[BretLudwig]

(( Not even that geriatric loser Twaddlebottom can fault this can he? No,
he can not. DAMN that Sailer is pretty bright. Bret.))


Baseball diplomacy?

"You don't hear his name mentioned much anymore, but it just occurred to
me that George W. Bush is still President of the United States. In fact, he
will be president for another eight months and a week.
What's he been up to lately? Is he still trying to start a war with Iran
over Iraq, despite both countries being on the same side, backing Maliki?
Well, who knows ...

Yet, if he was looking for something to do, I've got an idea for him.
Obviously, he can't do anything domestically with Congress in the hands of
the Democrats. So, that leaves foreign policy. But he doesn't have any more
troops to play with, so it would be hard for him to start any more major
wars.

I see in the news today that Cuba's forward-looking elderly
Sibling-in-Chief Raul Castro is trying to bring the Worker's Paradise up
into the later 1970s:

Cuba's Communist government has allowed microwave ovens to go on sale
to the general public for the first time ever.

Anxious Cubans gathered at an electronics store in Havana to purchase
a microwave.

And a week or two ago, Raul allowed the first PCs to be sold in Cuba! It
can't be long now until Betamax VCRs are in all the Havana shops.

Few in Cuba can afford to buy a PC or microwave, however, because Cuba is
poor. The CIA World Factbook says the Purchasing Power Parity per capita
income is $4,500. In cash terms, Cubans are much, much poorer than even
that -- the State Dept. says the average monthly salary is $16! (The
majority, however, get some hard currency from relatives in America.)

Therefore, how about Bush trying to bring a little peace and prosperity,
Nixon goes to China-style, by trying to negotiate an end to America's
half-century conflict with Cuba?

There's a lot of money to be made by both Americans and Cubans if Bush
could work out an end to the American embargo in return for opening up the
Cuban economy.

Let's just use Cuba's per capita GDP PPP number of $4,500. The Cuban per
capita income is less than half of the Dominican Republic's $9,200. (For
comparison, Cuba is about an order of magnitude below the U.S. GDP per
capita).

Back before the Castro Bros., Cuba was wealthier than the Dominican
Republic.

So, it's reasonable to imagine that Cuba, which is a fairly well-educated
country, could catch up to the Dominican Republic in not that many years
if Cuba now followed the Chinese path and de-Communized. It has a
population of 11.5 million, which means that a lot of money could be made
bringing the place up to the 21st Century.

It's easy to catch up economically if you haven't been allowed to buy any
new technology for the last few decades. Think how much of productivity
gains you can get just from microwave ovens. And in March, Raul announced
that ordinary Cubans would be allowed to buy cell phones for the first
time. Typically, cell phones do more economically for Third World
countries than any other piece of technology.

Cuba has three times as much coastline ( 3,735 km, or about 2100 miles) as
the Dominican Republic. It's a long skinny country with a lot of beaches.
And it's closer to the U.S., barely half as far from the big airline hub
in Atlanta as the DR. I imagine American hotel companies have contingency
plans locked away for turning Cuba into a tourist paradise. And cruise
ship companies would love to make the Miami-Havana run.

If Cuba caught up economically to the Dominican Republic, which is about
10-15% smaller in population, it could buy a fair amount of stuff from the
U.S. The D.R. buys 46% of its $13 billion in total imports from the U.S.
each year. That's not big money, but it adds up over the years.

How could Bush get started? The first public hint of the
Nixon-Kissinger-Chou opening was the "ping-pong diplomacy" of 1971. What
would be more natural than for Bush, a former baseball team co-owner, to
start Baseball Diplomacy with Cuba, a font of baseball talent not allowed
to play in America?

There are currently 88 Dominicans in the major leagues (plus far more in
the minors). The average major league salary is approaching $3 million, so
that's a quarter of a billion dollars paid annually to Dominican major
leaguers.

Cuba only has $3.2 billion in annual exports at present, so if Cuban big
leaguers could make, say, $200 million per year in salary, that alone
could boost national exports by 6%. So, if Bush offered to broker a deal
with his old baseball owner colleagues, I suspect Raul would be very
tempted.

From there, a more general settlement that would let American businesses
into Cuba might be negotiable.

A baseball player deal could set a useful precedent for a sticky problem.
The Communists presumably don't want all their talented people, such as
their doctors, racing off to America for big salaries as soon as
totalitarianism is lifted, but before the economy starts to get into gear.
The Cuban government's view will be that they paid to train the baseball
players and doctors, so they are entitled to a cut. And America doesn't
need a new huge immigrant influx into Florida. (The special "Ollie Ollie
Home Free" treatment of Cuban immigrants as refuges would have to be
changed once Cuba opens up.)

This is similar to the Japanese baseball league's view that they don't
want all their players dashing off to higher pay in America without them
getting a cut. So, Major League Baseball has agreed to a "posting system"
with a Japanese league where an American team pays the Japanese team to
let a player out of his contract so he can come to America. For example,
the Boston Red Sox paid $51 million to the Japanese team that held Daisuke
Matsuzaka's contract. The Red Sox also had to negotiate his salary with the
pitcher himself, with him getting a six year contract totaling $52 million
(plus incentives). So, the star and his Japanese team basically split his
value on the American market 50-50.

So, it might make sense for the U.S. to recognize the Cuban government as
having legal employment contracts for some number of years into the future
with skilled Cubans. Thus, the U.S. firms would have to pay Cuba for hiring
its doctors and other skilled workers. This would reduce the rush to the
exits that could otherwise leave Cuba even more economically prostrate
than it is now.

The bottom line is that the current situation in Cuba is ridiculous.
Somebody is eventually going to make a lot of money fixing it, and
Americans might as well get in on the action."

http://isteve.blogspot.com/2008/05/b...diplomacy.html

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