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Archive for the ‘Cuba’ Category

Even vicious, reprehensible, and disgusting tyrants sometimes make wise observations. Back in 2010, for instance, Cuba’s Murderer-in-Chief confessed that communism didn’t work.

More recently, the thug expressed unhappiness with the current crop of presidential candidates in America. Here’s some of what he wrote.

Cuban revolutionary icon Fidel Castro said Monday that a “robot” would be better in the White House than President Barack Obama — or any of the Republicans candidates in the 2012 election race. …Under the title “The Best President for the United States,” Cuba’s ex-president said that if faced with a choice between Obama, a Republican rival or a robot, “90 percent of voting Americans, especially Hispanics, blacks and the growing number of the impoverished middle class, would vote for the robot.”

I imagine someone clever could come up with a good joke about Mitt Romney being a robot and Castro making a subliminal endorsement, but I’ll simply make the serious point that elections in the United States all too often feature two candidates who only differ in that one will expand the burden of government at a faster rate than the other.

So even though Castro’s thinking and my thinking are as different as night and day, I’m also less than thrilled about the likely options this November.

Though I’m not sure why Castro has soured on Obama. Has anything changed since 2010, when he endorsed Obamacare?

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P.S. Here’s a good Jay Leno joke about Cuban and American economic policy.

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I’m not serious , of course, but it is rather ironic that Raul Castro is cutting the tax burden on small business at the same time that Obama is pushing for higher tax rates on small business. Reuters reports on the latest in supply-side communism.

Cuba unveiled on Friday a new tax code it said was friendlier for small business, signaling authorities are serious about building a larger private sector within the state-dominated economy. The new system, outlined in the Communist Party daily Granma, greatly increases tax deductions… The tax redesign comes as the government has begun slashing 500,000 workers from state payrolls and preparing to issue 250,000 self-employment licenses to create new jobs in President Raul Castro’s biggest reform since taking office in 2008. …The new tax system enables the self-employed to deduct up to 40 percent from income for the cost of supplies, compared to just 10 percent under the old one. Formerly, small businesses simply paid a graduated income tax. Now they will also have to pay a 10 percent sales tax and 25 percent social security tax, but both are deductible at the end of the year.

Unfortunately, Obama seems to views tax issues through the prism of class warfare. This video explains why class warfare tax policy is misguided, and it includes the footage from the 2008 campaign where Obama basically said that he didn’t care whether his proposed tax increase on capital gains led to lower revenue.

The politics of hate-and-envy may be emotionally satisfying to some on the left, but there is strong evidence that high tax rates damage small business. And even though Obama apparently doesn’t think this means much, there is also lots of evidence that the so-called rich won’t wind up paying much additional tax because they can easily adjust their behavior. I guess the real question is why so many statists are consumed by disdain and resentment.

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I’ve already commented on Cuba’s surprising announcement to slash the number of government workers. And I’ve complained about the federal workforce expanding in the United States. This is not what one would expect when comparing policy developments in a communist nation and a (supposedly) capitalist nation. Well, Russia wisely is following the Cuban approach on this issue (I never thought I would type those words!) and plans to get rid of 100,000 bureaucrats over the next three years.
Russia will cut its army of bureaucrats by more than 100,000 within the next three years, saving 43 billion rubles ($1.5 billion), Finance Minister Alexei Kudrin said on Monday. “We assume more than 100,000 federal state civil jobs will be cut within three years. The government has already included a schedule for cutting the number of federal civil servants in the draft budget for the next three years and coordinated it with ministries and agencies,” Kudrin told President Dmitry Medvedev, who in June ordered a 20 percent cut in the number of bureaucrats. Under the government plan, ministries and agencies will have to sack five percent of their staff in 2011 and 2012, and 10 percent in 2013. …In the last three years, the number of bureaucrats in the federal government had increased by nearly 20,000, in regional governments by 60,000 and at municipalities by 50,000, he said.

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Since we’re talking about a totalitarian nation, I suppose I should make clear that Raul Castro is getting rid of 500,000 government jobs, not executing a half-million bureaucrats. This is a remarkable development, particularly since the entire workforce is only 5 million people. What’s ironic, though, is that Cuba is trying to reverse its mistakes while politicians in the United States keep adding more bureaucrats. In other words, Obama  wants more people in the wagon and fewer people pulling the wagon. That’s not a good trend line. Here’s a CNN story about the Cuban reforms.

