Month: April 2018

U.S. and Cuba Continue To Cooperate on Agriculture 

Quietly the U.S. and Cuba are continuing to hold bilateral meetings on various topics. Recently, for example, the meetings have covered cybersecurity, drug trafficking, terrorism, irregular immigration and money laundering.[1]

The latest, on April 10 and 11,  in Washington, D.C. was on the subject of agriculture.[2]

This meeting provided the opportunity to review the state of the implementation of the countries’ Framework Memorandum of Understanding on Agriculture and the Memorandum of Understanding on Animal and Plant Health. In particularly, both parties reviewed the compliance with the activities previously agreed upon, and analyzed the new actions proposed and other initiatives to give continuance to the technical exchanges.

This bilateral cooperation benefits both Cuban and U.S. farmers and helps promote the sustainability and development of agriculture, which are related to organic agriculture, soil management, water conservation, the prevention and treatment of plant pests and animal diseases, as well as to the actions for organic certification and seeds, among others.

The Cuban delegation was led by Moraima Céspedes Morales, Director for International Affairs at the Ministry of Agriculture, and composed of other officials of the ministries of Agriculture and Foreign Affairs. The U.S. delegation was led by John P. Passino, Director for Western Hemisphere at the U.S. Department of Agriculture and composed of other officials of that agency and of the Department of State.

The meeting was held in an ambiance of respect and professionalism. Both delegations shared the view to underscore the importance of maintaining the bilateral cooperation in these topics.

Conclusion

It is refreshing to know that the U.S. and Cuba are continuing to hold meetings on various subjects of mutual interest despite all the hostile rhetoric from the U.S.

At the same time it is disappointing that there was no mention of this latest meeting on the websites of the U.S. Departments of State or Agriculture or in the U.S. major news media.

However, on April 5, U.S. Senator John Boozman (Rep., AR) addressed the subject of U.S. agricultural exports to Cuba in a short article that stated the following: “United States’ producers are unable to fully tap into the Cuban market because federal law prohibits private financing for agricultural trade with Cuba. This misguided policy creates a major roadblock to trade. That’s why Sen. Heidi Heitkamp, D-N.D., and I introduced the Agriculture Export Expansion Act to lift the ban on private banks and companies offering credit for agricultural exports to Cuba. It’s a small step that would help level the playing field for farmers and exporters, while simultaneously exposing Cubans to American ideals, values and products. A true win-win for American farmers and the Cuban people.”[3]

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[1]  This blog has commented on these bilateral meetings. E.g., Cuba and U.S. Continue To Hold Bilateral Meetings on Various Issues (Jan. 18, 2018).

[2]  Cuba Foreign Ministry, Representatives from Cuba and the United States talk about cooperation in agriculture (April 11, 2018); Cuba Embassy in U.S., Representatives from Cuba and the United States talk about cooperation in agriculture (April 11, 2018); Cuba and the United States exchange on cooperation in agriculture, Granma (April 12, 2018); Washington and Havana talk about agriculture in a new technical meeting, Diario de Cuba (April 12, 2018).

[3] Boozman, Time to expand U.S. agricultural exports to Cuba, WashingtonDC100 (April 5, 2018).

Developments Regarding the Summit of the Americas 

Later this week the Summit of the Americans takes place in Lima, Peru. Interesting  developments regarding the Summit have taken place from the U.S. and Cuba.

U.S. Developments[1]

On April 10 President Trump cancelled his scheduled attendance at the Summit of the Americans in Peru. The stated reason was his need to attend to the new crisis in Syria: the Syrian regime chemical weapons attack on some of its citizens and President Trump’s announcement that the U.S. was considering a military response.

The New York Times reporter, Julie Davis, said, “Scrapping the trip spared Mr. Trump potentially unpleasant interactions with leaders of Latin American nations whose citizens have been insulted by his harsh language about their countries as sources of illegal immigration, criminal gangs and illicit narcotics. White House officials said Vice President Mike Pence would attend the summit meeting in the president’s place.

“Skipping the Summit of the Americas sends a terrible message about U.S. disengagement in our hemisphere, compounding negative message of Trump’s Cuba, NAFTA and immigration policies,” was the opinion of Benjamin J. Rhodes, who served as a deputy national security adviser in Mr. Obama’s White House and who was the principal negotiator of the U.S.’ opening to Cuba in December 2014.

A similar opinion was voiced by Richard E. Feinberg, a senior Latin America fellow at the Brookings Institution and professor at the University of California San Diego’s School of Global Policy and Strategy. He said, “Trump’s dropping out of the Lima summit is an appalling demonstration of disrespect for Latin America. “This has to be seen in the context of a president who has been ranting and railing against Latin America continually for the last several years. They’re his bête noire. They’re his scapegoat for everything that’s wrong in America, from immigration to narcotics to alleged loss of jobs from trade.”

A more nuanced opinion was offered by Christopher Sabatini, executive director of Global Americans, a group promoting better engagement in the region. He said,  “The truth is, given the level of discourse on trade, immigrants and intervention coming from this administration, not paying much attention to the region may be welcome by a number of governments as they search for their own alternatives. The question though is what it means for U.S. leadership, not just now but over the long term.”

