Year: 2001

I had expected oppressively hot weather, choking cigar smoke, and mosquitoes. Instead, it was unseasonably cold, in the breezy seventies; very few people were smoking cigars; and in place of mosquitoes there were mojitos – sugar water, lemon juice, mint leaves and rum in tall narrow glasses that appeared at every stop. (Also readily available despite the embargo, that most American of American products: Coke and Diet Coke – from Mexico.)

We landed at Jose Marti Airport, Terminal 2 (of 2), got through the paperwork easily, and boarded a modern Volvo luxo-bus that would be with us for the rest of the trip.

Basically, there are two economies in Cuba right now. The Cuban economy, for the 11 million Cubans, who deal mainly in pesos and ration books . . . and the dollar economy, for the relative handful of foreign residents and tourists, who pay American prices to live in American-style luxury.

Our hotel, the Golden Tulip is a joint venture with the Dutch, I believe (hence the tulip) – 9 storeys, a small but modern health club, a business center with Internet access, a terrific roof-deck pool overlooking the Capitol, a short walk away (and overlooking, not too much further off in the distance, a former Exxon refinery, belching flame and smoke round the clock). Our room had all the basics, including a mini-bar, CNN, HBO and ESPN. The Cubans have two channels, both state-owned.

The breakfast buffet at the Golden Tulip was killer, at least as good as at your local Hyatt Regency.

And the service is good, for two reasons. First, we got the impression that many of the bellmen had graduate degrees – they were eager, like everyone, to work in the tourist trade where they could get dollars. So when you ask for a wake-up call, the conversation is crisp, clear, in English – and you get the wake-up call. Second, in a country where the top monthly pay is $20 in pesos and the U.S. dollar is needed to buy many things pesos can’t no matter how many you have, tourism is the place to be. The night before we left we found a lovely handwritten note from the chambermaid thanking us for our stay and wishing us a safe flight home – signed, ‘the Chambermaid’ – and happily left a $10 tip for her, just as we might in the U.S. But think of it! Ten dollars! To a Cuban national making $20 a month, the opportunity for a couple of $5 and $10 tips each day is phenomenal. Service was good.

Even doctors get paid the same $20 a month everyone else does, along with the same free rent, health care, and education everyone else gets. If I heard right, the official pay scale ranges from about $12 a month to $20 a month. But that’s like spending money to supplement the free essentials, and to supplement the ration books that get you enough rice and beans for about half the month, a bar of soap once a month – that sort of thing. Your pay helps you make up the difference.

Castro encourages tourism because it’s necessary. Prior to the collapse of the Soviet Union, Cuba’s 11 million people were subsidized to the tune of about $5 billion a year. The Soviets paid way above market price for Cuban sugar and sold Cubans oil at below market prices. Sweet. But in the early Nineties that stopped, the Cuban GNP dropped by 40%, and Castro found a new way: tourism. Since then, much or all of the loss has been made back.

(To repeat yesterday’s disclaimer: we were only four days in Cuba. I think I’m recounting most of this about right, but I am hardly an expert, and may certainly have misunderstood some of what we were told – or been misled.)

There’s no point my going into great detail – there are books and travel guides available for that, and I need to get back to business pretty soon. A company called Equilink has made a $5.50 a share offer for Calton, Inc. (CN), one of the little stocks written up in this space from time to time, and a number of you have asked for comment. But that can wait until tomorrow.

A few things we saw:

THE CAPITOL. Built before the 1959 Revolution, it’s based on the American model – a House Chamber at one end and a Senate Chamber at the other, with a dome in the center that is seven inches taller than our own dome, if I heard right. Of course, it’s not nearly as large or impressive as our own Capitol – but it’s pretty darn beautiful and impressive all the same. As you enter, there is a huge statue of a woman with a shield (the third largest statue of a human figure in the world?) and the woman is . . . Cuba. Cuba, one of our three guides explained, is a woman’s name (‘Show me the money,’ I couldn’t help flashing to Cuba Gooding, Jr. – no woman – shouting to Tom Cruise), and this statue represents her.