Cuba announced on Monday it would lay off “at least” half a million state workers over the next six months and simultaneously allow more jobs to be created in the private sector as the socialist economy struggles to get back on its feet. The plan announced in state media confirms that President Raul Castro is following through on his pledge to shed some one million state jobs, a full fifth of the official workforce — but in a shorter timeframe than initially anticipated. “Our state cannot and should not continue maintaining companies, productive entities and services with inflated payrolls and losses that damage our economy and result counterproductive, create bad habits and distort workers’ conduct,” the CTC, Cuba’s official labor union, said in newspapers. …The state currently controls more than 90 percent of the economy, running everything from ice cream parlors and gas stations to factories and scientific laboratories. Traditionally independent professions, such as carpenters, plumbers and shoe repairmen, are also employed by the state. …The announcement avoided the word “private,” but said alternative forms of employment to be allowed included renting or borrowing state-owned facilities, cooperatives and self employment and that “hundreds of thousands of workers” would find jobs outside of the state sector over the next few years. Castro has launched a few, small free-market reforms since taking over from his brother Fidel Castro in 2006. In April, for example, barbershops were handed over to employees, who pay rent and tax but charge what they want. Licenses have also been granted to private taxis. For a couple of years, fallow land in the countryside has been turned over to private farmers. The more they produce, the more they earn.

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It must be the time of year for confessions. Cuba’s former dictator recently confessed that the Cuban model is a failure. That was a surprise, but now we have a remarkable admission from a Democrat member of Congress, who admits that “if you don’t tie our hands, we will keep stealing.” But since this looter voted for the faux stimulus, cap and trade, and Obamacare, it’s obvious that he is a proficient kleptomaniac. But if this Washington Examiner column is correct, Congressman Periello may need to find a new career in a couple of months.
On March 16, when confronted by members of the Jefferson Area Tea Party, Rep. Tom Periello, D-Va., made a startling confession: “If there’s one thing I’ve learned up here (in Washington) and I didn’t really need to come up here to learn it, is the only way to get Congress to balance the budget is to give them no choice, and the only way to keep them out of the cookie jar is to give them no choice, which is why – whether it’s balanced budget acts or pay as you go legislation or any of that – is the only thing. If you don’t tie our hands, we will keep stealing” …Perriello unwittingly gives voters in the Fifth District the most compelling reason to throw him – and the rest of his fellow Democrats, who have been in charge of Congress since 2006  – out of office in November. … Perriello – who rode into office on President Obama’s triumphant coattails – is now one of the most endangered Democrats in the country. A SurveyUSA poll has him running 26 points behind Republican state Sen. Rob Hurt, thanks to his liberal voting record – and his mouth. Perriello voted against the bank bailout (TARP), but he’s been House Speaker Nancy Pelosi’s loyal foot soldier ever since. He voted for the stimulus, for cap and trade, and for Obamacare, backing the House leadership 90 percent of the time. All that party loyalty is now backfiring on him big time.

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I touched a raw nerve with my post about Fidel Castro admitting that the Cuban model is a failure. Matthew Yglesias and Brad DeLong both attacked me. DeLong’s post was nothing more than a link to the Yglesias post with a snarky comment about “why can’t we have better think tanks?” Yglesias, to his credit, tried to explain his objections.

This leads Daniel Mitchell to post the following chart which he deems “a good illustration of the human cost of excessive government.”…this mostly illustrates the difficulty of having a rational conversation with Cato Institute employees about economic policy in the developed world. Cuba is poor, but it’s much richer than Somalia. Is Somalia’s poor performance an illustration of the human costs of inadequate taxation? Or maybe we can act like reasonable people and note that these illustrations of the cost of Communist dictatorship and anarchy have little bearing on the optimal location on the Korea-Sweden axis of mixed economies?

I’m actually not sure what argument Yglesias is making, but I think he assumed I was focusing only on fiscal policy when I commented about Cuba’s failure being “a good illustration of the human cost of excessive government.” At least I think this is what he means, because he then tries to use Somalia as an example of limited government, solely because the government there is so dysfunctional that it is unable to maintain a working tax system.

Regardless of what he’s really trying to say, my post was about the consequences of excessive government, not just the consequences of excessive government spending. I’m not a fan of high taxes and wasteful spending, to be sure, but fiscal policy is only one of many policies that influence economic performance. Indeed, according to both Economic Freedom of the World and Index of Economic Freedom, taxes and spending are only 20 percent of a nation’s grade. So nations such as Sweden and Denmark are ranked very high because the adverse impact of their fiscal policies is more than offset by their very laissez-faire policies in just about all other areas. Likewise, many nations in the developing world have modest fiscal burdens, but their overall scores are low because they get poor grades on variables such as monetary policy, regulation, trade, rule of law, and property rights.

