Tag Archives: economics

The Take (2004)

Famed Canadian activist and author Naomi Klein and her husband Avi Lewis investigate Argentina’s young worker cooperative movement in this revelatory 2004 documentary film. The Take offers a look into what can happen when working class folks band together in the face of economic disaster and seize their own destinies. Margret Thatcher’s infamous claim that “there is no alternative” to neoliberal capitalism is critically undermined by this groundbreaking film. 

View the film here: https://www.youtube.com/watch?v=Sug7bWxTuSo 

(Be sure to switch on English subtitles by clicking the video’s closed captions [cc] option if you aren’t a Spanish speaker.)

  

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Puerto Rico: Crisis Point

In a bid to sure up their island’s dire fiscal situation and address its $72 billion in outstanding public debt, Puerto Rican lawmakers narrowly passed a bill on Tuesday to significantly raise taxes on the territory’s inhabitants. The controversial legislation specifically increases Puerto Rico’s sales tax from 7 to 11.5 percent, the highest in the United States, and introduces a new 4 percent tax on professional services. If the bill is ultimately signed by Puerto Rico’s governor Alejandro Garcia Padilla, which seems likely given his avowed pro-austerity views, then the tax hikes will be implemented within the year.

Tuesday’s news comes after an announcement from San Juan that the government will be closing nearly 100 schools and 20 public agencies in the near future in order to save money.

Puerto Rico is in the midst of a crippling 8 year recession, characterized by devastating unemployment and poverty levels and unprecedented population flight. Critics of Tuesday’s bill decried the fact that the burden of the San Juan’s latest austerity scheme falls squarely on Puerto Rican consumers; they argue that the new taxes will seriously undermine already lagging economic demand on the island and ultimately deepen and prolong Puerto Rico’s longstanding recession, making it impossible for the territory to get out from under its smothering debt in the longterm.

Proponents of the legislation, on the other hand, say that such tax increases are desperately needed in order to stave off a government shutdown in the short-term. Foreign creditors, whose ongoing financing of the island’s government has become indispensable, with vested interests in Puerto Rico’s future solvency have long threatened to pull out of the U.S. territory in the absence of substantive austerity measures there. Policy makers in San Juan are hoping that the $1.2 billion in revenue that the new taxation is expected to yield will calm creditors abroad and attract new investors on the international bond market.

While credit rating agencies’ repeated downgrades of Puerto Rican treasury bonds have led many to reconsider their fledgling investments in the territory, one institution is actually seemingly eager to go all in on the struggling island.

You might be wondering who in their right mind could possibly want to purchase chunks of Puerto Rico’s behemoth and seemingly insurmountable debt. Why it’s our old friends over at Goldman Sachs; you know, the infamously predatory Wall Street banking conglomerate, and Federal Reserve junkie, that Matt Taibbi once hilariously, and poignantly, dubbed “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Well, according to recent article from Bloomberg Business, Goldman is currently gobbling up Puerto Rican bonds at breakneck speed, even as other investors flee for the hills. That a firm as historically and continually immoral and incompetent as Goldman Sachs is tripping over itself to buy up junkish Puerto Rican bonds should unnerve everyone. There’s a scam afoot here ladies and gentlemen, and you and I are the marks… again.

We’ve seen this movie before, and we know how it ends. If past is pretext, and -considering the U.S. government’s failure to break up Wall Street’s seemingly omnipotent “Too Big To Fail” banking cartels and fundamentally reform how it regulates and subsidizes such firms in the wake of the 2008 crash- it almost certainly is, then American taxpayers will get stuck bailing out Puerto Rico’s bondholders if and when the island eventually goes belly up fiscally. But by that point, the sharks at Goldman will have presumably already swam off into the Caribbean sunset, having sold off most of their toxic Puerto Rican assets to unwitting investors and simultaneously made lucratively risky and cynical bets against those same sales long before the island’s financial collapse. Wall Street will have transformed another crisis into a golden opportunity for itself, and the dismantling of Puerto Rican society will continue apace.

  

“Free Trade” and the Consequences of Neoliberal Globalization.

Thanks to the office of Senator Elizabeth Warren for documenting some of the blatant failures of U.S. trade policy in recent decades. Forming an appreciation for the history of this issue is necessary when attempting to understand the present dismal state of U.S. trade with the rest of the world.

