Obligatory embargo post

If the U.S. embargo on Cuba were a person he’d be in tatters with a big old bullseye on his back. I recently received an email from a reader about the embargo. I responded to him at length (below) but have not heard back from him. Here’s his letter with my response.

I think you will agree that we live in a results oriented society. In my business, results is the ends to the means. This is why I think that the embargo as it is and has been has not achieved the intended results.

I agree that we live in a results oriented society (though bailout mania makes me doubt that it’s still the case). You say the embargo has not achieved the intended results. By that I suppose that you mean that it has not dethroned the Castro brothers. If results are what really mattered then JFK would have made sure the Bay of Pigs invasion worked. He would not have allowed the missiles to be introduced into Cuba giving the Soviets chips at the poker table.

I don’t think that regime change is a reasonable goal for unilateral economic sanctions. Anyone that says so is fooling themselves. The embargo was enacted as a punitive measure in response to specific actions by the regime, actions for which the regime has not made restitution.

In today’s environment I believe a more reasonable goal for the embargo is to deny credit and cash to the regime. Credit and cash are the lifeblood of the regime and the patient is currently on life support. Unilaterally lifting the embargo without gaining a single concession is like giving the patient a transfusion.

I am not saying that removing is the answer but I do believe that a new strategy is necessary. I have some ideas but my depth on this subject is not that deep to make real educated recommendations.

I’d be seriously interested in hearing your thoughts. I believe the argument that the embargo hasn’t worked therefore removing it must work is a false dichotomy. It can in fact be argued that without the embargo the regime would be a stronger position than currently. That’s what I believe.

I do believe that the embargo is the enemy that those animals in charge have been able to use for their benefit. I also think that taking that crutch away would create a different dynamic in this saga that might lead to a shift in the entire situation.

I agree, but the question is: in the absence of the embargo who exactly would be convinced that the problem all of these years has been the regime and not the embargo? Who are these people that we need to convince? The Cuban people? Are the Cuban people going to rise up in rebellion when the scales fall from their eyes? Is the international community going to put aside its love affair with fidel castro and its hatred for America because we remove the embargo? I think you know the answer is no on both counts. That’s because the regime derives its power from two sources, the fear that it generates among Cubans and the solidarity that it receives from foreign governments. I don’t think removing the embargo changes that calculus one bit.

What I am saying is that we might want to take the emotion out of saying the embargo should be removed.

It’s not emotional for me, not one bit. This position I have is not the one I have always had, it’s a result of thinking about this issue a lot. When I was in college as an economics major I believed that unbridled capitalism would spell the death of fidel castro’s rule. In fact, I still believe it. The problem is (as I have analyzed it) that as long the regime has people like fidel and raul in charge there will be no unbridled capitalism allowed in Cuba, just more of what we have now: a bunch of foreign companies working as minority partners of the regime under strict rules the regime sets precisely because it knows capitalism will be the death of their rule. They are not going to willingly introduce the Trojan horse that will destroy their reign. Let’s not forget that American corporations doing business in Cuba under such conditions will not be the first ones to the party. They’ll be the last. And what have we seen in terms of results from those who have been at the party a lot longer? Nothing. Cuba is no closer to freedom today than it was in 1991 despite all of the foreign investment, family travel and remittances.

I know the argument has always been that it would help them stay in power and continue to enrich them. But the embargo has not prevented that anyway.

Cuba’s economy is literally a basket case, the regime has its hand out. China, Russia, Venezuela, and other countries have decided to sink endless sums of cash into it. That doesn’t mean we have to follow suit, or that we shouldn’t require something in return. The price of oil has recently plummeted. This will affect both Russia’s and Venezuela’s economies. I think they will be less willing to subsidize Cuba going forward. Chavez could meet his demise at any minute.

I do not believe they want the embargo lifted because it would take away one of their biggest weapons .

I think they want it removed, but they want it removed unconditionally. Remember they refused to take free money from the US after the storms unless we ended the embargo.

When you control someone’s economy you control them. I think if you unleash the possibility of creeping economic freedom on the island they will slowly loose control.

Where is this “creeping economic freedom”? Many of the reforms from the special period were repealed after Chavez became Cuba’s sugar daddy. Many of the small and mid-sized joint ventures with foreign companies have been unilaterally closed by the regime. The regime does not want economic freedom to “creep” in and has remained very vigilant to prevent that. They simply want hundreds of millions of dollars that U.S. tourism and investment will represent so that they can continue to perpetuate what they have perpetuated for 50 years.

Maybe I am wrong but I think we should advocate a different approach to see if it could work. We can always reinstall the embargo. These are my thoughts and I am not sure whether they are correct or not but I would like to see a different approach.

Obviously I do feel that you are wrong. A different approach could actually have negative consequences, you have to admit that. And once the embargo is gone it will NEVER be reinstated. You know it and I know it. That genie won’t go back in the bottle. Let’s say American corporations invest hundreds of millions of dollars in Cuba and the regime continues its policies do you think they will allow congress to reinstate an embargo that will surely result in the loss of their investments? Why do you think countries like Spain and Canada and the UK cave in to Cuba’s bad behavior so easily? They are in bed with the regime, it’s success means their success.

These are my thoughts and I am not sure whether they are correct or not but I would like to see a different approach.

I am open to a new approach but I have to be sold on how it would work. “Try something new” is not an argument. I need to know how it will work. We remove the embargo and then what happens? Who changes their mind and how does that translate into regime change?

On the flip side I can say that Cuba is running out of lifelines. Chavez won’t last forever and the Russians and the Chinese will only stand to lose so much money. Cuba owes Canadian Sherritt more than $400 million. Why do we want to supply life support at this point in time?

Something you need to know about me. MY GREATEST DESIRE IS TO VISIT CUBA. I won’t do it under current circumstances. If I thought there was an easy way to accelerate the inevitable I would wholeheartedly endorse it. And I will denounce any idea that I think prolongs the inevitable. Dropping the embargo is, I believe, an example of the latter.