The frog, the scorpion, the rhinoceros and the crisis
Two things afflict Brazilians worried about the economy at this point: the feeble growth of activity - about 1% in the last three years - and the rise of inequality.
They are sister problems and also seem to afflict President Jair Bolsonaro, especially now that the coronavirus crisis threatens to stifle the global and consequently the Brazilian economy. Although quite careful when publicly commenting the performance of his Economy minister, Paulo Guedes, the president stopped calling him as often as before of "Posto Ipiranga," a reference to the ad campaign of Ipiranga fuel stations that claim you can get everything there.
The Posto Ipiranga fumbled by referring to public servants as "parasites" and demonstrating discomfort with the fact that housemaids were traveling to Disney. Last week, he also blundered when he said that "if I botch it," the dollar could reach R$5.
But this type of comment doesn't worry Mr. Bolsonaro so much. In a year of municipal elections, it is known that he began being upset with the fact that Mr. Guedes has not shown any attachment to measures to attenuate the fiscal squeeze and give oxygen to the economy. The circus is burning and calling the fire department it is all that is left, at any cost, whatever the budget deficit is. What afflicts the president is the prospect of being unable to offer at least 2% growth in his second year in office, a mediocre goal, but which now seems unattainable.
As the economy calls for help, it is timely to recall here the fable of the scorpion and the frog. Following a long talk, the frog agreed to carry the scorpion on its back to cross the river. The scorpion promised not to sting it along the way with the argument that this would kill both. But midway the frog felt a sharp sting and asked: "Why did you do this? Now we will both die drowned!" The scorpion answered: "Because this is my nature and I can't change it."
It is of the nature of the current government economic team to carry out the economic policy it is adopting: taking care of government accounts and let the market do the rest. You can't expect from it, for example, the launch of a package of measures to promote development and income distribution. That is not of its nature. Not even in dramatic crises like the current one.
If Mr. Bolsonaro had more information, he would know in advance: by formation and ideology, this team will never adopt many measures of that type. Firm pro-market economists, they believe that once...
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