President Obama may tout the new Trans-Pacific Partnership (TPP) as a different kind of trade deal, but experts were quick to dub it “NAFTA on steroids.” The disturbing fact that the adminstration is fighting to negotiate the massive agreement in secret, using so-called “fast-track” authority, is indicative of a certain contempt for democracy among some American elites. If the TTP is as good a deal as Obama says, why not open it up to public scrutiny and debate?

It is absolutely vital that working class populations on the Asian and American sides of the Pacific unite against the radical expansion of corporate power that is the TPP. They must educate themselves and mobilize politically in order to compel their governments to reject the agreement. Only by fundamentally transforming our trade priorities -by eliminating transnational monopolies, protecting national and food sovereignty in developing countries and empowering local economies and labor rights internationally- can we create a sustainable and more just global economy.

View Warren’s report here: http://big.assets.huffingtonpost.com/WarrenReport.pdf

   

The New Cooperative Economy in Cuba

In an effort to jump start Cuba’s sluggish economy, the administration of President Raul Castro initiated a series of largely market-oriented economic reforms several years ago. These changes -dubbed “The Guidelines on Economic and Social Policy for the Party and the Revolution” when they were first approved by the Cuban Sixth Communist Party Congress in 2011- are designed to gradually shrink Cuba’s extensive, but hard-pressed, public sector and promote the development of more dynamic private enterprise in its place.

Like the Chinese regime before it, the Cuban government is attempting to liberalize its country’s economy without abandoning the core socialism of Cuba’s official state ideology and the successful aspects of their country’s half-century revolutionary experiment -most notably their popular and internationally lauded healthcare and education systems. They’re wary of the experiences of post-Soviet states like Russia, where a wholehearted and hasty embrace of dislocating capitalist reforms in the 1990s gave rise to a sort of oligarchic gangsterism that experts have since dubbed a “kleptocracy.” 

“The model is different from China and Vietnam,” a Cuban economist said of the reforms. “We have the advantage of learning from their experience.”

At the center of Cuba’s model for reform is a dedication to the expansion of private cooperatives. Cooperative businesses are generally for-profit enterprises which are collectively owned and democratically managed by the workers who staff them. This arrangement differs from the hierarchical and largely external control and ownership of government bureaucrats (in the case of statist business models) and shareholders/managerial staff (in capitalist business models). Like other private firms, they succeed or fail largely based on the dictates of the market. Importantly, cooperative’s decentralized and direct internal management and ownership often yield enhanced productivity, wages and longevity and promote notions of solidarity and equity. In this way, cooperatives businesses form a viable middle path between the extremes of fully market and state-based economic models, a path that the Cuban government is currently attempting to chart.

Prior to the implementation of 2011’s reforms, Cuban cooperatives were relegated to the agricultural sector; last year, agricultural coops were responsible for 70 percent of Cuba’s farmed land. The Castro regime’s new liberalizing program opens up most of the rest of Cuba’s economy to private -though individually state approved and monitored- cooperative enterprises. Today, Cuba is home to nearly 500 non-agricultural cooperative businesses in a whole range of sectors -including restaurants, cafes, wholesale and retail produce markets, construction firms, manufacturers of clothing and furniture, bus companies and car washes, recycling operations, body shops, computing and accounting services, beauty salons, night clubs and other industries.

A new 21-member cooperative -a formerly state-owned Havana-based nightclub called Karabali- has seen its workers’ salaries triple since going private in late 2013.

“We have more of a sense that this belongs to us,” Heydell Alom, an employee-owner of Karabali told reporters. “Here no one steals. This place belongs to everyone. We earn depending on what we can accomplish without any problems from the government.”

Despite the success stories of new firms like Karabali, the burgeoning Cuban cooperative movement faces a number of serious challenges. Persistent state encroachment, uneven and inconsistent government policy and limited access to national and international markets -owing to political factors like the U.S.’s trade embargo- combine to stifle the growth of new Cuban cooperatives. These obstacles -and others- will need to be surmounted if the full potential of the Cuban cooperative movement is to be realized.



       

                   

Venezuelan Revolution on the Horizon?

On February 5, the German Embassy in Caracas, Venezuela issued an ominous warning to Germans living in or visiting that country. The widely circulated declaration was written by Dr. Jörg Polster -the Chargé d’Affaires at the German Embassy- and urged German nationals in Venezuela to begin stockpiling food, drinking water, medicine and other vital provisions in preparation for a possible political crisis in Venezuela in the near future.

The statement went on to say, “We shouldn’t take it for granted that we will have access to electricity or internet services. The validity of passports and identity documents should be verified regularly.”

