Cuba: “You Too Can Own a Peugeot”
Pedro Campos
HAVANA TIMES — A sensationalist advertisement one would come across in Cuba before January 1, 1959 announced: “You too can own a Buick!” It wasn’t easy for Cubans to buy a Buick, for which one had to make a down payment of several hundred Cuban pesos (on a par with the US dollar at the time) and subsequent monthly payments that ranged from 100 to 500 pesos.
It was hard but not impossible, and many professionals, teachers and people with steady jobs did manage to make the monthly payments and buy, if not a Buick, at least a Chevrolet with 4 or 5 years of use, to be able to drive to work or take a family trip from time to time.
I know of a couple, both primary school teachers who earned less than 300 Cuban pesos between the two, who, through great effort, walked into a used car dealership and bought a 3-year-old Chevrolet, which they paid in monthly installments of 100 pesos over a 2 to 3 year period.
How did they manage it? They would rent the car out to a driver, Monday to Friday, from 8 in the morning to 5 in the afternoon, who would make money off it driving people to nearby towns. This way, they were able to finance the car, and the teachers had the vehicle from 5 in the afternoon until 8 in the morning the next day, as well as on the weekends.
Today, Cuba’s generous “socialist” government, which owns and decides everything through its monopolistic, State capitalist mechanisms, is announcing an end to the prohibition on the sale of new and used cars to the population and says the following straight to our faces: “You too can own a Peugeot!”
This State, the country’s chief (and, until recently, only) employer, which also provides its salaried workers with free public health and education so they can be more productive and work in good physical condition, pays measly wages that range from 300 to 1,000 Cuban pesos a month, that is to say, between 12 and 40 Cuban Convertible Pesos (CUC), a currency that is more or less on a par with the US dollar.
According to what has been announced, 2013 Peugeots have been put on sale by the monopolistic State at something over a quarter of a million dollars, which is roughly a quarter of a million CUC, or more than 6,250,000 Cuban pesos (1 CUC = 25 Cuban pesos).
I know a medical specialist who earns some 700 Cuban pesos a month. Public health employees are among the best paid government employees. This professional, thus, would have to work over 8,900 months, without spending any money, to be able to buy this Peugeot. In other words, he would have to work some 714 years to be able to afford this car.
Here are some other “specials”:
A 2010 Geely at 26,500 CUC or 650, 000 Pesos (928 months, or 77 years of work)
A 2011 Kia Picanto at 38,285 CUC or 957,125 Pesos (1367 months, or 113 years of work)
A 2009 Hyundai Sonata at 60 000 CUC or 1,500,000 Pesos (2,142 months, or 178 years of work).
And a range of other deals for new and used VWs, Toyotas, Renaults and other brands.
The information that has been made public to date makes no mention of payment methods, whether it will be cash down or through an installment plan (and, if so, what the interest rate will be).
I’ll leave all commentary in the hands of readers. I will limit myself to exposing facts and information. If someone were to ask me for my opinion, I would say: yes, yet another absurd prohibition (of the many that still stand) has been eliminated, but this measure has a nearly criminal underside to it, for the country’s economy is facing a severe crisis because of the State-command wage model which the government intends to “update”, not change.
It is yet another measure which does not go to the root of the disaster and seeks to secure more money for the bureaucracy and create the semblance of economic liberalization, yet another affront on the people of Cuba, on behalf of a socialism that has never existed and a people’s revolution that has been betrayed.
Who says they were “happy” to pay that?
Did they have any choice?
Look at Puerto Rico 500,000 have left in the last decade more than from Cuba Viva la democracia!
http://mobile.nytimes.com/2014/02/09/us/economy-and-crime-spur-new-puerto-rican-exodus.html?_r=0&referrer
Hey, you should live and stay in cuba if its so great. But do it like any regular cuban with the money they get pay, not with dollar. Get pay what they get pay and try to survive over there. Dale…
Thanks for the clarification. I suppose I am not the multitasker I purport to be. I have read Stiglitz. Solid assessment of how we got to where we are.
In your rush to answer you missed my sarcasm, the “depression” was the recent one euphemistically called recession. Under Clinton and Republican support repealed it “Glass-Steagall’s repeal. Robert Weissman writes: “It is an anniversary worth noting for what it teaches us about forestalling financial crises, the consequences of maniacal deregulation, and the out-of-control political power of the megafinancial institutions.” Read Joe Stiglitz book on inequality I just finished it. He was a recipient of the Nobel Prize in Economics.
You have got it reversed. The Banking Act of 1933, otherwise known as Glass-Steagall was passed as a result of the Great Depression.
