Minnesota’s Challenges of Declining, Aging Population

Minnesota has an aging, declining population coupled with shortages of skilled and other labor, as discussed in prior posts.[1] Here is additional information on that subject along with words about the problems of shortages of medical care in rural parts of the nation and the challenges of having more immigrants.

Skilled Labor Shortages[2]

As of September 30, 2019, “the number of job vacancies in Minnesota continues to climb and is now at the highest total on record — which state officials said continues to be of concern because it could slow economic growth. . . . More than half of the job vacancies were in the seven-county Twin Cities area. . . . While most of the openings statewide are in the health care and social assistance field, nearly 8% are in manufacturing.”

These shortages have led to employers expanding “job candidate lists to include older workers, people with disabilities, people of color and other groups sometimes marginalized from good-paying jobs.”

Other responses to these shortages include employers busing metro-area residents to companies in smaller nearby cities, buying houses to rent to new employees, investing in apartment buildings for renting to the newcomers, engaging in social media campaigns about the companies and their towns, designing high school courses for needed job skills, and sponsoring social activities for newcomers.

Warning signs of a downturn in the U.S. and Minnesota economy, however, threaten this demand for more skilled and other labor. On October 1, a report showed that nationwide factory activity in September fell to the lowest level since 2009, the last month of the Great Recession. As a result, some economists now consider the manufacturing sector to be in a recession. This  follows months of worrying earnings and other economic reports that signaled slowing economies around the world and heightened pressures as U.S. factories scrambled to deal with the shortage of skilled workers and the fallout from a volatile trade war with China.

Creighton University’s Economic Forecasting Group, which measures activity in Minnesota and eight other states including the Dakota, said through its Director, Ernie Goss, “Based on the last two months of surveys of manufacturing supply managers, both the U.S. and Mid-America economies are likely to move even lower in the months ahead.”  The probability of a recession during the first half of 2020 has “risen significantly” over the past few months.

Another expert, Thomas Simons, senior money market economist at Jefferies LLC, said that the Mid-America economy has been expanding in 2019 at a pace well below that of the nation and that  recent reports were “troubling,” “weaker than expected” and dragged down by “non-organic forces” such as the trade war and Boeing’s grounding of its entire fleet of 737 Max Jets. . .  Manufacturing itself is in a recession, but it does not mean that the overall economy is in a recession.” These thoughts were echoed by Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis: “Easily the biggest issue that [manufacturing executives] talk about is trade. . . . The manufacturers are not just worried about the trade war between the Trump administration and China, but also unresolved trade agreements with Canada and Mexico, Germany’s weak economy and unfinished U.S. trade policies that affect Europe’s auto industry.”

Another bit of negative news came on October 1 when the World Trade Organization slashed its forecast for trade growth for this year and next. World trade in merchandise is now expected to expand by only 1.2 percent during 2019, in what would be the weakest year since 2009, when it plunged by nearly 13 percent in the midst of the worst global financial crisis since the Great Depression. The W.T.O. warned that intensifying trade conflicts posed a direct threat to jobs and livelihoods, while discouraging companies from expanding and innovating.

In response to this new negative news, global stock markets declined on October 1 and 2.

Medical Care Shortages [3]

Rural areas in Minnesota and other states also are facing shortages of primary-care physicians and other doctors. “In the medical desert that has become rural America, nothing is more basic or more essential than access to doctors, but they are increasingly difficult to find. The federal government now designates nearly 80 percent of rural America as ‘medically underserved.’ It is home to 20 percent of the U.S. population but fewer than 10 percent of its doctors, and that ratio is worsening each year because of what health experts refer to as “the gray wave.” Rural doctors are three years older than urban doctors on average, with half over 50 and more than a quarter beyond 60. Health officials predict the number of rural doctors will decline by 23 percent over the next decade as the number of urban doctors remains flat.”

One example of this shortage is the State of Texas, where “159 of the state’s 254 counties have no general surgeons, 121 counties have no medical specialists, and 35 counties have no doctors at all. Thirty more counties are each forced to rely on just a single doctor.”

A related problem is the closure of at least 113 rural hospitals in the U.S. since 2010. It, therefore, should not be surprising that “elderly patients are more likely to die when the nearest rural hospital closes and they have to travel farther for treatment of time-sensitive conditions such as heart attacks and strokes, according to a study by a new University of Minnesota health economist.” This study also invalidates  the theory that rural patients might do better after a hospital closes because they would travel farther for higher-quality care.

 Challenges of More Immigrants [4]

The Minnesota city of Worthington has been cited in this blog as an example of a city that has successfully welcomed and integrated immigrants. Its “population has surged from fewer than 10,000 in 1990 to more than 13,000 today and its residents expect it to exceed 14,000 in the near future with immigrants constituting roughly one-third of the population.  And the median age is under 36.”

“Some of the [Worthington] immigrants are entrepreneurs, who described the difficulties they had in getting their businesses started and frustration over lack of stores with their favorite foods and police forces still almost exclusively locally born white people. But they still expressed optimism about their future in this community.”

Worthington had recently been visited by “Neel Kashkari, the president of the Minneapolis Federal Reserve Bank. At a community meeting in the town he said, “If you do the math, there are three choices we have as a society. One choice is just accept slower growth. A second choice is to subsidize [human] fertility. Or number three, you can embrace immigration. Now the advantage we have in the U.S. is that, while we are not perfect, we are better than just about any other country at embracing immigrants and integrating them in our society.”

More recently, the Washington Post published a critical article about this small city as it struggles to meet the educational needs of the children of these immigrants and the costs of doing so.

This article reports that in the past six years, more than 400 unaccompanied minors have been placed in Worthington’s . . .[county]— the second most per capita in the country. . . . Their arrival has helped swell Worthington’s student population by almost one-third, forcing administrators to convert storage space into classrooms and teachers to sprint between periods, book carts in tow.” As a consequence, “the number of ELL [English language learner] students in Worthington has nearly doubled since 2013, to 35 percent of students. In the high school, where most unaccompanied minors are placed, it has almost tripled.”