The German Embassy’s cryptic warnings elicited suspicion and alarm from certain corners of the Venezuelan media, with many wondering whether German officials had based their advisory on information about a specific potential event or development that the public was not aware of.

Moritz Jacobshagen, Secretary of Cultural and Political Matters at the embassy, was quick to assuage such concerns on a Venezuelan radio show; he explained, “Many people on Twitter are saying that we are on the brink of evacuating German citizens, this isn’t true… This statement is purely routine.”

Venezuelan concerns over the intentions of foreign governments operating in their country are not unfounded. The anti-government protests currently gripping Venezuela are partially fueled by regular subsides from the U.S. government. In 2014 alone, President Obama publicly allocated at least $5 million dollars for Venezuelan political opposition activities, a figure that Mark Weisbrot argues is only the “tip of the iceberg” in terms of the U.S.’s accumulated material support for anti-government forces in Venezuela over the past 16 years -which he says amounts to hundreds of millions of dollars.

Domestic dissatisfaction with the socialist government of Venezuelan President Nicolas Maduro is focused on soaring inflation and shortages of basic consumer goods in Venezuela -two problems which opposition groups blame on government mismanagement. The Maduro regime points to economic sabotage by anti-government forces both within and outside of their country as the cause of these issues, citing the seizure of 1.5 million diapers, 360,000 kilos of detergent, 277 thousand units of soap, and 14,000 units of baby formula and many other hoarded goods at a private Venezuelan warehouse last month as evidence of such sabotage.

Despite these issues, working class and poor Venezuelans have experienced significant gains in their living standards since their late president, Hugo Chavez, nationalized Venezuela’s oil industry and began implementing social reforms in the early 2000s. Chavez’s handpicked successor Maduro’s wide margin of victory in the much scrutinized -but throughly legitimate and transparent– 2013 presidential election was largely predicated on these gains.

Still, President Maduro’s troubles show no signs of abating. Besides inflationary and product shortage problems, his country’s economy is currently reeling from a recent precipitous drop in global oil prices -a drop which Andrew Topf of OilPrice.com says may stem from politically-motivated collusion between the U.S. and Saudi Arabian governments. Given oil-wealthy Venezuela’s heavy reliance on petrol exports, these shocks could end up exacerbating Venezuelan political unrest and confirming the German Embassy’s fears.

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Castro Breaks His Silence

Fidel Castro, revolutionary and retired Cuban political leader, has finally weighed in on the recent resumption of diplomatic ties between his country and the United States. In a letter commemorating the 70th anniversary of his admission to the University of Havana, he tacitly endorses the breakthrough, but was sure to affirm his own personal mistrust of the U.S. government.

The full contents of the letter can be viewed here: http://en.granma.cu/cuba/2015-01-27/for-my-federation-of-university-students-classmates

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U.S.-Cuba Trade: a Trojan Horse?

In an interview with the Tampa Bay Times this week, U.S. Secretary of Agriculture Tom Vilsack discussed some of the lucrative opportunities for American business offered by the recent easing of relations between the U.S. and Cuban governments. Naturally, Vilsack is primarily interested in promoting the sale of American agricultural and food products to the Cuban population.

Vilsack argued that American agribusiness would profit greatly from the lifting of the U.S.’s longstanding trade embargo on Cuba; he specifically said of Cuba, “It’s 11 million people, a $1.7 billion market, and we really ought to be dominating that market.”

The secretary tellingly spent less time detailing the impact such a development could have on the Cuban population. Although trade with the U.S. would presumably give Cuban consumers access to relatively cheap, mass-produced American food products, it may also make it all but impossible for many rural Cubans to afford those new foodstuffs -or anything else for that matter- by undermining the Cuban agricultural sector.

Historically, after other underdeveloped and mostly rural countries ratified “free trade” agreements with the U.S., their previously thriving agricultural sectors were unable to compete with highly subsidized American agribusiness and deteriorated as a result. The implementation of the North American Free Trade Act (NAFTA) in 1994, for example, drove some two million rural Mexicans from their farms after it introduced cheap American corn into the Mexican food market. In Haiti, 50 percent of the food supply is now imported -mostly from the U.S. and often in the form of humanitarian aid- thanks to a series of harmful trade deals signed in the late 1990s that decimated rice production there. Both Mexico and Haiti -along with a number of other underdeveloped rural countries in the global south- saw sharp spikes in their unemployment rates and steep declines in the average incomes of their populations after signing “free trade” deals with the U.S.