THE CIGAR FACTORY. Some of them are made by machine, but we were taken through the part of the factory where the top quality cigars are rolled by hand. The Cohibas. The predominant smell in the factory was not cigar smoke, although workers are allowed to smoke all they want (bearing in mind that it cuts into the quota of what they produce), but manure. Or so it seemed to me. Possible explanation: the fertilizer from the tobacco plantations from whence the leaves come. I am about as vehement an anti-smoker as you’ll find (you should smoke all you want, but not where I have to breathe it), and lip cancer is a pretty ugly thing you don’t see pictured on cigar boxes. But the process and skills involved in producing these cigars were fascinating, and it seemed that the workers could have had worse jobs in worse conditions. There are a lot of smaller rooms and processes, but one main room in which I’d imagine perhaps 300 or so men and women of all ages and colors are engaged in rolling their quota of cigars. In the morning, they are read the newspaper as they work; at other times of the day music is piped in; at still other times, readers read them books they have chosen. They are still some years away from each having audible.com and a Diamond Rio 500.

THE MARKET. Oh, how fortunate we are to have Safeway – and the money to afford to shop there. But the huge indoor food and flower market we visited had a huge variety of fresh fruit and vegetables – and, upstairs, severed sheep’s heads and things – brought into town by the farmers themselves (if I got this right), who are allowed to sell a certain portion of what they produce this way, with appropriate taxation to the state.

THE BALLET SCHOOL. Every child in Cuba is tested for skills in this and certain other areas, with the best selected to go to special schools like the one we visited. It was run by a wonderful dark-skinned woman of perhaps 45. The students at this school – two-thirds girls, one-third boys – were from about 8 to 12. They put on a wonderful performance for us. Usted va ser una estrella, I learned to say (you will be a star!), hoping to get a chance to say it to all of them. We left several bags of individually wrapped Hershey’s Tastations for the kids, but also passed around an envelope to leave what must have amounted to about $300 for the school. The director was very pleased – but non-plussed. She had had few foreign visitors, and this gift situation was a first for her. She was unsure how to accept and account for the money. After some consideration, she made a point of accepting and counting the gift in front of several faculty members, and writing up a receipt, and making it clear to all that every penny of it would be kept separately and spent solely on supplies for the school.

THE NATIONAL BALLET. As we were entering the building, the crowd parted and a striking older woman was escorted slowly, with help at each arm, into the building. She was Alicia Alonzo, the world-famous (and, for the last few years, blind) artistic director of the Cuban National ballet. It was perhaps the second or third best night I have ever spent at the ballet. It was also perhaps the second or third night I have ever been to a ballet. Others in our group were far more sophisticated, and disliked the performance for far more sophisticated reasons than I did. I was just bored – though happy enough sitting comfortably in the third row listening to the music and thinking about all the e-mails that must e piling up back home. All agreed the ballet building was wonderful. But the ballet itself – a classical ballet of some kind set in Venice, I think, with harlequins and a lecherous old man and rather hefty prima ballerina – represented a great deal of effort but not, in the end, a transforming experience. The Cuban audience loved it.

One thing I noted at the ballet school is that most of the children were quite fair skinned. And at the ballet itself, we saw only one black face dancing out of surely 50 or more performers. Our sense was that this was not the result of overt racism, which may be less of a problem in Cuba than it has been in the U.S., but that it suggested a racial hierarchy all the same. (Again, I do not profess to be an expert!)

THE SYNAGOGUE. One of three in Havana, actually – and that for just 1,500 Jews, down from 15,000 before the Revolution. According to the funny and charming Cuban woman who took our questions – and who had just come back from participating in some kind of cultural exchange in Columbus, Ohio – the Cuban people and Cuban government have never been particularly anti-Semitic. Rather, the sharp decline in their numbers had to do with political and economic, not religious, oppression. Namely, when the Revolution came, most of the Jews left. Our hostess described meeting Fidel at some kind of gathering and asking him why he had visited other houses of worship in Cuba but not a synagogue. Not long afterward, to their mild astonishment, he paid a visit to this beautiful, modern synagogue, built with funds from Jews living abroad, and, she said, proved to be remarkably knowledgeable and engaging.

(One more time, lest I not be clear: Castro is a ruthless dictator. He’s not Saddam, but the sooner he leaves – though it’s not likely to be soon – the better.)

HEMINGWAY’S HOUSE. Ernest Hemingway spent much of his life in Cuba, and we got to visit his home, Finca Vigia. Real nice. Click here for a very good story from US News, a few years back, that will give you a lot of the flavor my own account lacks. Pictures, too, including one of The Old Man upon whose tale The Old Man and the Sea is based. Though we didn’t meet him, at 104 or so, he is still alive and kicking (and his grandson, I believe it is, has taken to making a living showing him off). I have some letters Hemingway typed and hand-corrected on thin blue stationery from this home, and so was particularly interested to see the exact spot, and the exact typewriter, where – standing up, naked, as was his wont – he must have banged them out half a century before.

