Pals Hugo Chavez and Muammar Kaddafi in Doha. Photo: Venezuela Presidency / AP

 

Baby steps toward independence, he said. South Americans have long wanted to step out from the U.S. shadow. In recent years, with about $4 trillion in GDP behind them, left-leaning governments like Brazil, Venezuela, Bolivia, Chile and Argentina are finding that's finally possible. And these days, as rest of the world is making the region seem like a model of economic stability (which is really saying something), they have plenty of reason to court new friends.

The Arab League, for one, has taken note. That's especially good news for South America, Delgado told me, since Arab governments are sitting on enormous capital reserves--a mouth-watering treasure chest for countries with a long tradition of spending rather than saving (here's lookin' at you, Argentina). What's more, Arab countries are big food importers--so much so that certain Gulf countries have begun buying up farmland in Africa to sustain their consumption. For Argentina and Brazil, which have more corn, soy, and wheat than they know what to do with, that's gold. In fact, in the three years since the first summit, Brazil's trade balance with the Arab world shot up from $8 billion to more than $20 billion. Argentina's climbed from $1.8 billion to $4.5 billion. And Chileans, who import about 90 percent of their oil, have reasons of their own to cozy up to the Middle East.

As expected, yesterday's summit produced more grandstanding than it did specifics (did I mention the entertainment value...?). Leaders broadly called for increasing trade, removing tariffs, setting up an Arab-South American bank, facilitating visas, and--of course--taking on the developed world. And what about that developed world? As Mac Margolis, my colleague in Brazil, reported recently, young Latin Americans are big Obamaniacs and much more accepting of free trade ideas than their parents. Delgado says the Obama team has already begun to change minds in South America about rebuilding relations with the States. But, he added, they have a long way to go in tamping down on protectionism and bolstering dialogue if they're going to woo the region back. It might be a good time to start.

I just came across a fantastically interesting paper from Christopher Crowe, an economist at the IMF. (Hat tip to Zubin Jelveh at Economix.) Citing Robert Shiller's work on "irrational exuberance," Crowe sets out to test the hypothesis that "the housing cycle should be more muted in areas with high concentrations of households whose beliefs or 'values' make them less prone to participating in a speculative mania."

And who better to test the idea on than evangelical Protestants, whose fervent belief in Scripture, one would assume, dampens the human greediness necessary for rampant speculation. Evangelicals "embrace a unique set of economic values that is suspicious or even hostile toward wealth accumulation," writes Crowe.

He finds that in areas with a higher proportion of evangelical residents, the variability in housing prices is less extreme. In other words, less boom, but also less bust.

Christopher Crowe

The economy is back on track and economists expect global growth of four percent this year. Happy April Fool's Day!

Apocalypse Now: On the eve of the G20 Summit in London, protesters take to the streets. "Four marches, led by representations of horsemen of the apocalypse, converged on the Bank in the Financial Fools’ Day protest," reports the Financial Times. The rest of the FT's G20 coverage, found here, is excellent.

Say It Ain't So, Joe: Joseph Stiglitz throws his hat in the ring with Krugman, et al. in criticizing the Obama Administration's toxic asset repurchase program. "It’s the kind of Rube Goldberg device that Wall Street loves," he writes. "Clever, complex and nontransparent, allowing huge transfers of wealth to the financial markets."

No Help For the Neediest: Many world leaders have come out in favor of expanding the IMF's giving power, but the Wall Street Journal is having none of it. "No one should mistake this as charity for the deserving poor."

It's Okay to Laugh: In order to "broaden the revenue base," the Economist has decided to open a theme park dubbed Econoland. (Remember to check today's date before pre-ordering tickets.)