I agree with your article "Cuban Time Travel". The US embargo has given the Cuban government a get out of jail free card for the problems the country faces, as the government can blame the economic problems on the embargo. The embargo is now completely outdated: it was put in place during a time of great fear over the rise of world communism. If the US really wants Cuba to change, the best way to do that would be to increase trade with it: that would convince Cuba of the benefits of the market and encourage it to make reforms in that direction.
Although you cite many impressive figures to do with falling child mortality and fewer deaths of women during childbirth, to a certain extent the gains will surely be harder to maintain in the future. In a sense the development you describe must be the result of plucking low hanging fruit. For example mosquito nets can be manufactured and distributed fairly cheaply let yield large immediate falls in cases of malaria. However the only way that developing countries can truly become developed countries and sustain the gains made so far is with effective governance and the right economic and social policies in place. These vital factors are sadly lacking in many poor areas of the world. Hence although aid definately helps, it cannot act as a substitute for good governance.
Although you are right in saying that Europe's hell bent focus on austerity is damaging the continent, this is a mantra which has been repeated for months if not years now, and appears to be falling on deaf ears, due to the intrasigence of Mrs Merkel. The crunch point will be after the Greek elections next month, when a left wing coalition hostile to the bail out could conceivably gain power. It will be interesting to see if at this point Mrs Merkel finally repents and loosens the noose of austerity, or if she sticks to the course, jettisoning Greece from the Euro. My money would be on the latter.
Although it is of course right to aim for growth, many of the policy prescriptions being mooted, such as those you mentioned in your article are supply side reforms which would raise the long run growth rate but have little or not effect on growth today. Unfortunately, growth today is exactly what is needed. Economies right across Europe are being choked by the misguided drive for austerity, spearheaded by the German Chancellor Mrs Merkel. This is simply sending economies into a tail spin, with lower growth leading to lower tax receipts, higher spending on unemployment benefits, and lower investment. This makes it even harder to reduce the budget deficit. To go for growth in the short term, the pace of fiscal tightening must be lessened. Northern countries must be prepared to fund extra investment in the struggling south; infrastructure investment for example has a large multiplier effect and would have an immediate impact on growth. It is all very well talking about growth in the long term, but unless we get growth today there may be no long term, if European countries buckle under the strain of austerity and the Euro collapses.
It seems to me that regardless of whether or not the Euro area was an optimal currency area upon its conception, it is now too late for any country to back out. The repercussions of a Euro area breakup, although hard to calculate, would most likely be catastrophic. Southern European countries could suffer runs on their banks, forcing them to impose strict requirements on bank withdrawals, which would cripple their economies. Germany and a few other northern European economies would see their exchange rate soar due to their large current account surpluses. And then there is the extremenly difficult process of restablishing national central banks and minting national currencies. Although part of the reason for Mrs Merkel's current intrasigence with regards to loosening the noose of austerity surely stems from her desire to retain the support of German voters, will it not be worse for her and her party in the long run if the Euro collapses and Germany suffers as a result?
Cuban Time Travel
I agree with your article "Cuban Time Travel". The US embargo has given the Cuban government a get out of jail free card for the problems the country faces, as the government can blame the economic problems on the embargo. The embargo is now completely outdated: it was put in place during a time of great fear over the rise of world communism. If the US really wants Cuba to change, the best way to do that would be to increase trade with it: that would convince Cuba of the benefits of the market and encourage it to make reforms in that direction.
Aid Works
Although you cite many impressive figures to do with falling child mortality and fewer deaths of women during childbirth, to a certain extent the gains will surely be harder to maintain in the future. In a sense the development you describe must be the result of plucking low hanging fruit. For example mosquito nets can be manufactured and distributed fairly cheaply let yield large immediate falls in cases of malaria. However the only way that developing countries can truly become developed countries and sustain the gains made so far is with effective governance and the right economic and social policies in place. These vital factors are sadly lacking in many poor areas of the world. Hence although aid definately helps, it cannot act as a substitute for good governance.
After Austerity
Although you are right in saying that Europe's hell bent focus on austerity is damaging the continent, this is a mantra which has been repeated for months if not years now, and appears to be falling on deaf ears, due to the intrasigence of Mrs Merkel. The crunch point will be after the Greek elections next month, when a left wing coalition hostile to the bail out could conceivably gain power. It will be interesting to see if at this point Mrs Merkel finally repents and loosens the noose of austerity, or if she sticks to the course, jettisoning Greece from the Euro. My money would be on the latter.
Europe’s Misguided Search for Growth
Although it is of course right to aim for growth, many of the policy prescriptions being mooted, such as those you mentioned in your article are supply side reforms which would raise the long run growth rate but have little or not effect on growth today.
Unfortunately, growth today is exactly what is needed. Economies right across Europe are being choked by the misguided drive for austerity, spearheaded by the German Chancellor Mrs Merkel. This is simply sending economies into a tail spin, with lower growth leading to lower tax receipts, higher spending on unemployment benefits, and lower investment. This makes it even harder to reduce the budget deficit.
To go for growth in the short term, the pace of fiscal tightening must be lessened. Northern countries must be prepared to fund extra investment in the struggling south; infrastructure investment for example has a large multiplier effect and would have an immediate impact on growth.
It is all very well talking about growth in the long term, but unless we get growth today there may be no long term, if European countries buckle under the strain of austerity and the Euro collapses.
A Centerless Euro Cannot Hold
It seems to me that regardless of whether or not the Euro area was an optimal currency area upon its conception, it is now too late for any country to back out. The repercussions of a Euro area breakup, although hard to calculate, would most likely be catastrophic. Southern European countries could suffer runs on their banks, forcing them to impose strict requirements on bank withdrawals, which would cripple their economies. Germany and a few other northern European economies would see their exchange rate soar due to their large current account surpluses. And then there is the extremenly difficult process of restablishing national central banks and minting national currencies.
Although part of the reason for Mrs Merkel's current intrasigence with regards to loosening the noose of austerity surely stems from her desire to retain the support of German voters, will it not be worse for her and her party in the long run if the Euro collapses and Germany suffers as a result?