Sunday, August 17, 2008
Cuban communism may be repressive, but at least it provides good health care. This is a common trope of left-wing apologias for Castro's brutal dictatorship. This claim is getting recycled yet again in the wake of Castro's recent resignation (e.g. here). One response to this point is that of liberal Berkeley economist Brad DeLong: Cuba would likely have a much higher standard of living (and better health care) today had it not gone communist in 1959. As DeLong documents, Cuba in the 1950s was one of the richest countries in Latin America and rapidly approaching Western European standards of living and health outcomes.
Under communism, it became one of the poorest nations in the Western hemisphere - despite receiving vast quantities of heavily subsidized oil from the Soviet Union for decades. Taking Cuban official statistics at face value (as DeLong does), Cuban health outcomes and standards of living are roughly similar to those of Mexico and the Dominican Republic. In the 1950s, DeLong notes, Cuba was vastly better off than these countries and, on some measures (such as infant mortality) better than many Western European nations.
For years now people have been saying that our fiscal policies were undermining the value of the dollar (some truth in that) and the trend toward the the Euro signaled an end to the dollar as the worlds principal reserve currency. But that argument only made sense if Europe's underlying economic fundamentals were better than ours-and they aren't. Add an increasingly erratic and dangerous Russia to the mix and what do you have?
Against sterling, the US currency notched up its 11th consecutive day of gains – its longest uninterrupted rise in more than 35 years – as markets became increasingly convinced that the US was best-placed to weather the global downturn.
Of course the hard part is getting back.
First Poland now this. It seems Russia may have overplayed their hand.