What The Estadão Said The Treasury Minister Said That The Treasury Minister Said He Did Not Say

The image “https://i1.wp.com/i113.photobucket.com/albums/n216/cbrayton/Stuff/tobin.png” cannot be displayed, because it contains errors.
UNESCO Courier, February 2002. Trying to understand the issue of the Brazilian financial transaction tax without understanding the history of the debate on the “Tobin tax” is a bit like the legendary “headless mule” who “shoots fire from his nostrils.” Get it? How can the fearsome ghost mule shoot fire from his nostrils if he has no head? As Ricardo Kaufmann says, the Brazilian press tends to prevent opinion divorced from fact.

Mantega quer recriar tributo sobre movimentação financeira: “Mantega wants to recreate tax on financial transactions.”

This is the headline at issue in a dispute between the Brazilian Hank Paulson — treasury minister Guido Mantega — and the Estado de S. Paulo newspaper.

It begins:

Contribuição Provisória sobre Movimentação Financeira, nunca mais. Essa foi a lição que o ministro da Fazenda, Guido Mantega, tirou da derrota – a maior do governo Lula, em seus seis anos de vida – na tentativa de prorrogar a CPMF. Para buscar os R$ 40 bilhões perdidos na madrugada de quinta-feira, no Senado, Mantega quer criar uma nova contribuição nos moldes da que morreu. Mas, desta vez, permanente e, como adiantou ontem ao Estado, por meio de medida provisória.

The Provision Contribution on Financial Transactions (CPMF), never again. That was the lesson Mantega learned from the defeat — the biggest defeat of the Lula government in its six years in office — of an attempt to extend the CPMF.

The headline and the lede graf do seem to tell very different stories there.

  1. Mantega wants to “recreate” the CPMF
  2. The CPMF, never again: Mantega

In search of the R$40 billion in revenues lost in the early morning hours of Thursday in the Senate, Mantega wants to create a new tax on the model of the one that died. But this time, permanent and, as he [confided] to the Estadão, through a provisional measure.

“Não será tributo provisório. Não queremos saber mais da CPMF. Terá de ser um tributo permanente, todo voltado para a saúde e que não tenha de ser rediscutido”, disse. E acrescentou: “Tem de ser sobre movimentação financeira. Porque, senão, não teremos como controlar a sonegação.”

“It will not be a provisional tax. We do not want to hear any more about the CPMF. It will have to be a permanent tax, dedicated to funding health care and that would not have to be reauthorized,” he said. He added, “It has to be a tax on financial transactions. Because if not we have no way of controlling tax evasion.”

This quote does not mention using an MP, or executive “provisional measure.”

Mantega não definiu quando, mas a novidade pode sair na semana que vem. Seria um tributo voltado todo para a saúde, talvez com alíquota de 0,20%. O pacote a ser levado ao presidente Luiz Inácio Lula da Silva, segundo ele, soma esforços de vários ministérios, “cada um encarregado de uma ou mais medidas”.

Mantega did not say when, but the new proposal could come out next week.

If Mantega did not tell you this, who did?

It would be a tax dedicated to funding health care, possibly with a rate of 0.20%.


The package to be delivered to President Lula, Mantega says, represents joint efforts by various ministers, “each one in charge of one or more measures.”

From the interview that ensues:

Há informações de que a alíquota do novo imposto ficaria em 0,20%. É isso mesmo?

There are reports that the rate for the new tax would be fixed at 0.20%. Is that true?

Não posso comentar.

I cannot comment.

Por medida provisória?

Through an executive “provisional measure”?

É uma fórmula que exige maioria simples no Congresso.

It [that?] is a formula that requires a simple majority of Congress.

I guess the Estado is taking that as meaning “yes.”

I am not sure what it means.

Are you?

It sounds to me like the guy desconversou — a nonresponsive response.

Is he saying that the MP is a formula that requires a simple majority in Congress, or that the plan is to seek some formula that requires a simple majority in Congress?

I am not familiar enough with tropical parliamentary procedure — is anyone? — to grok that quite clearly.

But generally, when an interview subject gives a laconic, coy or ambiguous answer, the competent journalist will ask follow-up questions until the subject gives a clear, quotable, complete-sentence answer.

Such as, say: “Is that a yes or no?”

Mantega denies that is what he meant.

“At no time during the interview, which was recorded, even when asked explicitly about it, did the minister say the government would create the tax through a provisional measure [MP], much less that it would do so this year.”


The interview continues.

Tem um prazo para apresentar tudo isso?

Is there a deadline for presenting all this?

É para a semana que vem, não vou dizer o dia.

Next week, but I am not going to say what day.

Mantega also complained that the Estado continued to “erroneously” report that he proposed — or confirmed the existence of a proposal — for

  1. a permanement tax on financial transactions
  2. introduced via MP
  3. by the end of the year

He complained,

… the Estadão, along with other news outlets, is covering the “repercussions” of the erroneous information, in a front page article and an article on page A4 with the headline: “Opposition reacts to the recreation of the CPMF proposed by Mantega,” with the subhed “DEM and PSDB lawmakers criticize the idea of using an MP to revive the tax.”

Did it?

The lede from the article he cites, headlined “Opposition Reacts to Recreation of CPMF Proposed By Mantega,” from today’s Estadão.

A oposição recebeu ontem como uma provocação a declaração do ministro da Fazenda, Guido Mantega, defendendo a criação, por medida provisória, de um imposto nos moldes da Contribuição Provisória sobre Movimentação Financeira (CPMF), derrubada na quinta-feira em votação no Senado. A proposta de Mantega foi revelada ontem com exclusividade pelo Estado.

