Estadão resumes its campaign against Mantega.

247 - The editorials in Estado de S. Paulo used to be more consistent. Conservative texts, certainly, but ones that always prioritized rigorous argumentation. Gradually, however, the editorials are beginning to slip into irony and even mockery, as in Tuesday's text, called "Mantega's Happy World". Check it out below:

Mantega's Happy World - EDITORIAL O ESTADÃO

Any inflation rate below 6,5% will leave Finance Minister Guido Mantega with a clear conscience and the certainty of a job well done, judging by the interview published yesterday by the newspaper Brasil Econômico. It doesn't matter whether the result could have been better – and it undoubtedly could have been – in recent years if the authorities had been less lenient with the general rise in prices. The government, he said, will never let inflation exceed the target, as it has never done in the last six years. This is more than debatable. Since 2007, only in two years has the rise in the Broad Consumer Price Index (IPCA) been close to the target of 4,5%. In all the others, it was above 5,8%, far from the official target. The minister's statement would be almost acceptable if that 4,5% were only the center of the target, an expression frequently used, but improperly. The Central Bank (BC), however, establishes a clear distinction between target and margin. The confusion between the two concepts is just another disguise for bad politics.

A considerable deviation, but within the margin, is excusable in certain situations. The Brazilian case is different. Other countries – in Asia and South America – were also affected by the rise in food and other commodity prices, but managed to perform much better than Brazil, with lower inflation and much higher growth.

Contrary to international evidence, the minister continues to attribute Brazilian inflation to a supply shock. He thus disregards other well-known and far more important factors, such as the rapid expansion of credit, incentives for consumption, the rise in consumer income, and, of course, the uninterrupted federal spending spree.

The minister continued in the same vein when commenting on public finances. "We will strictly adhere to the government's fiscal targets, as we always have. I have been Minister of Finance for seven years and have always strictly adhered to the targets," he stated. It may be a memory lapse, but it seems unlikely. After all, he has been consistent over the years in his efforts to disguise the progressive, but undeniable, abandonment of the most respectable criteria of economic policy.

True to this pattern, he failed to mention the use of investments—even from the controversial Growth Acceleration Program (PAC)—to reduce the fiscal target defined in the Budget Guidelines Law. Worse than that: he omitted the use of increasingly creative—scandalously creative—accounting to balance the books at the end of the year.

The same criteria applied to his comment on public debt. No informed person would fail to notice two points. First, net debt may have indeed improved, but a degree of manipulation is undeniable: some large assets correspond to transfers from the Treasury to federal banks. What are these assets really worth? Second, the Finance Minister, like his government colleagues, insists on commenting only on net debt. But gross debt has been growing. In this respect, the situation of several emerging countries is much more comfortable.

But the Finance Minister managed to outdo himself when talking about foreign trade. According to him, imports have grown much more than exports because Brazil is growing faster than other economies. Really? And does that justify a deficit of US$ 5,74 billion in four months and one week?

He went further. Last year, when Brazil grew less (perhaps he was ashamed to mention the 0,9% growth), "imports fell more than exports." Someone must have lied to the minister. According to official data, the value of exports fell by 5,26% last year, while imports decreased by 1,37%. Furthermore, the increased dynamism in imports has been observed as a trend since 2007.

The end of the interview was a masterpiece. "We managed to isolate the economy from politics, so there is no longer a political cycle." There is no longer—this is the meaning of those words—influence of electoral interests on economic decisions. They lied to him again—and he believed it. Can one no longer trust government colleagues?