The Prof G Pod with Scott Galloway
00:01:42 · Scott Galloway
[00:01:42] S0: Today's Prof G plus deep dive is on the biggest election you probably didn't follow, Brazil, where voters just reelected their president, Lula, to a historic fourth term. Lula, a veteran of the left who first took office in 2003, beat Flavio Bolsonaro, the right wing senator and son of former president, Jair Bolsonaro, 51.8% to 48.2. He's now the first four term president in Brazil's history. He's also the first candidate to lose the first round and come back to win the runoff since Brazil reinstated direct elections in 1989. The result surprised almost everyone. For most of the three weeks before the runoff, the polls had Flavio in front by as much as six points. The outcome also defied a broader regional shift. Since Trump returned to office, Argentina, Bolivia, Chile, Colombia, Ecuador, and Honduras have all moved to the right. The biggest country in Latin America, Brazil, went the other way. Lula's win comes with a catch, however. Voters also elected the most conservative congress since Brazil's return to democracy, and Bolsonaro's party and his allies are set to control both chambers. Lula will be governing against that congress with an economy under real strain. Brazil has one of the highest real interest rates on the planet, more than 9% after inflation. That's higher than Russia's, a country at war, and four times what peers including Chile and South Africa pay. In The US, it's close to zero. Even so, inflation is running at 4.6% above the central bank's tolerance range. A record of nearly 85,000,000 Brazilians are behind on their debt payments, and public debt has surged more than 10 points during Lula's current term to over 82% of GDP. Why should we care? Brazil is the largest economy in Latin America and the fourth largest democracy on Earth, and Donald Trump had a candidate in the race. Last year, he hit Brazil with 50% tariffs, at the time the highest he'd imposed on any country, and tied them directly to the prosecution of Jair Bolsonaro, who's now serving twenty seven years in prison for plotting to overturn the twenty twenty two election. Flavio promised his father amnesty. If that sounds familiar or could be increasingly familiar, trust your instincts. Trump's tariffs on Canada helped hand Mark Carney a victory. And in Brazil, they helped turned a weakened incumbent into a nationalist hero.
00:04:05 · Scott Galloway, Laura Jáner, Brian Winter
To unpack what comes next, our associate producer Laura Jáner, a Brazilian herself, sat down with Brian Winter, editor in chief of Americas Quarterly and vice president of policy at the Americas Society and Council of the Americas. Brian spent a decade reporting from Brazil, Argentina, and Mexico for Reuters. Here's Laura in conversation with Brian. [00:04:29] S2: Brian, it's great to have you with us today. Thank you so much for doing this. [00:04:33] S3: It's a pleasure to be here.
00:04:33 · Brian Winter, Laura Jáner
[00:04:33] S3: It's a pleasure to be here. [00:04:34] S2: I'm currently in Sao Paulo where we just lived through a historic election. Incumbent and left wing president, won a fourth term beating right winger Flavio Bolsonaro, the son of former president, Jair Bolsonaro. And it was a pretty stunning comeback. Lula lost the first round of elections to Flavio and trailed in the polls for most of the race. No candidate had ever done that and still won the presidency since Brazil returned to direct elections in 1989. Investors also had priced in a Flavio win as well. But for anyone who doesn't follow Brazil closely, it's the fifth largest country in the world by area and the seventh by population with more than two thirteen million people. It's Latin America's largest economy and by the IMF's latest count, the tenth largest economy in the world on track to pass Italy and Russia next year. It's also the fourth largest democracy on earth. And if you drank coffee this morning, there's a good chance some of it came from here. Brazil is the world's biggest coffee exporter and supplies about a third of what Americans drink. But we'll get into how Lula pulled off the win and what it means for Brazil. But first, Brian, for people who don't follow Brazilian politics, why is this an election they should have been watching?