Yesterday, opposition took as a provocation the statement by Treasury minister Mantega defending the creation, by executive “provisional measure” (MP), of a tax along the lines of the CPMF, which was struck down on Thursday by a vote in the Senate. The proposal was revealed yesterday exclusively by the Estado.

Well, there you have it.

Can you make heads or tails of all that?

Did Mantega “defend the creation, by MP, of a tax along the lines of the CPMF?”

Or did the Estado attribute statements to him that he never made?

Do you care?

Do I?

Not really, but as I said, this is an interesting test case, from the journalistic and press relations point of view: Is the massive hysterical reaction of the opposition to the Mantega Proposal an instance of “heroic resistance to a phantom menace?”

I think the Minister has a technical point here, though: As to “create a permanent financial transactions tax, by the end of this year, via MP,” it is not clear that his what he said. There is some ventriloquism involved here.

In logic, if one element of an conjunctive proposition is false, then the entire proposition is false.

All of the following is true:

  1. My dog is named Corisco and
  2. my cat is named Iggy and
  3. Santa Claus lives on the planet Venus.

(1) and (2) are true. I have veterinarian paperwork to prove it.

Santa Claus does not exist.

Those FUD artists from the Masters in Jornalismo content management training program are playing scholastic logic-chopping and semantics games with us again.

When you have to have some familiarity with the works of Averroes and William of Ockham to be able to parse complex inferences, based on techniques normal reserved for scriptural exegesis, that are reported by your local newspaper as factoids, there is a good chance your local newspaper is vigorously yanking your chain.

A competent interviewer does not leave ambiguities hanging.

It is the whole point of the exercise: Get the interview subject to say something meaningful, coherent, and quotable, or else issue a categorical “no comment.”

Also sleazy:

  • Questions based on unattributed rumors, such as “There is information that the rate is going to be fixed at 0.20%. Is that true?”

Who says that?

This is “anonymous coward” sourcing.

Provisional verdict: Yes, the Estadão is probably aiding and abetting “heroic resistance to a phantom menace” here.

I am just going to stop reading Brazilian newspapers altogether one of these days — except for Valor and the Gazeta, which I read for work — I guess.

Or maybe I will just take to reading the subregional Díario do ABC.

Really, the incident reminds me of nothing so much as that incident in which Maria Bartiromo was seated next to Fed chair Bernanke at some social occasion — a correspondents dinner? — and used their dinner conversation to generate a “scoop” for her CNBC column — a piece of gossip that made the markets tremble.

The Washington Post, May 24, 2006:

Federal Reserve Chairman Ben S. Bernanke said yesterday that he erred by talking to a TV news anchor about interest rate policy at a recent Washington dinner, making remarks that caused stock prices to plunge when they were reported a few days later. The conversation at the White House Correspondents’ Association Dinner last month “was a lapse in judgment on my part,” Bernanke, who took over as Fed chief Feb. 1, told the Senate Banking Committee in a hearing yesterday. “In the future, my communications with the public and with the markets will be entirely through regular and formal channels.”

Bernanke was extremely naive to believe that the Rona Barrett of financial journalism would respect the assumption that private conversation in a social setting was off the record. These people are completely unscrupulous. As Lawrence Summers famously said: “It’s a shitty world.”

Which in turn, sort of reminded me of TV Globo journalist Monica Veloso recording her intimate conversations with Senator Calheiros.

Mantega, on the other hand, might be faulted for lack of clarity and discretion himself.

He is, after all, like Bernanke and Paulson, a guy a big part of whose job is to communicate clearly in order to avoid creating moral panics in the financial markets. And to know when to shut up.

Get this man a more competent public relations adviser.

He should probably also take better note of the fact that there are people out there who get paid to create moral panics.

Well, that exercise was an utter waste of my time.

An interesting question is raised by a comment on the article, though: Does the financial transaction tax have the advantages claimed for it? Is it needed in the combat against money laundering and tax evasion?

What is the international experience in that area?

Our commenter claims that no country, and specifically “civilized” European nations and United States, uses or has ever used FTTs.

Este ministro pensa que somos idiotas. Se a CPMF fosse um imposto inteligente existiria em países civilizados na Ámérica do Norte e na Europa.

But that actually seems to be the opposite of the case.

The Estadão is apparently read and commented on by gabbling Moonies as well as being run by them.

In 1996, a Canadian study of the issue noted:

A number of countries have had an FTT for some time. An early example was the American tax on the time sales of gold (“forward contracts” in today’s nomenclature) imposed during the Civil War.

Apparently a number of U.S. states have, or have had, check taxes.

Do they still?

At around the same time the Brazilian FTT was rolled out in the 1990s, FTTs were going into effect in Italy, Japan, Sweden, France, Germany, the Netherlands, Blighty, and various U.S. states.

Source: L.H. Summers and V.P. Summers, “When Financial Markets Work Too Well: A Cautious Case For a Securities Tax,” Journal of Financial Services Research, Vol. 3, 1989, p. 275.

That is to say: The former president of Harvard says so.

And the former president of Harvard is an honorable man. Right?

So how did those work out, anyway?

Did they rock?

Did they suck?

Were they a mixed bag?

Are they still around?

That question is moot, of course, if you start from the premise that no civilized European or North American has ever tried such taxes.

Look, I am just starting my reading on the subject — thanks to the Brooklyn Public Library, which I can access from down here in the Federal Republic of Tropicalist Confusion thanks to the miracle of the “Internets” — so do not assume I know what I am talking about.

I think it is a valid question, though.

I would pay good money for a newspaper or magazine that would research that for me thoroughly, so I did not have to do it my freaking self.


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