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Baloo is a "sleepy brown bear" (1.52) who wakes up long enough to speak for Mowgli at the Wolf Pack Council when they're deciding whether to keep the boy or feed him to Shere Khan. Unlike Bagheera, who has ulterior motives, Baloo speaks up out of the kindness of his big cuddly bear heart.
Baloo is a kind and generous teacher, who teaches Mowgli the Law of the Jungle, which is key to his survival. He's not afraid to smack the boy around a bit, either—violence is pretty common in the jungle—but he's gentle when he does it. Any other bear might snap Mowgli in two.
Despite being so sweet and kind to Mowgli, though, Baloo is pretty hard on himself. He blames himself hard when Mowgli is monkey-snatched: "I am the most miserable of bears!" (3.52), he says. "Oh, fat, brown, root-digging fool that I am" (3.56), he wails. Yes, he's a little melodramatic, too.