The region’s leaders  seemed to be taking the U.S. decision in stride, reflecting some of the unease generated by Trump’s anti-immigrant rhetoric and growing economic self-confidence in a region long resentful of Washington’s dominance.

The U.S. State Department announced that Acting Secretary of State John J. Sullivan will accompany Vice President Mike Pence at the Summit, where the U.S. “will promote priorities of mutual interest to the region, including supporting democracy; addressing the political and humanitarian crisis and restoring democracy in Venezuela; stemming corruption and transnational crime, and promoting economic prosperity.” Sullivan will meet separately with leaders from Peru, Brazil, Haiti, Mexico, Bahamas, Barbados, Guyana, Jamaica, St. Lucia, El Salvador, Guatemala, and Honduras.

The State Department noted that Sullivan “will also engage with members of Cuban and Venezuelan independent civil society.” Apparently he will avoid meeting with Cuban President Raúl Castro.

In another release the Department said it had “received numerous, credible reports that the Cuban government prevented, and continues to prevent, members of independent civil society from traveling to Peru to participate in the Summit . . . .  Cuban authorities prevented these individuals’ travel through arbitrary stops at the airport, short-term detentions, and visits to individuals’ homes to warn them against trying to leave the island.”

The Department’s release further stated that the U.S. “condemns these actions. We call on the Cuban government to facilitate full, robust participation in the Summit by allowing the free and unrestricted travel of its citizens, a universal human right.” As a result, the U.S. “stands with the brave activists facing repression by the Cuban regime. We are working with the Government of Peru and civil society to promote a Summit that features open, inclusive dialogue with the full participation of independent civil society representatives from Cuba and the hemisphere.”

At the Press Briefing the same day, the Department said that on April 12 Sullivan would be meeting with “with Cuban NGOs and opposition leaders,” but there was no meeting scheduled with Castro.

Cuba Developments[2]

Cuba has an official delegation of people from its purported civil society, who already are in Peru to attend the alternative Peoples Summit that has been organized by Peru’s General Confederation of Workers (CGTP). Its leader said it would express “support for the Cuban Revolution and reaffirm the commitment to progressive and left governments of Latin America and the Caribbean currently being ‘sabotaged by imperialism.”’ On April 12 they have planned an anti-imperialist rally called “Trump out of Peru,” but with Trump not coming, they will have to have a different theme.

The official Cuba delegation of civil society has criticized “attempts by mercenaries and groups with links to terrorists to pass for supposed representatives of Cuban civil society.” The official delegation’s official statement expressed their desire “to contribute the experience of the Cuban Revolution that has, over almost 60 years, constructed a consensus in favor of our political, economic, and social system, forged through participative, socialist democracy, in which human beings constitutes the highest priority, and in which government is exercised by the people.”

These Cubans vandalized a Lima billboard that said in Spanish (here in English translation): “Cuba, enough of corruption, repression and impunity, stop human rights violations.”

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[1]  Davis, Trump Cancels Trip to Latin America, Citing Crisis in Syria, N.Y. Times (April 10, 2018); Assoc. Press, Latin America Takes Trump’s Forgoing of Summit in Stride, N.Y. Times (April 10, 2018); U.S. State Dep’t, Acting Secretary Sullivan Travel to Lima, Peru, To Participate in the Summit of the Americas (April 10, 2018); U.S. State Dep’t, On Cuba’s Restriction of Civil Society Participation in the Summit of the Americans (April 10, 2018); U.S. State Dep’t, Department Press Briefing-April 10, 2018.

[2] Gómez, People’s Summit kicks off in Lima, Granma (April 10, 2018); Statement from Cuban delegation to 8th Summit of the Americas parallel forums, Granma (April 9, 2018); ‘Shock troops’ of the Cuban regime in Lima vandalize the fences that denounced the repression, diario de Cuba (April 11, 2018); “CUBA in #Cumbre”, Cuba Debate.

 

The New York Central Railroad’s 1907 Woodlawn Crash

In the midst of the national political debate over railroad freight rates of 1907, the New York Central Railroad and William C. Brown, its Senior Vice President and my great-great uncle, had to confront the tragic human, legal, financial, political and public relations problems presented by the February 16, 1907, crash of one of its trains in the Woodlawn section of the Bronx. The train with one of the new type of engines (electrical) left the tracks, killing 24 people and injuring another 143.[1]

Remember that this occurred during the construction of the Grand Central Terminal in midtown Manhattan, which would require the replacement of steam-powered locomotives with electric-powered ones that previously had not been designed, manufactured and used. [2]

The Central’s Chief Engineer, William J. Wilgus, was in charge of designing the new electric engines, and General Electric Company was manufacturing them. The initial test run in September 1906 had been successful.

