January 6, 2015

Reopening economic ties between the U.S. and Cuba will benefit both countries

Reopening economic ties between the U.S. and Cuba will benefit both countries

By Michael S. Hartz and Louis D. Johnston | 12/19/14
President Obama’s announcement that the United States and Cuba will resume full diplomatic relations came as a surprise, but it isn’t surprising that the United States and Cuba are rebuilding their economic relations.
Cuba was an important American trading partner before the U.S. trade embargo began in 1960. For instance, exports from the United States to Cuba were about 13 percent of total exports to Latin America in the late 1950s, with the dollar amount of exports from the U.S. to Cuba were equal to American exports to France over the same period. Imports from Cuba to the U.S. were of a similar magnitude.

Limited incomes

With renewed trade, American businesses will gain access to a new market for their goods, but the demand for those products is limited by Cuban incomes. The figure below shows Cuba’s income per capita from two perspectives: in real (inflation-adjusted) dollars and relative to U.S. GDP per capita.
Cuban GDP per capita, 1947–2008
Cuban GDP dropped precipitously after the fall of the Soviet Union and only recovered its 1988 level in 2005.
Created with Highcharts 4.0.4Chart context menuGDP per capita in 1990 dollarsGDP per capita relative to U.S.1950196019701980199020005%10%15%20%25%30%$1,500$2,000$2,500$3,000$3,500$4,000
GDP per capita in 1990 dollars: $3,764
GDP per capita relative to U.S.: 12%
Cuban income per person grew steadily from the mid-1960s until the collapse of the Soviet Union. From 1988 to 1993, Cuba’s income per capita fell by almost 40 percent and did not reach its 1988 level until 2005. All of this meant that Cuba fell further behind the United States in terms of GDP per capita, falling from 22 percent of the US level in 1947 to 12 percent in 2008.

Bright prospects for exports

The prospects for Cuban exports to the U.S. are brighter. First, after the collapse of the Soviet Union, Cuba refocused its economy to encourage tourism. With reduced restrictions on travel, more Americans will head to Cuba to relax with a nice cigar and a bit of rum and they will be able to bring back more of what they sample.

Commodity exports to the U.S. are another potential source of growth for the Cuban economy. Cuba’s sugar is famous around the world, but will likely face a tough time in the United States because we give our sugar producers a defensive barrier through quotas on sugar imports. You can bet that Red River Valley sugar beet farmers will not allow these barriers to fall without a fight.
In addition to sugar, Cuba also exports nickel, a mineral that is used in many industrial processes such as the creation of stainless steel. The U.S. imports around 43% of our nickel from the rest of the world and Cuba could benefit by entering the U.S. market.
Another policy change that President Obama unveiled in his speech was that he was planning to loosen limits on remittances, i.e. money that people living in America can send to friends or family living in Cuba. This will benefit Cubans by increasing the flow of dollars from the U.S. to Cuba.
One of the most important policy initiatives was that the United States is going to begin helping Cuba to develop better internet infrastructure. This is a big change that indicates Cuba is willing to work with U.S. companies and investors, something it was not willing to do during the Cold War and not able to do with the embargo in place.

Unanswered questions from 1959

Thinking about U.S. investments in Cuba is where things start to get a little bit messier. When Fidel Castro came to power in 1959, there was over $1.8 billion worth of U.S. capital in Cuba and all of those assets were nationalized by the Cuban government. This remains a touchy issue because the existing law that enforces the U.S.-Cuban embargo, the Helms-Burton Act of 1996, specifically states that the ownership of all $1.8 billion of U.S. investment that was confiscated after the Cuban Revolution has to be addressed before the embargo can be fully lifted.
President Obama outlined in his speech that he would engage Congress to change the law, but the incoming Congress looks to be very hostile. So it is not without some pressure from home that President Obama has decided to pursue this.
So what will this look like in the long run? Well, don’t buy your plane ticket just yet — there’s still a lot of work that needs to be done for Cuba and the U.S. to have a normal economic relationship. However, with around 2 million Cubans and Cuban descendants living in the United States and serious reforms in Cuba over the last few decades, this looks to be the first of many steps to recovery.
President Obama said something during his speech that would stand out to anyone from Latin America, “Todos somos Americanos,” “We are all Americans.” This, in a sense, is the most convincing piece of evidence that there has been a serious change in attitude towards Cuba, and that we’ll see some serious changes to U.S.-Cuban economic policy. So go ahead, open up a bottle of rum to celebrate — it’s the beginning of a new chapter with Cuba.

