WEBVTT - Q4... Continue Watching 0:00:03.920 --> 0:00:07.480 Welcome to Bloomberg Opinion. I'm Ronnie Quinn. This week very 0:00:07.520 --> 0:00:09.640 well could be true that the markets are right in 0:00:09.720 --> 0:00:12.160 sensing a less aggressive sed but we're just gonna have 0:00:12.160 --> 0:00:13.760 to wait and see if I think it's just more 0:00:13.800 --> 0:00:17.040 hope these days. Mike Regen on markets whip sewing again 0:00:17.640 --> 0:00:21.840 and Clara Ferrero Marquez on the Brazilian election after polls 0:00:21.960 --> 0:00:26.239 underestimated President Jayyer bol Snaro's popularity, sending the presidential race 0:00:26.440 --> 0:00:29.240 to a runoff. First, though, to the mid term elections 0:00:29.240 --> 0:00:31.840 here in the United States November eight. We heard from 0:00:31.840 --> 0:00:35.879 President Biden this week preaching unity with Republican Governor Rhonda Santas. 0:00:36.000 --> 0:00:38.440 He thanked me for the immediate response we had. He 0:00:38.479 --> 0:00:40.920 told me how much he appreciated it, said he was 0:00:40.960 --> 0:00:43.600 extremely happy with it was going on. This is not 0:00:43.760 --> 0:00:47.520 about whether or anything having to do with our disagreements politically. 0:00:47.840 --> 0:00:51.040 This is about saving people's lives, homes, and businesses. But 0:00:51.080 --> 0:00:53.840 the message community may be sure lived. With mid terms 0:00:53.960 --> 0:00:57.160 fewer than five weeks away, markets and corporations will be 0:00:57.160 --> 0:00:59.440 looking to results to figure out what happens to a 0:00:59.560 --> 0:01:02.880 slate of short term tax parks designed to sunset at 0:01:02.920 --> 0:01:05.560 the end of the year, also the prospect for legislation 0:01:05.560 --> 0:01:09.040 in the next two years regulatory risk and federal energy policy. 0:01:09.319 --> 0:01:12.280 I spoke with Bloomberg Opinions Jonathan Bernstein to gauge the 0:01:12.319 --> 0:01:15.360 state of the slate. So, Jonathan, it's important to preface 0:01:15.360 --> 0:01:18.000 everything by saying that we're still five weeks away from 0:01:18.000 --> 0:01:20.319 the mid terms, and so much can change in so 0:01:20.360 --> 0:01:23.680 many arenas, from individual candidates to what issues even Americans 0:01:23.680 --> 0:01:26.640 consider paramount But for now, at least, it does look 0:01:26.720 --> 0:01:31.800 like the Senate is favored to stay Democrats. Do you agree, Um, 0:01:31.840 --> 0:01:34.520 you know, both the House and the Senate have become 0:01:34.600 --> 0:01:38.959 so up for grabs right now. The latest polling couldn't change. 0:01:39.000 --> 0:01:41.920 But right now it looks like there's about a one 0:01:42.000 --> 0:01:46.160 third chance that Republicans would have majorities on both sides 0:01:46.160 --> 0:01:48.680 of Congress, about a one third chance that Democrats would 0:01:48.680 --> 0:01:51.400 have majorities on both sides, and a one third chance 0:01:51.400 --> 0:01:54.080 of a split Congress with Republicans having the majority in 0:01:54.080 --> 0:01:57.640 the House Democrats in the Senate. So yeah, most of 0:01:57.640 --> 0:01:59.760 the forecasters right now would say Democrats have a slightly 0:01:59.800 --> 0:02:02.480 better a chance of holding their senti majority than not. 0:02:02.840 --> 0:02:06.400 But it's very up for grabbed. What states does it 0:02:06.480 --> 0:02:09.760 depend on? Obviously we're watching Georgia. It may come down 0:02:09.760 --> 0:02:12.959 to Georgia, but other states have huge impact on where 0:02:12.960 --> 0:02:15.840 it actually ends up. Yeah, I mean, there's still several 0:02:15.880 --> 0:02:23.200 states that could go either way. Nevada, Georgia, Wisconsin, North Carolina, Pennsylvania, Ohio, 0:02:23.960 --> 0:02:27.240 Arizona and Florida, even New Hampshire even you know, there's 0:02:27.280 --> 0:02:30.160 just a lot of states that are at least if 0:02:30.160 --> 0:02:33.080 the poll isn't quite within the marginary, it's awful close 0:02:33.120 --> 0:02:35.840 to that. So you don't think that New Hampshire and 0:02:36.040 --> 0:02:38.880 Arizona are lost to Republicans yet. Then if you had 0:02:39.040 --> 0:02:41.560 me bet on even odds, I'd take the Democrats to 0:02:41.560 --> 0:02:43.840 New Hampshire and Arizona. I don't bet on elections, but 0:02:44.120 --> 0:02:46.320 if you gave me, you know, tend to want odds. 0:02:46.400 --> 0:02:49.760 I'd have to think seriously about the possibility if the 0:02:49.880 --> 0:02:54.400 environment shifts to Republicans over the last month. It's certainly 0:02:54.440 --> 0:02:58.920 possible that Republicans could get back in the game, and 0:02:58.960 --> 0:03:01.560 some of the states that right Democrats have an advantage. 