If the new engines were outlawed, the Railroad faced financial ruin. If the Railroad were deemed to be negligent in any way, that too presented many problems. For example, an assistant district attorney called for an investigation of the Central’s executives for possible indictment for manslaughter.[3]

Dr. Kurt C. Schlichting’s Hypotheses Regarding the Crash

Some of the documents about the Crash have been analyzed by Dr. Kurt C. Schlichting, the holder of the E. Gerald Corrigan Endowed Chair in the Humanities and Social Sciences and a professor of sociology and anthropology at Fairfield University (Fairfield, CT). Here are his conclusions from that investigation:[4]

  • In testimony before the New York State Railroad Commission, the Central’s President, William H. Newman, and Senior Vice President, William Carlos Brown, testified that the fault was Wilgus’ design of the engines.
  • Wilgus, however, proud of his design work and his professional reputation, strenuously disagreed with this assessment. Therefore, Wilgus did his own investigation and concluded that the cause of the wreck was a track defect at the point of the wreck and a widening (or “nosing”) of the track due to the heavier weight of the electric engines. This would make the Central’s Operating Division liable.
  • Wilgus thought Newman and Brown agreed with him, but Brown in an April 1907 memo told Wilgus that the engine design by Wilgus was flawed and thus the cause of the wreck.
  • In response Wilgus prepared an April 9th detailed report defending the design and instead arguing that the cause was a spreading of the track (nosing) due to the extra weight of the engine. This was seen as a “time bomb” for the Central and its top executives for liability for putting the new engine into service without adequate testing and for possible perjury in their testimony to the Commission.
  • On April 12th, the Central’s vice president and chief general counsel, Ira Place, visited Wilgus and explained how his memo would damage the Railroad and that Newman and Brown could go to jail if the report were made public. Therefore, Place instructed Wilgus to burn the report, and Wilgus agreed to do so.
  • The Central’s lawyer delivered the same message to Newman and Brown, and they obeyed the instruction and destroyed the report.
  • Under the direction of Brown, the Railroad then proceeded to made significant changes to the design of the engines without Wilgus’ knowledge and consent. Wilgus felt double-crossed and told the Central’s lawyer that he had re-created the report.
  • Wilgus put a copy of the re-created report in a box of records given to the New York Public Library with instructions that it was not to be opened without his permission until after his death.
  • This collection of papers also included testimonial letters about Wilgus from J. P. Morgan, William K. Vanderbilt, Ira Place and W.C. Brown. A letter by Brown before the crash, for example, stated, “The great work undertaken and practically completed by you, of changing the power within the so-called electric zone and the reconstruction of Grand Central Station, was the most stupendous work of engineering I have ever known; and it has gone forward practically without a halt, certainly without a failure in any essential feature.”
  • Wilgus resigned from the Railroad on September 20, 1907.
  • No criminal charges were ever brought against the Railroad or any of its executives regarding the Woodlawn Wreck.

 Reaction to Schlichting’s Analysis

I have not seen or reviewed the documents that Dr. Schlichting has and I am not an engineer. Thus, I am not in a position, as Mr. Brown’s descendant, to refute the above analysis. But I do have the following points:

  1. Wilgus was out to protect his professional reputation as an engineer and thus has an interest in casting blame elsewhere. Moreover, he was never subjected to cross-examination on his criticisms of Mr. Brown and the others.
  2. According to Schlichting, Wilgus went to great pains in designing and testing the new engine. A good argument can be made that this was reasonable care, not negligence.
  3. Yet after the Crash, the railroad at the direction of Mr. Brown and without Wilgus’ participation successfully redesigned the engine and eliminated the problem. (Presumably this involved reducing the weight of the engine.) Thus, Wilgus was not essential to designing the engine, and the redesign suggests that he had not done all that he could have done on the initial design.
  4. Brown and the other railroad officials had not had an opportunity to defend themselves against these charges.

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[1] E.g., ONLY SECOND TRIP OF DOOMED TRAIN; Passengers Were Frightened at Speed Made Early in the Run. “CRACKED LIKE A WHIP,” Card Playing Commuters Soon Gave Up Their Games in the Swaying Cars, N.Y. Times (Feb. 16, 1907); CENTRAL WRECK; EIGHTEEN DEAD; New Electric Train Leaves the Tracks in the Bronx. MORE THAN 40 INJURED Passengers Ground to Death as Upset Cars Dragged Along the Ties. LAID TO OVERSPEEDING Bodies Chopped Out of the Wreckage—Motor Cars Never Left Rails. ENGINEER IS ARRESTED. Police Find Him Early This Morning—The Coroner Already Investigating, N.Y. Times (Feb. 16, 1907); NEWMAN QUIZZED AT WRECK INQUIRY; President Tells of Central’s Methods at the State Commission Hearing. RELIES ON MEN BELOW Details of Operation Are Left to Heads of Departments, President Declares, N.Y. Times (Feb. 27, 1907); WARNING WAS GIVEN BEFORE FATAL WRECK, N.Y. Times (Mar. 6, 1907); Weak Track Caused Wreck, N.Y. Times (May 8, 1907) (N.Y. Board of Railroad Commissioners conclusion)l PBS, The Woodlawn Crash, 1907.