If past is pretext, Cuba will be similarly negatively impacted by any trade deal that subjects its relatively insulated and highly regulated food market to cheap American agricultural products. In fact, several factors make Cuba especially vulnerable in this regard. While agriculture accounts for only around four percent of Cuba’s gross domestic product (GDP), it employs roughly a fifth of the country’s population. Any large-scale shocks to the Cuban agricultural sector could seriously endanger the Cuban government’s ability to continue to guarantee the employment of those farmers. In addition, rice and poultry -two staples of Cuban farming- would be specifically endangered by trade with the U.S. as both of these products are mass-produced quite cheaply by American agribusiness. The Cuban government should consider these realities -as well as the experiences of other nations that have undertaken trade with the U.S.- when negotiating any future agreements with their northern neighbor.

For the most part, the lifting of the U.S. trade embargo on Cuba would be highly beneficial to the Cuban people. In the area of agricultural trade however, this does not appear to be the case.

Source(s): 1) Jeff Harrington “Agriculture secretary says Cuba trade could grow by hundreds of millions” Tampa Bay Times (January 29, 2015): accessed January 31, 2015 http://www.tampabay.com/news/business/agriculture/agriculture-secretary-says-cuba-trade-could-grow-by-hundreds-of-millions/2215620
2) Britannica Kids accessed January 31, 2015 http://kids.britannica.com/comptons/article-229038/Cuba
3) Laura Carlsen “Under Nafta, Mexico Suffered, and the United States Felt Its Pain” The New York Times (November 23, 2013): accessed January 31, 2015 http://www.nytimes.com/roomfordebate/2013/11/24/what-weve-learned-from-nafta/under-nafta-mexico-suffered-and-the-united-states-felt-its-pain
4) Julie Lévesque “Haiti, Five Years After the Earthquake: Fraudulent Reconstruction Under Military Occupation” GlobalResearch (January 12, 2015): accessed January 31, 2015 http://www.globalresearch.ca/haiti-5-years-after-the-earthquake-fraudulent-reconstruction-under-military-occupation/5424139

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U.S.-Cuba Developments

According to U.S. officials, American tourists in Cuba will be able to take advantage of several changes to U.S.-Cuban travel and trade regulations starting tomorrow. These specific changes come in the wake of recent announcements by both the U.S. and Cuban governments favoring diplomatic and economic re-engagement after more than 50 years of hostility.

Henceforth, visitors to Cuba from the U.S. will finally be able to utilize credit and debit cards in the Caribbean nation, and they’ll no longer face limits on the amount they’re able to spend there. In a move that many argue will effective end the U.S.’s ban on Cuban cigars, American tourists will now be free to bring up to $100 worth of alcohol and tobacco home after trips to Cuba.

U.S. firms and investors will find it easier to invest in Cuban small businesses and agricultural operations thanks to several regulatory changes. Additionally, in a move that should help to boost Cuba’s low internet connectivity rate, American telecommunications conglomerates will have easier access to the Cuban marketplace; this in addition to other changes making it easier for U.S. firms to sell smartphones and certain computer software in Cuba.

Though a formal ban on ordinary American tourism to Cuba will remain despite Friday’s changes, the new regulatory alterations do seriously undermine restrictions on U.S. travel there. As long as American citizens cite one or more of the U.S.’s government’s dozen new pre-approved reasons for travel to Cuba, they can now make trips to the island nation without official permission. This change is sure to fuel Cuba’s growing tourism industry by increasing the annual number of American visitors to Cuba, which last year stood at around 170,000 -each of which had to be specifically approved for travel to Cuba by the U.S. government.

The new pre-approved reasons for American travel to Cuba are the following:
1. Family visits
2. Official government business
3. Journalistic activity
4. Professional research or meetings
5. Educational activities
6. Religious activities
7. Public performances, athletic competitions, exhibitions
8. Support for the Cuban people
9. Humanitarian projects
10. Activities for private foundations or research institutes
11. Exportation, importation or transmission of information
12. Certain authorized export transactions

Importantly, the U.S.’s overall trade embargo on Cuba will remain despite these marginal changes. Only the U.S. congress can fully end that policy through a vote. With right-wing legislators like Senator Marco Rubio publicly and vehemently condemning President Obama’s recent moves toward limited Cuban re-engagement, such a development seems unlikely. Even so, tomorrows changes will make it easier for several powerful American special interests -most notably finance and telecommunications- to do business in Cuba. Hopefully, this -in addition to changes making U.S. Cuban travel easier- will enhance the lives of average Cubans and make further regulatory alterations more palatable to hardliners in both countries.