0:03:01.680 --> 0:03:04.480 On the other hand, the environment could shift a little 0:03:04.480 --> 0:03:09.680 bit to the Democrats and something like Florida or Utah 0:03:09.800 --> 0:03:12.960 where we have an independent Republican running against the regular Republican, 0:03:13.040 --> 0:03:17.160 but the independent Republican would probably caucus with the Democrats 0:03:17.200 --> 0:03:18.880 if he was elected. I think I'm not sure if 0:03:18.919 --> 0:03:21.560 he's actually said that or not. You know, those could 0:03:21.560 --> 0:03:24.000 become all of a sudden in flight if things move 0:03:24.040 --> 0:03:26.080 a little bit to the Democrats, and we just don't 0:03:26.080 --> 0:03:28.320 know if that's going to happen or not, so it's 0:03:28.360 --> 0:03:30.720 all to play for. Still, it does seem like Republican 0:03:30.760 --> 0:03:34.560 money is going to Ohio and Florida. Should we read 0:03:34.560 --> 0:03:38.240 anything into that? You know, I'm sort of an outlier 0:03:38.240 --> 0:03:41.240 on opinions about money right now. My feeling is there 0:03:41.360 --> 0:03:43.360 is so much money out there, it is so easy 0:03:43.400 --> 0:03:47.760 to raise. There are so few restrictions that any candidate 0:03:47.840 --> 0:03:50.320 who has a reasonable chance is going to be funded 0:03:50.480 --> 0:03:53.560 enough that diminishing returns start sitting in. So I don't 0:03:53.600 --> 0:03:56.200 think that any candidate who would have a chance otherwise 0:03:56.800 --> 0:03:59.400 is going to be starved for funds, even in states 0:03:59.440 --> 0:04:02.200 like I believe Arizona is one where the party seemed 0:04:02.200 --> 0:04:04.600 to be deserting the candidate. If a good poll shows up, 0:04:04.600 --> 0:04:06.840 he'll have the money to spend. If it does come 0:04:06.840 --> 0:04:08.880 down to Georgia. Even if it doesn't come down to Georgia, 0:04:09.160 --> 0:04:11.640 does Harshel Walker do it? Even with these new allegations 0:04:11.680 --> 0:04:14.600 about paying for a girlfriend's abortion, even though he's staunchly 0:04:14.640 --> 0:04:18.599 anti abortion publicly. You know, I think what we should 0:04:18.600 --> 0:04:21.800 think about stuff like that is that it probably matters 0:04:21.800 --> 0:04:25.320 on the margins. After all, hardcore Republican voters, it's too 0:04:25.400 --> 0:04:27.320 late to drop him as a candidate, so he's going 0:04:27.360 --> 0:04:30.280 to be on the ballot. Hardcore Republican party actors are 0:04:30.360 --> 0:04:33.159 stuck with him. You know, we'll take something extraordinary for 0:04:33.200 --> 0:04:34.960 them to say, oh, forget it, We're going to give 0:04:34.960 --> 0:04:37.520 away one of the major swing states and give them. 0:04:37.839 --> 0:04:41.000 It's not gonna happen. Could it affect some voters, sure, 0:04:41.560 --> 0:04:45.120 even if it's one two percent of voters in Georgia. Well, 0:04:45.160 --> 0:04:47.160 if they stay home and they said, do I really 0:04:47.160 --> 0:04:48.760 want to go out to the polls and vote for 0:04:48.800 --> 0:04:51.680 this guy who has not just this latest candle but 0:04:51.680 --> 0:04:56.159 a whole series of things. Um, you know, not to 0:04:56.200 --> 0:04:59.039 mention that his qualifications for the job were very shaky. 