Last week, Folha de São Paulo invited the main parties to write an article about their respective economic proposals for the next elections. Guido Mantega was selected by former President Lula to write a text disseminating the economic ideas that will guide the future Lula government.
It is only fair that this task should be delegated to Mantega. After all, he was Minister of Planning (2003-2004), president of BNDES (2004-2006) and Minister of Finance (2006 to 2014), that is, he is a legitimate representative of the PT, having a long record of services provided to the party. .
But going straight to the text, what caught my attention is that it repeats the same line as a previous one released in December 2020, entitled “Another Lost Decade”, whose content appears to demonstrate a profound economic amnesia about the facts in which it participated.
In fact, I also wrote an article at the same time recalling facts that had Mantega’s participation and that led to the economic and political crisis of the beginning of the last decade, which culminated in the impeachment of then-President Dilma Rousseff.
The fact is that the current text of the one chosen by Lula makes it clear that we must forget the “Lulinha paz e amor” and the “Letter to the Brazilian People” of 2002, written in his first election. In reality, this letter was a masterstroke by Antonio Palocci, then Coordinator of the PT’s electoral campaign, who sought to make Lula and the party more palatable to the market, with the promise of institutional and economic stability.
More than that, Palocci, when Minister of Finance, brought a first-level technical team into the government and, with the support of a very competent team from the Ministry of Justice, managed to preserve and expand the fiscal adjustment effort that had already been being done and proceed with some fundamental microeconomic reforms for the country.
The merit of this team is unquestionable, both for recognizing and preserving the advances that had already been made since the real plan – including the recent approval of the Fiscal Responsibility Law (Complementary Law nº 101/2000) and the institution of the of Inflation – as well as for being able to hold back the spendthrift and interventionist eagerness of the most radical wings of the PT.
Basically, it was the work of this team that, together with the “blessed inheritance” of the FHC administration (despite the various mistakes that were also made) and with the commodities boom at the beginning of the century, propitiated the process of sustainable economic growth until 2008 and the continued and expanded income distribution policies during the Lula government.
However, with the replacement of Palocci by Mantega in the Ministry of Finance in 2006 and, mainly, with the departure of the Secretary of Economic Policy, Bernard Appy, in 2008, economic rationality was left aside and the Lula government started to look of the most radical wings of the PT.
And it is exactly this face that appears in Guido Mantega’s latest text and in the very speeches of candidate Lula and PT president Gleisi Hoffmann. The body of work shows, for example, a total lack of commitment to fiscal responsibility, the main cause of continued inflation in the country. There are no miracles. Without having a controlled trajectory of the Debt/GDP ratio, we will never get out of the current economic crisis.
The idea of lowering interest rates with forceps without an adequate fiscal adjustment, as occurred during the Dilma government, will also only reinforce the inflationary process that we are experiencing under the Bolsonaro government.
In the current context, proposing more public investment would only be possible with a strong cut in inefficient current expenses or with an increase in the tax burden. In other words, structural reforms (such as administrative) would be necessary, to which the PT is refractory, or creating more taxes, which would imply exchanging private for public spending, the latter naturally tending to be much more inefficient.
And speaking of inefficiency, the proposal to “repeal” the labor reform, insist on industrial policies along the lines of PT (which only distributed income in a regressive way) and review privatizations, in addition to the idea of controlling fuel prices, will only introduce new distortions in the economy and will drive investments away from the country.
Incidentally, in the chapter on renationalization (or “non-privatization”), it is also worth remembering that the biggest corruption scandals took place exactly within public companies or mixed capital during the PT governments. And corruption, in addition to destroying institutions, as we have seen in the country, drives away good investments (from serious companies) and reduces the potential for economic growth.
In this context, remembering the candidate Lula without remembering Dilma is a mistake because it was in his government that the wrong decisions, which led us to the economic crisis that began in the last decade, began to be taken; not to mention that Dilma is Lula’s child, having even been his head in the Civil House.
To remember Lula without remembering Mensalão and Petrolão is to forget that state-owned companies were the epicenter of all the corruption experienced in the last two decades, as “never before in the history of this country”.
Remembering Lula without remembering the rigging of regulatory agencies, even in the case of direct interference from the change of president of Anatel, is to fail to consider the importance of institutions for the growth of a country.
Remembering Lula without remembering the constant attempts to implement “social control of the media” is to ignore the importance of the role of the press as one of the counterweights to the abuse of the State, in addition to the democratic values that guaranteed the economic development of the vast majority of developed countries.
In any case, if the candidate Lula wins the next elections, as all the polls indicate, he will discover what is truly a “cursed legacy”, left not only by mistakes made during the Bolsonaro government, but also by the remnants of successive wrong decisions. of PT governments as of 2008.
And then, the reality will be totally different from his first term. It remains to be seen whether he will “get real” and incur the political burden of doing what must be done to avoid a deepening of the crisis in the country or, like his colleagues Alberto Fernández and Nicolás Maduro, will he tread the path of economic populism, which has gradually destroyed Argentina and Venezuela.