Source(s): 1) “US-Cuba travel and trade: New rules start on Friday” BBC (January 15, 2015): accessed January 15, 2015 http://www.bbc.com/news/world-latin-america-30836679

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The Cuban Question

Last week, President Obama announced a reorientation of the U.S. government’s policy with respect to Cuba. In a subsequent press release from the White House Press Office, the administration laid out several specific deviations from the U.S.’s more than half-century long failed attempt to diplomatically and economically isolate and destroy Cuba. Couched in language stressing the need to empower the Cuban people and expand democracy in the Caribbean nation, the Press Office’s statements promised to normalize heretofore nonexistent diplomatic relations between the U.S. and Cuba, ease American restrictions on travel to and trade with Cuba, and facilitate the expansion of telecommunications and internet access on the island (among several other things). The Cuban government has responded to the U.S.’s government’s policy shift with guarded optimism, promising to embrace the American government’s change in attitude (and the economic opportunities that come with it) while maintaining the basic character of their state capitalist (what they call “communist”) regime. The degree to which both governments will ultimately follow through on their respective promises remains to be seen, but already several imprisoned spies have been exchanged between the two countries, a good sign.

For a serious examination of the events currently transpiring between the U.S. and Cuba to take place, those events must first be fully contextualized. Since the Spanish-American War (in which the Cubans, with the help of the American military, gained their independence from Spain), the American government has sought to transform Cuba into a quasi-colony. For a long time, they were highly successful: by the 1950s, Cuba, under the rule of U.S. backed dictator Fulgencio Batista, had been transformed into a virtual plantation/casino client nation. 85 percent of Cuba’s arable land had been bought up by American companies and investors and Cuban tenant farmers languished under a brutal situation of semi-serfdom. In Havana, American celebrities partied in gaudy hotels and casinos and gangsters ran drug, gambling, and other vice operations there with impunity. Batista imprisoned and/or killed any Cubans who sought to organize and resist his rule. By early 1959 though, a nationalist guerrilla movement lead by the revolutionary Fidel Castro had (after a bloody and protracted civil war) driven Batista from power. After purging Cuba of Batista’s henchmen (with many fleeing or exiled to Miami in the U.S.), Castro installed himself as the nation’s de-facto leader and set about cleaning up the now fully independent island nation.

Initially, the U.S. government cautiously recognized the new regime, but that amicability turned to bitter contempt after Castro unveiled an ambitious land reform program in May of 1959. Similar to other nationalist land reform initiatives in post colonial nations in that period, the new plan finally broke up Cuba’s large and mostly foreign-owned agricultural estates and distributed them among native Cuban small-farmers. Though the plan promised compensation to the displaced American companies and investors that had lost their ill-gotten Cuban property, the U.S. government was livid over Castro’s audacity and the CIA immediately began plotting to topple the new regime in Havana. In the summer of 1960, President Eisenhower unprecedentedly declined to purchase 700,000 tons of Cuban sugar (which was, along with tobacco, the Caribbean nation’s staple crop) and the Cuban economy was crippled. Rather than bending to the American’s will and rolling-back his reforms, Castro turned to the Soviet Union, which promptly began buying Cuban sugar. Castro then nationalized all American owned property in Cuba, and the U.S. quickly declared a Cuban embargo which was to last for more than half a century.

The ensuing decades were tense to say the least. In 1961, the CIA staged an unsuccessful invasion of Cuba at the Bay of Pigs, utilizing U.S. trained pro-Batista Cuban exiles as amphibious solders. Rather than rising up in support of the attacking exiles (as the CIA illogically assumed they would), the Cuban population rallied around Castro’s regime and the humiliated Americans were beaten back. By this point, Castro felt compelled to enter into a strategic military alliance with the Soviet Union to protect against further American incursions. The Soviets seized on the opportunity and began (in a move designed to counteract an earlier nuclear buildup by the U.S. in Eastern Europe) transporting nuclear missiles to Cuba. The Americans soon uncovered evidence of the Soviets’ Cuban missile deployment and immediately blockaded the Caribbean nation. Subsequent backroom diplomatic wrangling between the Soviets and the Americans only narrowly averted a nuclear disaster. Ultimately, the Soviets (in an action that cost Nikita Khrushchev his political career) agreed to remove their missiles from Cuba in exchange for a promise from the Americans to secretly remove their own (outdated) missiles from Turkey. The U.S.’s blockade of Cuba was lifted, but their embargo on the nation remained.

