An economy stuck in the 1950s.

Get Over It and End Cuban Embargo

Barry Ritholtz is a Bloomberg View columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He blogs at the Big Picture and is the author of “Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.”
Read More.
a | A

U.S. policies toward Cuba are anachronistic and perplexing.

The embargo is a Cold War relic that has long ago stopped serving its intended purpose. It was adopted after the now-defunct Soviet Union tried to establish nuclear bases on the island, bringing the two superpowers to the verge of nuclear war.

But what purpose does the embargo serve today? A half-century later, we have to wonder why it continues. A humanitarian crisis grips the island. You might not read about it in U.S., but overseasmedia reports on it regularly. The Guardian last weekreportedthat, "US economic sanctions against Cuba have cost the island nation $3.9bn in foreign trade over the past year, helping to raise the overall estimate of economic damage to $116.8bn over the past 55 years, Cuba said on Tuesday."

The United Nations, the Guardian continued, has urged an end to the U.S. embargo and other trade sanctions against Cuba’s Communist government. A resolution gets passed every year -- as it has for the past 22 years -- with overwhelming support. Last year the vote was 188 to 2, with only the U.S. and Israel voting against the resolution.

I am not running for office in Florida, and I have no relatives in Cuba trying to escape the poverty and despair there. I have no dog in this fight. Well, other than being distraught that my country is causing another country tremendous economic discomfort for no clear reason. And we do business with regimes with unsavory qualities, such as China and Saudi Arabia. So I don't understand why the embargo remains in place. It should be ended immediately. At the very least, it should be part of a political discussion as to why it has continued.

At one point, the embargo did serve a useful purpose -- namely, preventing Russia from obtaining a nuclear launch site less than 100 miles from our shores. But five decades later, and almost three decades after the Berlin Wall came down, we are long past due in recognizing this embargo no longer serves its original purpose.

The 2003 invasion of Iraq was done under the pretense of destroying Saddam Hussein's nonexistent weapons of mass destruction and bringing democracy to the Middle East. That rationale was never fully explained to, nor approved by, the American people. But instead of trying to transplant democracy in inhospitable ground on the other side of the world by military force, perhaps we should consider trying to bring a little democracy to our own back yard via other means. Diplomacy and normalizing relations with Cuba would go a long way towards accomplishing that.

It also might give us some moral high ground in responding to Cuba’s repressive human rights policies. Cuba's communist rule is guilty of one of the world’s worst records of political repression. The regime engages in censorship, restricts the right of assembly and greatly limits religious freedom. Rights of women and minorities are minimal, and torture of prisoners is common. The UN condemns Havana’s human rights violations each year, to little effect. Consider it a small measure of progress that this oppressive regime no longer officially makes it illegal to be gay, as it was for most of the time since the Communist Party seized power in1959.

Normalizing relations with Cuba would provide several benefits to both the U.S. and Cuba: Ending the crippling economic sanctions would allow an impoverished nation to raise the standard of living for its people. There are numerous U.S. companies in real estate development, agriculture, manufacturing, energy and tourism that would benefit from the end of the embargo. It would also allow the U.S. to take the diplomatic initiative in resolving a long festering problem.

It is hard to imagine that a policy, created in the dark era of nuclear fear, still lives on, mostly on inertia. The biggest obstacle, of course, is the dwindling supply of Cold War hardliners and revanchists who refuse to recognize new realities.

We should move on from this relic of a bygone era that long ago stopped serving any useful purpose.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Barry L Ritholtz at britholtz3@bloomberg.net

To contact the editor on this story:
James Greiff at jgreiff@bloomberg.net