[2] See Grand Central Terminal’s Centennial, dwkcommentaries.com (Feb. 2, 2013); Another Report on Grand Central Terminal’s Centennial, dwkcommentaries.com (April 7, 2014); Sam Roberts, Grand Central: How a Train Station Transformed America at 110 (Grand Central Pub; New York 2013).

[3] In early March 1907 the New York Central was held “culpably negligent” by the Coroner’s jury  and the Coroner held the company, its President Newman and its Board of Directors for the grand Jury. (Company Blamed for Bronx Wreck, N.Y. Times ( Mar. 5, 1907). Later that month the New York Central and two lower-level officials were indicted for manslaughter in the second degree by a New York State grand jury. (Central Indicted for Manslaughter, N.Y. Times (March 28, 1907).)

[4] Kurt C. Schlichting, Grand Central Terminal: Railroads, Engineering and Architecture in New York City at 82-106 (Johns Hopkins Univ. Press; Baltimore, MD; 2001); Kurt C. Schlichting, William J. Wilgus and the planning of modern Manhattan at 63-66 (Johns Hopkins Univ. Press; Baltimore, MD; 2012). Dr. Schlichting based his conclusions on documents in Box 7 of the Wilgus Papers at the New York Public Library.

 

 

U.S. President Theodore Roosevelt’s Second Term (1905-1909): Federal Regulation of Railroads

During President Theodore Roosevelt’s second term (March 4, 1905—March 4, 1909) the major developments regarding federal regulation of railroads were congressional enactment of the Hepburn Act in 1906 and proposed increases in such freight rates in 1907-1908.

The main provision of the Hepburn Act empowered the Interstate Commerce Commission to impose “just and reasonable” freight rates while banning rebates and preferential rates.The debate over this legislation and its terms were covered in prior posts.[1]

Now we look at the controversy over proposed increases in such freight rates in 1908.[2]

Following the Financial Panic of late 1907 [3] and  the continued economic recession in the first half of 1908, railroads felt pressured by Roosevelt not to cut wages while believing they could raise profits only by raising freight rates. As a result, some roads announced such increases. Roosevelt did not like this, especially in advance of the November 1908 presidential election.

During this new battle over freight rates, President Roosevelt met at the White House with W. C. Brown, now the Senior Vice President of the New York Central Railroad and my great-great uncle, who through letters and speeches had been the most vocal advocate for raising rates. Indeed, Brown provided the President with a collection of Brown’s speeches and other materials, Freight Rates and Railway Conditions. One was the Freight Rate Primer, which in comic-book form argued that an increase in rates would have minimal impact on the common man. Comic Book Propaganda!

Afterwards in an August 6, 1908, letter, Roosevelt told Brown that raising rates just before the election was very unwise, and instead the issue should be addressed later “purely on its merits.”

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[1] See these posts to dwkcommentaries.com: Federal Regulation of the Railroads in U.S. President Theodore Roosevelt’s Second Term (1905-1909): Introduction (Aug. 19, 2014); Federal Regulation of the Railroads in U.S. President Theodore Roosevelt’s Second Term (1905-1909): The Hepburn Act (Aug. 29, 2014); Reactions to the Hepburn Act Regarding Railroads’ Freight Rates, July-December 1906 (Sept. 8, 2014); Public Debate About U.S. Regulation of Railroads, January-May 1907 (Sept. 12, 2014); President Theodore Roosevelt’s “Decoration Day” Speech About the Railroads (May 30, 1907) (Sept. 14, 2014).

[2] See Edmund Morris, Theodore Rex  (Random House; New York; 2001).

[3]   See U.S. President Roosevelt’s Second Term: The Economy and Securities Markets of 1906-1907, dwkcommentaries.com  (Sept. 11, 2014).

Steven Pinker’s Analysis of Wealth and Inequality

“The world has made spectacular progress in every single measure of human well-being,” as noted in a prior post, is the cheery synopsis of the new book, “Enlightenment NOW: The Case for Reason, Science, Humanism, and Progress “ (p. 52)  by Harvard University’s Johnston Family Professor of Psychology, Steven Pinker.

Two of the measures that he examines are wealth (Ch. 8) and inequality (Ch. 9), both of which illustrate his overall analysis over long periods of time and for the whole world with unusual sets of data and graphs.

Wealth

For wealth, he starts with the proposition that “wealth is created . . . primarily by knowledge and cooperation: networks of people arrange matter into improbable but useful configurations and combine the fruits of their ingenuity and labor . . . [and] that we can figure out how to make more of it” (p. 80).

His graph of Gross World Product, 1-2015 (p. 81) shows virtually no change from year 1 through the middle of the 19th century and then virtually a straight-upward line through 2015. This “Great Escape” from poverty was due to “the application of science to the improvement of material life,” “the development of institutions that lubricated the exchange of goods, services, and ideas” and “a change in values” or “endorsement of bourgeois virtue” (pp. 80-85).