0:04:59.320 --> 0:05:01.719 Misibility to form on the job have been very shaky 0:05:01.760 --> 0:05:04.200 in any of the settings we've seen him in, so 0:05:04.800 --> 0:05:06.719 you know, if it's a very close race, it costs 0:05:06.760 --> 0:05:09.320 some more two percentage points, that could be enough. On 0:05:09.360 --> 0:05:12.119 the other hand, we've seen plenty of big campaign issues, 0:05:12.120 --> 0:05:15.280 including important ones, come up, matter for a while and 0:05:15.320 --> 0:05:18.800 then they move on to something else, and most partisans 0:05:18.839 --> 0:05:21.120 are very good at making excuses for people on their 0:05:21.120 --> 0:05:26.800 own side. So um, sometimes campaigns really do collapse, and 0:05:26.839 --> 0:05:30.000 we've seen in this cycle some candidates running well below 0:05:30.080 --> 0:05:33.120 where their party seems to be in that state. That 0:05:33.160 --> 0:05:36.400 could happen to Walker as well, But we'll see how 0:05:36.440 --> 0:05:39.320 it plays out over several days and over the remaining weeks, 0:05:39.320 --> 0:05:42.440 and what else happens. If he has other public fights 0:05:42.440 --> 0:05:45.160 with members of his family, for example, that can't be good. 0:05:46.920 --> 0:05:48.640 But he does love them at the end of the day, 0:05:49.600 --> 0:05:52.960 apparently so so. In terms of issues, we obviously saw 0:05:53.040 --> 0:05:56.320 abortion becoming a huge issue. It's questionable as to whether 0:05:56.320 --> 0:05:58.240 it will stay an issue for the next five weeks, 0:05:58.400 --> 0:06:00.400 what happens with the economy, what happens with the inflation 0:06:00.440 --> 0:06:03.000 and so on. It will bring out more voters, though, 0:06:03.040 --> 0:06:05.440 that's for sure. Are you looking for turnout to increase 0:06:05.640 --> 0:06:09.359 this time around? The indication so far seemed to be 0:06:09.440 --> 0:06:12.560 that it will be a high turnout election. Um, we 0:06:13.240 --> 0:06:16.520 are in a relatively high turnout cycle and most recent 0:06:16.520 --> 0:06:21.440 elections was very high turnout election and for mid you know, 0:06:22.160 --> 0:06:24.599 midterms are never as high turnout, but it does look 0:06:24.680 --> 0:06:28.080 like all the indications are that this will be high 0:06:28.080 --> 0:06:31.120 turnout election. And as you know, as you implied, yes, 0:06:31.680 --> 0:06:34.000 whether first of all, an issue can get people to 0:06:34.040 --> 0:06:37.159 turn out and might not otherwise, but issues can be 0:06:37.240 --> 0:06:39.800 very Policy questions can be very important even if they 0:06:39.839 --> 0:06:43.159 don't affect vote choice. Because a whole lot of Democrats, 0:06:43.200 --> 0:06:46.480 for example, are running on the abortion issue. They may 0:06:46.600 --> 0:06:48.520 feel that that was why they want if they win, 0:06:48.960 --> 0:06:51.880 and they will then act on it if they have 0:06:52.000 --> 0:06:54.640 the votes to do so when they're elected. The same thing, 0:06:54.720 --> 0:06:57.080 you know, for Republicans who are running on other issues, 0:06:57.120 --> 0:07:00.200 those issues, even if they don't actually move votes, will 0:07:00.200 --> 0:07:03.760 be what Republicans perceived to have elected them. So, Jonathan, 0:07:03.800 --> 0:07:05.720 it's hard to postulate, given though we don't know how 0:07:05.760 --> 0:07:07.920 the next government is going to look, But if it 0:07:07.960 --> 0:07:09.960 were to be a divided government, what would that mean 0:07:10.000 --> 0:07:12.920 for Joe Biden for the next two years? In terms 0:07:12.920 --> 0:07:15.960 of reelection it probably doesn't mean anything, But in terms 0:07:16.000 --> 0:07:19.120 of getting things done well. You know, if Republicans are 0:07:19.160 --> 0:07:22.560 a House majority, in particular, Republicans don't have sort of 0:07:22.880 --> 0:07:26.080 a list of policies that they want that they will 0:07:26.120 --> 0:07:30.600 then compromise with Biden and with the Senate, since nobody's 0:07:30.640 --> 0:07:33.240 going to have sixty senators so with the filibuster, that 0:07:33.240 --> 0:07:35.480 means that whoever has the majority, they're going to have 0:07:35.520 --> 0:07:38.120 to compromise with the Senate just to get anything to Biden. 0:07:38.720 --> 0:07:40.960 But if the Republicans have a majority, we're going to 0:07:41.080 --> 0:07:45.080 see investigations, a lot of ugly smear type investigations, not 0:07:45.160 --> 0:07:48.840 sort of serious policy type or even you know, based 0:07:48.840 --> 0:07:52.200 on fact types of investigations. You know, we saw this 0:07:52.280 --> 0:07:56.920 before with Benghazi and a Republican House and Barack Obama. 