There’s one in the title of this blog site: it’s supposed to be the letter “a” with a grave accent (you know, falling to the right) over it. There’s a bunch more in some of the earlier posts. They looked fine for a while; now they’ve gone all erroneous on me. Sorry about that.

I just read a piece in the New Yorker (well, I started it, it’s pretty long) in which Walt Whitman is quoted derisively dismissing the late Matthew Arnold as among “the dudes of literature.” Californian males my age and younger will tend to understand this in a way Whitman did not intend.

I discovered that the nineteenth-century definition of “dude” referred to “a well-dressed male, or one who is unfamiliar with life outside a large city” Thus, a “dude ranch” was a little cowboy getaway for citified know-nothings. This according to Wikipedia. Wikipedia even features a photo of one Evander Berry Wall, a New York socialite, known as “King of the Dudes.” You’ve got to check it out. the honorific fits under any definition of the word.

A new publication of the OECD Development Centre allows for the first time systematic comparison of the level and structure of taxes in Latin America and OECD countries, using the long-established OECD methodology. Latin America Revenue Statistics shows that tax revenues have been rising in Latin America in recent years. Excellent work!

Reaction to last night’s State of the Union address by President Obama, meanwhile, demonstrates that the issue of fiscal legitimacy is at least as relevant here as it is in the famously dysfunctional systems of Latin America. Our opposition party argues that being opposed to regressive rates of income taxation is equivalent to “class warfare,” “politics of envy” and “pitting one American against another.” Imagine that.

President Obama’s former chair of the Council of Economic Advisors, Christina Romer, gave a talk in November entitled “What do we know about the effects of fiscal policy? Separating evidence from ideology.” It poses a particularly relevant question in the context of the coming presidential election, to wit:

These days, the Recovery Act isn’t very popular. A lot of politicians and pundits assert with great confidence that the Recovery Act was useless. If you are a Republican candidate for President, you probably describe it as $787 billion of pork that did nothing. If you press people for why they think this they will probably say something like, “It’s not rocket science—all you need are two good eyes to look around you. We spent all of this money and the economy is still terrible. It obviously didn’t work.”

She goes on to show that it’s not so obvious, and provides a readable review of how the impact of the expansionary fiscal policy might be estimated. She argues convincingly that things would have been much worse without the stimulus measures and that more stimulus is in fact called for (and along the way discounts the empirical support for the fashionable notion of “expansionary austerity”).

At least as interesting is her account of her job interview with the president-elect. “The President- Elect began the discussion by saying that the economy was very sick and there was not much more the Fed could do—so we needed to use fiscal policy,” she reports.“…I started talking excitedly about what more the Federal Reserve could do. Only afterward did my husband point out that the very first thing I did upon meeting the President-Elect was to contradict him.”

At the déclenchement of the crisis, I wrote a short piece in the OECD Observer, asking “Is fiscal policy back?”. The financial crisis was first met with monetary measures and then and only then were fiscal policy measures entertained. I suggested that economists and plenty of conservative politicians in the US are hostile to fiscal policy because it is political and discretionary in a way that monetary policy is not. Romer herself pushed her boss-to-be, who had asked for advice on fiscal policy, to consider further monetary measures. Central banks are (ideally) independent of the executive and follow rules (like interest rate or inflation targets) that limit the risk of their being politically tempted to act in impecunious ways. Fiscal policy, meanwhile, is “pork,” as Romer noted. I argued that fiscal policy’s great and under recognized importance stems precisely from the fact that it is political. Indeed, fiscal policy is a snapshot of the social contract linking citizens and their government.

I’ve been studying these issues with my former colleagues from the OECD in the context of Latin America, but it’s astonishing to me the degree to which so many Latin American scenarios–regarding taxes, spending, inequality and the legitimacy of the state–are unfolding in my own country these days.

I don’t know how I missed the Romer piece at first, but thanks to the redoubtable blogger/emailer Zé Roberto Afonso for spreading the word. Check out his site for remarkable resources on economics, particularly if you’ve an interest in Brazil.

So many things happening in the news that deserve closer attention, globally, domestically, politically, economically. Here’s a few from the last few weeks that I’ll just offer up for your consideration:

(1) Hugo Chávez painted a portrait of Nestor Kirchner and gave it to Cristina Fernández as a gift. I have no sarcastic comments on this, it’s just a nice thing to do. And the painting ain’t half bad.

(2) Letting women drive makes men gay. That, and other social ills. That’s what the leading authorities on the subject (in Saudi Arabia) say.

(3) Squirrel monkey Banana Sam is safely back at the San Francisco Zoo! I just love saying “Banana Sam”.

A new OECD paper by Stephen Matthews looks at tax-return data from several countries, much of it going back many decades, to characterize trends in top incomes. This growing data set is the result of a fascinating research project led by Tony Atkinson.

For most of the OECD economies considered, the income share of the top 1% fell over the course of the 20th century. While for some countries (most of Continental Europe), the trend looks like a long-term decline with a little uptick in the last few years, for others — the US, the UK, Australia, basically all the English-speaking countries — the curve over time looks like a U, with the top 1% earning fully as much of national income as they did back in the go-go twenties. (Click here for a picture of the latter group of countries:

topincomes.

There is also interesting information about the kinds of jobs these folks hold, and the sources of their income. Matthews stresses that most of the income of the 1% is not from capital gains, but instead employment and business income. Nevertheless, capital gains income plays an important role in growing polarization.

So much to process, so many interesting developments in the last month or so:

1. Andrés Manuel López Obrador will the leftist candidate for next year’s Mexican presidential elections;

2. Cristina Fernández de Kirchner handily trounced all opposition to be reelected president in Argentina–here is a case of disconnect between international punditocracy and voters;

3. Former rebel Gustavo Petro is elected mayor of Begotá, outpolling the innovative former mayor Enrique Peñalosa, who had pacted with former president Uribe…

4. Then there’s Guatemala…