The next graph–GDP per capita, 1600-2015 (p. 85)—shows, Pinker argues, that “starting in the late 20th century, poor countries have been escaping from poverty in their turn,” thereby converting the Great Escape to the Great Convergence. This is also shown, according to Pinker, by data and graphs of World income distribution, 1800, 1975, and 2015; Extreme poverty (proportion of world population), 1820-2015; and Extreme poverty (number), 1820-2015 (pp. 86-88).

For Pinker, the following are the three major causes of this Great Convergence:

  1. The “decline of communism (together with intrusive socialism).” Market “economies can generate wealth prodigiously while totalitarian planned economies impose scarcity, stagnation, and often famine. Market economies, in addition to reaping the benefits of specialization and providing incentives for people to produce things that other people want, solve the problem of coordinating the efforts of hundreds of millions of people by using prices to propagate information about need and availability far and wide.” Moreover, many market economies also “invested in education, public health, infrastructure, and agricultural and job training, together with social insurance and poverty-reduction programs.” (Pp. 90-91.)[1]
  2. Better leadership in developing countries (p. 91).
  3. The end of the Cold War (p. 91).
  4. Globalization through an explosion of international trade (p. 92).
  5. Advances in science and technology (pp. 94-96).

Inequality

The initial premise of this chapter is that unlike “health, prosperity, knowledge, safety, peace “ and certain other factors, “economic inequality is not a fundamental component of well-being.” The contrary view confuses inequality with poverty. (Pp. 98-102.)

Here Pinker asserts that inequality comes with modernity and refers to the Gini Coefficient as the usual measure of economic inequality with 0, when everyone has the same as everyone else and 1, when one person has everything and everyone else has nothing.  (Pp. 98, 102.)

He then displays three graphs of the Gini Coefficient: International inequality, 1820-2013 (population weighted and unweighted), Global inequality, 1820-2011 and Inequality, UK and US, 1688-2013. These graphs demonstrate, he says, that “inequality in the world is declining.” (Pp. 98, 103-06.) An historian, Walter Scheidel, is said to have identified the Four Horsemen of Leveling: mass-mobilization warfare, transformative revolution, state collapse and lethal pandemics by obliterating wealth and killing large numbers of workers. (Pp. 106-07.)

Moreover, “modern societies now devote a substantial chunk of their wealth to health, education, pensions, and income support (the Egalitarian Revolution).” This has “redefined the mission of government to include such social spending to inoculate citizens against the appeal of communism and fascism, to benefit the entire society, to indemnify citizens against misfortunes against which they can’t or won’t insure themselves and to assuage the modern conscience.” (Pp. 107-08.)

The conclusion from Pinker on this issue is the following:

  • “As globalization and technology have lifted billions out of poverty and created a global middle class, international and global inequality have decreased, at the same time that they enrich elites whose analytical, creative , or financial impact has global reach. The fortunes of the lower classes in developed countries have not improved nearly as much, but they have improved . . . The improvements are enhanced by social spending, and by the falling cost and rising quality of the things that people want. In some ways the world has become less equal, but in more ways the world’s people have become better off.” (P. 120.)

Conclusion

The overall thesis of this book– The world has made spectacular progress in every single measure of human well-being—is very attractive. What are the counter arguments?

The above summary of Professor Pinker’s analysis of wealth and inequality raises at least the following questions:

  • Many of the data sets used by Pinker are not well known. Therefore, do they accurately and fairly depict what they purport to depict?
  • It seems valid that “wealth is created . . . primarily by knowledge and cooperation: networks of people arrange matter into improbable but useful configurations and combine the fruits of their ingenuity and labor . . . [and] that we can figure out how to make more of it.” Any legitimate objections to same?
  • Is it valid to state that “in the late 20th century, poor countries have been escaping from poverty in their turn,” thereby converting the Great Escape to the Great Convergence?
  • Are Pinker’s reasons for the Great Convergence valid?
  • Is economic inequality not a fundamental component of wellbeing?
  • Is the Gini Coefficient a valid measure of inequality?
  • Are the major causes of Leveling or reduced inequality these factors: mass-mobilization warfare, transformative revolution, state collapse and lethal pandemics?

Comments from others who know more about these data sets and analyses are earnestly solicited.

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[1] Right now we are seeing Cuba struggle with whether and how it will modify its communist economic system to allow greater private enterprise. See Economic Challenges Facing Cuba’s New President, dwkcommentaries.com (April 5, 2018).

 

 

 

 

 

Economic Challenges Facing Cuba’s New President 

According to John Caulfield, a former Chief of Mission of the U.S. Special Interests Section in Cuba (before the 2015 reopening of the U.S. Embassy in Havana), Miguel Diaz-Canel, when he becomes Cuba’s President of the Council of State on April 19, “will face serious challenges from the moment he takes over. Cuba’s Soviet-style economic model is not working. Raul has acknowledged as much and in 2011 began to implement economic reforms that allowed many Cubans to become self-employed and buy and sell residences. These changes have allowed some Cubans to achieve relative prosperity, while the majority is stuck in low-paying jobs.”[1]

Caulfield added, “Their success caused a negative reaction from inside the Communist Party that saw the rise of these non-state workers as a threat to the system. Recognizing these concerns, Raúl [Castro] told the National Assembly last summer that he took personal responsibility for ‘errors’ and froze the concession of most new business and self-employment licenses.”