In response, the Worthington school district has “scrambled to hire Spanish-speaking teachers, who are part educators, part parents, part therapists. Many unaccompanied minors live with unfamiliar relatives who offer little support. Teachers often fill the void, arriving early, staying late, even buying their students groceries.”

To meet this challenge, the school district over the last five years has “asked residents to approve an expansion of its schools to handle the surge in enrollment. Five times, the voters have refused” with another scheduled this Fall. According to this article, “The driving force [in this Trump-supporting county]behind the defeats has been a handful of white farmers,’ who provide a major portion of its tax base. One activist said, ““White people here don’t want to pay for people of color and undocumented children to go to school.”

The Executive Director of the Immigrant Law Center of Minnesota, Veena Iyer, disagreed  with the Washington Post article. She said, “Immigrants keep Worthington strong, growing, and working — and many residents welcome them. The Immigrant Law Center of Minnesota has worked in Worthington for more than a decade. We have seen many residents respond with welcome arms and generosity as one wave of immigrants after another arrived. This century’s immigrants reversed a decline in population and prosperity that threatened Worthington and that still characterizes too many rural communities. . . . These immigrants come from Guatemala and Mexico, and also from Laos, Myanmar and Ethiopia. In all, they come from 80 different countries and speak more than 40 languages. They are young — with an average age of 36 — and hardworking. Immigrants make large contributions to the local economy and help make Worthington a vibrant and dynamic community. . . . Immigrants remain a crucial part of Worthington’s past, its present and its hope for the future.”

The Washington Post article, however, spurred Michele Bachmann, the former Republican member of the House of Representatives from a district north of the Twin Cities and far away from Worthington, to write an article in the leading newspaper of the State, lamenting the “ideological civil war” in the town created by the immigrants’ causing “significant social disruption and severely strain[ing] local resources.”

Bachmann’s article prompted a letter to the editor from a former senior vice president of the Minnesota Chamber of Commerce, who voiced three criticisms of Bachmann. First, she failed to recognize that immigrants pay state and federal income and payroll taxes, sales taxes when they shop and real estate taxes whether they are homeowners or renters. Second, she also failed to recognize that immigrants “are significant contributors to the development and growth of our economy.” They “start businesses and help existing ones to grow” and replace “our retiring baby boomer workforce.” Third, she failed to suggest “ways to redesign [our broken immigration system] to support 21st century community growth and the development of our economy.”

 Impact of Lower Immigration Numbers [5]

The latest data from the Census Bureau’s American Community Service indicates that the net increase of immigrants in the U.S. population “dropped to almost 200,000 people in 2018, a decline of more than 70 percent from the prior year.” According to the Chief Demographer at the Brookings Institution, William Frey, said this “was likely caused to a more restrictive approach by the Trump administration.”

Mr. Frey also pointed out that of the 14 states with the lowest concentrations of foreign-born people, 12 voted for Mr. Trump in 2016. In half of those 12 states, Asians dominated recent immigrant gains and in 10 of those states, immigrants are more likely than native-born residents to hold bachelor’s degrees.

Another expert, David Bier of the Cato Institute, observed, “It’s remarkable. This is something that really hasn’t happened since the Great Recession. This should be very concerning to the administration that its policies are scaring people away.”

Also favoring more U.S. immigration was the Chair of the Latino Donor Collaborative, Sol Trujillo, who said if  “the U.S. Latino population were an independent economy, its gross domestic product would be the fastest-growing among the world’s developed economies. U.S. Latino GDP is now $2.3 trillion, as detailed in a new report that estimates the group’s economic output by measuring their share across 71 industries.” Continued growth of the U.S. economy requires the continued growth of Latino immigration to counteract the decline in U.S. labor-force growth.

In addition, Trujillo says, “Latinos also strengthen the economy by creating jobs. Latino entrepreneurs produce more than $700 billion annually. And as Latinos in the U.S. have become wealthier, they increasingly contribute to the economy as consumers. They account for nearly 30% of America’s growth in real income. With that comes purchasing power, and from 2010-17 real consumption by Latinos in the U.S. grew 72% faster than the rest of the population.”

Trujillo continues. “The U.S. needs an immigration policy focused on recruiting people who are ready to work in every sort of job, who have demonstrated an exemplary work ethic, and who have become essential workers in many industries.” This requires “comprehensive reform of immigration laws and policies.”

Conclusion

Once again, Minnesota and other states with aging, declining population need more immigrants. The Trump Administration’s anti-immigrant rhetoric and actions are contrary to the U.S. national interest and need to be abolished as soon as possible.

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[1] E.g., Minnesota Facing Slowdown in Labor Force Growth, dwkcommentaries.com (September 3, 2019); Rural Minnesota Endeavoring To Attract Younger People, dwkcommentaries.com (Sept. 2, 2019).

[2] DePass, Job vacancies in Minnesota rise again, StarTribune (September 30, 2019); Forgrave, Worker shortage sparks Minnesota businesses to think outside the box, StarTribune (Sept. 29, 2019); DePass, Manufacturing in Minnesota slumps but faring better than nation as a whole, StarTribune (Oct. 1, 2019); Goodman, Global Trade Is Deteriorating Fast, Sapping the World’s Economy, N.Y. Times (Oct. 1, 2019); Tsang, Stocks Slide as Investors Face New Evidence of a Slowdown, N.Y. Times (Oct. 2, 2019); Bernhard & Vigna, U.S. Stocks Drop on Worries About Growth, W.S.J. (Oct. 2, 2019) .

[3]  Saslow, ‘Out here, it’s just me;’ In the medical desert of rural America, one doctor for 11,000 miles, Wash. Post (Sept. 28, 2019); Olson, Deaths rise after hospitals close, StarTribune (Sept. 29, 2019).

