[Marxism] The Wall Street Journal tries to sabotage legal Cuba sales

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

THE WALL STREET TRIES TO SABOTAGE LEGAL SALES TO CUBA
by Walter Lippmann, CubaNews, November 12, 2004

Today's WALL STREET JOURNAL features an hysterical attack
on Cuba's recent decision to remove the U.S. dollar as
legal tender for financial transactions on the island.

The full text of the WSJ article is available below.

(At all times, please keep in mind that there is also a
difference between the physical dollar which exists on
a piece of paper, and electronic dollars.) 

Worshipping the almighty dollar is a religion for the
Wall Street Journalists. They cannot imagine, and don't 
want anyone else to imagine, that "a world without the
almighty dollar is possible". But that is what is just
what is happening as these lines are written.

The Wall Street Journal's Mary Anastasia O'Grady conflates
Cuba's plans to rid itself of the U.S. dollars which is at
once declining in value relative to other currencies, with
Washington's effort to disrupt TOTALLY LEGAL business
transactions which are fully authorized under CURRENTLY-
EXISTING U.S. statutes.

At the just-concluded Havana International International
Trade Fair, U.S. companies signed contracts worth $100+
MILLION U.S. dollars. NONE expressed any concern that they
would not get paid. And why would they? In the last three
years, U.S. companies have had close to ONE BILLION DOLLARS
in CASH sales to Cuba by U.S. corporations. 

Every contract with every U.S. corporation, has been paid,
in full and AHEAD OF DELIVERY, as required under U.S. law.
NOT ONE SINGLE PENNY HAS BEEN PAID LATE, and we know that
because the Miami Herald, the Wall Street Journal, or the
U.S. State Department, which describes Cuba as a deadbeat,
financially-broke nation, WOULD HAVE TOLD US REPEATEDLY.

It's no surprise that the dominant daily organ of the U.S.
business establishment, all-out supporters of the Cuban
exile-ridden Bush administration would want people to get
this swallow this absurd notion. After all, Washington 
trying to impose its [declining]value on the world economy.

Note, too, that this imposition takes TWO forms: First, 
the use of force and violence as exemplified by both the 
invasion and occupation of Iraq, and Second, flooding the
planet with adulterated dollars. This latter would cause
the rest of the world to help pay for Washington's effort
to conquer Iraq and other countries.

The Cuban government's goal is to remove the adulterated
U.S. dollar from the Cuban market and replace it with the
healthier, more valuable, more reliable currencies such as
the Euro, the Canadian dollar and so on. As Cuba's bank
president Francisco Soberon pointed out, Cuba will know it
has succeeded if it collects NOTHING from the tax on the
physical U.S. dollar because none will be coming in here.

Keep in mind as well that Cuba's efforts here are aimed
at the PAPER U.S. dollar. Electronic dollars are still OK.

Since U.S. law requires that Cuba pay for Cuban purchases
from the U.S. IN CASH, the Cubans have been obliged to 
take the PHYSICAL PAPER DOLLARS which the relatives and 
tourists have been bring to the island, wrap them up in
boxes, and physically transport them to a bank which is
willing to take them and change them over into electronic
form. Imagine all the time and effort wasted in doing
this!?!?! Gigantic!

The $100 million dollar fine with the Swiss bank paid to
Washington for working with US dollars is clear proof of
the exterritorial nature of U.S. policy. It's not as they
say, a blockade, which would be a limit on activities by
U.S. nationals and companies. It's a BLOCKADE because the
US is trying to bludgeon other countries in to cutting its
economic relations with the island. 

I hope that Francisco Soberon, the head of Cuba's National
Bank, will write to the Wall Street Journal to correct the
mis- and dis-information it's trying to peddle here. Even
responsible members of the U.S. business community should
resent the false and distorted information which the WSJ
is giving its readers. U.S. business people deserve better
from their daily news source.

Parenthetically, the WSJ's attempt to foster a division
between two close allies, Cuba and China, won't work either.
U.S. corporations are deeply addicted already to the low-
price products which enter the US from the Chinese market.

FIDEL EXPLAINS WHY CUBA TOOK THESE NEW MEASURES:
http://www.granma.cu/ingles/2004/octubre/mart26/44nada.html 

CUBA URGES TOURISTS TO AVOID BRINGING U.S. DOLLARS:
http://www.granma.cu/ingles/2004/octubre/juev28/45tusd.html 

ACTUAL TEXT OF CUBAN NATIONAL BANK RESOLUTION:
http://www.granma.cu/ingles/2004/octubre/mart26/44resol-i.html 


Walter Lippmann
Havana, Cuba
http://www.walterlippmann.com 
==========================================================

November 12, 2004 
THE AMERICAS  
  
Castro's Scheme
To Shake Down
The Miami Cubans

By MARY ANASTASIA O'GRADY
November 12, 2004; Page A13

A decade ago, a tsunami of optimism predicting the imminent
collapse of Cuba's totalitarian state was rolling across
the hemisphere.

