was Rousseff who was in charge once growth started to falter. Not understanding how economies worked, she responded to her nation’s calamity by doubling down on taxes, bureaucracy, and tariffs – a disastrous formula that guaranteed increasing stagnation. Nor did it help that the massive government and Workers’ Party corruption set in system under Lula only got worse, if anything, on her watch.  

Despite the bad choices of her first term, Rousseff was re-elected (by a very close margin) in October 2014. Comments by her supporters left the impression that she’d won despite her handling of the economy, not because of it. (One voter, Natascha Otoya, while admitting that Rousseff’s government had been involved in “corruption,” “embezzlement,” and “white collar crimes,” said that “as a woman, a feminist and a socialist, I am very glad that Dilma has won! 4 more years for the left, I can only be happy about that.”) According to one source, Rousseff was re-elected only because a law requiring Brazilians to vote had guaranteed a big pro-Dilma turnout in poor regions, where people “feared losing their social programs.” 

Unsurprisingly, her victory was celebrated in places like the New Yorker, where John Cassidy called it a win “for the world’s financial markets.” Brazil, insisted Cassidy, was “no basket case.”

Not yet, perhaps. But after Election Day, things got a lot worse – and did so very fast. “There is a process of economic, social and moral collapse under way,” said Senator Ronaldo Caiado, an opposition politician, on March 15, a mere two and a half months into Rousseff’s second term.

Then came the Petrobras scandal. Petrobras is Brazil’s national energy company. From 2003 to 2010, Rousseff, in addition to her other positions under Lula, had served as chair of Petrobras. Operation Car Wash, a probe into the firm’s operations from 2004 to 2014, began in 2014. It soon uncovered evidence that about $2 billion in company funds had been stolen during that decade by Petrobras officials, construction companies, and politicians – Rousseff included.

More on that probe – and the results thereof – tomorrow.