…The excuse of all authoritarian and totalitarian states
My sources? ….Cubans. I am Cuban, I lived in Cuba, many of my friends are Cuban. I also visit the island, speak to people (who they are are not your concern) and I use my intellect to see who controls what and where things are going. Unlike your armchair Bolshevek sources
Cuba will move to a more open society (many in the Cuban Communist Party want this) but what makes it difficult is 1. Role of US dirty tricks which began almost after 1959 including terrorism and sabotage, the embargo and the shenannigans and paranoia of the Cuban exile community. When that changes, Cuba will transition to a more open society, while it is in state of siege…it will be slow….
To Informed Consent, no the state does not want that, I don’t know where your source is for this….
You are comparing mangoes with apples, stealing like the JP Morgan and the S%P pecadillos and countless other companies and NO ONE has yet gone to jail does not compare defaulting on usurious loans. Argentina did it and has done very well… I don’t care whether Democans of Republicats approved laws they all serve one master, the 1 per cent. Remember, eliminating the Glass-Stegall Act was a major cause of the depression (that is what it really was) and it was a bi partisan consequence of a government of the rich, by the rich and for the rich.
Your wrong. The “state” very much wants to do that, a la China. The key for them is finding a way to stay in control
As has been pointed out many times in these pages NOTHING in Cuba is free. The effective tax rate approaches 95 percent so in effect they pay for everything …and at substandard quality at that. Your Potemkin village of a socialist paradise is showing its true reality, unable to meet basic needs or keep up with its infrastructure. It can’t even properly grow its own food, and this with some of the worlds most arable land. In fact slaughtering a cow for private consumption is illigal yet Cuba somehow has managed to have less head of cattle in the 21century than it did during the 1950’s. As far as housing is concerned…..LOL
If it were preferable to live in Cuba I and my parents would have stayed, yet for 50+ years there has been a mad rush to get out. So apparently Cubans don’t seem to share your enthusiasm for. That’s the biggest condemnation of Cuba.
Your responses above to me and to Informed Consent reflect the false paradigm that Castro apologists frequently use to defend the failed regime. You posit that the ONLY other alternative to Castro-style socialism is the worst aspects of capitalism. Why don’t you consider as an alternative to the Castro dictatorship a type of social democracy as exists in northern Europe? There is free education and healthcare in Norway and very little homeless. The people of Norway are free to speak their mind and have an independent media and freely elect their heads of state. BTW, Capitalism is messy and prone to corruption BUT it does encourage the best and the brightest among us to reach their potential. Socialism has the opposite effect on progress. Cuba is a living model of social and intellectual stagnation.
The government of Cuba has several times defaulted on paying their loan obligations, so don’t point to Havana as an example of wise financial prudence. They have also been known to spend huge proportions of their national budget on some pretty hair-brained ideas.
By the way, the deregulation of the financial market which lead to the derivatives market and default credit swaps was part of the cause, but not the whole thing. Another factor was the removal of proper oversight rules for the financial industry. The Republicans and the Democrats can share responsibility for both of those bad ideas.
But the big factor which got the whole financial collapse rolling was the subprime mortgage market. That business was promoted by the Democratic party as a housing solution for the poor: force banks to lend money to people who had no way of paying for their mortgages. Freddy Mac & Fanny Mae (the senior directors were all very well connected to the Democrats) resold these bad loans as mortgage-backed securities. These toxic assets spread through the financial system like dry rot in a house. When too many of the subprime mortgages started to go into default, it turned out that the rot had spread to nearly every financial institution through the default credit swaps and derivative markets.
By the way, back in the 1990’s a young lawyer in Chicago helped bring a lawsuit against banks in Illinois to force them to provide these sub-prime mortgages to the poor. That was where the whole stupid idea got it’s start. The young lawyer’s name?
Barack Obama.
Better to have no medical care? Minimum social support net? Free education? I did not see homelessness as a huge problem in Cuba as it is in the rest of Latin America. Nobody goes hungry in Cuba, they may not always have filet mignon, but do not go hungry as in the US, the wealthiest country on earth.
Most of the wealthy don’t play by the rules, what do you think caused the recession in the US the working people? The poor? It’s called speculation on derivatives base don laws pushed by the Wall Street banksters. Thank god the state will not allow this in Cuba.
Better to have everyone equally poor eh? It’s that thinking that is the failure of Communism. You remove the incentive and what you end up with is a dejected work force, devolved of incentive. You end up with….Cuba.
Thank you for your honest clarification. I have no problem with anyone who works hard and gets wealthy, even super-wealthy, as long as they play by the rules. I believe in equal opportunity. It would appear that you want everyone to stay poor in order to ensure greater equality of outcomes. It is my observation that your view of the world stifles creativity and invention. After all, for all the negatives you can count no doubt, money does motivate. I respect your view but I hope to never live in a society where people who think like you are in control.
Whoever can pay those prices, has too much. I have been to a few of the luxurious paladares and hearing the owner talk about opening a few more (under the table of course) and then become a capitalist, That cannot be allowed. I am all for opening up but not to allow wealthy people to again control Cuba like before….