[4]  Outstate Minnesota City Aided by Immigrants, dwkcommentaries (Aug. 5, 2018); Miller, Immigrant kids fill this town’s schools. Their bus driver is leading the backlash, Wash. Post (Sept. 22, 2019); Iyer, Immigrants make our community stronger, StarTribune (Sept. 26, 2019); Bachmann, Washington Post article shows that open borders rip our towns apart, StarTribune (Sept. 26, 2019); Letters re Bachmann, Star Tribune (Sept. 30, 2019);

 

[5] Tavernise, Immigrant Population Growth in the U.S. Slows to a Trickle, N.Y. Times (Sept. 26, 2019); Trujillo, Latino Workers Save America From Stagnation, W.S>J. (Sept. 25, 2019).

 

 

Major Difficulties in Reinvigorating U.S. Rural Areas

As previously discussed in this blog, most rural areas of the U.S. have aging, declining population. Therefore, this blog has advocated for increasing immigration and having these immigrants settle in the small and medium-size towns in these areas.[1]

However, Eduardo Porter, an economics writer for the New York Times, presents persuasive reasons why  reinvigorating these rural areas has been and will be very difficult.[2]

He starts by pointing out that for the last 25 years the 60 million people now living on farms and in hamlets and small towns have experienced “relentless economic decline” in terms of median income and population along with an increase in median age. Moreover, their share of U.S. population and income are shrinking while crime and opioid abuse are increasing. The result is “intensifying ruralization of distress,” with “distress”  measured “as a combination of data ranging from joblessness and poverty to abandoned homes and educational attainment.” Indeed, he says, “These days, economic growth bypasses rural economies.”

Although many ideas have surfaced on how to address and alleviate these problems, Porter is very doubtful that they will be successful.

The primary reason is “the inescapable reality of agglomeration, one of the most powerful forces shaping the American economy over the last three decades. Innovative companies choose to locate where other successful, innovative companies are. That’s where they can find lots of highly skilled workers. The more densely packed these pools of talent are, the more workers can learn from each other and the more productive they become. This dynamic feeds on itself, drawing more high-tech firms and highly skilled workers to where they already are.”

Therefore, he endorses a suggestion in a Brookings Institution report that any effort to address the problems of rural America should “focus on middle-sized places that are near big tech hubs and have some critical infrastructure, rather than scatter assistance all over the landscape.”

Another suggestion is to help rural residents relocate to prosperous cities and, therefore, focus on developing affordable housing in these cities.

Moreover, not all cities are equal in this regard. A Wall Street Journal article asserts, “Technology is creating an economy in which superstar employees work for superstar firms that gather them into superstar cities, leading to a stark geographic concentration of wealth.[3] The article cites to a study by the Brookings Institution that created an index of every metro area in the U.S.  according to the extent to which their workers use computers in their jobs (their digitalization), Those indices resulted in the following list of superstar cities:

  San Jose-Sunnyvale-Santa Clara, Calif.

  California-Lexington Park, Md.

  Huntsville, Ala.

  Boulder, Colo.

  Durham-Chapel Hill, N.C.

  Trenton, N.J.

 Washington D.C.-Arlington-Alexandria, Va.-Md.-W.Va.

 Boston-Cambridge-Newton, Mass.-N.H.

  Austin-Round Rock, Texas

  San Francisco-Oakland-Hayward, Calif.

  Ann Arbor, Mich.

  Salt Lake City, Utah

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[1] See the posts listed in the “U.S. Population & Immigration”  section in List of Posts to dwkcommentaries—Topical: United States (POLITICS).

[2]  Porter, The Hard Truths of Trying to ‘Save’ the Rural Economy, N.Y. Times (Dec. 14, 2018).

[3] Mims, Where You Should Move to Make the Most Money: America’s Superstar Cities, W.S.J. (Dec. 15, 2018).

Small Chance of Liberalized U.S. Rules for Agricultural Exports to Cuba  

The U.S.-China trade war initiated by the Trump Administration has had a significant negative impact on U.S. agricultural exports to that country. In response, some U.S. senators and representatives have been pressing for relaxation of U.S. restrictions on such exports to Cuba. These advocates include Senators Heidi Heitkamp (Dem., ND), Amy Klobuchar (Dem., MN) and Tine Smith (Dem., MN)  and Representatives Collin Peterson (Dem., MN) and Tom Emmer, (Rep., MN). [1]

In addition, a bipartisan group of over 60 agricultural associations, businesses and elected officials from 17 states have urged the two congressional agriculture committees to include in the pending farm bills a provision to remove restrictions on private financing of U.S. agricultural exports to the island. [2]

This week Cuba President Miguel Diaz-Canel in New York City for a meeting of the U.N. General Assembly met separately with a bipartisan and bicameral group of Members of the U.S. Congress, including Sen. Ron Wyden (Dem., OR), Rep. Karen Bass (Dem., CA), Rep. Kathy Castor (Dem., FL), Rep. Robin Kelly (Dem., IL) Rep. Gregory Meeks (Dem., NY) and Rep. Roger Marshall (Rep., KA). Rep. Marshall told AG NET that the U.S. “can and should be Cuba’s number one supplier of commodities like sorghum, soy, wheat, and corn.”

But legislation to expand such exports by allowing credit sales to Cuba did not make it into the pending farm bills in both houses of the Congress, and most observers and participants think chances are nil of such a provision being added. And Senator Heitkamp’s provision in the Senate bill to allow the U.S. Department of Agriculture to use federal funds to develop the Cuban market could easily be cut from the bill in a conference committee.

The reason has more to do with politics than economics, according to Ted Piccone, a specialist in Latin American issues at the Brookings Institution. “It basically comes down to domestic politics in Florida,” Piccone said.

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[1] Spencer, Little appetite for effort to bolster ag trade with Cuba, StarTribune (Sept. 21, 2018).

[2] Engage Cuba, Agriculture Groups Support Farm Bill Cuba Provision that Would Save $690 Million (Sept. 5, 2018).