This will present Diaz-Canel and the Cuban Communist Party with a dilemma:

  • Pull “Cuba from its economic morass” by introducing “urgent reforms to eliminate economic distortions such as the use of two national currencies and inefficient state industries,” by attracting “private foreign investment to generate new exports and rebuild Cuba’s decaying infrastructure” and by allowing “Cuba’s incipient private sector to grow.”
  • Or reject this reform agenda and thereby halt the creation of private wealth and a threat to the Communist Party’s domination of the island.

The case against reform may have been strengthened by the apparent success of the Mariel Special Development Zone, a deep-water port and adjacent land for industry and distribution businesses on the north shore of the island west of Havana. Currently 10 projects are operational, related to several sectors, including industry, biotechnology and pharmaceuticals, logistics, construction, food processing, and real estate, and this year another  six (Richmeat, Profood Service, Devox Caribe, Bouygues Construcción Cuba, Engimov Caribe, and Nescor) will begin operations while another 18 have been approved and await implementation.along with construction of an Agricultural Terminal, a second business center and other infrastructure.[2]

The Mariel Special Development Zone received another foreign investor on March 29 when a Vietnamese entity signed an agreement to develop an industrial park of 156 hectares in the Zone. Another eight agreements with such entities were signed that day at the conclusion of the visit to the island by Nguyen Phu Trong, general secretary of the Communist Party of Vietnam. One of these agreements called for the construction of a 50 megawatt bio-electrical plant and an agricultural development combined with the use of renewable energy to generate electricity.[3]

On the other hand, as noted in a prior post. Secretary-General Trong in a speech at the University of Havana emphasized the need for the incorporation of market economic measures in communist systems.

At the end of last month there was a public debate in Havana about Cuba’s emerging private sector. A survey of the 200 attendees revealed that those with the highest monthly incomes of 20,000 CUC (roughly $20,000) were the owners of rental houses, paladares (restaurants), musicians, small farmers, and, on a smaller scale, scientists, miners, ministers, workers in the sugar industry, lawyers, and doctors. Havana, Ciego de Ávila and Matanzas, were considered the provinces with the highest incomes in the country. On the other hand, at least 25% of the Cuban population lives below the poverty line, and the average monthly salary for State workers in 2018 rose to 740 Cuban pesos (approximately 30 dollars). The audience also discussed what pattern of inequality the population was politically willing to accept and whether this  which could fracture Communist ideology on the Island.[4]

Overriding all of these issues and problems is the recognized need for Cuba to eliminate their dual currency system. According to Pavel Vidal, a Cuban economist,“It is impossible for Cuba to achieve a significant and sustainable improvement in the productivity of its economy so long as it operates with two national currencies, with multiple exchange rates between them and an official exchange rate that is excessively overvalued.”[5]

However, Vidal said “state enterprises that show permanent losses should be closed or merged instead of being allowed to operate in a ‘financial bubble’ where they are sustained by implicit subsidies received every time they pay for imported inputs using an overvalued exchange rate. This bubble must be burst, and the state sector must be restructured. Enormous amounts of financial and human resources have been wasted in supporting state enterprises with no economic value.” Vidal added that if the Cuban government chooses true currency reform, “it should be accompanied by not only a greater opening to foreign investment but also by liberalization of the private sector. An expansion of the private sector, he said, “would allow Cuba to absorb the unemployment that would be produced from enterprises that go bankrupt.”

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[1] Caulfield, Cuba’s next president faces choice between economy and communism, the Hill (April 4, 2018).   Many of these issues have been discussed in posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Martinez, Promoting development and connecting Cuba to the world (Photos), Granma (April 3, 2018).

[3] Peraza, New accords strengthen strategic relations between Cuba and Vietnam, Granma (April 4, 2018).

[4] Ramirez, Rich “comrades,” Diario de Cuba (April 4, 2018).

[5] Whitefield, Cuba desperately needs to reform currency system, but timing couldn’t be worse, Miami Herald (April 4, 2018).

Robert Kennedy’s Moving Eulogy for Martin Luther King, Jr.

A prior post discussed the eloquent eulogy by Robert f. Kennedy for Rev. Dr. Martin Luther King, Jr. on the night King was assassinated, April 4, 1968.

David Margolick, a former New York Times journalist who is writing a book about King and Kennedy, reminds us that before that night, the two men had a “testy” relationship[. King was horrified to learn of RFK’s appointment as Attorney General because of “his early ties to Senator Joseph McCarthy, [Kennedy’s] attacks on organized labor, his cozy relationship with Southern racist politicians and his reputation for being his big brother’s consigliere.” Their subsequent contacts were infrequent and private. Moreover, Kennedy felt more at home with black militants than many mainstream black leaders like Dr. King. Thus, Kennedy came to Indianapolis that night because of promises he had made to black Indianapolis and despite aides’ worries that Kennedy would be putting his life at risk.[1]

The Eulogy[2]

That night Kennedy arrived late and climbed into the back of a pickup truck as his platform and delivered the following six-minute eulogy:

“I have bad news for you, for all of our fellow citizens, and people who love peace all over the world, and that is that Martin Luther King was shot and killed tonight.”

