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Costa's worst fears were soon borne out. Corruption spread through every level of government, Brazil's cost of living rose 81% in 1963, the cruzeiro plunged from 280 to the dollar to 1,720, and foreign investment froze in the face of Goulart's sporadic fits of nationalization. After rare and alarming protest marches by 500,000 Brazilians in Sao Paulo and 100,000 in Belo Horizonte, Costa and his generals finally rose up and sent Goulart packing off to exile in Uruguay. Costa took over the country's military.
When the state governors met and asked Costa to head the new government, he refused; Castello Branco took the job instead. Often bypassing Congress altogether, Castello Branco launched a massive cleanup of inflation, corruption and Communism. He issued more than 3,000 decrees, stripped almost 800 Brazilians of their political rights and had hundreds more arrested and grilled for hours. To cool off Brazil's badly overheated economy, he cut government spending by 30%, quadrupled income tax revenues, held down wages and did his best to woo foreign investment.
Vigor & Passion. Though the results were not so spectacular as the army had promised, they were notable. The rate of inflation dropped in half, to 41% last year. Foreign investment bounced back from $709,000 under Goulart, to $200 million. The growth rate of the gross national product went from 1.4% a year to 5%. For the first time in years, the World Bank sent a mission to Brazil, and last December came up with $230 million in loans and financing. Washington, which had cut aid to Goulart's government, now came across with $560 million in assorted aid, loans and food donations.
Castello Branco had far less success in keeping his army united. On one side were the so-called soft-liners, who wanted to operate within a constitutional framework; on the other the hardliners, who demanded even more aggressive "revolutionary government." The hard line at one point considered Castello Branco's ouster, was dissuaded from acting only by Costa e Silva. Acting as a buffer between the two sides, Costa then persuaded Castello to issue a tough new set of decrees to appease the hard line. They tightened national-security laws, dissolved all 13 of Brazil's political parties in favor of a single opposition called the Brazilian Democratic Movement (M.D.B.) and the government-controlled ARENA party, and provided for indirect presidential elections by Congress—which would obviously be stacked in the government's favor.
By this time, the hard line was calling all the shots, and demanded that Costa run for president. Costa himself, no longer content to play Brazil's great grey eminence, was more than willing. Though Castello Branco was not very happy about the choice of his successor, Congress dutifully elected Costa last October.
Even though he is the candidate of the hard line, Brazilians welcomed Costa as a relief after the drab and dour Castello Branco. As a man who wants to reinterpret the revolution in human terms, Costa emerges as the essence of the middle-class Brazilian. He likes to play the horses now and then, appreciates good cognac, enjoys his family (Wife lolanda, a son, four grandchildren) and laughs at the latest jokes about his military ways. Among his favorites: one concerning a contest that Costa plans to hold for the best joke about him—first prize is 20 years in jail.