1. One of my takeaways from visiting Cuba several years ago was that Castro was very clever to make it difficult but not impossible to leave the island.
2. As a result, the people who were most ambitious and dissatisfied - and mostly likely to cause him trouble if they stayed - were willing to take the risk and flee to Florida.
3. Those - even within the same family - who were more risk adverse (and therefore likely more compliant) remained, often supported by remittances from more ambitious family members who left.
4. It gave the Castro regime, in a strange way, the best of both worlds: not only a safety valve for the most dissatisfied, but a way of harnessing them to mitigate the circumstances of those who stayed ...
5. And a relatively more compliant domestic population who were regularly scared with the prospect of their more ambitious, competitive cousins coming back and eating their lunch.
6. That worked for a long time, aided in strange ways by an increasingly porous US embargo. But given the domestic protests we are now seeing, one has to wonder if even the remaining, more risk-adverse population has reached its breaking point.
7. As for the US embargo itself, my impression was that Cuba's own disastrous economic policies outweighed any opportunities from trade with the US. Even absent the US embargo, trade, business, and investment in Cuba remains extremely difficult and unattractive.
8. Since it was an MBA trip, we had the opportunity to meet with several state-owned companies, foreign investors, and other enterprises in Cuba. I left with the impression they were wholly unprepared to do business with the outside world, and knew it.
9. This ironically bolstered the regime, because they were all the more fearful of being deluged by Miami-based entrepreneurs and investors coming in, buying up, and running everything if the "wall" ever came down.
10. I talked to a wide range of people before and during my Cuba trip. A classmate who had fled a Cuban mission abroad hidden in the truck of a car and came to the US. His family back in Cuba. Die-hard supporters of the regime, both in official roles and at the grassroots level.
11. I did meet a few everyday Cubans, in completely unscripted encounters, who were supportive of the regime, mainly out of national pride (which includes a strong dose of anti-US feeling). Ironically, many were financially dependent on relatives in the US.
12. As for health care, what I was told (again, in unscripted encounters) was this: there are well-trained doctors, but they are mainly sent abroad. You can typically see a doctor, but good luck filling the prescription they give you - there are no supplies.
13. People I met were generally grateful to receive small gifts like shampoo, pantyhose, pens, etc. much like when I visited the Soviet Union in the 1980s. They were especially thrilled to receive a bottle of aspirin.
14. I say "unscripted encounters" because, in sharp contrast to my visits to North Korea - or even the USSR or China in the 1980s - I was allowed to wander Cuba at will, and talk to anyone I liked, which surprised me.
15. A lot of the photos I posted yesterday reflect those encounters with everyday people. I'm sure those people were aware they could be monitored (by local committees), but they were pretty frank in conversation.
16. I am not an expert on Cuba. I had some fascinating conversations with US diplomats there who were - and were far from ideological firebrands. These are just some impressions from a trip there several years ago, that have stuck with me.
17. Some people angry about my take on the embargo and it's relative importance. I came away of two minds on the embargo.
18. On the one hand, it was clear the Castro regime used the US embargo as an all-purposes excuse for its own failures. Taking away that excuse might actually expose the regime.
19. On the other hand, it was equally clear that the only party equipped - and allowed - to engage in trade with the US would be the Cuban government, which would use it as patronage to reward loyalty, rather than opening up the country.
20. So to be honest, I walked away unsure what the best path forward could be.

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More from @prchovanec

13 Jul
Regarding inflation, it's good to define transitory vs. persistent. Transitory would be the next several months, to the end of the year. Persistent would be the next decade.
When trying to understand the economy, we tend to refer back to historical experiences as our model. In the case of inflation, for most of us, the go-to reference is the experience of the 1970s.
But there are other historical models that may capture the situation better. I'd argue it's possible that our current experience of inflation bears less resemblance to the inflation of the 1970s than the surge in inflation immediately after World War II.
Read 9 tweets
13 Jul
I'm not sure the size of the y/y figure tells you whether it's transitory or not. A high number could easily be as reflective of a temporary spike, due to bottlenecks, as it would a more lasting problem.
A lot of the price pressure being reported by companies in the ISM surveys do seem to reflect bottlenecks, as opposed to more persistent constraints. Of course, it's possible that one can turn into the other, if unresolved.
The fundamental problem here is that the entire supply side of the economy - from labor markets to foreign supply chains - has been thrown into utter chaos over the past year, even as stimulus spending has helped demand recover quite buoyantly.
Read 4 tweets
13 Jul
US consumer prices (CPI) rose +0.9% m/m in June, up +5.3% from a year ago, its highest y/y rate since January 1991. Image
Core CPI (excluding food and energy) also rose +0.9% m/m in June, up +4.5% from a year ago, its highest y/y rate since September 1991. Image
Often volatile US consumer energy prices rose +1.5% m/m in June, up +24.2% from a year ago. Image
Read 5 tweets
13 Jul
I've noticed that the consistency/reliability of timely COVID-19 data in the US has deteriorated over the past few weeks, due to patchy reporting by various states. This is making it harder to tell a story about what is happening. Even the CDC data gets constantly revised.
According to Worldometer, the US reported +129 coronavirus yesterday, bringing the total to 623,029. But several states, including Florida, are still missing. The 7-day moving average rose slightly to 216 deaths per day. CDC still isn't posting a number for yesterday. Image
The US reported +14,715 new confirmed cases of COVID-19 yesterday. The data is more complete than deaths, but Florida, Michigan, and a few others still missing. Still, the 7-day moving average rose to above 20,000 new cases per day, for the first time since late May. Image
Read 14 tweets
13 Jul
There is a point where the critique of objectivity becomes an embrace of subjectivity. And at that point, whether people realize it or not, all is lost.
This is why CRT and MAGA and all thinking rooted (consciously or not) in post-modernism are just different faces of the same counterfeit coin.
In other words, there is no “my truth”. There is only “my perspective on the truth” which is always subject to critical examination.
Read 6 tweets
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Today in MSFS I'm checking out a rather odd bird called the EA-7 Edgley Optica, and I'm doing it at the location where it was developed, Old Sarum Airfield near Salisbury in southwest England.
The Optica is the brainchild of British designer John Edgley, who envisioned it in the 1970s as a slow-flying alternative for many tasks now performed by helicopters.
The cockpit, which stretches forward of the powerplant and wings, gives the occupants clear 270-degree visibility much like a helicopter.
Read 34 tweets

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