Sergio Moro’s candidacy took the first wrong step with the announcement of professor Affonso Celso Pastore as economic adviser, in a farcical repetition of when Jair Bolsonaro announced Paulo Guedes as his “Ipiranga post”. With the maneuver, Bolsonaro and Guedes sold the idea that the then deputy with a long corporatist career would leave the economy in the hands of the liberal Guedes, a guarantee that gave the economic establishment a free pass to embark on the right-wing candidacy. But as I explained in the book “The Worst Job in the World”, superministers and boitatás do not exist.

In the Brazilian presidential regime, the power of a minister is not a right, but a concession by whoever received the votes. The president grants part of his power to a minister, but he can withdraw it with a signature. In three years of government, Guedes became just another minister, who only keeps the position by submitting to the whims of his boss and fulfilling the economic agenda of reelection. It was naive for Guedes and the gang in the financial market to assume that an elected president with 57.8 million votes would submit to an advisor without any vote.

Please note: Pastore is far from being Guedes. President of the Central Bank in the 1983-85 moratorium crisis, one of the most respected scholars on the effects of exchange rates and inflation on the economy, one of the few economists who knows how to do math. And write in Portuguese, Pastore is what is conventionally called orthodox. In his latest book (which Moro says he is reading) “Past Mistakes: Solutions for the Future”, Pastore projects a long period of devaluation of the real as an opportunity to open up the economy to capital goods imports and deliver a productivity shock in the industry. He also writes about the urgency of administrative and tax reforms, a new fiscal regime, and privatization — themes that Moro began to recite in conversations as a candidate.

Intelligent, Pastore hastened to discard the possibility of being a new “Ipiranga Post” and, due to his age, of becoming a minister in an eventual Moro government. “What excites me is that he (Moro) is willing to listen to me. I’ll say this: he has a very clear sense of economic problems and is able to ask intelligent questions that shift the discussion to answers that make sense. It’s a very different thing from an economist’s relationship with someone who doesn’t understand anything and doesn’t want to get into the discussion.” told the State, alluding to how he imagines Guedes’ relationship with Bolsonaro to be.

It is difficult, for now, to prove the claim that Moro asks “smart questions” because the former judge has avoided interviews. He gave friendly interviews on TV Globo, to a former Big Brother Brazil presenter, and to a website that ostensibly supports him. In courtesy visit to Bloomberg news agency, Moro quickly answered some questions, defending a “Christian capitalism”, whatever that is. At interview with TV Globo, Moro reproduced generalities such as “we have to control these fuel increases with the right economic policies” (which would make sense if he identified the wrong policies).

For brief periods, Brazil had finance ministers who actually wielded power to the limit. Delfim Netto in the Medici government (1969-74) took advantage of the AI-5 to change the taxes charged by the States, Dílson Funaro decided to maintain the price freeze in 1986 to cement his political ambitions and in 1993 FHC authorized the purchase of Brazilian foreign debt in the secondary market with the order that Itamar Franco was not informed. But they are exceptions and all with presidents who were not elected. All the other occupants of the 5th floor of the Ministry of Finance had to negotiate their decisions with the other ministers, the Congress, the STF, public opinion and, last but not least, the president.

Whoever takes over Brazil in 2023 will inherit a recession, a disorganized fiscal regime and an unbalanced exchange rate – this in the most optimistic hypothesis. After Guedes’s catastrophic experience as superminister, all the country doesn’t need is for a candidate to use a guarantor as a shield to avoid answering essential questions about inflation, unemployment and inequality. It is no longer possible to have a candidate hiding behind Postos Ipirangas.

Continues after advertising

Leave a Reply