0:07:57.320 --> 0:08:00.119 We will see it again. If Republicans stake control. There 0:08:00.320 --> 0:08:03.240 is a possibility that Republicans could bring the country to 0:08:03.280 --> 0:08:06.920 default over the debt feeling. If Democrats don't do something 0:08:07.080 --> 0:08:09.320 before the end of the year to make that impossible. 0:08:09.760 --> 0:08:12.400 There is I'd say a fairly good possibility that next 0:08:12.480 --> 0:08:15.600 September October will have a government shutdown. If Republicans have 0:08:15.640 --> 0:08:18.120 the majority of the House, they don't have a set 0:08:18.120 --> 0:08:20.280 of things that they want to get done that they 0:08:20.320 --> 0:08:23.280 can compromise about their running on Joe Biden being unpopular, 0:08:23.760 --> 0:08:26.040 and that's what they're going to try to do, is 0:08:26.400 --> 0:08:30.080 go after Biden. Just in that scenario, is Kevin McCarthy 0:08:30.120 --> 0:08:33.360 a shoe in for speaker? Some of the experts on 0:08:33.440 --> 0:08:36.000 the House that I've spoken to think, you know what 0:08:36.120 --> 0:08:39.760 he probably is. But it also depends on what the 0:08:39.800 --> 0:08:42.160 majority is. You know, it takes two d eighteen to 0:08:42.160 --> 0:08:44.120 have a majority in the House. Speaker elections is an 0:08:44.120 --> 0:08:48.440 election on the House floor. If Republicans from the Freedom 0:08:48.440 --> 0:08:53.520 Caucus or other even more outlier Republicans refuse to vote 0:08:53.559 --> 0:08:56.840 for McCarthy for speaker, he needs to get to eighteen. 0:08:57.080 --> 0:09:00.000 And if they only have two twenty Republicans and three 0:09:00.040 --> 0:09:03.760 Republicans refused to vote for him, they can't elect him. 0:09:03.920 --> 0:09:05.840 Is that what's going to happen? We have no idea, 0:09:06.200 --> 0:09:07.880 but it certainly is something that he's going to have 0:09:07.920 --> 0:09:10.599 to worry about. And then, of course we're assuming a 0:09:10.640 --> 0:09:13.400 lot of things now. But McCarthy, you were to be speaker, 0:09:13.400 --> 0:09:16.200 and assuming the Republicans do take the House, how would 0:09:16.280 --> 0:09:20.920 McConnell want government to look? Would McConnell want an obstrappers Congress. 0:09:20.960 --> 0:09:23.880 I think we can look at what happened during the 0:09:24.000 --> 0:09:28.760 last two years of Barack Obama's presidency. McConnell wasn't trying 0:09:28.800 --> 0:09:34.079 to bring the country into default. He has enough respect for, 0:09:34.080 --> 0:09:36.280 for example, the business interests that a lot with the 0:09:36.320 --> 0:09:38.960 Republican Party to not want to do that. But in 0:09:39.080 --> 0:09:44.240 terms of confirming nominations, confirming judicial nominations, that's not going 0:09:44.280 --> 0:09:47.400 to happen. We may have a half amfleach happening. You know, 0:09:47.640 --> 0:09:50.640 as we get to a normal cycle of cabinet members leaving, 0:09:50.679 --> 0:09:54.280 would McConnell bring up a Treasury secretary, of Defense secretary 0:09:54.400 --> 0:09:56.840 up for a vote? Would he have thoats to do 0:09:56.880 --> 0:09:58.920 it if there are fifty two or fifty three Republicans, 0:09:59.280 --> 0:10:01.960 I don't know. We may have a lot of positions 0:10:02.000 --> 0:10:04.439 that go un filled. So that kind of stuff he 0:10:04.440 --> 0:10:06.520 would certainly do. In terms of figuring out a way 0:10:06.559 --> 0:10:09.400 to get the debt feeling done, we've seen McConnell being 0:10:09.400 --> 0:10:11.679 willing to work on that, But we've also seen a 0:10:11.720 --> 0:10:13.880 couple of government shutdowns when he was the Republican leader, 0:10:13.960 --> 0:10:17.120 so you know, he won't have the ability to come 0:10:17.200 --> 0:10:19.800 up with those two eighteen votes in the House to 0:10:20.000 --> 0:10:22.960 get a debt limit increased fast or to get a 0:10:22.960 --> 0:10:25.760 continuing resolution to keep government spending going the next time 0:10:25.760 --> 0:10:27.840 it runs out. That's on the