"The solution is to slow down the economy. It's about laying people off."
The above quote is from economist Alexandre Schwartsman (left), former director of the Central Bank and one of the financial system's pit bulls in defending high interest rates; like him, Ilan Goldfajn (right), chief economist at Itaú Unibanco, also openly defends more unemployment to contain inflation; "you can't make omelets without breaking eggs," he says; is there a risk that this discourse will be heard in Brasília?
247 - The pit bulls of the financial system are nervous. Furious. They demand, by any means, a higher ration of interest rates, which could immediately result in increased unemployment. And they no longer even bother to hide their intentions. They openly call for workers to resign as a way to reduce consumption and try to cool down inflation.
One of these figures is Alexandre Schwartsman, former director of the Central Bank, who later had a brief stint as chief economist at Santander, where even the Spanish couldn't manage his verbal excesses. Schwartsman demands immediate layoffs. "The solution is to slow down the economy," he states. "It's about firing people," he adds, without clarifying whether this recommendation applies to himself or to people close to him.
More restrained in form, but not in content, the chief economist of Itaú Unibanco, Ilan Goldfajn, who also worked at the Central Bank, adopts the same discourse. "Inflation doesn't fall by magic. It doesn't fall because the Central Bank decides to speak more harshly. It falls when supply growth meets demand growth. Choices have to be made. You can't make omelets without breaking eggs," he says, repeating a phrase from former minister Zélia Cardoso de Mello.
The position of these two economists, however, is questioned by former minister Delfim Netto, one of President Dilma Rousseff's closest advisors. "The domestic worker became a manicurist or went to work in a call center. Now, she showers with Dove soap. The proposal of these geniuses is to make her go back to using coconut soap by increasing interest rates," he states.
In Brasília, until now, a different economic policy strategy has prevailed. With the reduction in interest rates, the federal government, which is the largest debtor in the economy, has fiscal leeway, allowing it to reduce taxes on various sectors of the economy. Thanks to this, taxes on basic goods have been reduced, as well as energy tariffs.
In any case, the barking of the pit bulls for the Central Bank to adopt the old remedy of raising interest rates is getting louder and louder.