The subsequent history of U.S.-Cuba relations takes on a David and Goliath-like appearance, with the Castro regime surviving an almost comically relentless CIA campaign to dislodge or kill him. The agency sponsored repeated terrorist attacks by anti-Castro Miami Cuban exiles into Cuba (most notably the activities of Luis Posada Carriles) and attempted to assassinate Castro more than six hundred times. All the while, the U.S. government labeled Castro’s regime an implacable Cold War enemy, failing to mention that they themselves had unnecessarily and vindictively forced him into the embrace of the Soviets. Still, the Cubans preserved. Until the fall of the Soviet Union in 1991 that is, when Cuba lost its primary trade partner and the Cuban economy stagnated. At this time, Castro was forced to implement several economically liberalizing reforms in Cuba, but, shutout from a major portion of American dominated global trade as a result of the U.S.’s embargo, the country continued to struggle. It wasn’t until the new millennium, when the so-called “pink tide” began sweeping anti-American leftist governments into power throughout Central and South America (most notably Hugo Chavez in Venezuela) that were sympathetic and open to trade with Cuba, that conditions began to seriously improve in Cuba. Today, partially in an effort to oust Chavez’s successor in Venezuela, Nicolas Maduro, by driving a wedge between Cuba and Venezuela, the U.S. government is finally rethinking their Cold War era strategy of Cuban suffocation; hence the current move toward re-engagement.

Moving forward, the Cuban government (now headed by the ailing Fidel’s brother Raul Castro) will need to strike a delicate balance in dealing with the U.S. Undoubtedly, they are mindful of the fates of so many developing nations who, during their own integration into the U.S. dominated global marketplace, were compelled by various trade and aid agreements/institutions to sell off their socialist programs for privatization and raiding by foreign speculators. In Cuba’s case, the maintenance of the Castro government’s hugely successful public healthcare and education programs will need to be a priority. With regard to Cuban healthcare, government run hospitals and other facilities administer free universal care to all Cubans. According to the World Health Organization (WHO), the quality of the county’s healthcare is responsible for Cuban citizens’ high life-expectancy, higher than the U.S.’s and one of the highest in the world in fact. Earlier this year, Margaret Chan, Director-General of the WHO, lauded the Cuban healthcare model for spurring impressive innovations in medical research and for its quality of care. A significant segment of Cuba’s considerable tourism industry is composed of foreigners seeking either medical care or training at Cuba’s largely unrivaled facilities; Cuban doctors have also played a pivotal role in combating the recent spread of Ebola in Africa, which is in-keeping with Cuba’s history of providing free medical aid throughout the developing world.

Education is a major priority for the Cuban government as well, with 13 percent of the island nation’s Gross Domestic Product (GDP) funding various education programs. The United Nations Educational, Scientific and Cultural Organization or UNESCO rates the Cuban education system (which provides free schooling through the university level) as the best in Latin America and the Caribbean. In 2009, the number of incarcerated Cuban juveniles was zero and the literacy rate was 99.4 percent, an astonishing testament to the Castro government’s education policies. Additionally, 85 percent of the population in Cuba own their own mortgage-free homes thanks to several government programs and everyone is legally guaranteed a basic, though low, income and job (if they are able to work).

All that said, Cuba is no paradise. Basic civil liberties and human rights, as the West understands them, are often disregarded by the Castro government, which routinely represses any and all political opposition. Though the population’s basic needs are largely provided for, wages, while guaranteed, are relatively low and any labor organizing not associated with the government is strictly prohibited. Private business, such as it is, is highly regulated and taxed. Many goods and services (most notably certain food products and the internet) are difficult to come by. One need only take a stroll through the streets of Havana to see the degree to which the country remains, visually at least, the same as it did when Fidel Castro first assumed power in 1959. Ancient, jerry-rigged cars line the streets and the facades of beautiful colonial-era Spanish buildings crumble daily. It is hoped that the easing of the U.S. embargo on the Caribbean nation, along with a continuation of the reforms initiated by President Raul Castro, will help to allieviate these, and other, problems. Nearly everyone, except maybe the Castro brothers, is eager to see greater democratization in Cuba.

