The Monday following the death of former Cuban dictator Fidel Castro, the The Herzfeld Caribbean Basin Fund (CUBA) rallied more than 12%. The exchange-traded fund is a basket of companies — like cruise lines and property developers — expected to benefit from improved economic cooperation between the United States and Cuba.
Investors may have celebrated the pop, but the short-term does not look very bright for the ETF.
That’s because all that optimism could crater should President-elect Donald Trump rip up the deal between the Obama administration and the Castro regime. And he should.
The appeasement by the Obama administration is a joke, a situation where President Obama acted like the United States has no leverage at all. It makes no demands to release political prisoners and it fails to ensure political and economic reparations by the Cuban government.
It also fails to improve the economic and social structures of the nation.
Should a nation want to establish better diplomatic ties, at the worst we should demand nations allow private property rights and the establishment of a free press. Those two things are tools that the United States should demand from any nation reopening economic ties. So what exactly do the U.S. and Cuban people receive in return for the embargo’s end?
It’s great that they are number two in the world in literacy. But who cares if the government jails journalists who dare explain that Castro was a thug?
Since Castro’s death, we have listened to a series of U.S. apologists blame our nation’s embargo on the economic plight of Cubans. According to reports, Cubans also blame their economic plight on the embargo.
Of course, that is what they are told by the nation’s lone and government-run newspaper Granma, which shares its name with the ship on which Castro launched his revolution.
The embargo’s responsibility for the economic catastrophe is Castro’s greatest lie; a smoke screen to cover the tracks of a destitute economic system still failing around the globe.
The United States placed an embargo on Cuba for good reason. Our government protects its citizens’ private property abroad.
But more than 190 other nations have still engaged in commerce with Cuba for the last 60 years. The apologists argue that one nation’s embargo somehow is driving the economic malaise, while 190 other nations are engaged in commerce with that failing economy?
It’s hogwash and proof that the alternative — economic engagement — is also not working to improve human rights, expand personal freedoms and liberalize the nation’s economy.
We also have embargoes on Sudan and North Korea.
Are these journalists, who love to play economist over Castro, willing to blame the economic destruction in these three nations on the United States’ policies as well?
This brings us back to property rights and press freedom. The lack of property rights leads to a continuous intrusion of government into the lives of people.
The embargo was about the failure of Cuba to give restitution to the people whose property was stolen. So what exactly about the embargo makes it impossible for the Cuban government to give its people economic rights? Rights to private property? Rights to a free press to ensure that people have a variety of information to make informed decisions on the future of their nation?
Nothing stops that. Castro’s choice was to consolidate power, eliminate rivals and stifle both economic and social freedoms to ensure his long-term power. He may have liberated his people from a corrupt Batista system, but he quickly instituted the brutalities of a failed economic system during his 60-year reign.
Castro peddled the myth of the embargo’s role, even though his country is an oligarchy without property rights. Watchdogs like the International Property Rights Index don’t even bother ranking Cuba’s economic freedom because it doesn’t exist in even square millimeters. Heritage Foundation ranks Cuba second to last in economic freedom, beating only North Korea’s destitution.
Venezuela’s economy is collapsing into dust before our eyes. The most oil rich nation in the Western Hemisphere has electricity and fuel shortages. Why? Because its economic system is a brutal kleptocracy with socialistic undertones.
The United States has still conducted business with Venezuela despite the nation’s efforts to expropriate assets of U.S. companies. The nation is ranked only two spots higher than Castro’s Cuba in terms of economic freedom.
As socialism plunges that nation into despair, people are now fleeing on rafts into shark-infested waters to find food. Not a job; food. To deflect blame, Venezuela President Nicolás Maduro looked to Castro for guidance. Since taking control after the death of Hugo Chávez, Maduro has maintained, as Castro did, that their plight is the fault of an economic conspiracy driven by the United States.
Even the Venezuelans are finally waking up to that lie.
Muerte a la revolución…
About the Author
Garrett Baldwin is the Managing Editor of the Alpha Pages and the Features Editor of Modern Trader. An author and Baltimore native, he earned a BS in journalism from the Medill School at Northwestern University, an MA in Economic Policy (Security Studies) from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University. @garrettbaldwin, @moderntradermag, @TheAlphaPages, Sound off: Editorial@alphapages.com Subscribe to Modern Trader magazine.