Fidel's Soviet sugar daddy had gone bust and the dictator
had declared the U.S. dollar legal tender. Expectations
soared that the Cuban state was gearing up to follow the
China prescription: A restricted political diet mixed with
low doses of economic liberty meted out to the Cuban
people.

There was but one tiny, yet significant, flaw in the
analogy to China. The intellectual author of 20th century
Chinese misery, Mao Tse-tung, was dead. Cuba's Maniacal
One, though aging, was still waving his revolutionary
finger in the air. The China model necessarily involves the
development of pockets of private economic power, something
Cuba's old man clearly could not tolerate.

This week's reversal of the 1993 decision that allowed
dollars to trade freely on the island makes the point, yet
again, that Cuba is not likely to follow China until Fidel
follows Mao. Indeed, this monetary "reform" is a prime
example of the opposite, a stiffening of the rich despot's
spine.

Far from a response to the embargo, as Fidel claims, the
confiscation of dollars is purely a defensive measure to
offset the high costs of bad policy.

The Cuban state is desperately short of foreign exchange.
Its decrepit state-run economy doesn't produce much that
can be sold abroad and the government has to import goods
to supplement the economy's limited ability to supply
domestic needs. Everyone in the world -- save Americans --
can legally invest in Cuba, but few want to take the
chance. To change the investment climate, Fidel would have
to understand why it is so bleak, in other words
acknowledge that he himself is the problem.

The Cuban state exports only one item successfully: Cubans.
It is the Cuban diaspora's export value that Castro now
intends to put in his own pocket by capturing more directly
the dollars Cuban expatriates send to their relatives back
home.

Castro of course blames the U.S. embargo for his
foreign-exchange shortage. He is particularly peeved that
the New York Federal Reserve has shut down a deal he had
going with UBS, a Zurich-based Swiss bank. That
arrangement, according to the Senate Banking Committee's
call for hearings, was uncovered last year when a joint
Fed-Swiss Banking Commission investigation found that a
Zurich UBS repository had engaged in illegal U.S. bank note
transactions with Cuba amounting to about $3.9 billion. UBS
had illegally sold dollars to three other blacklisted
countries, but the Cuban case was of special interest
because it involved huge shipments of dollars to UBS from
Cuba to be credited to a Cuban account. In short, it not
only violated the U.S. embargo but looked a lot like money
laundering.

UBS paid a $100 million fine for this violation of U.S.
embargo law and it's not likely that Fidel will be using
those Swiss bankers again any time soon. But the source of
the U.S. bank notes remains unclear. Cuban-born economist
Ernesto Betancourt, an expert on the Cuban economy, points
out that "Cuba cannot justify 600 or 700 million dollars
annually in cash through tourism income. The tourists,
Canadians, Europeans and Latin Americans buy their travel
packages with credit cards at travel agencies. Therefore,
some 90% of the tourism income is not cash." Nor are
remittances from abroad sufficient to explain the large
volume of cash, Mr. Betancourt argues convincingly.

Whether Fidel was engaged in facilitating illegitimate
business transactions by laundering money remains an open
question. If so, it's unlikely that New York Fed
surveillance can plug every hole in the world financial
system and shut down his operation. But it is possible that
the squeeze on UBS and other institutions since Sept. 11,
2001, has raised Cuba's transaction costs in what might
formerly have been a highly lucrative business.

Castro has already cracked down on the nascent
small-business community and on political dissent. This has
helped squelch competition but it hasn't helped his
pocketbook. That's where de-dollarization comes in. As any
International Monetary Fund economist will advise, when a
state is broke it can always get money from the population
by manipulating foreign exchange. Latin central banks
specialized in expropriation through devaluation during the
latter half of the 20th century.

The new regulations do not so far make holding dollars
illegal. Cubans may still withdraw dollars from bank
accounts but they may not deposit them. Most importantly,
the change means that dollars will no longer be accepted at
stores selling imports. Instead Cubans who want to spend
their remittances from the U.S. will have to exchange them
at par for "convertible pesos."

Clearly, the one-to-one exchange by the government is a
fraudulent claim. Castro gets a 10% surcharge for all
conversions. Add to this the average 15% price increase at
import stores in May, and you have the equivalent of a 25%
devaluation of the purchasing power of dollar remittances
in the past six months. Regular pesos, which are used to
buy domestically produced goods like farm products, trade
on the black market at 26 pesos to the dollar, which gives
some idea of how Cubans get short-changed.

By forcing Cubans to convert dollars if they want to use
the income they receive from Miami, the Cuban state has
officially recognized that its human exports are the
country's key foreign-exchange generator. Undoubtedly Fidel
noted how Venezuelan President Hugo Chávez exports oil,
takes in all the dollars and regularly devalues the Bolivar
to keep the palace rich. Fidel figured he could do the
same. No wonder Cubans are joking that the slang term for
the convertible peso, "chavito" or little penny, is
actually named after Chávez.

Cubans have not managed to survive Castro's tyranny all
these years without employing boundless creativity. It
won't take long for a thriving black market, rife with
corruption on the part of state employees, to develop in
response to Castro's latest gambit.



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