THE RIVIERA. This is a large high-rise hotel that Meyer Lansky and the American mafia built in 1958. Talk about the gang that couldn’t shoot straight! About two weeks after it opened, the Batista government fell to Castro and the hotel was nationalized. (One in our group wondered how history might have changed had the mafia, right then and there, rubbed out Castro.) Click here for a glimpse. What you won’t see is the hotel’s original brochure and advertisements, on display in the lobby. Amazing.

THE REVOLUTIONARY. We got to spend some time with a former high-ranking government official who now, at 66, has a prominent job dealing with foreign joint ventures. Born in Washington Heights – the Bronx, basically – the son of a Cuban dad and a Jewish mom, his family moved to Cuba when he was two. The last time he was back to Washington Heights, he was 13. He describes himself as a Revolutionary, is proud of what Castro and the Cuban people have accomplished, and believes that American attitudes toward the situation in Cuba are far too simplistic – and harsh.

STRAWBERRIES AND CHOCOLATE. Have you seen the film? The reviews are 5-star, and it was very courageous piece of Cuban film-making, but it’s not exactly what you’d call fast-paced for an American audience. I mention it because there is a now-famous restaurant featured in the film that we got to go to. The food was good, but mainly it is the bizarre experience of getting there and being there. Our bus dropped us off a couple of blocks away (something about it’s being one-way), and we walked down a dilapidated (almost everything in Cuba is monumentally dilapidated), deserted street. Not a storefront or sign of commercial life anywhere. And then we got to a sort of warehouse building a truck could have driven into, with a grand but scary old marble (?) staircase we were actually directed to climb. Really? In New York, or an American movie, you’d assume this was some kind of crack house or shooting gallery. Not a sign of the restaurant, let alone a doorman or anyone else. But up we went. On the second floor landing, off to the right, there was a Cuban family or household of some kind living – as squatters? – behind some largely open metal fencing, listening to music, having dinner, paying no attention to us. Up another flight, and there was what I suppose must have been a three-room apartment, with a kitchen in the middle and, instead of beds, three rooms of dining room tables, seating about 50. Waiters, commotion, crowded. mojitos – technically, private establishments like this are not supposed to seat more than 12 people, I think we were told. Well, there are exceptions to everything. Although it’s astonishing that more than 12 people a night could even find this place. Yet – not so! The Queen of Spain had recently been there for dinner, and any number of famous American movie stars, whose photos were on the wall. Jack Nicholson! (But no, Kevin Costner, who had been to Cuba not long before to screen the movie 13 Days, about the Cuban missile crisis, had not shown up for dinner.)

THE GAY BAR. Well, in this city of 2 million, there isn’t one. Instead, after dinner, around midnight, some of us went off in modern, comfortable taxis to a big, brightly lit movie theater where, standing outside, milled a weekend throng of both major sexual orientations (and perhaps a minor one or two). There, you find out where a sort of floating gay scene is happening that night, vaguely reminiscent of ‘the oldest established, permanent floating, crap game, in, New York’ that you may remember from Guys and Dolls (‘Where’s the action? Where’s the game? Gotta have a game or I’ll die of shame!’) And into an entirely different brand of cab – in our case, a Russian-built Lada on the way out, a 1952 Chevrolet on the way back – we piled, headed for the disco. This night, the disco was way out from the center of town, beyond paved roads, even . . . if it had not been so bizarre, it would have been scary . . . and there, finally, after traversing terrain out of a Jeep commercial, yet in an ancient Lada, we came to a semi-outdoor thatched roof, bordered by a wooden fence, with a bar at one end and, yes, a DJ spinning at the other. A dollar admission for Cubans, $2 for foreigners. It was crowded and friendly, but by the smell of it, may have functioned as some kind of stable most of the time. It was, in a word, bizarre. My thoughts alternated between counting my blessings – how extraordinarily fortunate we are to live here and not there – and wondering whether the cab we had asked to wait for us really would. How on earth would we ever get a cab out here otherwise? Who could even describe the address? Did it have an address?

A little after two, with the party in full swing, we went back outside and found at least 30 cabs waiting, virtually all of pre-1959 vintage, their drivers vying aggressively for our business. We chose the aforementioned 1952 Chevy and returned to the hotel without incident.

