The last of the Castros is about to step down from power in Havana – and the lessons of Cuban history could prove useful to many other current leaders, led by the United States.
Today we take a look at what went wrong in Cuba.
Had it been allowed to evolve normally, Havana would probably have become like Las Vegas – but with local culture and beaches – rather than the decrepit metropolis it is now.
But people so desperately want to be ruled – like children want parents – that they are willing to put up with just about anything, no matter how awful.
This is how the Castro regime – with its central planning and price controls – put Cuba on the road to ruin., where he remained for the next 60 years.
“A terrible economic crisis”
The Castro regime is now coming to an end, however. The Financial Times tells us about it:
” Cuba’s last Castro to leave the political scene : Raúl, Fidel’s brother, 89 years old, will give in [cette semaine] power to a younger generation at the Communist Party Congress, which must also tackle a terrible economic crisis and growing political dissension. ”
The “terrible economic crisis” is the fairly obvious result of the stupid policies put in place over the past six decades.
They began with the appointment of Che Guevara, the famous revolutionary, as head of Cuba’s central bank. Mr. Guevara probably knew no more about the banking system than Janet Yellen, current US Treasury Secretary and former Fed Chairman.
This generated a first setback for the new government … which would be followed by many others over the years – almost all of them fed by activist bureaucrats who thought they could allocate capital more efficiently than “the market”.
The result is now visible to everyone.
“It is a land for cattle”, according to a source from the province of Camagüey cited by the Financial Times , “But there is no milk, butter, yogurt or meat”.
Cuba imports 60% of its food. And when the tourism industry found itself in a rut following the Covid-19 panic of 2020, there was very little money available for anything else.
Over the years, some 1.4 million Cubans have left the island. Those who remain live in poverty. This does not mean that they are necessarily unhappy or sick. But the pursuit of “equality” has impoverished most of the population.
A government cannot “equalize up” because that means creating new wealth.
It can only equalize at the bottom, by confiscating money to redistribute it … destroying much of the economy’s wealth-generating capacity at the same time.
At first, Castro’s Cuba depended on subsidies from the Soviet Union – selling its sugar at inflated prices. Then it was the Venezuelan oil money that kept him going.
These two socialist havens ended up in the ditch. Cuba is now alone … desperately trying to hold out.
The end is near
Our discerning readers are already asking the question: why doesn’t the Bank of Cuba just print more money, like the United States? Don’t they know the “raise” thing?
Well what do you think?
Of course, Cuban central bankers read the same books and publications as everyone else.
The Cuban government recently devalued the peso by 96% … and raised the wages of all who work for the government – but not for the 40% of workers who actually produce goods and services.
And guess what? Cuba is approaching the final phase.
Consumer price inflation is likely to be close to 500% this year. New revolutionaries are gathering around Havana… like sharks off the coast of Playa Paraiso… ready to make short work of their aging leaders.
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