Criticism of Cuba’s New Regulations for Private Enterprise

Cuba’s 126 pages of new regulations for private enterprise (cuentapropistas), which were published on July 10, have been criticized by U.S. economist Richard Feinberg, a professor at the University of California San Diego’s School of Global Policy and Strategy and a Fellow at the Brookings Institution. He calls them “the revenge of the bureaucrats,” who are jealous of those in the private sector who are making much more money than employees of struggling state enterprises.[1]

The new regulations contain details about potential violations, penalties and fines, oversight and performance requirements. For example, an operator of a private day-care facility must devote at least 21.5 square feet per child plus provide a detailed inventory of personal toiletry items.

These regulations also are designed to virtually guarantee that most private businesses will not grow beyond 20 employees. For example, once a private employer hires more than 20 employees, the 21st employee must be paid six times the average wage for the first 20 employees.

In short, private enterprise is fine so long as they “don’t get too rich, diversify their businesses, open branches, try to evade taxes, resort to the black market, or provide too much competition to the state sector.” Indeed, a major motivation for the regulations is to halt growing inequities between ordinary Cubans and those in the private sector.

Moreover, the new regulations do not allow “for white-collar professionals to work for themselves, . . . private entrepreneurs to directly import for their businesses, and there is no recognition of their businesses as legal entities” and no provision for the creation of wholesale markets for the private sector.

These criticisms of the regulations were echoed in a  recent Cuban public opinion poll carried out by the CubaData Project with a team of academics from Cuba, Mexico and Venezuela. 87.6% believe that Cuban professionals should be able to establish businesses and businesses within their professions. In addition, a high percentage of those surveyed believe other political parties should be permitted and that the election of the island’s president should be direct.[2]

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[1] Whitefield, New Cuba regulations for private enterprise on the island have a long list of don’ts, Miami Herald (Aug. 2, 2018). See these posts to dwkcommentaries.com: Cuba Announces New Regulations for Private Business (July 10, 2018); More Details on New Cuban Regulations for Private Business (July 11, 2018); Comment: Yet More Details on Cuba’s New Regulations for Private Business (July 13, 2018).

[2]  Survey: Cubans want more autonomy for their business, political pluralism and elect president, Diario de Cuba (July 30, 2018).

Continued Official Uncertainty Over Cause of Medical Problems of U.S. Diplomats in Cuba     

There has been lots of news over the U.S. diplomats with medical problems from serving in Cuba. But there is still official uncertainty over the cause of those problems and resulting cooler Cuba relations with the U.S. and warmer relations with Russia.

U.S. Trying To Hide the Attacks?[1]

CBS News on October 10 reported that one of the 22 U.S. diplomats who has suffered from purported “sonic attacks” in Cuba had asserted that the U.S. was trying to hide the attacks.

In addition, this individual reportedly told CBS that the attacks had happened at the Embassy itself, their Havana quarters and hotels, that the State Department “pressured” some U.S. embassy officials who had been injured to remain on the island and “waited too long” to withdraw personnel and that the initial treatment by doctors in Havana and at the University of Miami Hospital in the U.S. was “superficial and incomplete.”

The State Department denied these allegations later the same day.[2] Its Spokesperson, Heather Nauert, at a press briefing, said, “We have an ongoing investigation that’s being spearheaded out of the [U.S.] with our best investigators on that, so they continue to move ahead with that investigation. We still don’t know who is responsible and we still don’t know what is responsible for the injuries of our American staff.” (Emphasis added.)

Pressed by other reporters about the above comments by one of the victims and by the Department’s recent identification of only two Havana hotels where some of the attacks occurred, Nauert said the following:

  • “I was just speaking with one of our colleagues who served down there in Cuba and is recently back here in the [U.S.]. And I asked this person that very question: ‘How do you feel that we responded?’ And I’ve asked numerous of my colleagues that very question. . . . [W]e all care deeply about how our folks are doing down there. And I asked the question, ‘Do you feel supported by us? Do you feel that we were quick enough to respond?’ And the answer I got back was ‘yes.’ . . . it took a while to put this together, because the symptoms were so different.”
  • “But this person said to me once we figured out a pattern, . . . the State Department was extremely responsive. This person said to me that they . . . never felt the pressure to stay in Cuba, although they wanted to make it clear that they wanted to serve down there. These folks love what they’re doing, they feel a real dedication to . . .our mission down there in Cuba, the activities that they were involved with on behalf of the U.S. Government with local Cubans, and they were encouraged by the State Department to come forward, please get tested if you feel like you’ve had some sort of symptoms or something.”
  • “I don’t have the actual timeline in front of me that lays out when attacks took place at different locations, and I’m not even sure that that is something that we’re making public. But once we started to figure out what this was all about and started to investigate and realized that we were not able to protect our people, that’s when the Secretary made [the decision to reduce U.S. personnel at the Embassy in Havana].”

U.S. Government Statements About the Attacks and Relations with Cuba

On October 12 White House Chief of Staff, John Kelly, provided a very unusual press briefing. Unusual because the chief of staff rarely, if ever, provides such a briefing. The apparent major reason for the briefing was to provide a platform for him to deny that he was quitting or being fired as chief of staff. In addition, in response to a reporter’s question, Kelly stated, “We believe that the Cuban government could stop the attacks on our diplomats.”  But he provided no bases for that belief and was not challenged with additional questions by the journalists.[3] (Emphases added.)

Later that same day Kelly’s comment was interpreted (or qualified) by the State Department spokeswoman, Heather Nauert, who said, “General Kelly, when he said we believe that they can stop the attacks, I think what he was referring to was, one, we have the Vienna Convention [on Diplomatic Relations]. And under the Vienna Convention, . . . the Government of Cuba, has a responsibility to ensure the safety of our diplomatic staff. That didn’t happen. But there’s also another well-known fact, and that is that in a small country like Cuba, where the government is going to know a lot of things that take place within its borders, they may have more information than we are aware of right now.”[4] (Emphases added.)