“Those who have too much”? Wow, so that’s how you think? So if you can afford to buy a car in Cuba, you have too much money. Do you know what that kind of thinking does? It makes people “who have too much” want to move to Miami. Then who is left in Cuba? Great policy.
If the government regulates commerce people complain, if it opens up a little people complain, if it regulates travel, it’s a problem, now poeple can travel, and they still complain……anti-revolution poeple love to complain. The purpose of this new policy is no to place a car in every Cubano’s house (that would create an environmental disaster, car accidents, misuse of resources, gasoline, individualism, traffic jams) better to improve the public transportation system (by milking those who have too much, a form of taxing the rich…). But even if cars were accessible anti revolutionaries would complain because it smacks of consumerism!
Good luck trying to knock Johnny off his hobby-horse.
The political compass an improvement over the linear left-right axis, but it has it’s limitations as well. The social axis should really be split up into several more planes, one each for political, religious, and social freedoms vs controls.
Some of the examples they provide I dispute, too. Thatcher, Harper and Mitt Romney are all much closer to the libertarian right quadrant that they have placed them. To claim these democratically elected politicians are so far authoritarian is absurd. Also, the lack of extra social dimensions blurs the distinctions between Canada’s Stephen Harper and some of his conservative American colleagues. Harper’s government has supported same sex marriage across Canada. I don’t see Mitt Romney ever taking that stand. And to place Ed Millband, the leader of the UK Labour Party, in the authoritarian-right has got to be some kind of joke.
With respect to that compass, Cuba’s Marxist-Leninist socialist past places it in the Left half, and their Authoritarian political control in the upper left quadrant (near Stalin). Meanwhile, the economic reforms Raul is introducing is pushing Cuba rightward toward the company of Mussolini & Hu Jintao. He continues to stay far away from from any kind of democracy and liberty. This trajectory confirms my assertion that Cuba is undergoing a transition from Marxism-Leninism toward Fascism.
I disagree with you. I think the naked greed of Castro’s minions is revealed with this latest disaster. They are so out-of-touch with reality and so contemptuous of the wealth in Miami, that they actually believe these prices will attract buyers. Cubans DID actually believe they would be able to buy new cars. My Cuban friends assumed prices would be a little higher than what I pay here in the US but the belief was that with more cars to purchase and with less bureaucracy to overcome, the free market would prevail and prices would be lower than the price of newer cars sold by permit letter. Castroism strikes again!
My wife’s grandfather used to work at the GITMO naval base prior to the revolution and up until the late 1980’s. As a result of the USD he earned at that base, he was among the top-earners in his area. He was a lawyer who ran the Human Resources Dept. for the Cubans who worked at the base. Anyway, on his salary, he was able to afford a brand new Pontiac. My wife’s mother (his daughter) says he was very proud of that car. That kind of pride, because of the failed economic policies of Castro-style socialism, has disappeared from Cuban society. My ‘grandfather-in-law’ knew that his new Pontiac put him among the rarified few who, based on hard work and education, could achieve and acquire whatever they aspired to. This post simply spells out what Cubans today have come to understand for the last 55 years. It does not matter how smart you are or how hard you work, you will NEVER be able to reach your dreams in Cuba.
I’m not sure about this. After all, Cubans were happy to pay 40,000 CUC for a 2001 Honda Civic as soon as it became legal last year. Of course MOST Cubans cannot afford those prices (same with the houses), so most likely the prices will come down quickly in the next couple of years.
John, thats a true Scotsman fallacy. Cuba IS a socialist country, just not a bottom-up democratic economic system.
The political spectrum is not lineal, so countries in the same economic position may and do often diverge in other ways. I personally like better the way the political compass do the classification:
http://www.politicalcompass.org/analysis2
This new policy was not meant to solve Cuba’s transportation woes. I doubt that it was meant to generate much tax revenue either — not at these prices. I also doubt that most people thought they might suddenly be able to afford a new car even without the steep mark-ups. Rather it seems to be nothing more than attempting to kill the black-market trade in permits for new cars — an easy way to rout out corruption in this area. I wouldn’t read anything more into it.
Thank you so very much for pointing out what so many posters at HT stubbornly deny in the face of fact: that Cuba is NOT a socialist country .
Whether from true ignorance or from a desire to make it appear that socialism, a bottom-up democratic economic system, is somehow identical with the Stalinist/Leninist and totalitarian systems as practiced in such states as the Soviet Union, China and Cuba and thereby prevent , even the thought of creating democratic societies is the question .
The other question most pertinent to the latest “reform’ dealing with auto buying is : what is the government thinking ? The prices will make autos available only to those few who have developed resources unavailable to the mass of the society .
This will create awareness in the Cuban people of a quite obvious and growing inequity that equals anything found under feral capitalism and which is in direct contradiction to socialist ideals. .
It would be useful to know the statistics on auto ownership prior to the revolution and the present before the senseless pricing issued by the top-down Leninist and NOT socialist government .