David R. Henderson  

Two Cheers for Obama on Cuba

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As is probably known to virtually all readers of this blog, President Obama announced today his steps to normalize relations with Cuba. It is long overdue and finally we have a President willing to do something about it.

I have written about these issues over the years.

On Econlog, I've written here, here, and here.

I also wrote a more extensive case for ending the Cuban embargo here and here.

For a more complete report, see here.


Comments and Sharing


CATEGORIES: International Trade




COMMENTS (20 to date)
Ryan writes:

I never understood how ending the political structure in Cuba was to be achieved by no diplomatic relations and severe economic restrictions. Wouldn't the political elite take what limited resources the nation has and let the rest suffer? I'm not a fan of many things President Obama stand for, but today he seems to have found a good fight to fight for.

Effem writes:

Americans will probably turn it into Cancun withing 10 years. Although I've never been to Cuba, so I can't say if that's better or worse.

AMW writes:

Why are you withholding the third cheer?

David R. Henderson writes:

@Effem,
Americans will probably turn it into Cancun withing 10 years.
I doubt that, but if that were true, that would be wonderful, both for Americans and for Cubans.
@AMW,
Why are you withholding the third cheer?
There are still substantial restrictions, including a ban on Americans going as tourists.

john hare writes:

Friends of mine have been to Cuba as missionaries and Cancun as tourists. The poor of Cancun are comparable to the average Cuban in living conditions according to them. The ones serving the tourists however, live far better.

Marc Joffe writes:

On withholding the third cheer: I agree that a more complete removal of travel and trade restrictions would have been better, but I wonder how far Obama could have gone before being accused of abusing executive authority. It seems, unfortunately, that most senators who have made statements oppose this move.

Lorenzo from Oz writes:

The hostile commentary one sees elsewhere seem to be absolutely indifferent to 50 years of not working (i.e. the regime has continued). It is all about signalling, apparently. Which is a very bad reason to continue a policy that has not worked for 50 years.

Peter H writes:

Prof. Henderson, Obama is now actively calling for repealing the rest of the restrictions, but since they're a statute, can't do it by executive fiat.

He's doing as much as a President could possibly do in this case. He gets all three cheers from me.

Ruy Diaz writes:

I'm amazed you think ending the trade embargo will be a boon to free trade. The economic restrictions are internal; the vast majority of the economy is centrally planned, with the few profitable sectors being controlled directly by the military.

You know nothing about Cuba, and yet write so confidently.

David R. Henderson writes:

@Marc Joffe and Peter H,
Thank you. If, indeed, Obama is doing all he can do without a statute, then I agree that he deserves that third cheer. I’m not a fan of executive power, which he, like many presidents before him, has way overused.
But are you sure that he can legally relax restrictions on all those other travel regulations but can’t relax restrictions on travel for tourism?

Brian writes:

I'm all for ending the Cuba embargo, so Obama deserves some cheers, but maybe only one, for taking a step toward normalizing relations.

Think in terms of opportunity costs. Does this announcement make Congress more or less likely to pursue further relaxing of the embargo? I think less.

In addition, what did we get out of the deal? We likely could have negotiated the prisoner swap without going farther. Obama basically gave away the normalization of relations as a freebie. Why couldn't he negotiate some concessions on Cuba's part? Basically, I see this as yet another example of Obama's ineptitude at negotiating deals and getting value for the U.S.

On the other hand, if it leads to reciprocation on the part of Cuba in the future, it will be of more value than it appears right now.

David R. Henderson writes:

@Brian,
Does this announcement make Congress more or less likely to pursue further relaxing of the embargo? I think less.
You could well be right. But this step in itself is progress.
In addition, what did we get out of the deal?
The ability to travel there. That’s huge. Although I don’t think Obama needed the Cuban government in on this. This was a relaxation of a U.S. government regulation.
Why couldn't he negotiate some concessions on Cuba's part?
Interesting thought. What would you suggest?

Ed Hanson writes:

Here is a suggestion.

Have Cuba pay for the private property of Americans which the regime confiscated without compensation. This is something Cuba could have done years ago and it would have resulted in end of the embargo. I suspect that those who lost their property would accept a much reduced value.

For you Professor, true test of the Libertarian dedication to natural right of private property.

Ed

Methinks writes:

"but I wonder how far Obama could have gone before being accused of abusing executive authority"

Sadly, like most presidents, it appears that he's only willing to risk being accused of abusing executive authority when acting in the interest of tyranny.

Nathan W writes:

It is one of the most obvious signs of hypocrisy that the USA has long been willing to do business with China but continues to have basically no formal relations with Cuba.

Presumably a lot of this has to do with relevant informational inputs coming from people who didn't like them apples that they got served up some time in the past, grudges, believing their own propaganda, etc. Basically, American influence was predominant in Cuba and then there was a revolution, and the response was 50 years of economic sanctions for trying to go their own way. Bastion of freedom and democracy indeed. In many cases, it will be far more difficult to manipulate an unelected leader than an election, and I believe that this fact has been exploited to significant negative effect on the reputation of the West and even the concept of democracy in general, as viewed through the limited electoral democracy which underlies the supposed legitimacy of many Western-backed governments. No wonder that bothers some people, a lot.

vikingvista writes:

It would be sufficient for the US Federal government to stop persecuting Americans who want to trade or visit with Cubans.

Nobody, including the bullies in the US government, should want to have *any* relations with the murderous looting thugs who call themselves the rules of Cuba.

Brian writes:

David, thanks for your comments and question.

"But this step in itself is progress."

In addition, what did we get out of the deal?
"The ability to travel there."

Agreed, that's why I'd say one cheer is in order. These are steps in the right direction.


"That’s huge."

Well, let's not exaggerate. Easing of travel restrictions will be good for those who want to visit family and a relatively small number of tourists. Open trade with Cuba would be an order of magnitude or two more important.


"What would you suggest?"

The Cuban government under the Castros confiscated private property and established a repressive regime. A small step in either compensation or openness plus a formal commitment to further progress in both areas should have been a minimum condition for any concessions beyond the prisoner exchange.

khodge writes:

I'm all for it and have long observed that the Cuban embargo has been counterproductive.

On the other hand...

Is it really necessary for every decision made by Obama be an opportunity for grand-standing? How much damage, for instance, was done to the intelligence community by turning the capture of Osama bin Laden into a near real-time media event? How hard would it be to fracture the opposition to his Cuban initiative or his illegal alien amnesty initiative with just a little politicking? As the president of the US he should be the best politician in America, yet his actions show an unwillingness to exercise those precise skills in a time and circumstance that begs him showcase the best he has to offer.

David R. Henderson writes:

@Ed Hanson,
Have Cuba pay for the private property of Americans which the regime confiscated without compensation.
Good suggestion, if by “Cuba” you mean Fidel Castro out of his hundreds of millions. But not if you mean the Cuban people, whom Communism has already punished enough. But the Cuban government could return the (unfortunately heavily depreciated) assets.

LD Bottorff writes:

Gee, I hate to agree with you, but I'm pretty sure that you're right. The plight of the Cuban people is not likely to get worse, despite what Senator Rubio and others claim.

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