00:05:50 · Brian Winter
[00:05:50] S3: Well, that's a great question. And you mentioned coffee. I've had a lot of it over the last several days in the wake of this election result, which as you mentioned nobody saw coming. You know, I speak to people on both sides of the political debate in Brazil on left and on right, and in the Lula camp no one expected this result because he lost by two percentage points in the first round. And their best hope was that maybe he just barely eke out a victory in the runoff, and he ended up winning by 3.5 percentage points. That's 4,000,000 votes. To the question of why people should care about Brazil, couple basic things. The United States and Brazil are the two largest democracies in the Western Hemisphere. It's also the home to two thirds of the Amazon Rainforest, which is critical to the present and future of the planet. And there's also, you know, these bizarre parallels that we've seen between The United States and Brazil over the last ten years or so. Ironic in a way because I spent the first half of my career telling US audiences, hey. Look, guys. Like, Brazil is its own country. It has its own history, its own energy. Let's not be so self obsessed and self regarding to think that what happens in The United States will have an impact on the politics of Brazil, but there have been so many parallels really since the election of Donald Trump in 2016 and then the election of Jair Bolsonaro two years later. So I think there's a lot that our countries have in common as well. So when it comes to why we should care, I would start with those things.
00:07:28 · Laura Jáner
[00:07:28] S2: I'd love to come back to the parallels because as you said, there are definitely many, especially with the recent Biden and and Trump election. But just to get back to the win... Lula's win. So he went from trailing to winning in, like, a pretty shocking three weeks. As we said, he gained roughly 10,000,000 votes between the rounds compared to, like, 3,600,000 for Flavio, mostly through, like, higher turnout and picking up voters from eliminated candidates. And as the sitting president, Lula also made some big policy moves in that window. Congress passed a constitutional amendment ending Brazil's six day workweek, guaranteeing workers two days off with no pay cuts. And for context, the five day workweek is pretty standard in most developed economies. And Lula also raised Bolsa Família, which is Brazil's main welfare program he himself started a couple decades ago, with bigger payments starting six days before the vote. And he also cut federal taxes on gasoline and launched a new debt relief program. But I'd love to ask you, what do you think really made the difference in those three weeks just so we can add some color to this sort of surprising turnaround? And one last follow-up is the the US midterms are as this is released this week. So is there anything in how Lula turned this around that the... That American campaigns on either side should also kind of pay attention to? What do you think of the the three weeks between the first and second round?
00:08:50 · Brian Winter
[00:08:50] S3: Well, Laura, as you mentioned, there were a variety of things that happened, including this big bill that he ran up of more than $40,000,000,000 worth of tax breaks and extra spending on welfare programs and so on. And that's part of the reason why financial markets were upset that Lula won. They had been counting on a Flavio Bolsonaro victory. But they, along with the rest of us, were wrong. And I have to say that these have been humbling days for me because I certainly... You know, we all sensed that the momentum was shifting in Lula's direction, but none of us expected it would swing quite this much. And I do wonder if there are lessons for Democrats in The United States or perhaps anyone anybody anywhere looking to run a campaign in 2026, where you know the technological landscape has changed so much. And I would start with this basic fact. Lula at the age of 80 acquired his first smartphone in the final two weeks of the campaign. And you know part of your audience may think, woah, why didn't he have one before? And that's a good question. You know he was an old school politician, really a man of the twentieth century. That was when he had his political rise, was during the 1970s and the 1980s. But this is also a story of a modern digital operation that came out of nowhere in the space of three weeks between the first round of voting, which Lula lost by two points, and the second round which of course he ultimately won. And the stories that are coming out suggest that Lula was prevailed upon to allow a small group of young aids to go crazy, you know, online and specifically on WhatsApp Yeah. Which is such a huge platform in Brazil along with others like Instagram and TikTok. I think it's important to pause here and note that there are various studies that show that Brazil is one of the countries in the world with the highest rate of engagement with social media. According to one study on average more than six hours a day, and that includes WhatsApp as well as other platforms. And so this was perhaps a country that was especially ripe for this kind of campaign. So what happened? There was this young... This one young congressman named André Janones.