House side. He can't 0:10:27.880 --> 0:10:31.240 really control that. There's so many things to ponder because, 0:10:31.240 --> 0:10:33.320 of course, as soon as the midterms are over, then 0:10:33.360 --> 0:10:37.079 we're looking at the potential for announcements by various people, 0:10:38.320 --> 0:10:40.880 whether they're running for president or not. Obviously we know 0:10:40.960 --> 0:10:43.959 Trump is very likely to run. Biden we're not quite 0:10:43.960 --> 0:10:46.760 sure about, but I guess you'll run. But there could 0:10:46.760 --> 0:10:48.200 be a lot of other candidates too, And there are 0:10:48.200 --> 0:10:51.640 different sort of strains of Republicanism emerging. What do you 0:10:51.679 --> 0:10:55.320 see in the hinterland. Well, let's start with Democratic side. 0:10:55.559 --> 0:10:59.280 It is in Joe Biden's interest to have pretended to 0:10:59.320 --> 0:11:02.000 be running for election up to this point, and it's 0:11:02.040 --> 0:11:04.960 acted to his interest to continue to whatever he's really 0:11:04.960 --> 0:11:07.600 thinking up to the point where it would really harm 0:11:07.640 --> 0:11:11.040 Democrats for him to drop out. We don't know what 0:11:11.080 --> 0:11:13.840 he's really thinking, but that's what he's doing. It's consistent 0:11:13.880 --> 0:11:16.840 with the interests of the presidency and his presidency. Some 0:11:16.960 --> 0:11:20.640 point between election day and say Memorial Day, he's going 0:11:20.679 --> 0:11:23.440 to have to make a final decision. And you know, 0:11:23.480 --> 0:11:25.760 if he intends to not run, he's gonna have to 0:11:25.800 --> 0:11:28.120 stop pretending that he's running. If he intends to run, 0:11:28.400 --> 0:11:31.679 he's gonna have to do something dramatic enough, possibly a 0:11:31.800 --> 0:11:34.680 formal declaration of candidacy that everybody knows, Oh, yes, he 0:11:34.760 --> 0:11:38.400 really is running. Assuming that he is recent rebounding, the 0:11:38.400 --> 0:11:41.679 polls holds up, he's over. He probably does not have 0:11:41.720 --> 0:11:45.800 any serious possibility of losing the nomination, and nobody important 0:11:45.880 --> 0:11:48.199 is going to come after him. But then again, if 0:11:48.240 --> 0:11:53.240 he flips back under who knows. On the Republican side, 0:11:53.440 --> 0:11:57.400 they've been running for two years now, whether it's governor senators. 0:11:57.440 --> 0:12:00.319 A lot of candidates have been running. Trump himself never 0:12:00.320 --> 0:12:02.719 stopped running for president. That's all he does is run 0:12:02.720 --> 0:12:04.520 for president. He didn't do very much presidenting when he 0:12:04.559 --> 0:12:07.920 was elected. He declared for re election the day he 0:12:08.000 --> 0:12:10.600 was sworn in, and then didn't bother stopping the whole time. 0:12:10.840 --> 0:12:13.559 So he's running now. He may have to drop out 0:12:13.559 --> 0:12:15.800 at some point. The way that he can raise money 0:12:15.880 --> 0:12:19.120 under the law changes if he becomes a declared candidate, 0:12:19.600 --> 0:12:23.440 and that's probably one of the big questions for him 0:12:23.480 --> 0:12:25.559 as far as when he makes a formal declaration or 0:12:25.600 --> 0:12:29.160 if he eventually doesn't. Obviously he's also got legal problems 0:12:29.240 --> 0:12:31.840 over him. He may have calculations about whether a formal 0:12:31.880 --> 0:12:34.679 candidacy would help or hurt his legal situation. And then 0:12:34.679 --> 0:12:36.720 we have a whole bunch of Republicans, yeah, that are running, 0:12:37.200 --> 0:12:40.120 and some of them will probably get to the point 0:12:40.120 --> 0:12:43.600 of formally declaring even if Trump runs. Most of them 0:12:43.600 --> 0:12:45.920 will drop out if they feel like Trump is a 0:12:45.960 --> 0:12:49.680 formidable foe. We haven't seen anything like this an hundred 0:12:49.760 --> 0:12:52.920 years or whatever. It is a former president trying to 0:12:52.920 --> 0:12:56.640 win back the nomination after being defeated. I would guess 0:12:56.640 --> 0:12:59.480 that there's a lot of Republican Party actors who feel 0:12:59.559 --> 0:13:02.199 that Trump is the worst thing possible for the party. 