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Veteran Advisor

Castro's Retraction

Dictator Fidel Castro's frantic bid to walk back his statement about the failure of communism in Cuba was laughable, given the state of his worker's para dise. What will show it best now are the big layoffs ahead.

In a remark that stunned everyone, Cuba's aging despot last week admitted to a writer from the Atlantic that "The Cuban model doesn't even work for Cuba anymore."

Such words would be unimaginable from an authentic leader, such as Lee Kuan Yew of Singapore or Alvaro Uribe of Colombia, who really did transform their countries for the better.

But for Castro, the truth slipped out. Never one to stand by his word, Castro now claims he was quoted out of context, and it was capitalism that didn't work. That's about par for a leader who's ruined his country. Dictators, after all, can say anything they like.

In concrete terms, the failure of "the Cuban model" is getting pretty obvious. On Monday, the Cuban government announced it would lay off 500,000 government workers by March, an implicit admission that it was deadweight all along.

Out of Cuba's work force of 5.1 million, 83% work directly for the state. That means 12% of Cuban workers will be out of a job in two years. Unlike in the U.S., they'll get no unemployment benefits.

It sounds like a necessary bow to fiscal reality in a state that produces nothing of value. But the incredible thing is, the cutbacks will barely begin to address the government's issues.

Sixty percent of the Cuban work force is completely unproductive, according to a U.S. State Department report.

So a 12% layoff of the work force would leave about half of the state's remaining work force still standing around on work sites with nothing to do but collect paychecks.

The Castro brothers are trying to sugarcoat these layoffs as "reforms" to the system — offering to increase private business licenses for tiny outfits such as nail salons, taxis and auto mechanics, as if they would willingly permit a small window of capitalism.

But even that's unlikely. Only 200,000 extra permits will be issued, leaving most laid-off workers out in the cold. Getting a business permit will soon be a major source of corruption in an already-corrupt state.

What's more, once these new businesses get profitable, the state will step in to confiscate their "excessive" earnings, negating the entire point of private enterprise — as they did a decade ago.

All this shows is how the ruling Castro oligarchy works. It's a master at creating a crisis, mitigating it for a time, consolidating its power, then cracking down anew. If that's not failure, what is?

2 Replies
Senior Advisor

Re: Castro's Retraction

Send Krugman down there, he knows what to do, raise taxes on the rich and increase spending.

Senior Contributor

Re: Castro's Retraction

Sometimes I wonder if a "two state solution" in America wouldn't solve an awfully lot of problems....let the area east of the Mississippi embrace communism, and the western USA stay with capitalism. Guys like Hardon, Bruce, Krusty,Ungrateful One,  et al that think the government controlled economy is the way to go could move to the east, and we would in turn take all the capitalists from the east that wanted to move to the west.

 

Both areas could be autonomous, with their own presidents and legislatures, and we could quit our role as world's policeman and each area could have their own national  security force. We could sell off enough government assets to pay down our foreign debt, at least the west probably would. The east would fail in a few years , anyways, so I guess it really would not matter much what they did fiscally.