The next day, October 13, President Trump addressed the 2017 Values Voter Summit.  It included the following comment: “We’re confronting rogue regimes from Iran to North Korea and we are challenging the communist dictatorship of Cuba and the socialist oppression of Venezuela. And we will not lift the sanctions on these repressive regimes until they restore political and religious freedom for their people.”[5] (Emphases added.)

Two days earlier (October 11) Vice President Mike Pence delivered a speech at a National Hispanic Heritage Month celebration at the Naval Observatory in Washington, D.C. in which he referred to meeting people from the Cuban communities here in the U.S., and had seen “the spirit of the Cuban exile community in this country firsthand.” On that same day, the Vice President continued. “President Trump announced a new policy to ensure that U.S. dollars will no longer prop up a military monopoly that exploits and abuses the Cuban people. Under this administration, it will always be “Que viva Cuba libre![6] (Emphases added.)

Sound Recording[7]

The Associated Press obtained an audio recording of what some of the U.S. personnel in Cuba heard.  Says the AP, it “sounds sort of like a mass of crickets. A high-pitched whine, but from what? It seems to undulate, even writhe. Listen closely: There are multiple, distinct tones that sound to some like they’re colliding in a nails-on-the-chalkboard effect.”  The AP adds that it has “reviewed several recordings from Havana taken under different circumstances, and all have variations of the same high-pitched sound.”

Similar Problems at U.S. Embassy in Moscow, 1953-1976[8]

The BBC reports that in May 1953 U.S. officials at the Moscow embassy detected a microwave frequency that oscillated above the upper floors at certain times, sometimes up to eight hours a day, and that autumn some embassy workers felt inexplicably ill. At first it was dizziness, palpitations, headaches, blood pressure too high or too low. But no one understood what was happening.

In 1962, those who were still there or even those who had already left had more severe symptoms: sudden cataracts, alterations in blood tests or chromosomes. In 1965 the U.S. began what was known as the “Moscow Viral Study,” a multimillion-dollar operation in which scientists apparently looked for the potential exposure of workers to an unknown strain of a mysterious and potent virus. The eventual conclusion was the Soviets were “bombing” the U.S. embassy with very low-level microwaves, which the U.S. called the “S ENAL Moscow.” This persisted until April 1976.

Cubans Doubt[9]

From Cuba, the Associated Press reports that “the common reaction in Havana is mocking disbelief” about the attacks.

The same tone was struck by Miguel Diaz-Canel, the first vice president who is widely expected to succeed Raul Castro when he steps down as president in February. He said, “A few spokespeople and media outlets have lent themselves to divulging bizarre nonsense without the slightest evidence, with the perverse intention of discrediting Cuba’s impeccable behavior.”

Mass Hysteria?[10]

Journalists from the Guardian newspaper in London reported that “senior neurologists” say that ”no proper diagnosis is possible without more information and access to the 22 US victims,” but speculate that the diplomats’ ailments could have been caused by “mass hysteria.”

Cuba-Russia Relations[11]

According to the Miami Herald, “after the election of President Donald Trump, the pace of [Cuba’s] bilateral contact with Russia has been frantic,” even more so after the eruption of U.S.-Cuba relations associated with the medical problems of U.S. diplomats. Here are such examples:

  • Just days before Foreign Minister Rodriguez’ September 26 meeting with Secretary of State Tillerson at the State Department, the Minister met with his Russian counterpart Sergei Lavrov on the sidelines of the U.N. General Assembly gathering. The conversation was “confidential,” according to a press release issued by the Russian Foreign Ministry.
  • On July 26 Cuban diplomat Josefina Vidal, the main negotiator with the U.S., went to Moscow and met with Deputy Foreign Minister Sergei Ryabkov.
  • Cuba’s ambassador to Russia has met with Ryabkov at least five times so far, this year.
  • Last December, just after the election of Mr. Trump, Russia and Cuba signed an agreement to modernize the Cuban army, and this year Russian officials — including military personnel — have made frequent visits to Havana.
  • In March, the Russian company Rosneft signed an agreement to ship 250,000 tons of crude oil and diesel to offset the decline in Venezuelan oil shipments to Cuba.
  • Rosneft also has discussed other joint projects with Cuba for oil extraction and the possibility of modernizing the Cienfuegos refinery, operated jointly by Cuba’s CUPET and Venezuela’s PDVSA.
  • In April, Russia offered to fund $1.5 million in U.N. projects in Cuba for hurricane recovery and later pledged to support recovery efforts following damage caused by Irma.
  • In September, Cuban Vice President and Minister of Economy Ricardo Cabrisas signed a package of agreements with Russia in the energy, rail transport and elevator-supply sectors.
  • Recently, Cuban news agency Prensa Latina, which has an office in Washington, and the Russian news agency Sputnik signed an official cooperation agreement.

These developments are no surprise to Richard Feinberg, an expert at Brookings Institution and a former U.S. policymaker for Latin America during Bill Clinton’s administration. He says, “[Vladimir] Putin’s message is not difficult to understand. [He] longs to regain the past imperial glory and relations with Cuba follow that same pattern.” Feinberg added, “From the point of view of the Cubans, they are looking to diversify their relationships. As closer economic relations with the U.S. do not seem likely for at least the next few years, they are looking for alternative allies, especially from countries with strong states like Russia and China that can offer favorable payment terms, something very welcome in an economy with poor international credit standards.”

Conclusion

In the above and the many other reports about the medical problems affecting some U.S. personnel serving in Cuba, I find it astounding that there still is official uncertainty about the cause or causes of the medical problems.

It also is astounding that no journalist or other commentator has publicly asked whether the U.S. has investigated whether the problems were caused by a secret and perhaps malfunctioning U.S. program or device and if so, to provide details. Such a possibility would help explain the delay in the U.S. public announcement of this set of medical problems and the apparent U.S. reluctance to share details of its investigation with Cuban investigators, all as discussed in previous posts to this blog. Moreover, this possibility would render various U.S. reactions—reducing the U.S. personnel at the U.S. Embassy in Havana, expulsion of 15 Cuban diplomats and the latest U.S. travel warning—as cover ups and as excuses for additional tightening of U.S. screws on Cuba.