With American business (especially the hotel, tourism, aviation, agriculture and telecommunications industries) chomping at the bits to invest and expand into Cuba, the momentum favoring economic integration seems inevitable. It’s left to a new generation of Cubans, mindful of the past but optimistic for the what is to come, to chart Cuba’s future course. The Castro brothers won’t live forever, but the popular and successful aspects of their complicated legacy should be seriously evaluated both within Cuba and abroad. Whatever the eventual outcome, last week’s development was a positive one.

Source(s): 1) White House: Office of the Press Secretary “FACT SHEET: Charting a New Course on Cuba” (December 17, 2014): accessed December 23, 2014 http://www.whitehouse.gov/the-press-office/2014/12/17/fact-sheet-charting-new-course-cuba
2) Chris Lewis “America’s Cuba” Counter Punch (December 23, 2014): accessed December 23, 2014 http://www.counterpunch.org/2014/12/22/americas-cuba/
3) Micheline Maynard “Five Industries Set To Benefit From The U.S.-Cuba Thaw” Forbes (December 17, 2014): accessed December 23, 2014 http://www.forbes.com/sites/michelinemaynard/2014/12/17/5-industries-set-to-benefit-from-the-u-s-cuba-thaw/
4) Alberto Mendez and Cynthia Fleming “Healthcare and Education in Cuba” Internations: accessed December 23, 2014 http://www.internations.org/cuba-expats/guide/life-in-cuba-15677/healthcare-and-education-in-cuba-2
5) Duncan Campbell “638 ways to kill Castro” the Guardian (August 2, 2006): accessed December 23, 2014 http://www.theguardian.com/world/2006/aug/03/cuba.duncancampbell2
6) Philip Fornaci “Cuba and Change We Can Believe In” Global Research (June 7, 2009): accessed December 23, 2014 http://www.globalresearch.ca/cuba-and-change-we-can-believe-in/13886

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Cromnibus: a Case Study in American Oligarchy

When the political establishment in Washington D.C. reaches a consensus on an issue, it’s usually a bad sign for the general population. The last-minute passage of an omnibus budget deal (the so-called “cromnibus” bill) by the House of Representatives and, subsequently, the Senate last week is a prime example. Cromnibus allocates $1.1 trillion of federal spending for the next fiscal year; it’s also riddled with under-the-radar corporate giveaways, painful cuts to social programs and dangerous regulatory changes. It was opposed by both the left wing of the Democratic Party (represented by figures like Senator Elizabeth Warren and Congresswoman Maxine Waters) and the right wing of the GOP (with Senator Ted Cruz vocally angry that the bill didn’t contain measures punishing undocumented immigrants). President Obama, seemingly desperate to avoid another politically toxic government shutdown and to get a budget deal through the Capitol before the Democrats lose negotiating leverage when Republicans take both houses of congress next year, bucked the left-wing of his party and aggressively whipped votes for the bill. In reality, Obama’s excuse that he’s simply playing three dimensional chess and thinking in the long-term by supporting cromnibus is laughable. His nearly six-year long presidency has been characterized by one giveaway to the right-wing after the next (from his extremist deficit reduction initiatives to his theft of a healthcare reform program crafted by the Heritage Foundation) and he’s now poised to sign-off on one of the worst pieces of legislation in recent memory.

The contents of the intentionally dense nearly 1600 page budget deal are too byzantine to describe fully, but there are several especially glaring measures that warrant attention. For one thing, cromnibus appropriates $479 million for four new F-35 joint strike fighter planes, something that the Pentagon didn’t ask for. Despite their constant wailing over the state of the country’s finances, most right-wing legislators are conspicuously silent about the notoriously expensive ($400 billion thus far to be exact) and problem ridden F-35 program. Then again, that may have something to do with the $28 million that the manufacturer of the F-35, Lockheed Martin, spent on political contributions during the last election cycle. Consider cromnibus’s generous military expenditures alongside its devastating reductions to spending on various social programs and one’s stomach really begins to churn. Funding for the Special Supplemental Nutrition Program for Women, Infants and Children (a.k.a. WIC), which provides vouchers for nutritional food to low-income mothers and their children, was cut by $93 million in cromnibus. It’s too bad all those mothers and their children didn’t think to hire lobbyists like Lockheed. To make it even easier for special interests to purchase politicians and dictate public policy, cromnibus allows for individuals to now donate up to $300,000 annually to political parties (in case super-pacs, which are almost totally unregulated, aren’t your thing), that’s ten times what was previously permitted. There are a litany of other harmful provisions in the cromnibus bill (including the nullification of D.C.’s recent legalization of marijuana and attacks on pension agreements, EPA regulations, and nutritional standards), enough to make one’s head spin.

