Brazil 2006 Presidential Election

[minionofmidas]

Re everyone saying this is a surprise...
this election had sort of passed under my radar until two days ago (to my shame... I`d followed the last Brazilian election quite closely...) when there was a short clip on the German news that basically said "everyone expects this to go to a runoff where everybody expects Lula to win".

[ag]

Re everyone saying this is a surprise...
this election had sort of passed under my radar until two days ago (to my shame... I`d followed the last Brazilian election quite closely...) when there was a short clip on the German news that basically said "everyone expects this to go to a runoff where everybody expects Lula to win".

Actually, I'd say the biggest surprize isn't just the second round - though just a few weeks back it seemed not very likely. The biggest surprize is that Alckmin did quite well, coming within a respectable distance of Lula. I don't think there've been any polls where he's been above 35%, in most polls he's been far below. In the end, he gets a respectable 41.64% (Helena should have gotten more - at least 10% in my expectation). 4 years ago Lula got around 46.5% in the first round, but the runner-up, Serra, was far, far behind, w/ 23%.  The second-round landslide was very predictable. This time Alckmin's position is a lot stronger - though, of course, still very difficult.

I'd say, I still give Lula a 90% chance of victory. But a couple of weeks ago it was a 99% chance.

[YoMartin]

But I admit Cardoso (like Menem) left a tough situation.

First time I see your English slip. I said something like "Cardoso was a tough act to follow" - which means, a presidency like his is hard to match.  I guess, we disagree on that man's heritage.

Ah, you´re right. As I see it, Cardoso left a quite serious debt situation (at least, unlike Menem, he had the decency of devaluating the real when needed).  It´s funny how supposedly "orthodox" presidents like Menem or Cardoso are much less fiscally responsible than "populists" or "left wingers" like Lula or Kirchner. It´s true this last two have no other option than fiscal responsability, but they even go for a larger superavit than required.

Going back to yesterday´s results, the country has become very regionally divided between the poor northern states, that went overwhelmingly for Lula (in spite of voting for right wingers like Rosana Sarney at the state level; I guess PT has developed a machine than can compete with the old PFL nowadays), and the middle class southern states that went quite clearly (to my surprise) for Alckmin. In Sao Paulo Lula did worse than the party´s candidate to the senate, Eduardo Suplicy (former husband of Sao Paulo city mayor and then rising star, Marta Suplicy), but still much better than Aloizio Mercadante, easily defeated by Serra in the governor´s race. Mercadante´s campaign was found, a few days before the election, trying to bribe people so they accused PSDB of corruption.

[Tory]

I was bored so I created this map. It's of pretty poor quality but I didn't feel like sprucing it up.

[ag]

But I admit Cardoso (like Menem) left a tough situation.

First time I see your English slip. I said something like "Cardoso was a tough act to follow" - which means, a presidency like his is hard to match.  I guess, we disagree on that man's heritage.

Ah, you´re right. As I see it, Cardoso left a quite serious debt situation (at least, unlike Menem, he had the decency of devaluating the real when needed).  It´s funny how supposedly "orthodox" presidents like Menem or Cardoso are much less fiscally responsible than "populists" or "left wingers" like Lula or Kirchner. It´s true this last two have no other option than fiscal responsability, but they even go for a larger superavit than required.

Observation, two explanations, and a linguistic aside.

Observation: in general, borrowing (within strict prudent limits) is good, especially when you expect to grow in the future.  Not borrowing (or not being able to borrow) might be evidence of either problems down the road (perhaps, you've borrowed too much and will have to repay, or else you do not expect to grow), or of suboptimal economic policy.

Two explanations: a) prices and b) do we really know?

The first is: you can't really talk about demand without considering prices. If the markets trust you, they offer you cheap credit, if they don't, you might find even holding old debt to be prohibitively expensive. Now, the Argentinian problem was, markets overestimated their probity.  In case of Brazil the problem was, if I recall correctly, more in (the perception of) Lula: I don't believe Cardoso's borrowing would have been problematic, if the lenders could have been certain Lula was just Cardoso reincarnate.  As it was, when Lula emerged the front-runner in 2002 election, everyone suddenly realized Brazil wasn't Cardoso - and, suddenly, things became a problem. Lula had to be super-orthodox to earn the market trust.

The second is: don't compare current administrations with historical counterparts (especially, though not exclusively, in the third world).  While a government is in power, it has many ways of pretending things are better than they are (or, for that matter, of blaiming the predecessors for its own sins).  Even one day before Zedillo became Mexico's president, neither he, nor his choice for the finance secretary had a clear picture of what the short-term government obligations were (what was on the books was one story, what was off the books was quite another). And that was even though the government was being transferred within a small group of ostensibly like-minded people people (Zedillo had been education secretary, and his finance secretary had been the trade secretary until the last days of the previous administration).  I am by no means a specialist on Argentinian public accounts, but I'd be cautious with endorsing their worth (it doesn't seem like the markets are offering Kirchner much reward for good behavior, aren't they?).

