The Wealthy Won Big in Brazil’s Election

(Bloomberg Opinion) -- Political earthquakes can wreak plenty of havoc. So after Brazil’s turbulent national elections catapulted a bilious right-winger to the political center stage, I decided to check around for damages. Although a few friends and family were despondent, most everyone else I talked to seemed pleasantly surprised if not ebullient over the first round victory of Jair Bolsonaro. The onetime army paratrooper flummoxed pundits by routing his 12 rivals in the first round of voting and helping to propel the legislature to the hard right. He is poised to win the runoff on Oct. 28.

My friend Guilherme, who sells equipment to the oil industry, said he was relieved, while Alex, a broker, was “elated.” A senior labor court judge I know hailed the prospect of ridding Brazil of the left-wing Workers’ Party, “and all its political and economic ideology.” For the first time in months, my friend Andre, an attorney, was no longer talking about moving to Portugal. Notably, all these “Bolsonaristas” are well heeled and highly educated. They hail from Rio de Janeiro’s elite, with children in the finest private schools. 

Meet Brazil’s newest power demographic, the emerging populist bien pensants, who are no longer shy about being tagged as right-wingers and have found their voice.

Most see themselves as free marketers and tolerant political moderates. Any other time, they might have flocked to candidates on the center-right, like the classic economic liberal Joao Amoedo and onetime market darling, the understated former Sao Paulo governor Geraldo Alckmin. Yet conflagrated times razed the middle ground and Alckmin’s chances, causing moderate voters to plump for an uber-right populist who swoons over handguns and the days of the generalissimos, and is determined to make Brazil straight again.

Conservatism used to be kryptonite for Brazilian politicians. “Until now both the left-wing Workers’ Party and the Social Democracy Party who’ve owned politics had the same reading of the past, a broad democratic pact that shared social values, embraced human rights and saw the military period as a dictatorship,” said Fernando Schuler, who teaches politics at Insper, a business school in Sao Paulo. “That pact ended in 2014, with the re-election of Workers’ Party leader Dilma Rousseff and her statist economic policies that led to stagnation.”

Yes, Bolsonaro drew votes across social boundaries, from Rio’s favelas to the western prairies. Yet what’s most surprising is his success among Brazil’s upper crust, the privileged tenth that controls more than half the national wealth. Election eve surveys showed that no candidate enjoyed deeper support among white voters (37 percent) and those with the highest earnings (51 percent) and the best education (43 percent). His message also resonated in the more developed southern regions and, tellingly, among voters aged 35 and under. By contrast, runner-up Fernando Haddad, the former Sao Paulo mayor from the Workers’ Party, known as the PT, carried only the poor northeast and the poorest households. Not even Brazilian women, who marched en masse against Bolsonaro’s patented machismo, made much of a dent in his Sunday massacre.

So what explains this revolt of the haves? Rancor against the Workers’ Party, for one. “The upper classes are turned off by the Workers’ Party’s backward looking big-statism and proposals like capping bank spreads and social control of the media,” Mailson da Nobrega, a former finance minister told me. “Anti-PT sentiment was stronger than the attraction to Bolsonaro,” he continued. As a rich friend put it to him: “I prefer a leap in the dark to voting PT.”

But that could be folly. Goldman Sachs analyst Paulo Leme told O Estado de Sao Paulo that the financial markets are “grossly underestimating the future risks.” To bring the much needed fiscal adjustment and reforms “takes political ability,” Leme said.

That’s a glaring lacuna in the Bolsonaro campaign. A self-described outsider, Bolsonaro has spent 27 years in public office, but none of them in executive positions. His economic guru, Paulo Guedes, known as a brilliant University of Chicago-trained economist, has never served in government, and yet is expected to be anointed as the next economic “czar.” His brief: overseeing a bureaucratic octopus including finance, planning, and industry and commerce. That arrangement was hard enough to manage under the dictatorship, in which the uber-minister Delfim Netto had the junta at his back; it failed miserably under the first post-military president Fernando Collor de Mello, who ran the economy into the ground and was drummed out of office.

Such difficulties would be slippery ground for any leader, much less an anti-politician with a short fuse. Yet it’s not democracy that’s in imminent danger: “Brazil has the shock absorbers in a strong judiciary, independent financial controls, a vocal congress and combative media to shore up democracy,” Nobrega said. “The next president will have to face a fiscal debacle and a soaring debt problem bigger than any leader has ever faced since the generals stepped down.”

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mac Margolis is a Bloomberg Opinion columnist covering Latin and South America. He was a reporter for Newsweek and is the author of “The Last New World: The Conquest of the Amazon Frontier.”

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