0:13:02.200 --> 0:13:06.319 In what are your thoughts on the descantist style and 0:13:06.400 --> 0:13:10.480 whether that could take over nationally? I think that we've 0:13:10.520 --> 0:13:13.960 seen him get a lot of publicity in Republican align media. 0:13:14.440 --> 0:13:18.280 That's a very important factor in Republican nomination politics. I 0:13:18.320 --> 0:13:21.240 don't know that it's a style very different from Trump's. 0:13:21.280 --> 0:13:23.120 It looks like one of the things that we're going 0:13:23.200 --> 0:13:26.080 to have is several candidates who in various different ways 0:13:26.280 --> 0:13:29.800 stick with the Trump profile, Trump without this, or Trump 0:13:29.800 --> 0:13:32.880 plus that, something like that, because Trump is still popular 0:13:32.880 --> 0:13:36.040 among a lot of voters and some party actors. So 0:13:36.520 --> 0:13:41.600 I don't see any particular disqualifications for either of those candidates. 0:13:41.720 --> 0:13:43.360 But I don't see it for several of you know, 0:13:43.440 --> 0:13:47.360 we don't have somebody like Rudy Giuliani from several cycles ago, 0:13:47.400 --> 0:13:50.040 where it was very obvious that whatever the poll said, 0:13:50.360 --> 0:13:54.600 he had some serious problems attracting Republican voters and the 0:13:54.600 --> 0:13:58.280 support of Republican Party actors because of his policy position. 0:13:58.800 --> 0:14:01.400 For the most part, I don't see policy position problems 0:14:01.400 --> 0:14:03.719 with any of these people, any of a dozen or 0:14:03.800 --> 0:14:06.840 so Republicans who have made the trip out to Iowa, 0:14:06.920 --> 0:14:10.280 New Hampshire, and South Carolina indicating that they are running 0:14:10.360 --> 0:14:13.120 right now, or they're doing what one political scientist says, 0:14:13.120 --> 0:14:18.040 they're running four. Whether they'll be running in is another question. 0:14:18.679 --> 0:14:21.120 Some people think about the sand as the other lane 0:14:21.240 --> 0:14:23.560 locked up. It's very early for that kind of thing, 0:14:23.600 --> 0:14:25.800 and I wouldn't be very surprising at all if we 0:14:25.880 --> 0:14:30.000 have more than one candidate have a surge at some 0:14:30.080 --> 0:14:33.040 point and perhaps catch on long term, and perhaps surge 0:14:33.040 --> 0:14:35.480 and then burnout as we've seen lots of candidates doing 0:14:35.520 --> 0:14:39.840 previous cycles number opinions. Jonathan Bernstein to Brazil now on 0:14:39.880 --> 0:14:42.160 the presidential election runoff at the end of the months, 0:14:42.160 --> 0:14:46.040 which will pitt former President Lula against President Wilsonaro. This 0:14:46.200 --> 0:14:49.400 after a closer first round than predicted by pollsters. I 0:14:49.440 --> 0:14:52.760 spoke with Clara Ferra Marquez, So Clara, in a way, 0:14:52.800 --> 0:14:55.320 this was a huge loss for Lula, given that the 0:14:55.320 --> 0:14:57.920 polls are suggesting he might win in the first round. Right, 0:14:58.360 --> 0:15:00.200 it's important, I think the things that if the facts 0:15:00.200 --> 0:15:02.520 of a little bit when Brazilian elections are very rarely 0:15:02.600 --> 0:15:05.120 solved in the first round. It's only really happened twice 0:15:05.160 --> 0:15:07.840 to the advent of democracy. And I think wild colts 0:15:07.920 --> 0:15:10.960 had indicated in the weeks before that it was possible 0:15:10.960 --> 0:15:13.480 that Lula could carry the election in the first round. 0:15:13.720 --> 0:15:15.440 It was always a little bit of an outside chance. 