Linguistic aside: the opposite of "deficit" in English is "surplus", not "superavit" (the letter word doesn't exist).

[YoMartin]

Observation, two explanations, and a linguistic aside.

Observation: in general, borrowing (within strict prudent limits) is good, especially when you expect to grow in the future.  Not borrowing (or not being able to borrow) might be evidence of either problems down the road (perhaps, you've borrowed too much and will have to repay, or else you do not expect to grow), or of suboptimal economic policy.

Two explanations: a) prices and b) do we really know?

The first is: you can't really talk about demand without considering prices. If the markets trust you, they offer you cheap credit, if they don't, you might find even holding old debt to be prohibitively expensive. Now, the Argentinian problem was, markets overestimated their probity.  In case of Brazil the problem was, if I recall correctly, more in (the perception of) Lula: I don't believe Cardoso's borrowing would have been problematic, if the lenders could have been certain Lula was just Cardoso reincarnate.  As it was, when Lula emerged the front-runner in 2002 election, everyone suddenly realized Brazil wasn't Cardoso - and, suddenly, things became a problem. Lula had to be super-orthodox to earn the market trust.

Linguistic aside: the opposite of "deficit" in English is "surplus", not "superavit" (the letter word doesn't exist).

Yes, superavit sounded strange. Well, it comes from latin...

About Cardoso: I think the debt (as a % of GDP) doubled during his mandate. I have to admit my complete ignorance on economic issues, but that sounds a bit too much, especially if that happened while he was cashing in money from privatizations. The burden on your succesesors is heavier, and they depend almost entirely on getting cheap money. And it forces them to play a "confidence game" with the markets or the country would go to hell (well, with De la Rúa both things happened). As I see it, that goes beyond "strictly prudent limits".

About Argentina: if I were a foreign investor I probably would never "endorse the country´s public accounts worth", but apparently, for some reason, somebody is. Investment (again, as a % of GDP) is reaching the all-time highest of 1998. So, it´s taking 4 years to populist Kirchner to get what neo-liberal Menem got in 9 . Besides, Kirchner has always been (even in the 90´s) an ultra-orthodox when it comes to fiscal equilibrium (I hope this word exists).

The second is: don't compare current administrations with historical counterparts (especially, though not exclusively, in the third world).  While a government is in power, it has many ways of pretending things are better than they are (or, for that matter, of blaiming the predecessors for its own sins).  Even one day before Zedillo became Mexico's president, neither he, nor his choice for the finance secretary had a clear picture of what the short-term government obligations were (what was on the books was one story, what was off the books was quite another). And that was even though the government was being transferred within a small group of ostensibly like-minded people people (Zedillo had been education secretary, and his finance secretary had been the trade secretary until the last days of the previous administration).  I am by no means a specialist on Argentinian public accounts, but I'd be cautious with endorsing their worth (it doesn't seem like the markets are offering Kirchner much reward for good behavior, aren't they?).

I agree with this, and there is plenty of evidence that Menem and De la Rua didn´t really know what the situation was until they took office. But I think information has become a bit more available (and reliable) now. Time will tell.

[ag]

As I said: prices. If prices go down, you borrow more.  Hence, the more responsible you are (or, at least, are perceived) the more you can responsibly borrow.  It's like your credit cards .

If I recall it correctly (and I am too lazy to check, so it would have to remain a recollection), for a while before Cardoso Brazil was largely shut out of the credit markets.  Markets trusted Cardoso and offered cheap credit - so he could borrow.  His predecessors didn't have a chance to do the same, so, naturally, they didn't.  Brazil's public debt is not that high, about 50% of GDP. Though this is higher than in many other countries in the region (other than the even more indebted Argentina), it would be a fairly low level of debt for a major "developed" country.  Of course, Brazil is not a "first world" country, so it wouldn't be wise to try to increase the debt further, but, as long as the governments behave - and are perceived to behave - responsibly, the current burden is quite manageable.

Now, markets trusted Argentina too much. The "trust" was based on Argentina deliberately designing its economy in such a way that abusing it would have very painful consequences (to which you can attest, I am afraid). As it turned out, this was a lousy commitment device on Argentina's part, since there was no guarantee that the pain would be faced by the same political actors taking the "wrong" decisions.  Tough.

I'd have to actually read up to figure out what is happening in Argentina now, and that's going to violate my time constraint, so I'd have to forgo this part of the discussion for now.

[ag]

Just eyeballing the complete election results (for all offices) in O Globo, it is almost shocking how little the presidential and lower-office races seem to have to do w/ each other.

[Colin]

Interesting very interesting.