DR. RUTH. Dr. Ruth did not accompany us to the disco, or whatever it was, but she was, in almost every other venue, our most enthusiastic participant. The cigar factory, the synagogue, the schools, an AIDS clinic . . . Dr. Ruth was front and center. Nor is Cuba a country uninterested in sex. Cubans, we were told, love sex. Dr. Ruth found several occasions to bestow ‘good sex for the rest of your life’ on people we met. But she also had a message for us. Two messages, actually, and because our group decided not to quiz her publicly, she asked me to pass these messages on to people individually. One does not lightly say no to Dr. Ruth, all four-foot-not-many-inches of her (and one does not easily get her irrepressible, distinctive voice out of one’s head). ‘The first thing I want you to do,’ she told me, ‘is check your testicles.’ I was having this conversation? With my grandmother? She wanted me to pass this message on to others, many of them virtual strangers? ‘For what are we checking, Dr. Ruth?’ I asked. ‘For ir-reg-oo-lahr-i-ties’ — in much the same way as a woman periodically checks her breasts for lumps. Dr. Ruth has been spreading this message far and wide, and told me that a hotel employee came up to her at a recent speech to thank her – he had heard her on the radio, checked for ir-reg-oo-lahr-i-ties, found one, and caught it early enough, his doctor told him, that he saved his life. So there you are. Message number two was for any in our group, she said, concerned with the size of his penis. (Where are the euphemisms, Dr. Ruth? The allusion? Could we not just say, ‘concerned with . . . his size’?) ‘I want you to tell them to stand in front of a full-length mirror, brrrring themselves to an errrreection, and admirrrre themselves.’ Observe themselves from this much more favorable perspective, she assured me, and they would never lack confidence again. ‘Unless they are really very, very small,’ she added as an afterthought.

Tomorrow: Back to Business – Or, Well, Anything But This

Thanks for all your thoughtful comments, a sampling of which follows:David Maymudes: ‘I know you probably just said it so you could look like a moderate while criticizing the ‘invest 2% in the stock market’ silliness, but do you really think that raising the IRA/401k limits is a good idea? The 401k change only helps people who earn at least $65,000 and were hitting the old limit. The IRA change only helps people who have an extra $3000 at the end of the year that they weren’t spending before. OK, perhaps it’s better than the rest of the Bush tax cut, but how about something like ‘match IRA contributions dollar for dollar up to $1000,’ which would push some of the benefits to lower-income people and cost about the same amount?’

☞ Good points. Friday, I said that raising the limits made sense, meaning that, yes, it would increase the pool of retirement savings, as intended – whereas the privatization idea would not. What I didn’t address, and should have, was whether raising the limits this way would be worth the cost. Or would it be better to use our resources to provide ‘matching funds’ as you describe, and Vice President Gore proposed . . . or perhaps some combination of the two. Ideally, I’d like to see both. I’m a big believer in saving for tomorrow; and I’d love to see families earning $44,000 a year live as if they were earning $39,000 – it can be done! some people do get by on $39,000 a year! (well, a great many people do, actually) – with the $5,000 difference going into their IRAs. At the same time, it would be great to start lower-income families saving as well by providing all-but-irresistible matching funds. (Who can turn down free money?)

As expensive as it would be to do both, I would surely do both before I cut the top income tax bracket.

But I haven’t costed any of this out, and that wasn’t the focus of Friday’s column.

John Seiffer: ‘I think we got into trouble because social security is called retirement funds and there is some connection between what I put in and what I get out. This naturally leads me to ask whether I’m getting enough out, or whether I could have done better for my retirement with what I put in had it been put somewhere else. Yet this is actually the wrong way to describe social security. Social Security [isn’t an investment fund for our retirement, it is a taxpayer-financed safety net] – it keeps penniless people who can no longer work out of the gutter and keeps them from being a burden to their children or to strangers. This, by the way, is a benefit to EVERY individual. Aside from the moral issue, my life is much better off if I don’t have to step over old people in the gutter when I get in and out of taxis, and if I don’t have to buy a house with an extra room for my aging parents.’

☞ Yes, and yes.

Brooks Hilliard: ‘I have heard that the effective ‘return’ we citizens get on our FICA ‘investment’ is in the range of 2% or 3%. Is that true? Isn’t some sort of equity component of the social security funds a solution to this?’

☞ No. Our FICA money is, for the most part, not invested for our future retirement. As fast as we pay it in, most of it is paid right back out to our parents and grandparents – just as the taxes they paid when they were working were paid out in benefits to their parents (and the taxes your kids will pay when they are working will be paid out to you).