0:15:15.480 --> 0:15:17.320 I think the surprise here was really the strength of 0:15:17.360 --> 0:15:21.520 a scenario support impulsed push him in somewhere in the midberties, 0:15:21.560 --> 0:15:24.000 and he came out of the pot. And I think, 0:15:24.040 --> 0:15:27.320 really importantly it's the strength of congressional support and the 0:15:27.480 --> 0:15:30.880 success which his allies had both in Congress and in 0:15:31.000 --> 0:15:35.640 guvenatorial races exactly a financial markets love the results. The 0:15:35.680 --> 0:15:39.400 interpretation was that if Lula wins, it will temper his 0:15:39.520 --> 0:15:42.080 more leftist tendencies. But in truth, we don't really know 0:15:42.160 --> 0:15:44.600 what either candidate would do or even be able to 0:15:44.640 --> 0:15:46.640 do in power, do we. Well, I mean, we do 0:15:46.800 --> 0:15:49.240 have some indications because both these men have been president 0:15:49.320 --> 0:15:52.880 try for two terms and Bocenaro for one. So it's 0:15:52.960 --> 0:15:55.840 a really On the one hand, there's a sense that orcenario, 0:15:55.920 --> 0:15:59.120 if re elected, would really push ahead with reform, parking 0:15:59.160 --> 0:16:02.520 back to twenties. Seen, the reality is, as president wasn't 0:16:02.560 --> 0:16:05.240 really able to do very much of that. Bulgeard his 0:16:05.360 --> 0:16:08.440 finance minister came in on this big ways of hope. 0:16:08.520 --> 0:16:11.920 There was some reform of the pension system, roll and overdue, 0:16:12.120 --> 0:16:14.320 but really it felt short of what could have been done. 0:16:14.640 --> 0:16:18.400 They haven't really tackled physical and other much needed changes, 0:16:18.960 --> 0:16:22.360 and they've mismanaged the greatest shock, which with COVID, So 0:16:22.720 --> 0:16:25.440 it's a little odd. And then on the Rula's side, 0:16:25.440 --> 0:16:27.560 you know, as president, he was a pragmatist. He really 0:16:27.600 --> 0:16:30.280 did govern from the center. I would say, you know, 0:16:30.360 --> 0:16:32.920 this probably will push them to do that even further, 0:16:33.000 --> 0:16:34.960 he'll have to move to the center in order to 0:16:35.040 --> 0:16:37.280 gain the support of third way candidates. But the fact 0:16:37.320 --> 0:16:39.960 is he was already there. His Vice President Gerald Well, 0:16:40.040 --> 0:16:42.880 whose former governor of San Fallow, is really a centric 0:16:42.960 --> 0:16:45.720 So that's the message he's been sending for Sometimes, if 0:16:45.880 --> 0:16:49.400 Lula wins, what is the danger that Bolton Arrow doesn't 0:16:49.440 --> 0:16:53.880 accept the outcome? How tense could have become very I think, 0:16:54.000 --> 0:16:56.240 and it's going to become terms for the next four weeks. 0:16:56.280 --> 0:16:59.320 We've already seen quite a lot of electoral violence. We've 0:16:59.360 --> 0:17:03.000 seen pulp, there's attacks because the white bolcenario has discredited 0:17:03.200 --> 0:17:06.760 the poles and people carrying out those poles that will 0:17:06.800 --> 0:17:09.480 only accentuate I think the real issue with Boar scenarios 0:17:09.560 --> 0:17:12.400 that taking a leaf from the Donald Trump playbook, he's 0:17:12.400 --> 0:17:15.600 really been paving the way for some sort of adventurism 0:17:15.720 --> 0:17:19.000 come October thirty and so he's questioned the electoral mechanism, 0:17:19.040 --> 0:17:22.199 even though Brazil has a very well established electronic voting system. 0:17:22.680 --> 0:17:25.439 You know, there's absolutely no evidence of fraud. He's eaten 0:17:25.480 --> 0:17:28.600 away at the balance of powers, attacking the Supreme Court. 0:17:28.640 --> 0:17:31.160 He's really cozied up to the military since twenty eighteen, 0:17:31.160 --> 0:17:33.800 and large parks didn't really have a party power base. 0:17:33.920 --> 0:17:36.040 He took to the military as a way of basking 0:17:36.119 --> 0:17:39.880 in the reflective glory of their reputation for competence. For examples, 0:17:39.920 --> 0:17:42.120 he was an army captain. He wasn't a particularly good one. 0:17:42.359 --> 0:17:44.159 That doesn't really matter if he can still do that 0:17:44.280 --> 0:17:46.520 and has done it very effectively. So that's connections to 0:17:46.560 --> 0:17:49.560 the military and with the security services generally that include 0:17:49.560 --> 0:17:52.359 the police, and that very worrying. Also the supports of 0:17:52.440 --> 0:17:55.200 gun ownership, so there's a surge and gun ownership and 0:17:55.280 --> 0:17:57.640 business a washing guns and that too. I think he's 0:17:57.640 --> 0:18:00.639 a pretty major concern as we approached this. It's not 0:18:00.680 --> 0:18:03.520 necessarily true that we would have an uprising. I mean, 0:18:03.560 --> 0:18:05.760 he has said things like