That Man in Rio

Over the past 15 years, the loudest, most persistent and least predictable voice in Brazil has been that of Carlos Lacerda, 51, the handsome, mercurial politician now serving as governor of Guanabara state, which includes Rio. Brazilians know him as the man whose hounding attacks helped drive Dictator Getulio Vargas to suicide in 1954. Lacerda--who started as a Communist, then swung to the right--was the severest critic of Presidents Cafe Filho and Juscelino Kubitschek, played a major role in pushing the erratic Janio Quadros into resigning, and was a key civilian leader in the 1964 revolution that toppled Leftist Joao Goulart.

Last week Lacerda was on the march again. After first supporting the new government of President Humberto Castello Branco, he was now in violent opposition, particularly against the economic policies designed to curb Brazil's inflationary chaos.

Political Ammunition. According to Lacerda, the government is destroying Brazil, and the man primarily responsible is Economics Minister Roberto Campos, 48, a former Ambassador to the U.S. and an internationally acclaimed economist (TIME, Aug. 2). Campos, cried Lacerda, is "a mental weakling" whose plans are "leakier than a boardinghouse showerhead." On the one hand, Lacerda accused Campos of selling out to U.S. businessmen by offering favorable deals to investors; on the other, he railed that Campos had throttled Brazil's development by imposing an unduly harsh austerity. "Instability, insecurity and disorder have been succeeded by depression, perplexity, gloom and unemployment," said Lacerda. And he added: "The price of the depression will be either dictatorship or the return of those we threw out."

Presidential elections are not scheduled until October 1966, but Lacerda is already running, and he has found his best ammunition in the government's tough but necessary campaign against inflation. Before the revolution, Brazil was headed for economic disaster with a soaring inflation approaching 100% a year. By tightening credit, freezing wages, and placing a price ceiling on many agricultural and manufactured products, Campos slowed the cost-of-living increase to barely 2.9% in May. Their confidence at last partly restored, foreign investors moved back into Brazil. Yet Brazilians have never been strong on economic discipline--and they do not like it now.

Farmers complain that the government-dictated prices are so low that it is not even worthwhile to harvest their crops. Unions gripe bitterly about low wages and increasing layoffs in the auto, appliance and textile industries. Manufacturers complain that consumers are not buying, are waiting for prices to go down farther.

The real enough danger is that Campos' plan will slow Brazil's economy too rapidly, thus bringing a recession. And this is the fear that Lacerda plays on hardest. He describes his own, somewhat fuzzy economic plan as "a policy of development in spite of inflation." Instead of attacking inflation on all fronts, he would only cut back in certain "state-run monopolies." Rather than reduce credit, he wants to expand it, demands a salary policy that would increase consumer buying power, and asks an end to commodity controls. Says Lacerda: "I would give more money to agriculture and more credit to industry, even if I had to print the money."

Counterattack. So far, neither Castello Branco nor Campos shows any inclination to change the government's policies substantially. Campos finally struck back sharply, calling Lacerda a man who "deliriously needs a climate of catastrophe so he can present himself as the messianic savior."

In Brasilia, Castello Branco met with Lacerda. As Lacerda tells it, he did most of the talking. "I asked the President, 'Are you prepared to become a dictator?' and he said, 'Certainly not.' Then I told him, 'If that's the way you feel, you are going to have to change your economic policies.' " Others at the meeting recall a different scene--Castello Branco pounding the table and flatly telling the rambunctious governor: "You have no right or reason to speak about the government as you do!"

In order to lessen the danger of recession, Economics Minister Campos last week did ease off a notch by putting additional funds into a road-building program and offering tax reductions to automakers. But he warned that there would be no overall change in the government's austerity program for at least another year. And he reminded Brazilians that "in spite of momentary difficulties, a relatively small price is being paid to remove the cancer of inflation."

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