Social Security was never intended as an investment program, nor as being sufficient to provide a comfortable middle-class retirement. It was intended as a bare-bones, bare-minimum safety net – a pact between generations to assure that none would starve, each successive generation taking care of the last – and it has served that purpose, and is likely to continue to.

The first generation paid very little in taxes and got, relatively speaking, huge benefits in return. (For one thing, people started living longer than the original draftsmen of Social Security expected they would. Instead of collecting benefits for three years, they might collect for twenty-three.) That first generation made out like bandits. By now, with so many more retirees to support, the ‘return’ you are likely to get on the taxes you pay in will be much smaller. But neither, as John Seiffer points out above, are you as likely to have your grandmother living in your house with you for the next 20 years.

It’s true that in the past decade or so we’ve begun collecting more than we need to pay out right now, hoping to build a cushion for when the baby boomers are retired, with too few workers to support them all. (When Social Security was launched, there were about 40 workers paying into the system for each retiree receiving benefits. Now it’s more like 3 workers – and headed for 2.)

This surplus is invested in a special form of Treasury bond. I forget the exact formula that determines the rate, but it’s a lot more than 2%, at least before allowing for the effect of inflation.

Chris Ficklin: ‘However much I may disagree with you on most things, I’d have to say that I agree with you on privatizing Social Security. I’m disappointed by the fact that it seems Bush is acting like an impulsive teenager; doing and proposing things that look and sound good without fully thinking them through. I know how much you enjoy people from the ‘other side’ agreeing with you. I’m so ashamed! I’m going to go hide in the corner!’

Marissa Hendrickson: ‘Your column left out what I think is one of the most important points in this debate. People who favor privatization frequently complain that the current structure gives taxpayers an abysmal return on ‘their investments,’ but to say this is to miss the point of the program entirely. Social Security was never conceived as an investment program or a personal savings plan; it is a safety net to minimize poverty among the elderly and disabled, funded by a payroll tax on today’s able-bodied workers. So far we as a nation have been able to agree that widespread poverty among the elderly is unacceptable. Will this belief really change if the stock market fails people and their private accounts don’t provide enough income? My prediction is that if that happens, people will still turn to the government to bail them out. Why can’t people accept that one of the most honorable roles of government is to provide such safety nets? Call me crazy, but I think people (like me) who have the means to save for their own retirements should do so, and be glad they won’t need a government check to stave off poverty and hunger when they can’t work anymore. And call me a socialist, but I think it is pure greed to whine about paying payroll taxes to support those who are less fortunate, when any one of us could be forced to rely on that support if we had chosen a different life or if a different life had chosen us.’

David LeFevre: ‘How does transferring money from the working poor to the wealthy retired serve any useful service?’

☞ This is the case for a ‘means test’ to qualify for Social Security benefits. Many would argue, though, that fundamental to the success and widespread acceptance of the program is that – while it is weighted in favor of the less well off – everyone does get a benefit.

A compromise solution is to fully tax Social Security benefits (as we now, at 85%, largely do), so that those in high brackets ‘give back’ in taxes at least a fair portion of what they receive. One might argue that – above a certain income level – the full 100% and not just 85% should be taxable.

Joel Williams: ‘Social Security is a Ponzi scheme, and has been from the beginning, thanks to a bunch of politicians who wanted to promise high benefits for low cost. You cannot take a Ponzi scheme, convert it into a legitimate investment program and still leave the projected benefits intact without adding a bunch of money to the fund. That is simply the nature of a Ponzi scheme. It is high time that somebody just pointed that out.’

☞ Well, it’s not exactly a Ponzi scheme, because, for one thing, the original schemes did not plan to profit from it personally to any great degree, and because, for another, unless our birthrate were to fall below the replacement rate (and if lifespans wouldn’t keep lengthening in the annoying way that they have), the numbers can work out – even if at some point the retirement age for receiving full benefits may have to be extended in recognition of people’s longer life spans and better health.

Tom Wilder: ‘While I am a strong supporter of the Bush tax cut plan (and can’t wait to “get me a Lexus”), the idea of putting part of the FICA taxes into individual savings plans is unsound for all of the reasons you mentioned Friday. As a practicing member of the insurance industry I can only imagine the field day ‘financial planners’ will have ringing up the commissions on this.’

Coming Soon: What’s Wrong with the Missile Shield