Alckmin didn't get as walluped as I though he would. Over 41% for him in the first round is a very good result. I was expecting a one round election with Lula getting around 53% or so or a runoff where Lula got right under the 50% mark. The gap is under 7%, which Alckmin should take to be as close to a victory as he is going to get.

As for the second round it's Lula's to lose, as was the whole election. Barring another big and atttention grabbing scandel, gotta remember that corruption and graft go hand in hand with Brazilian politics so it'll take something rather large, Lula's won this thing.

My prediction:

55% Lula
45% Alckmin

Also depends on turnout. If its higher in Sao Paolo and the South Alckmin will do better, if its higher in the Northeast and interior then Lula will do better.

[ag]

Seems like PMDB has done very well in the congressional races, and will have the largest number of seats in the lower house - PT, despite actually gaining a couple of seats (in comparison w/ the pre-election distribution - not w/ the previous result: compared to that they lost), slips to the second-largest party in the House.  PMDB also did well in the senatorial and gobernatorial races - all this despite neither running, nor endorsing a presidential candidate.

[ag]

Electoral results by state (I will be slow). Just the first couple indicate how strange Brazil's politics is.

1. Acre
President - Alckmin (PSDB) 51.8%

Governor - Marques (PT) elected w/ 53% of the vote

Federal Senator - Viana (PT) elected w/ 64% of the vote

Federal House (8 seats total) - 3 PT, 1 each PCoB, PMDB, PMN, PP, PPS

State congress - too lazy to do right now, will have to wait.

2. Alagoas
President - Lula (PT) 46.6%

Governor - Vilela (PSDB) elected w/ 56% of the vote

Federal Senator - Color (PRTB) elected w/ 44% of the vote

Federal House (total 9 seats) 3 PMDB, 2 PFL, 1 each PMN, PP, PDT, PSB

3. Amapa
President - Lula (PT) 54.4%

Governor - Valdez (PDT) elected w/ 54% of the vote

Federal Senator - Sarney (PMDB) elected w/ 54% of the vote

Federal House (total 8 seats) 2 PMDB, 1 each PFL, PT, PSB, PPS, PCdoB

[ag]

4. Amazonas

President - Lula (PT) 78%

Governor - Braga (PMDB) elected w/ 50.6% of the vote

Federal Senator - Nacimento (PL) elected w/ 47% of the vote

Federal House (total 8 seats) 2 PP, 1 each PFL, PT, PCoB, PDT, PMDB, PSB

[ag]

Finally, a rarity: a state in which Lula leads and a PT governor is elected (the latter happens to be a big surprize, actually, since a PFL incumbent, considered leading in the race was defeated):

5. Bahia

President - Lula (PT) 65.6%

Governor - Wagner (PT) elected w/ 53% of the vote

Federal Senator - Durval (PDT) elected w/ 47% of the vote

Federal House (total 39 seats) 13 PFL, 8 PT, 3 each PP, PL, PDT, 2 each PSDB, PCdoB, PPS, 1 each PMDB, PSB, PV

6. Ceara

President - Lula (PT) 71.2%

Governor - Gomes (PSB) elected w/ 62% of the vote

Federal Senator - Color (PCdoB) elected w/ 52% of the vote

Federal House (total 22 seats) 6 PMDB, 5 PSDB, 4 PT, 2 each PSB, PP, 1 each PCdoB, PTB

[Filuwaúrdjan]

Apparently Lula is polling about 57%

[Filuwaúrdjan]

BBC reports that early results (or exit polls?) have Lula at over 60%.

[○∙◄☻¥tπ[╪AV┼cVê└]

Good to see that some countries are electing leftist Presidents.

[Filuwaúrdjan]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

[Colin]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

I'm guessing some voted for Alckmin, and the minor leftist candidates, just to force a runoff in order to show Lula that he isn't invincible. That seems most likely unless Alckmin's stabbed himself in the vote in the intervening weeks.

[Bono]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

Voting is mandatory.

[Filuwaúrdjan]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

Voting is mandatory.

In theory. In practice it seems that a lot of people don't bother to vote regardless of what the law says; turnout in the first round was 83% and it was 81% in the second round.

Another thing; the number of invalid votes was down about two million from the first round to the second.

[Bono]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

Voting is mandatory.

In theory. In practice it seems that a lot of people don't bother to vote regardless of what the law says;

Well, it's Brazil.

[YoMartin]

Some things to note...

1. Turnout was about the same as in the second round as the first (down a little bit but not much).
2. Alckmin polled a lower % of the vote and less raw votes in the second than in the first round.

Voting is mandatory.

In theory. In practice it seems that a lot of people don't bother to vote regardless of what the law says;

Well, it's Brazil.

In most place "mandatory" voting is not really such.

Just a few days before the first round Lula was seriously hit by new corruption allegations. The effect was surely felt then, but it could have blown away weeks later. Besides, Alckmin didn´t seize the moment between the first and the second round. His campaign never catched momentum, in spite of his surprising 41%.