Moreover, Trump’s hostile rhetoric and actions regarding Cuba, which are unjustified in and of themselves, have adverse effects on other important U.S. interests, including the prevention of increasing Russian influence in Latin America.

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[1] Cuba victim tells CBS News “complaints were ignored,” CBS News (Oct. 10, 2017); ‘Washington was trying to hide the acoustic attacks,’ says one of the victims, Diario de Cuba (Oct. 10, 2017).

[2] U.S. State Dep’t, Department Press Briefing—October 10, 2017.

[3]  White House, Press Briefing by Press Secretary Sarah Sanders and Chief of Staff General John Kelly   (Oct. 12, 2017); Assoc. Press, White House Says Cuba Could Stop Attacks on Americans, N.Y. Times (Oct. 12, 2017).

[4] U.S. State Dep’t, Department Press Briefing-October 12, 2017.

[5] White House, Remarks by President Trump at the 2017 Values Voter Summit (Oct. 13, 2017); Reuters, U.S. to Maintain Cuba, Venezuela Sanctions Until Freedoms Restored: Trump, N.Y. Times (Oct. 13, 2017).

[6] White House, Remarks by Vice President Mike Pence at National Hispanic Heritage Month Reception (Oct. 11, 2017)

[7] Assoc. Press, Dangerous Sound? What Americans Heard in Cuba Attacks, N.Y. Times (Oct. 13, 2017).

[8] Lima, The “Moscow Sign”, the mysterious Soviet Union bombardment of the US embassy, which lasted more than two decades during the Cold War, BBC News (Oct. 14, 2017).

[9] Assoc. Press, ‘Star Wars’ Fantasy? Cubans Doubt US Sonic Attacks Claims, N.Y. Times (Oct. 13, 2017).

[10] Borger & Jaekl, Mass hysteria may explain ‘sonic attacks’ in Cuba, say top neurologists, Guardian (Oct. 12, 2017).

[11] Gámez, Amidst growing tensions with U.S., Cuba gets cozier with Russia, Miami Herald (Oct. 13, 2017).

Other Reactions to U.S. Ordering Removal of 15 Cuban Diplomats   

On October 3, the U.S. ordered the removal of 15 Cuban diplomats from the U.S. as discussed in a prior post while other posts looked at recent developments on these issues and on Cuba’s reaction to that U.S. decision and order. This post will discuss reactions from others.

Opposition to Expulsion of Cuban Diplomats[1]

The harshest criticism of this decision along with others recently taken by the Trump Administration has been leveled by Harold Trinkunas, the deputy director of the Center for International Security and Cooperation at the Freeman Spogli Institute for International Studies at Stanford University and a nonresident senior fellow at the Brookings Institution, and Richard Feinberg, professor at the School of Global Policy and Strategy at the University of California San Diego and a nonresident senior fellow at the Brookings Institution.They say the following:

  • “This White House and its pro-embargo allies in Congress have opportunistically seized on these mysterious illnesses affecting U.S. diplomats to overturn the pro-normalization policies of a previous administration, using bureaucratic obstruction and reckless language when they cannot make the case for policy change on the merits alone.”
  • By taking these precipitous actions, Trinkunas and Feinberg argue, “this White House is doing exactly what our adversaries in the region seek to provoke. Overt U.S. hostility [towards Cuba] empowers anti-American hardliners in the Cuban regime opposed to stronger bilateral relations between the two countries. In addition, [the announced American travel restrictions and warning hurts] the privately-operated [and progressive] segments of the Cuban tourism sector, and . . . [thereby weakens] the emerging Cuban middle class.”
  • Furthermore, they say, “a breakdown in U.S.-Cuban relations allows Russia, China, Iran and Venezuela to deepen their influence in Cuba and the broader Caribbean Basin. By pushing Cuba away, the U.S. is pushing it towards other actors whose interests are not aligned with our own.
  • “Our partners in Latin America welcomed the change in U.S. policy towards Cuba in 2014 as a sign that the Cold War had finally ended in the Western Hemisphere. The [Trump] administration’s retreat from the opening towards Cuba alarms our friends in the Americas and calls into question the enduring value of U.S. commitments . . . . This pattern of reckless animus towards diplomacy comes at a cost to the international reputation of the U.S. with no apparent gain for our interests abroad.”
  • “U.S. hostility [also] risks damaging the coming transition to a new Cuban government after President Raul Castro steps down in early 2018 by strengthening the hand of anti-American hardliners who oppose further economic opening on the island.”
  • “It damages Cuban-Americans and their families by impeding travel and the flow of funding associated with their visits, and those of other American visitors, which have allowed the Cuban private sector to gain traction. It also damages U.S. relations with our partners in the region, who have long criticized what they see as senseless hostility between the U.S. and Cuba. And finally, the Trump administration’s approach serves to widen the door to U.S. geopolitical adversaries, such as Russia and Venezuela, to advance their interests in Cuba and in the region.”
  • “Many of our professional diplomats, both those stationed in Havana and those at the State Department, oppose the dramatic downsizing of the U.S. and Cuban missions. While all are concerned for the safety of U.S. personnel, the health incidents seem to be in sharp decline. The U.S. diplomats in Havana are proud of the gains in advancing U.S. interests in Cuba, and they wish to continue to protect and promote them.”

EngageCuba, the leading bipartisan coalition promoting U.S.-Cuba normalization and reconciliation, said, “”The diplomats and their families suffering from unexplained health issues deserve answers. If the U.S. government is serious about solving this mystery, they shouldn’t make it more difficult to cooperate with the Cuban government during this critical time of the investigation. This decision appears to be purely political, driven by the desire of a handful of individuals in Congress to halt progress between our two countries. Expelling Cuban diplomats will not solve this mystery; it will not improve the safety of U.S. personnel, but it will make it harder for hundreds of thousands of Cuban-Americans to visit their families on the island. We hope that the driving forces behind this decision are comfortable with their Cuban-American constituents being unable to visit their loved ones.”