“Martin Luther King dedicated his life to love and to justice for his fellow human beings, and he died because of that effort.”

“In this difficult day, in this difficult time for the United States, it is perhaps well to ask what kind of a nation we are and what direction we want to move in. For those of you who are black–considering the evidence there evidently is that there were white people who were responsible–you can be filled with bitterness, with hatred, and a desire for revenge. We can move in that direction as a country, in great polarization–black people amongst black, white people amongst white, filled with hatred toward one another.”

“Or we can make an effort, as Martin Luther King did, to understand and to comprehend, and to replace that violence, that stain of bloodshed that has spread across our land, with an effort to understand with compassion and love.”

“For those of you who are black and are tempted to be filled with hatred and distrust at the injustice of such an act, against all white people, I can only say that I feel in my own heart the same kind of feeling. I had a member of my family killed, but he was killed by a white man. But we have to make an effort in the United States, we have to make an effort to understand, to go beyond these rather difficult times.”

“My favorite poet was Aeschylus. He wrote: ‘In our sleep, pain which cannot forget falls drop by drop upon the heart until, in our own despair, against our will, comes wisdom through the awful grace of God.’”

“What we need in the United States is not division; what we need in the United States is not hatred; what we need in the United States is not violence or lawlessness; but love and wisdom, and compassion toward one another, and a feeling of justice toward those who still suffer within our country, whether they be white or they be black.”

“So I shall ask you tonight to return home, to say a prayer for the family of Martin Luther King, that’s true, but more importantly to say a prayer for our own country, which all of us love–a prayer for understanding and that compassion of which I spoke.”

“We can do well in this country. We will have difficult times; we’ve had difficult times in the past; we will have difficult times in the future. It is not the end of violence; it is not the end of lawlessness; it is not the end of disorder.”

“But the vast majority of white people and the vast majority of black people in this country want to live together, want to improve the quality of our life, and want justice for all human beings who abide in our land.”

“Let us dedicate ourselves to what the Greeks wrote so many years ago: to tame the savageness of man and make gentle the life of this world.”

“Let us dedicate ourselves to that, and say a prayer for our country and for our people.”

Conclusion

Margolick observes that although no one in the audience probably had never heard of Aeschylus, the poem’s words “pain,” “despair,” “awful,” “grace” and “God” resonated with them.[3]

Andrew Young, the black leader who that night was with other black leaders in the Memphis motel where King had been assassinated, later recalled, says Margolick, that Kennedy “was in the middle of a totally black community, and he stood there without fear and with great confidence and empathy, and he literally poured his soul out talking about his brother. The amazing thing to us was that the crowd listened. He reached them.” Young also said the feeling in that motel room that night was “He’s probably going to go next.”

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[1] Margolick, The Power of Bobby Kennedy’s Eulogy for Martin Luther King, N.Y. Times (April 4, 2018). An account of Kennedy’s actions regarding King in the days after the assassination is set forth in an excerpt of the new book by Margolick, The Promise and the Dream.

[2] Robert F. Kennedy, Statement on Assassination of Martin Luther King, Jr., Indianapolis, Indiana, April 4, 1968, John F. Kennedy Presidential Library & Museum.

[3] Perhaps unartful comments about this poem by Aeschylus were provided in Aeschylus on Suffering and Wisdom, dwkcommentaries.com    (Feb. 10, 2014).

 

World Faces Demographic Challenges

“The world has made spectacular progress in every single measure of human well-being,” is the cheery synopsis of the new book, “Enlightenment NOW: The Case for Reason, Science, Humanism, and Progress “ (p. 52)  by Harvard University’s Johnston Family Professor of Psychology, Steven Pinker.

Important aspects of this “spectacular progress,” he says, are world-wide increasing life expectancy, declining maternal mortality and declining birth rates (pp. 53-57, 125-26, 273).

Unless I missed it in the 453-page book, however, Pinker does not grapple with the problems created by lower birth rates coupled with longer life spans. Examples of such problems are seen in Iowa and Minnesota in the U.S. and Brazil, Japan and Cuba.

Iowa [1]

For the Wall Street Journal, Iowa is an example of “a problem playing out in many parts of the Midwest, a region with lower unemployment and higher job-opening rates than the rest of the country. Employers, especially in more rural areas, are finding that there are just too few workers.” In fact, if “every unemployed person in the Midwest was placed into an open job, there would still be more than 180,000 unfilled positions, according to the most recent Labor Department data. The 12-state region is the only area of the country where job openings outnumber out-of-work job seekers.”

