‘Failed neoliberalism’ and ‘PT amnesia’: see reactions to the economic thought series of pre-candidates

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With classifications ranging from “failed neoliberal prescription” to “PT selective amnesia”, analysts commented on the series of articles published by leaf this week, in which economists detail the economic thinking of pre-candidates for the Presidency of the Republic.

The series featured the professor of FGV (Fundação Getulio Vargas) Nelson Marconi, who coordinated the government program of Ciro Gomes (PDT) in 2018; then the former Minister of Finance and current Secretary of Finance and Planning of São Paulo governor João Doria (PSDB), Henrique Meirelles, discussed the economic issues dear to the toucan.

After them, former Finance Minister Guido Mantega highlighted legacies of PT governments and plans for a new term of former President Lula (PT). Former Central Bank president Affonso Celso Pastore spoke about the economic thinking that supports the pre-campaign of former Minister of Justice Sergio Moro (Podemos).

Economists’ criticism of the articles ranges from the alleged return to the past proposed by Mantega, if former president Lula’s favoritism in the polls is confirmed in the polls, to the continuity of a reform prescription that did not show results and would be present in the analyzes of Meirelles and Pastore.

In the case of Guido Mantega, professor at Unicamp (State University of Campinas) Pedro Paulo Zahluth Bastos argues that the former minister reaffirms the basic characteristics of Lula’s program and goes in the direction of privileging public investment.

“This is essential and this is what the OECD countries are doing. Without expanding public spending, it is not possible to take the economy from the current level of low growth, as the last six years in Brazil have shown.”

He ponders that former minister Mantega is vague about the future of the spending cap and the reforms made by Michel Temer and Jair Bolsonaro. Bastos also points out that the article also does not touch on environmental issues, a topic that will be important for whoever wins the presidency.

Regarding Marconi’s text, he assesses that there is an excessive emphasis on the industrial sector, and criticizes the weight given to local policies. “In the case of a strongly internationalized economy like Brazil’s, it is necessary to have combined sectorial policies”, he says.

“Meirelles is the most vague of all and reaffirms Ponte para o Futuro, a Temer government program that proved to be a failure. He proposes advancing new reforms, but Temer’s labor reform did not reduce inequality or bring growth , for example.”

Bastos also considers that Pastore’s article shows a prejudice against industrial and sectoral policies that are widely used by developed countries. “He leaves infrastructure spending only for private concessions, without saying how they could occur.”

For former Central Bank director Alexandre Schwartsman, Mantega’s article demonstrates that the strategy is to “cancel” the government of former President Dilma Rousseff (2011-2016), as a kind of “selective amnesia”.

“It’s what I call ‘the curious case of PT amnesia’. Somehow, everything that happened in 2015 and 2016 never existed. At most, they try to find some excuse to explain the numbers.”

He even countered, through a thread (sequence of related posts) on his Twitter profile, a series of information contained in the text written by the former minister.

Schwartsman pointed out, for example, that Mantega cites that inflation will fall from 10% in the past, to around 6%, “at the expense of a fierce contractionary monetary policy, which will paralyze the Brazilian economy.”

“What the former minister omits is that between 2014 and 2015 inflation rose from 6.4% to 10.7% and only dropped to 6.3% at the expense of an even more contractionary monetary policy than the current one, which took the Selic to 14.25% per year”, says the former BC director.

He also highlights that Brazil lost the investment grade given by risk rating agencies in 2015, before the governments of Michel Temer and Jair Bolsonaro.

Professor at UnB (University of Brasília) José Luis Oreiro, who was close to Ciro Gomes’ campaign in 2018 and is now expected to vote for Lula, believes that Marconi’s article is the most correct diagnosis of the causes of the long stagnation of economy.

For the professor, the problem of low growth in the country is related to low industrialization. “It’s not a fiscal imbalance, as Pastore says, or inefficiency, as Meirelles says, and it’s not the result of a failed neoliberal recipe.”

Oreiro adds that the economic policy of the Temer and Bolsonaro governments — with the spending cap and labor and social security reforms —, in addition to not having tackled the central problem of the economy, also increased stagnation.

“But Mantega cannot say that deindustrialization took place after the departure of President Dilma, it is also the result of PT administrations.”

He also claims that the texts by Pastore and Meirelles mistakenly assume that there are efficiency gains to be exploited in the public sector. “What they didn’t point out is that in 2021 the parliamentary amendments were the cost of Bolsonaro’s stay in government.”

The chief economist at MB Associados, Sergio Vale, sees in the articles by Meirelles and Pastore the most modern proposals for the country to have sustainable growth in the coming years. “On the one hand, seeking consistent economic stability and a certain flexibility, as both put it, and bringing a scenario of lower inflation and fiscal stability.”

For Vale, Marconi’s and Mantega’s visions go in the opposite direction, delivering facilities that fail to generate macroeconomic stability. “Especially in Mantega’s text, what is seen is an old economy that repeats past mistakes. There is a more coherent view of social and environmental issues in the articles by Meirelles and Pastore.”

Economic consultant and specialist in public finance Raul Velloso, in turn, also highlighted that Mantega is heading in the right direction by pointing out the need to recover public investment. “All that was needed was for him to say where to invest and how to get space in the Budget for it. But it was clear that this will be a banner of former President Lula.”

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