This EngageCuba statement followed the one it issued about the reduction of staffing of the U.S. Embassy in Havana. It said, “”The safety and security of all diplomatic personnel in Cuba, and anywhere in the world, is the first priority of our country. Whoever is behind these serious and inexcusable attacks on American diplomats must be apprehended and brought to justice. We must be careful that our response does not play into the hands of the perpetrators of these attacks, who are clearly seeking to disrupt the process of normalizing relations between our two countries. This could set a dangerous precedent that could be used by our enemies around the world.

EngageCUBA continued, “It is puzzling that the Trump Administration would use this delicate time in the investigation to advise Americans against traveling to Cuba, given the fact that none of these attacks have been directed at American travelers. We are also concerned for the Cuban people, who will be impacted by this decision. Halting the visa process in Cuba and discouraging Americans from traveling to Cuba will divide families and harm Cuba’s burgeoning private sector, civil society groups and efforts to improve human rights on the island.”

In conclusion, said EngageCUBA, “the U.S. and Cuba must redouble efforts to solve this mystery as quickly as possible in order to keep our embassy personnel safe and continue to move forward with strengthening relations between our two countries.”

A New York Times’ editorial similarly observed, “until there is concrete evidence about the source of the attacks, the Trump administration is wrong to expel Cuban diplomats from Washington. . . . Secretary of State Rex Tillerson’s explanation that Cuba should be punished for failing to protect American diplomats presumes that Cuba was at least aware of the attacks, which the [U.S.] has neither demonstrated nor claimed. “Furthermore, “Until something more is known, punishing Havana serves only to further undermine the sensible opening to Cuba begun under Barack Obama. President Trump has made no secret of his disdain for the détente — in June his government ordered restrictions on contacts with Cuba that have slowed the flow of visitors to the island, and last week the State Department warned Americans not to travel there, though there is no evidence that tourists are in danger. The sonic attacks on Americans are too serious to be used for cynical political ends.”

Geoff Thale, director of programs at the Washington Office on Latin America, a human rights advocacy group, said: “The United States is using the confusion and uncertainty surrounding these events as justification to take a big step backwards in U.S.-Cuban relations. This doesn’t serve our national interests, or our diplomacy, and it most certainly doesn’t do anything to help advance human rights or a more open political climate in Cuba. This is an unfortunate decision that ought to be reversed.”

Tom Emmer (Rep., MN), the Chair of the Congressional Cuba Working Group, stated, “The Administration’s decision last week to withdraw all non-essential personnel from our embassy in Havana was concerning but understandable to ensure the safety of our foreign service staff on the island. Unfortunately, yesterday’s actions do not seem to advance our efforts of identifying a cause or culprit behind these ‘sonic attacks.’ Instead of sending us back down a path of isolation, we must foster open lines of communication as we continue the investigation to determine who must be held responsible for these attacks on Americans. We cannot lose sight of the fact that an improved and sustained relationship with Cuba brings us one step closer to ensuring the stability and security of the entire Western Hemisphere.”

Senator Ben Cardin (Dem., MD), the Ranking Member on the Senate Foreign Relations Committee, more guardedly said, “Although . . . [the] decision to expel Cuban diplomats brings parity between U.S. and Cuban embassy personnel levels, I am concerned that it may also stoke diplomatic tensions and complicate our ability to conduct a thorough investigation of these attacks. The U.S. should not take actions that could undermine our bilateral relations with Cuba and U.S. policies aimed at advancing our strategic national interests in the hemisphere.”

Although the most recent Cuba Travel Warning from the State Department strongly discouraged Americans from traveling to Cuba, “several cruise lines operating ships in and around Cuba have released statements pushing back on the warning, noting that no tourists have been harmed in these incidents.” Moreover, “several cruise companies had already announced significant expansion of their Cuba operations before the warning was issued.”

Approval of Expulsion of Cuban Diplomats[2]

This latest U.S. announcement is what was recommended by a Wall Street Journal editorial and by U.S. Senator Marco Rubio, who immediately tweeted that this was “the right decision.” His subsequent press release Rubio stated, “I commend the US State Department for expelling a number of Cuban operatives from the US. No one should be fooled by the Castro regime’s claim it knows nothing about how these harmful attacks are occurring or who perpetrated them. I have called on the State Department to conduct an independent investigation and submit a comprehensive report to Congress. . . . All nations have an obligation to ensure the protection of diplomatic representatives in their countries. Cuba is failing miserably and proving how misguided and dangerous the Obama Administration’s decisions were.”[7]  He added, ““At this time, the U.S. embassy in Havana should be downgraded to an interests section and we should be prepared to consider additional measures against the Castro regime if these attacks continue.”

This news should also be welcomed by the Washington Post, whose recent editorial continued this newspaper’s hard line about U.S.-Cuba relations by refusing to believe Cuba’s denial of knowledge about the cause and perpetrator of the “attacks” on U.S. diplomats in Havana. It asserts “recent events suggest that the unpleasant reality of Fidel Castro’s dictatorship remains in place” and that “For decades, the Cuban state security apparatus has kept a watchful eye on everything that moves on the island, and informants lurk on every block. It begs disbelief that Cuba does not know what is going on. Unfortunately, this kind of deception and denial is all too familiar behavior.” Therefore, if “Cuba sincerely wants better relations with the United States, it could start by revealing who did this, and hold them to account.”[8]

This suspicion of Cuban involvement in the attacks received some corroboration by the Associated Press, which reports that six unnamed sources say that “many of the first reported cases [of attacks] involved intelligence workers posted to the U.S. embassy.” Moreover, of “the 21 confirmed cases, American spies suffered some of the most acute damage, including brain injury and hearing loss that has not healed.” U.S. investigators, according to the AP, have identified “three ‘zones,’ or geographic clusters of attacks, [which] cover the homes where U.S. diplomats live and several hotels where attacks occurred, including the historic Hotel Capri.” Both the State Department and the CIA declined to comment to the AP. This report undoubtedly will fuel efforts to overturn normalization of relations between the two countries.[9]