This problem is associated with low birth rate coupled with and an outflow of people. A net 1.3 million people living in the Midwest in 2010 had left by the middle of last year, according to census data. The area also attracts fewer immigrants than the rest of the country.”

Minnesota [2]

A similar problem exists in Minnesota. Last month, its unemployment rate dropped to 3.2%, compared with 4.1% nationally. This has made it difficult for “manufacturers, construction firms and repair-service firms to fill job vacancies and replace departing retirees try to meet the need for more employees, some firms, “employer associations and cooperating unions are working jointly to expand the labor pool.”

For the tech sector of the economy, last year Minnesota added 3,500 jobs, up 1.4% to 250,000 and constituting around 8% of the state’s total work force. And there is demand for even more such workers.

Minnesota’s need for immigrants is especially pronounced in the assisted-care industry. In late March the Trump Administration announced that it was ending, effective March 31, 2019, the Deferred Enforcement Departure program for certain Liberians in the U.S. One of the largest communities of Liberians lives in Minnesota and at least 1,000  are members of a local union that provides workers for assisted-care facilities.

Brazil[3]

“Retirement outlays already eat up 43% of Brazil’s national budget, and health care about 7%, while two expenditures that are critical to economic development—education and infrastructure—claim only about 3% each.” Its “social security system’s revenue shortfall widens each year as the worker-to-pensioner ratio shrinks.” This problem is exasperated by decisions last century to grant pensions to millions of peasants and informal workers who hadn’t paid [into the pension system]. . . . Rural workers paid about $3 billion in social-security taxes for the 12 months through September 2017, while rural retirees drew about $36 billion in benefits.”

The solutions are obvious. “They can raise the minimum retirement age, increase the number of years that workers must pay into the system, or reduce payouts. The bad news is that such measures tend to repel voters.”

Other Countries[4]

Brazil is not alone.

Japan has a very low birth rate, very high life expectancy and very low immigration. As a result, it has an aging, declining population, which should lead to declining economic and political importance in the world.

Cuba has the same sort of problems. It has a declining birth rate associated with readily available abortion services, longer life-spans associated with good health care and many younger people leaving the island to find greater economic opportunities elsewhere.

 More generally, “throughout Latin America and Asia, decades of falling birth rates and growing life expectancies have produced more retirees with fewer workers to underwrite their care. For government policy makers, this means challenges as burgeoning pension and health costs leave less money for economic development.”

“The United Nations projects that by 2050, the number of potential workers per retiree in upper-middle-income developing countries such as Brazil will tumble from the 2015 figure of seven to just 2.5.”

“Credit-rating firms are getting anxious. Standard & Poors estimates that unless there are major changes to publicly funded pension and health-care systems, population aging will help drive net government debt in the biggest emerging economies to extraordinary levels—307% of gross domestic product in Brazil, 274% in China, 262% in Russia and 341% in Saudi Arabia by 2050.”

Conclusion

The U.S. now has a fertility rate below the replacement rate. It, therefore, needs foreign immigrants to sustain population growth, especially in the rural parts of states like Iowa and Minnesota.[5]

Such immigration also would provide workers to pay into the Social Security trust fund and thereby help to finance the increasing number of older Americans who now draw benefits from that fund and who face rising costs of medical care.

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[1] Raice & Morath, Iowa’s Employment Problem: Too Many Jobs, Not  Enough People, W.S.J. (Apr. 1, 2018).

[2] St. Anthony, Horizon Roofing lures workers with higher pay, training, as industry embraces apprenticeships, StarTrib. (Mar. 25, 2018); St. Anthony, Twin Cities tech employment grew 1.6 percent last year, but many jobs go unfilled, StarTrib. (April. 2, 2018); Trump to end deportation protection for Liberians, StarTrib (Mar. 27, 2018); Koumpilova, Local Liberians rally to salvage deportation protection program, StarTrib (Mar. 16, 2018);Koumpilova, Trump administration announces end of deportation reprieve for Liberians in Minnesota, elsewhere, StarTrib (Mar. 28, 2018).

[3] Kiernan & Magalhaes, These Developing Countries Are Getting Old Before They Get Rich, with Dire Consequences, W.S.J. (Apr. 2, 2018).

[4] See n.3 supra; these posts to dwkcommentaries: The Importance of a Growing U.S. Population, dwkcommentaries.com (Mar. 27, 2017); Projected Cuban Population: Stabilizing and Aging (Sept. 6, 2016); Cuba Addresses Its Declining and Aging Population (Oct. 17, 2016); Cuba Faces Economic Challenges (Dec. 14, 2016); Comment: Cuba’s Economic and Political Challenges for 2017; Comment: Cuban Government’s Bleak Economic Assessment for Cuba (Dec. 28, 2017); Economic Problems Bedevil Cuban government and President Raúl Castro (Mar. 23, 2017); Comment: Elderly Cubans Unable To Retire (Mar. 26, 2017); Cubans Want Economic Growth and Opportunity (Mar. 22, 2017).

[5] The Importance of a Growing U.S. Population, dwkcommentaries.com (Mar. 27, 2017).