I'll leave power either to 0:18:05.800 --> 0:18:07.920 go to prison or because God removes me and I'm 0:18:07.920 --> 0:18:10.800 not going to prison. They're very sort of comments. But 0:18:10.840 --> 0:18:13.080 I think the real risk here it will depend on 0:18:13.240 --> 0:18:15.960 how why the margin is between the two countilates of 0:18:16.080 --> 0:18:19.240 ruler winds, how wide is that margin between them. The 0:18:19.320 --> 0:18:21.359 other thing to bear in mind is that this might 0:18:21.400 --> 0:18:24.040 not be as outright coup as you would imagine in 0:18:24.080 --> 0:18:27.119 a nineties seventies kind of way that these are modern 0:18:27.160 --> 0:18:29.720 coups work in different ways than what we might well 0:18:29.720 --> 0:18:32.840 see is there's lots of point back point instability, and 0:18:32.840 --> 0:18:36.080 that is extremely concerning. Can we draw any conclusion about 0:18:36.119 --> 0:18:39.480 how populism is developing differently in Latin American countries, Well, 0:18:39.520 --> 0:18:42.000 it's always different, and I think Latin America we have 0:18:42.000 --> 0:18:44.399 a tendency to talk about it like it's one uniform. 0:18:44.440 --> 0:18:47.200 Play is obviously very very differently to different countries, different 0:18:47.240 --> 0:18:50.040 experiences with dictatorship. I think I have the things to 0:18:50.119 --> 0:18:52.480 point sales would be. One is to spare down this 0:18:52.600 --> 0:18:54.480 idea of the pink tide. You know, we have seen 0:18:54.560 --> 0:18:57.680 quite a lot about the bag in Chile, Peter in Colombia, 0:18:57.720 --> 0:18:59.879 there's a lot of talk of inside of ruler country 0:19:00.000 --> 0:19:02.160 are in Brazil now, the reality of these are all 0:19:02.240 --> 0:19:04.800 very different candidates. They're not on the right, but really 0:19:04.800 --> 0:19:07.360 what stands out for three of them is that they're 0:19:07.480 --> 0:19:10.800 anti incumbents. People are unhappy with the way things are going, 0:19:10.840 --> 0:19:13.760 the way economies are going in particulars, and I think 0:19:13.800 --> 0:19:15.639 also just to bear in mind that it's sorts of 0:19:15.760 --> 0:19:18.360 very different experience. When Will was first empower when there 0:19:18.359 --> 0:19:22.199 genuinely was addictively that's not really the case. Now. It's 0:19:22.200 --> 0:19:24.240 been operating from the assumption that Lula is going to win, 0:19:24.280 --> 0:19:25.880 but that's based on the polls and they were wrong. 0:19:25.960 --> 0:19:28.679 So could your ball scenarios day in power, Well, it 0:19:28.680 --> 0:19:31.600 would be unpertidented because since the advent of democraty, no 0:19:31.680 --> 0:19:34.720 one became second or did not win the first round 0:19:34.800 --> 0:19:38.520 one the second round. But we're in pretty unprecedented territory here. 0:19:38.840 --> 0:19:42.120 I think it's important to how little ruler has said 0:19:42.119 --> 0:19:44.760 about his actual agenda for when he governs, So the 0:19:44.840 --> 0:19:47.840 longer he has to wait for the next round for 0:19:48.000 --> 0:19:50.960 more details he provides, and that's less effective than just 0:19:51.040 --> 0:19:54.680 being the anti ball Canaro candidate. I think it's also 0:19:54.840 --> 0:19:58.560 notable how lukewarm some of the support has been for Lula. 0:19:59.040 --> 0:20:01.400 It's astounding, and you know, this is an election where 0:20:01.440 --> 0:20:04.480 democracy is that they can just hasn't really come across 0:20:04.520 --> 0:20:06.320 that way to a lot of people. For most people 0:20:06.320 --> 0:20:08.560 in Brazil, this is stilled an election that is about 0:20:08.600 --> 0:20:11.879 the economy, and despite you know, the reality being a 0:20:11.880 --> 0:20:15.560 lot less worthy, people still credit for scenario with quite 0:20:15.560 --> 0:20:17.479 a lot, and he'll be giving out quite a bit 0:20:17.520 --> 0:20:20.080 of cash hando that's just for the next round. So 0:20:20.400 --> 0:20:22.960 I think it's absolutely a possibility that is not to 0:20:23.000 --> 0:20:27.080 be discounted. Bloomberg Opinions Clara Ferrera Marquez. By the way, 0:20:27.119 --> 0:20:30.000