Michael S. Hartz is a senior at St. John’s University and a student coordinator at the Eugene J. McCarthy Center for Public Policy and Civic Engagement.

December 5, 2014

Joe Farry Professor Louis Johnston on the Legacy of John Brandl

Is there hope for cutting through gridlock? John Brandl shows us a way

October 30, 2014

Joe Farry Professor Louis Johnston named Growth & Justice Policy Fellow

Paul Anton, Louis Johnston Named G&J Policy Fellows
By: Growth & Justice
We are pleased to announce the addition of two highly respected Minnesota economists to our team of Policy Fellows. They are Paul Anton, chief economist for Anton Economics and formerly a top adviser to several of Minnesota’s largest banks, including the Federal Reserve Bank of Minneapolis; and Louis Johnston, associate professor of economics at the College of St. Benedict and St. John’s University, and also the Joseph P. Farry professor in the Eugene J. McCarthy Center for Public Policy and Civic Engagement. Anton’s areas of expertise include benefit-cost and return-on-investment analysis, economic impact analysis, and urban planning and land use studies. Johnston’s specialties include the evolution of Minnesota’s economy and the history of the U.S. economy before 1930. Both have been widely published over many years in economic journals and the news media. Anton serves on the Council of Economic Advisers for the state of Minnesota and Johnston is a frequent contributor of commentary and expert analysis to MinnPost and other Minnesota media.

August 18, 2014

Matt Rhoades To Be Featured at Mark Kennedy Frontiers of Freedom Lecture Series

The Eugene J. McCarthy Center is pleased to announce that "The Mark Kennedy Frontiers of Freedom Lecture Series" will feature Matt Rhoades at Saint John's University on September 15, 2014. The time of the lecture has yet to be determined.  

Rhoades is the Founder of America Rising SuperPAC and former Romney for America Campaign Manager.

This Lecture Series is made possible through the generosity of the Honorable Mark Kennedy '79.

August 5, 2014

McCarthy Center Student Coordinator Justin Markon on his summer experience at Citizens League

The Citizens League


For the last several years, the Citizens League has been fortunate enough to host a Brandl Scholar from the Eugene J. McCarthy Center at St. John’s University over the summer. The interns we’ve had from this program are bright and enthusiastic, and quickly become key contributors to our work at the League. This year’s intern, Justin Markon, was absolutely no exception. He stepped in with great initiative and became a valued member of the staff. Our thanks to him and the Eugene J. McCarthy Center at St. John’s for this ongoing partnership. The following are some parting words from Justin as he prepares for his final year at St. John’s.

Working with the Citizens League this summer has been a valuable experience. The League itself is a unique organization, as I’ve heard staff explain on numerous occasions. When I began my internship, words like “organizing agency” and “civic policy making” were difficult to grasp, and I know for all staff their meanings continue to evolve. I tried to jump right in and learn as much about the League’s work, including the electrical energy project, which has been extremely rewarding. My biggest takeaway from this summer has been learning about civic policy making and why the Citizens League is relevant today as much as ever. Unfortunately, our political system these days is not operating at its best. Speakers at seminars or discussions call for change to the current system, but do so without suggesting meaningful resolutions that truly help all parties. The Citizens League, over its 62 years, has crafted real solutions. Over that time, not every policy won unanimous support, but the staff and members choose issues they see as making Minnesota a better place. These are lessons I will take no matter where life takes me.
In three weeks, I will start my final year at St. John’s University on Minnesota’s prairie. I am very excited to take a class on local and regional politics, where I am sure I will use knowledge from this summer. Additionally, this year I will complete my senior thesis. I plan to write on the political differences between Minnesota and Wisconsin that have cropped up in the past decade. Undoubtedly, work by the Citizens League will serve as background for comparing polices. After graduation in May I will seek gainful employment, like most college graduates. Right now, I’m not sure what sector or policy area I will jump in first, but I am excited to see what is over the horizon.
Finally, I am excited for the future of the Citizens League. I am thankful to the Eugene J. McCarthy Center at St. John’s for giving me this opportunity to learn from and work with the Citizens League. As one of those citizens, I hope to stay involved and watch the continued success. Thank you to all the staff, members and supporters for making this a meaningful summer. The Citizens League is an important institution in Minnesota that will continue to serve the people and create “common ground for the common good.”