The most idiotic and dangerous component of the cromnibus legislation is undoubtedly the measure rolling back a vital aspect of 2010’s Dodd-Frank financial reform bill, legislation crafted in the wake of the 2008 global financial crisis that wrecked the global economy and left millions of Americans homeless, jobless and hopeless. Though Dodd-Frank was far from perfect, most notably failing to both break apart the gargantuan Too-Big-To-Fail Wall Street banking conglomerates and untether commercial and investment banking by reimplementing some form of the Glass-Steagall act (which had come into existence after the Great Depression but was repealed on the eve of the new millennium), it at least addressed what was arguably the most glaring cause of 2008 meltdown: reckless and predatory derivative trading by Wall Street traders with government insured money. Specifically, Dodd-Frank’s Lincoln Amendment required large banks to separate derivatives (which are, often high risk, financial assets that were infected with toxic mortgages and knowingly, and highly profitably, sold by Wall Street traders to unwitting foreign and domestic investors, public pensions, etc. during the period leading up to the 2008 housing market crash) from regular government backed consumer assets. Taxpayers from across the political spectrum were disgusted at having had to fork over nearly $30 trillion to bailout Wall Street firms whose derivative dealings brought about the crash, and almost everyone agreed that the regulations laid out in the Lincoln Amendment were necessary and good measures. Everyone, that is, except Wall Street banks and their paid cronies in D.C.

Citi-Group, the firm which received the most bailout money during and after the crisis, shamelessly snuck a last-minute provision into the cromnibus bill that strikes down the Lincoln Amendment. In language that is apparently blatantly copied and pasted from a Citi-Group document (see here: http://www.motherjones.com/files/citigroup-side-by-side_0.png) cromnibus again puts taxpayers on the hook for risky Wall Street derivate trading. The top three Wall Street firms currently hold $182 trillion in derivative contracts, much of which is infected with toxic student loan debts. Make no mistake, the stage is set for repeat of 2008 and its aftermath. The inherent “moral hazard” of socializing the risk involved with predatory and volatile Wall Street behavior doesn’t seem to bother the CEO of banking conglomerate JPMorgan Chase, Jaime Dimon, however, who (along with President Obama) spent an entire day last week lobbying congressional Democrats over the phone to support the cromnibus bill. He need not have worried though, money, as always, did the heavy lifting. The 57 House Democrats that broke with Minority Leader Nancy Pelosi and joined with 162 House Republicans to make the GOP/White House’s cromnibus bill a reality cumulatively received twice as much in donations from Wall Street as those Democrats that rejected the bill. It seems as though the $1.5 million that Wall Street firms spend daily on D.C. lobbying efforts is, unlike so many of their now taxpayer insured derivative assets, a sound investment.

The state of U.S. politics is sorry to say the least. According to a recent Princeton study, Americans no longer live in a representative democracy. The authors contend that the disproportionate political resources of concentrated private power (the super wealthy 1%) have, in effect, turned the U.S. into a de-facto oligarchy. After examining the disturbing contents of the cromnibus bill, it’s difficult to take issue with that conclusion.

Source(s): 1) Josh Silver “5 Awful Things that Congress Snuck into the Omnibus Budget Deal” HuffingtonPost (December 11, 2014): accessed December 17, 2014 http://www.huffingtonpost.com/josh-silver/omnibus-budget-deal-2014-5-worst-things_b_6307852.html
2) Gregg Levine “Cramming the CRomnibus: Rushed spending bill creates systemic moral hazard” Aljazeera America (December 15, 2014): accessed December 17, 2014 http://america.aljazeera.com/blogs/scrutineer/2014/12/15/cramming-the-cromnibusrushedspendingbillcreatessystemicmoralhaza.html
3) Barry Ritholtz “Bailout Total: $29.616 Trillion Dollars” The Big Picture (December 9, 2011): accessed December 17, 2014 http://www.ritholtz.com/blog/2011/12/bailout-total-29-616-trillion-dollars/
4) Cheryl K. Chumley “America is an oligarchy, not a democracy or republic, university study finds” the Washington Times (April 21, 2014): accessed December 17, 2014 http://www.washingtontimes.com/news/2014/apr/21/americas-oligarchy-not-democracy-or-republic-unive/

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