Monday, October 19, 2009

Great moments in the history of statism Pt. III

Recessions make people do the wackiest thing. Over here, when recessions strike we chuck the free-market, limited government model and go Keynesian. Recall President Bush last December saying that he had “abandoned free-market principles to save the free-market system”?

So what happens in workers’ paradises like Cuba when the jaws of the recession are crushing the economy? They start channeling Milton Friedman. Who knew?

As the Cuban government struggles through a deep recession, its leaders have begun picking away at socialism in order to save it. But experts say the latest buzz by the Cuban government is simply another desperate fix to stem the slide of a failed economy that buckled long ago.

Even one of Havana's leading economists recently said Cuba's economy needed to be turned upside down -- "feet up." So taxi drivers got private licenses, farmers now have their own plots of land and government workers have to pack their own lunches.

"I think what they are trying to do is prepare the people for a hard landing," said Cuba expert Jonathan Benjamin-Alvarado of the University of Nebraska. "The government is really saying in so many words: We've got limited resources and can only do so much. I think they are stuck."

Imagine a politician over here saying that, as in, “we don’t have any money, you’re on your own”? It certainly has a nice ring to it but our elected leaders are notoriously bad at carrying that tune when the bad times hit.

In the 18 months since he took office, Castro restructured the nation's agricultural system to give idle land to farmers, hoping they would revive a deeply troubled state-run agricultural industry plagued by inefficiency. He also allowed taxi drivers to have private licenses; many were working illegally anyway.

The sad part is that no one will learn the lesson. When Cuba’s economy does rebound, these market-based reforms which will work, will be scrapped and Cuba will re-institute the full slate of economy-stagnating statism so as to not run afoul of The Revolution.

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