Conclusion

I agree with Trinkunas and Feinberg, the recent decisions about Cuba by the Trump Administration do exactly what our adversaries in the region seek to provoke: empower anti-American hardliners in the Cuban regime opposed to stronger bilateral relations between the two countries; damage Cuba’s upcoming transition to a new government after Raúl Castro leaves the presidency early next year; and hurt and weaken the privately-operated and progressive segments of the Cuban tourism sector. In addition, those decisions weaken U.S. relations with most other governments in Latin America while damaging many Cuban and Cuban-American families seeking to maintain and increase their ties. Those decisions also allow Russia, China, Iran and Venezuela, all of which are hostile to the U.S., to deepen their influence in Cuba and the broader Caribbean Basin.

I must also note my surprise that at the two recent State Department press briefings no journalist followed up on the previously mentioned Associated Press report that the initial U.S. diplomats who reported medical problems were U.S. intelligence agents to ask whether that report was valid and other related questions.

All who support the continuation of U.S.-Cuba normalization and reconciliation should oppose these moves by the Trump Administration.

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[1] Trinkunas & Feinberg, Reckless hostility toward Cuba damages America’s interests, The Hill (Oct. 5, 2017);  EngageCuba, Statement on U.S. Expulsion of Cuban Diplomats in Washington (Oct. 3, 2017); Engage Cuba, Statement on U.S. Cuts to Havana Embassy & Travel Alert (Sept. 29, 2017); Editorial, Cuba and the Mystery of the Sonic Weapon, N.Y. Times (Oct. 5, 2017) (this editorial also noted that the reported medical problems “are real and serious” and that “Cuba’s repressive government must be the prime suspect”); WOLA, U.S. Plan to Expel Two-thirds of Cuban Embassy Needlessly Sets Back U.S.-Cuba Relations (Oct. 3, 2017); Emmer Statement on Administration’s Decision to Remove Cuban Diplomats from Washington, D.C. (Oct. 4, 2017); Cardin Questions Expulsion of Cuban Diplomats amidst Attacks on U.S. Personnel in Cuba (Oct. 3, 2017); Morello, U.S. will expel 15 Cuban diplomats, escalating tensions over mystery illnesses, Wash. Post (Oct. 3, 2017); Gomez, U.S. orders 15 Cuban diplomats to leave; Cuba blames Washington for deteriorating relations, Miami Herald (Oct. 3, 2017); Glusac, Despite Travel Warning, Cruises to Cuba Continue, N.Y. Times (Oct. 5, 2017).

[2] Rubio Press Release, Rubio commends State Department’s Expulsion of Cuban Operatives (Oct. 3, 2017); Editorial, Cuba plays dumb in attacks on American diplomats, Wash. Post (Sept. 30, 2017); Assoc. Press, APNewsBreak: Attacks in Havana Hit US Spy Network in Cuba, N.Y. Times (Oct. 2, 2017).

 

United States and Cuba Hold Economic Discussions

On September 12 the United States and Cuba held its Inaugural Economic Dialogue in Washington, D.C.[1]

The goal of the Dialogue is promoting long-term bilateral engagement on a wide range of topics as part of the ongoing normalization process. The delegations discussed trade and investment, labor and employment, renewable energy and energy efficiency, small business, intellectual property rights, economic policy, regulatory and banking matters, and telecommunications and internet access. Both parties agreed to continue the dialogue and, under its auspices, convene working groups to continue technical discussions in the coming months.

The U.S. delegation was co-chaired by Assistant Secretary of State for Economic and Business Affairs Charles Rivkin and U.S. Department of Commerce Deputy Assistant Secretary for the Bureau of Industry and Security Matthew Borman. The Cuban delegation was headed by Ministry of Foreign Trade and Foreign Investment Vice Minister of Commercial Policy Ileana Nunez Mordoche.

In the meantime, a U.S. newspaper, InCubaToday, reports that the Cuban military’s Business Administration Group, GAESA, “has grown dramatically since the declaration of detente between the U.S. and Cuba on Dec. 17, 2014.”[2] GAESA operates through at least the following branches or subsidiaries:

  • Its tourism office, Gaviota, “has 62 hotels with 26,752 rooms across Cuba, pulling in some $700 million a year from more than 40 percent of the tourists who visit Cuba” and “is in the midst of a hotel building spree that outpaces projects under control of nominally civilian agencies like the Ministry of Tourism.”
  • Its Cimex has “retail stores, auto-rental businesses and even a recording studio among its holdings.”
  • Its “retail chain, TRD, has hundreds of shops across Cuba that sell everything from soap to home electronics at prices often several times those in nearby countries.”
  • “The military-run Mariel port west of Havana has seen double-digit growth fueled largely by demand in the tourism sector.”
  • “The armed forces this year took over the bank that does business with foreign companies, assuming control of most of Cuba’s day-to-day international financial transactions.”

According to the InCubaToday article, the Cuban “armed forces are widely seen in Cuba as efficient, fast-moving and relatively unscathed by the low-level payoffs and pilferage that plague so much of the government.” A similar observation was offered by Richard Feinberg of the Brookings Institution: “GAESA is wisely investing in the more international — and more lucrative — segments of the Cuban economy. This gives the military technocrats a strong stake in a more outwardly oriented and internationally competitive Cuba deeply integrated into global markets.”

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[1] Department of State, United States and Cuba Hold Inaugural Economic Dialogue in Washington, D.C. (Sept. 12, 2016); Cuba Foreign Ministry, Celebrate Cuba and the United States first bilateral economic dialogue, Granma (Sept. 12, 2016).

[2] Rodriguez, Amid post-détente tourism boom, Cuban military expands its economic empire, InCubaToday (Sept. 9, 2016).