So, yes, Cuba is an example of “the human cost of excessive government.” And so is Somalia.

Sweden and Denmark, meanwhile, are both good and bad examples. Optimists can cite them as great examples of the benefits of laissez-faire markets. Pessimists can cite them as unfortunate examples of bloated public sectors.

P.S. Castro has since tried to recant, claiming he was misquoted. He’s finding out, though, that it’s not easy putting toothpaste back in the tube.

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Here’s a story for the better-late-than-never file. Former Cuban dictator Fidel Castro confessed that communism doesn’t work and that his nation’s economic system should not be emulated.

Fidel Castro told a visiting American journalist that Cuba’s communist economic model doesn’t work, a rare comment on domestic affairs from a man who has conspicuously steered clear of local issues since stepping down four years ago. The fact that things are not working efficiently on this cash-strapped Caribbean island is hardly news. Fidel’s brother Raul, the country’s president, has said the same thing repeatedly. But the blunt assessment by the father of Cuba’s 1959 revolution is sure to raise eyebrows. Jeffrey Goldberg, a national correspondent for The Atlantic magazine, asked if Cuba’s economic system was still worth exporting to other countries, and Castro replied: “The Cuban model doesn’t even work for us anymore” Goldberg wrote Wednesday in a post on his Atlantic blog.

Too bad Castro didn’t have this epiphany 50 years ago. The Cuban people languish in abject poverty as a result of Castro’s oppressive policies. Food is harshly rationed and other basic amenities are largely unavailable (except, of course, to the party elite). This chart, comparing inflation-adjusted per-capita GDP in Chile and Cuba, is a good illustration of the human cost of excessive government. Living standards in Cuba have languished. In Chile, by contrast, the embrace of market-friendly policies has resulted in a huge increase in prosperity. Chileans were twice as rich as Cubans when Castro seized control of the island. After 50 years of communism in Cuba and 30 years of liberalization in Chile, the gap is now much larger.

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Hugo Chavez is a palpably evil thug, and he confirms this status with a new proposal to issue cards that almost certainly will be used to ration food. Left-wing despots claim that their policies put “people above profits,” but they never can explain why people (especially the masses) have much higher living standards in countries where “capitalist greed” runs rampant.

Presented by President Hugo Chávez as an instrument to make shopping for groceries easier, the “Good Life Card” is making various segments of the population wary because they see it as a furtive attempt to introduce a rationing card similar to the one in Cuba. The measure could easily become a mechanism to control the population, according to civil society groups. “We see that in short-term this could become a rationing card probably similar to the one used in Cuba,” Roberto León Parilli, president of the National Association of Users and Consumers, told El Nuevo Herald. “It would use more advanced technological means [than those used in Cuba], but when they tell you where to buy and what the limits of what you can buy are, they are conditioning your purchases.” Chávez said Tuesday that the card could be used to buy groceries at the government chain of markets and supplies. …In theory, the government could begin to favor the import of products to be sold through the government chains and have more control over the type of products purchased and the people buying them. Jaime Suchlicki, director of the University of Miami’s Institute for Cuban and Cuban-American Studies, said that Venezuela’s current problems of scarce supplies are very similar to those Cuba faced when Fidel Castro introduced the rationing card. “The card emerged when goods began to become scarce,” Suchlicki said. “The government had seized many companies that did not work because the government managed them poorly. Then they decided to distribute groceries through those cards.” And although the cards were introduced as a mechanism to deal with scarcities, Suchlicki said, they later became an instrument of control.

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The socialist paradise off the coast of Florida is having a slight problem with toilet paper. But since the Cuban government has a hard time providing any basic necessity, that is hardly a surprise. What is remarkable, though, is that there are some people who think that it is a good idea to put politicians and bureaucrats in charge of health care:

Cuba, in the grip of a serious economic crisis, is running short of toilet paper and may not get sufficient supplies until the end of the year, officials with state-run companies said on Friday. …Cuba’s financial reserves have been depleted by increased spending for imports and reduced export income, which has forced the communist-led government to take extraordinary measures to keep the economy afloat. “The corporation has taken all the steps so that at the end of the year there will be an important importation of toilet paper,” an official with state conglomerate Cimex said on state-run Radio Rebelde.

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