Brazil is certainly getting its play in the international press lately. Electing a possibly illiterate clown to congress by a landslide will do that for a country. (No, that is not a metaphor. An actual, professional clown will be representing Sao Paulo.) Because I live here, I would prefer to focus on Brazil’s success stories and my stepmom sent me a link that does just that.
On NPR’s All Things Considered last week, there was a segment about Brazil’s remarkable end to decades of runaway inflation. It’s due in no small part to a group of drinking buddies from PUC (Catholic University in Rio) and a trick that worked on pretty much the entire population of Brazil.
My Brazilian husband refers to the problem as “Brazil’s culture of inflation.” He being somewhat (no specifics) older than myself remembers prices on virtually everything changing daily during the worst periods of inflation. Those who could bought dollars or had savings accounts that adjusted daily. But for lower income families (i.e. most of Brazil at the time) paychecks had to be deposited immediately or risk being worth less by the next day.
This went on for decades until it became built into Brazilian culture. People had no faith in the government or the currency. They behaved as if the currency had no value and expected all government plans to fail. So part of the solution was to trick the population into believing the currency was stable. How do you do that? You create a imaginary currency. This became known as the real plan.
Obviously, this is a gross simplification and at 7 minutes the broadcast is not delving into all the complexities either. I do think, however, that’s it’s an informative and enjoyable introduction to a subject most Americans have never heard of. You can listen to the story here.
And on a human interest note, I can say that one of those four drinking buddies who ended inflation, is now a nice, doting father. I taught his daughter in an SAT prep class.
