Gaspari condemns Paulinho's salary trigger.

247 - Journalist Elio Gaspari, a columnist for Folha and Globo, published a harsh article criticizing the proposal by Congressman Paulo Pereira da Silva (PTD/SP) to reinstate the so-called "salary trigger." According to him, this would be a passport to the return of indexation, which ruined a generation of Brazilians. Read below:

Inflation enters the political debate.

The Força Sindical (Trade Union Force) wants to bring back the trick that ruined a generation of Brazilians: indexation.

Brazilian congressman Paulo Pereira da Silva announced that he will use the Labor Day celebrations as a platform to launch a campaign for the indexation of workers' salaries. According to his first proposal, negotiations for annual collective bargaining agreements would become quarterly. Another suggestion, from a union leader affiliated with the PSDB party (again, a PSDB party member), proposes that every time inflation reaches 3% above the last adjustment, a trigger would be activated, raising salaries. On the surface, this compensates for what workers lose due to currency devaluation. In reality, it generates more inflation.

Today's festivities are expected to include the presence of three presidential candidates (Aécio Neves, Eduardo Campos, and Marina Silva), plus Commissioner Gilberto Carvalho, representing Dr. Dilma. This is a good opportunity for everyone to denounce the proposal as political demagoguery and economic irresponsibility. Indexation of anything is to a society what cocaine is to the human body. What Brazil needs is less indexation, and if there are indexed tariffs and services, what should be discussed is their elimination, not their expansion.

Combining the professional seriousness of union leader Paulinho with that of all the presidential candidates, plus that of Dr. Dilma, it doesn't even reach half of what Professor Octavio Gouvêa de Bulhões had. For it was he who, in 1964, created monetary correction. He injected a virus into the country's system, creating a cycle of torpor that ruined society. It endured six different currencies, and inflation reached 1.764% in 1990. It's worth remembering that Bulhões used indexation to restore confidence in government securities. He believed that would be the end of it.

When the government prints more than it can handle, everyone loses. Imagine a situation where it starts to rain. Everyone gets wet. However, some groups protect themselves by seeking shelter. Indexation creates a system through which the government distributes protection. From that moment on, one part of society profits and another suffers. Thirty years of inflation and monetary correction have distributed profits to the upper class and ruin to the workers.

The congressman's proposal is a moment of political demagoguery in the face of a government stunned by rising prices. When Dilma's advisors ask mayors to postpone tariff adjustments to offset end-of-month inflation, they set in motion a cycle of trickery that culminates in proposals like that of the Força Sindical (a Brazilian labor union). These tactics have already cost the president the trust of a segment of the business community. Another, more astute segment takes advantage of these tricks, obtaining tax breaks, favorable interest rates, and contractual benefits.

What workers need is less inflation and no indexation. The weakness of President Dilma's administration lies in its use of band-aids to control prices, and, in terms of band-aids, the most dangerous is the return of wage indexation. If Aécio Neves, Eduardo Campos, and Marina Silva have the courage to state this simple truth, the campaign for next year's presidential succession will start well. After all, you can't stop the rain, but you can change governments that generate inflation and cripple the value of the currency.