Viva capitalismo, at least in Cuba

There is a country that is in the midst of slashing government payrolls. In this country, public sector employment actually dropped by almost 6 percent last year. They are focusing on spurring private sector growth. In fact, their private sector experienced enormous growth in 2012. In this country, the number of private sector workers increased by 23 percent in 2012 alone. The unemployment rate in this country is now 3.8 percent including those not looking for work.

D.M. Lukas is an author, entrepreneur and contributor to The Brenner Brief.

D.M. Lukas is an author, entrepreneur and contributor to The Brenner Brief.

What is this country? Believe it or not, it’s Cuba!

Yes, since Raul Castro took over, he has been quietly dismantling the collectivist, socialist apparatus that has kept the country in the dark ages for so long. In 2012, Raul Castor cut the number of public sector workers by 228,000. That was on top of the 137,000 they cut in 2011. At the same time, the number of private sector employees rose to 1.1 million. Cuba is closing thousands of state-run businesses, such as cafeterias, barber shops, etc. offering to then lease the properties to employees or those wanting to run their own businesses.

“Our state cannot and should not continue maintaining companies, productive entities, services and budgeted sectors with bloated payrolls (and) losses that hurt the economy, are counterproductive and form bad work habits,” a trade union federation statement said in 2010, when plans were first announced to push state employees into the “non-state” sector.

Do you find it ironic that while this country has begun to realize how damaging collectivist, socialist policies are to the human spirit and the demonizing of the rich instead of fostering the principles of success, that our President has embraced them, and is taking the U.S. down the road that Cuba and all of these failed communist states are running from as fast as they can?

I have said many times that there is no such thing as collective salvation or collective prosperity. All this type of ideology does is kill the human spirit, make people lazy and dependent, and destroy their ability to better themselves. Free people in free markets who have the ability to better themselves and strive to new heights will always have a better quality of life. They are free to pursue their own salvation — their own form of happiness — because they have liberty.

In the U.S., more and more, we are losing our liberty. This week, every working person lost income from their paychecks. We will be losing even more as decisions about our health will be taken away and new taxes put upon us to pay for it.

The only thing that I can say at this point is that although these politicians seem to act like idiots, they are not. They understand how things work. They know why communism and socialism fail. They know that 70 percent of the U.S. GDP is based on you and spending your money, so taking money out of our hands slows the economy down. They are not that inept.

Instead, the only thing that makes sense at this point is that it is being done intentionally and they are not afraid to make it obvious. Power is their drug and they want more and more. As Obama just said and I paraphrase, “Cutting spending will not get us out of this mess, further closing loopholes on the rich and the wealthiest corporations will need to be done.”

Mr. President, when was the last time you cut any spending? Now, after you have gotten your coveted tax raise on all of us, it’s not enough?

Mr. President, you increased taxes at a ratio of 41:1 — $41 in new taxes for every $1 in spending cuts. And, you need more taxes now because you cut spending by $1? In addition, we are yet to discuss what those cuts are going to be, and you’re saying you will want even more tax increases at that time.

Obama will never learn from the lessons of failed states that have finally had to turn themselves around, like Cuba. He just thinks they didn’t do it right, but he has the ability to do it correctly. The laws of economics must bend to the politicians in Washington differently than in the rest of the world.

Sadly, I think not, and we are going to have to endure another failed experiment of collectivism in this world right here at home. Who knows, maybe Cuba will become the next great Caribbean getaway as it was in the early 1900s, because we are going to need a vacation from the train wreck coming our way.

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  1. Hi, my name is Henry Gomez and I’m a contributing writer at Babalu Blog, the most widely read English language blog about Cuba and Cuban-Americans. While I agree with the idea that the United States is moving in the wrong direction (away from economic liberty and capitalism) I have to strongly caution you on your conclusions about Cuba.

    It seems that you draw your conclusions from Castro regime pronouncements as filtered through outlets like Wikipedia and the mainstream media. These outlets must be scrutinized very closely when it comes to Cuba. For example, you link to Reuters. The Havana correspondent for Reuters is a gentleman named Marc Frank who, has lived in Cuba for years and before working for Reuters, penned more than 1000 articles for the People’s Daily World, the newspaper of Communist Party USA. You can imagine that he’s not trustworthy to report the unvarnished truth about a country and a system he has sympathies with. Wikipedia, as you know, can be edited by users and the left has become very good about maintaining slanted articles about such subjects that are important to them like their idealized worker’s paradise of Cuba. Additionally Cuba’s own propagandists work hard to maintain the image of the regime.

    Here’s a little experiment. Do a google search for “Pinochet Dictatorship” and “Castro Dictatorship” (in quotes to give you exact results). You’ll find that there are many more mentions of the Pinochet dictatorship and that the sources include all of the important mainstream outlets such as NYT, WAPO, AP, etc. Meanwhile for Castro fewer entries and most from blogs such as ours (Babalu). Now here’s the thing. Pinochet was in power from 1973-1991 and left Chile in position to become the most vibrant economy in the region (in fact Heritage ranked it in the top ten in terms of economic freedom, higher than the US). Was he a dictator, yes? Did he do terrible things to some people yes. But he also left voluntarily after less than 20 years. Castro destroyed a first world country and turned it into a third world cess pool and has clutched to power for 54 years yet he gets a much softer treatment in the media. So be careful.

    It is true that Raul Castro has announced many reforms including layoffs of government workers. But closer inspection reveals that many of these reforms are never implemented and if they are they are never implemented fully. They are part of a storyline that Cuba is entering the family of “normal” nations and the US maintains a trade embargo against Cuba despite the fact that it’s just a country like any other, in fact one that’s moving toward capitalism. It’s bunk. The US is Cuba’s largest trading partner as food and medicine sales are permitted on a cash basis. Cuba want the embargo lifted so that they can purchase American goods on credit (which is ultimately financed by taxpayer funded institutions like the US Import/export bank). But Cuba is a terrible credit risk and owes money to every country it trades with. The embargo is the one thing protecting US taxpayers from being defrauded by the Castro brothers.

    Also I caution you about ascribing what seem like natural motivations to totalitarian dictatorships like that in Cuba. What I mean is this. The goal of any reform in Cuba is sustain the dictatorship (i.e getting other people’s money to continue operating). If you or I were in charge we might be looking for ways to improve the economy and therefore the lives of the people we lead. But the leaders in Cuba have no such goals. Only self perpetuation in power. That’s why when Soviet subsidies disappeared in 1991 and Cuba was plunged into a “special period” of particularly grinding poverty the regime made all kinds of reforms including inviting foreign investment. The pot was in danger of boiling over. When Hugo Chavez was elected in 1998 and began subsidizing Cuba many of the reforms were rolled back. You see they were made out of necessity for survival of the dictatorship, not because they were the right way to go for a more prosperous Cuba.

    Best regards,


  2. I feel your pain because I share it along with your frustration. Sadly, I reserve what fight I have in me to preserve to the best of my ability the fundamental rights we are entitled to by the creator. But as far as our economic prosperity and freedom, I am beginning to come to peace with the fact that it appears America needs to learn the lesson the hard way. Washington said at the Constitutional Convention, “Let us raise a standard to which the wise and honest can repair…” I just hope that the damage will be repairable and not irreparable.

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