An Economic Diamond In The Rough

For the past forty five years or so, America has enforced an economic embargo on the island nation of Cuba. The economic embargo was enacted because the revolutionary government of Fidel Castro didn’t want the corruption of capitalism permeating his country. The way Mr. Castro saw it, the national resources of Cuba were enriching the pockets of a relative few. And all the people of Cuba were entitled to a share of the benefit from these resources. And Cuba instituted a communistic form of government.

Communism had no place in the western hemisphere let alone North America within spitting distance of the Florida Keyes and the shining beacon of capitalism known as the United States. Those Cubans who had a lot to lose in this new government made a beeline to Miami. Cuba had nationalized the private investment of American corporations and the American corporations took their complaint to the government. But the government didn’t need much prodding to respond. Communism was not going to exist right in the backyard of the superpower that fought for truth, justice, and the American way of life. Well, one out of three isn’t so bad.

The United States invoked the economic embargo around the island nation. Prior to the Cuban revolution, Cuba was one of America’s largest trading partners. That trade was brought to a screeching halt and the United States invoked an embargo around the island nation and worked to starve the Cuban people. For the past forty five years or so, the Cuban economy existed greatly insulated from the rest of the world.

Today, the economy of the United States is teetering on the edge of implosion. The United States dollar is plummeting against world currencies as if it was an anvil with wings. Every currency that is tied closely with the American dollar is being dragged down as well. It would not be surprising to see nations abandon their dollar investments in favor of the Euro. Virtually every country that exports oil conducts their trade in US dollars. But everyday that passes these countries watch their dollars get cheaper and cheaper. It has gotten to a point where these countries are seriously considering trading in almost anything but the US dollar.

The United States owes so many countries so much money it’s not even funny. Five percent of the world’s population has been engorging itself on twenty percent of the world’s resources. Our economy has gone from being a manufacturing base with its leadership into the industrial revolution to a service based economy where our companies have exported so many jobs overseas that in many respects it would be much too difficult to bring any large portion of these jobs back. While every major domestic car company exports jobs, many foreign manufacturers have made the investment to bring jobs to America. Go figure! But even the service jobs are being exported. Now that even the service jobs are being moved to the other side of the border, our economy is based on little more than a bubble of credit and consumption. And all those countries that have traded with the United States on credit are deeply vested in our economic condition.

But not Cuba!

The economic embargo that has made Cuba one of the poorest countries in the world has also made Cuba one of the countries best prepared to go the rest of the twenty first century free from the economic albatross called the United States. But eventually, Cuba will begin to trade with the United States and other countries again. In fact, now that Fidel Castro has relinquished control of the country and has admitted he’s just too old to keep on keeping on, American companies will be lining up at the starting gate, ready to descend on the island of Cuba like hungry vultures on a fresh carcass.

Right now the federal government refuses to change its position on Cuba. America has an embargo on Cuba and damn it we’re going to keep the thumb screws twisted tight until they beg for mercy.  To quit now would be akin to inviting communism to our shores. But eventually the embargo will be lifted. There will be a massive push for companies to help Cuba return to its pre embargo days. Companies will make deals to buy crop lands and beach fronts and build casinos and world class, eight star hotels. From a capitalistic perspective, Cuba looks like a golden crop just ripe for picking. All those years of being left out in the cold have made Cuba an economic diamond in the rough.

What’s a half century long embargo between friends? American companies will do their best to make sure the juiciest parts of Cuba are tied to America. But then that would mean that the Cuban economy will be closely tied to the American dollar. The way things are looking these days it may be in Cuba’s best interest to keep its own embargo against the United States.