The failure went to the head of Paulo Guedes

Economy Minister Paulo Guedes: True liberals will need decades to undo the bad image he left. Photo: Edu Andrade / Ascom / ME

At the end of 2021, it’s really hard to find a serious economist who respects Paulo Guedes. In other groups of Brazilian society, the minister retains some admirers. In Faria Lima, there are still people making money by selling courses to lay people to mine high-risk assets – some even make a statue in honor of the minister. In the media, there are people who take advantage of classes for radical supporters of pocketbookism, always pleasing the group. To those good people, whose values ​​are high, there is also the case of the radical pocketnarists themselves, who ignore serious economists, which is why they believe that the minister-spokesperson is a model of the species. .

With the consolidation of his bad reputation with his colleagues, Paulo Guedes lets himself go to failure. His responses to criticism can be divided into two parts.

In the first part, he denounces his colleagues for the practices he adopts as minister. This was the case when he denounced Felipe Salto, director of the IFI, for allegedly partisan and erroneous predictions. The same is true of Affonso Pastore’s criticism, who would be incapable of integrating the general equilibrium into his reasoning.

None of the reviews are fair. Guedes criticized Felipe Salto for alleged errors in the forecast regarding the spending limit being exceeded. Time, lord of reason, has shown who is right – and, unfortunately for the minister, it will continue to show. History books will record that Felipe Salto helped build an important institution for Brazilian democracy, while Guedes has clung to a role in a government that wants to turn Brazilian democracy into nothing more than history.

After the publication of the GDP in the third quarter, with the right to a technical recession, the Ministry of the Economy announced that the growth is negative, but that it is of good quality. After all, savings increase as a share of GDP, as does investment and the supply of untargeted credit. Therefore, GDP growth will come soon.

Interestingly, the reasoning cites three partial equilibrium relations to come to a very strange conclusion about general equilibrium. This is just another example of this dismal parade that we have been following for months. What happens in the economy does not matter to economists who are driven by their attachment to their position. Unable to recognize on what the analysis of his ministry is really based, the minister prefers to denounce the alleged ignorance of Affonso Pastore.

After accusing his colleagues of what he is doing, Guedes generally moves on to the second part of his answers: playing as low as possible, in an attempt to intimidate his interlocutors. The minister has called for the resignation of Felipe Salto and associates Affonso Pastore with the military dictatorship. A curious choice, given that Pastore was at the Central Bank during a period of political openness, a very different situation from Guedes, the official spokesperson for a government that every day weakens Brazilian democracy.

At the start of government, there was a debate as to whether Guedes was part of the technical or ideological wing of government. Time has shown that neither of the two options is correct. The minister, Pix tax defender and critic of PEC 45, is not a serious technician. Nor is he an ideologue: the world of ideas matters little to such a mediocre figure. To keep his job, he’s willing to do whatever the president likes to do, including throwing the current tax rules in the trash.

If there is a bright side to the speaker’s rudeness, it is this: by moving away from liberal economists, he mitigates the impact that his bad example will have on the reputation of the group he is working on. claims to be part. I’m afraid it’s too little. Unfortunately, even with this help, it will take decades for true liberals to undo the bad image left by Paulo Guedes.

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