Opinion – Samuel Pessôa: There are important differences between FHC’s and Dilma’s electoral scams

In the 2014 campaign, President Dilma lacked the truth. He won the election and did not finish his term. In the 1998 campaign, Fernando Henrique Cardoso also lacked the truth. He won the election and ruled for four years.

Petismo alleges that the asymmetry is the result of prejudice and persecution by the media and elites against a progressive government that allowed the poor to travel by plane.

There are important differences between the two electoral scams. The difference is quantitative. In politics, half a pregnancy is different from a full pregnancy.

Where is the difference in intensity? First: the maintenance of the exchange rate in FHC’s first term, despite the artificiality, occurred with the markets functioning. There were costs for the government to maintain that regime. Interest rates were much higher, and therefore economic growth more limited.

In contrast, both the fiscal pedaling and the delay in the readjustment of monitored prices and the perpetuation of the exemption from the payroll, among so many other populist measures adopted in 2014, played the bill for the future without any relevant present impact.

Second, FHC, realizing the difficult situation he would face, delivered, on September 23, 1998, 11 days before the first round of elections, a harsh speech on the need for a fiscal adjustment in 1999. At that moment, it is opportune to attend report in the Bandeirantes night newspaper with the repercussions of FHC’s speech. What would 2015 be like if Dilma had taken the same risk as FHC?

It is useful to review an excerpt from FHC’s speech: “The main problem is simple: the State has not been able to live within the limits of its own means. And that is why it does not fulfill its role in the Brazilian development process and weakens our economy Federal, state, and local governments have struggled to restrict their total spending to what their revenues allow, so they don’t adequately serve their citizens and burden the private economy.Governments spend more than they earn for a variety of reasons. Sometimes they are bad governments and they manage their money irresponsibly. The end of inflation has made these things easier to see. And it has made people understand more clearly what good government is and what morality in administration represents public money. The search for balance in public accounts is also a matter of citizenship”.

Third, FHC’s fiscal adjustment began in 1998, the year of the election. According to calculations by my colleague at Ibre Bráulio Borges, in 1998 there was a fiscal contraction of 0.84 percentage points of GDP. In contrast, in 2014 there was fiscal expansion of 1.4 point of GDP.

These three points —the least artificiality of economic policy in 1998 compared to 2014, the warning widely publicized to society and the beginning of housekeeping in 1998— differentiate one embezzlement from another. And they help to understand why in one case there was no loss of governability and in the other it did.

Belief in conspiracies and external enemies was never a good adviser. As FHC wrote in his speech at the Itamaraty, “it is necessary to be clear, on the other hand, that there are problems that are ours. It is about these that I would like to talk to you about today.”