March 31, 2014

Sivarajah, Clark to speak at Politics & A Pint at CSB on Thursday

Collegeville, MN -- The Eugene J. McCarthy Center for Public Policy & Civic Engagement is pleased to announce that Anoka County Commissioner and 6th District congressional candidate Rhonda Sivarajah and Former MN Senator Tarryl Clark will be the special guests at this Thursday's Politics & A Pint.

Sivarajah and Clark will be joined by CSBSJU political organization chairs Bridget Cummings (College Democrats), Ashley Bukowski (College Republicans), and Katherine Zuroski (Students Fostering Conservative Thought) to discuss the challenges women face in politics.

CSBSJU Political Science professor Dr. Claire Haeg will moderate the discussion.

These six women will join the CSBSJU community on Thursday, April 3 at 5pm in O'Connell's at the College of Saint Benedict in Saint Joseph, MN.

The bi-monthly conversation series is sponsored by the McCarthy Center.



March 19, 2014

President Hemesath, Dr. Hayes Discuss Ukraine at Politics & A Pint

SJU President Dr. Michael Hemesath with CSBSJU Professor Christi Siver
and student Bridget Cummings after "Politics & A Pint: Ukraine on the Brink " on Thursday.
Collegeville, MN – Last Thursday, Saint John’s University President Dr. Michael Hemesath and Dr. Nick Hayes joined CSBSJU students and community members in Brother Willie’s Pub to lead a discussion about the ongoing crisis in Ukraine.

At the Eugene J. McCarthy Center for Public Policy and Civic Engagement’s “Politics & A Pint: Ukraine On The Brink,” President Hemesath and Dr. Hayes shared their insights on Ukrainian history and the current crisis.  

CSBSJU students Melissa DeOrio and McKensie Diver had the privilege to moderate the interview with our distinguished guests. “I thought it was a lot of fun.” DeOrio said. “It was awesome to see two really bright individuals share their insights and talents of the region with all of us.”

Remarkable turnout
According to last week’s attendance tally, the Politics & A Pint attracted 130 engaged citizens. This high attendance has now become a pattern.

Since the conversation series’ birth in the spring of 2008, its student and community participation has grown exponentially. McCarthy Center Director and CSBSJU Professor Matt Lindstrom attributes this success to the Center’s impressive presence on campus.

“Since we have started Politics & A Pint, the branding of the event has increased dramatically,” explained Lindstrom. “Students know that it’s by students and for students.”

In the future, the McCarthy Center hopes to attract even more students to its events. SJU President Hemesath shares this desire and encourages everyone to participate in a Politics & A Pint at their time here at CSBSJU.

“It’s important to have these discussions in class, but I think it is also great that our future engaged citizens get a chance to talk about these things in an extra-curricular setting,” Hemesath said. “That’s what Politics & A Pint is all about.”

Practical utility
And this unique environment comes with powerful benefits. Not only do students learn the value of continually being informed on the issues of today, but students also acquire invaluable skills like constructing arguments, articulating probing questions, and expanding one’s outlook.

Despite coming from different academic perspectives, President Hemesath enjoyed participating in civil-discourse and discussion with Dr. Hayes.

“It was fun to go back and forth with Dr. Hayes a little bit to see how a historian and an economist might view the world a little differently,” President Hemesath said after the event. “It was great to show students that we can disagree with each other and come to completely different conclusions by looking at the same set of facts.”

The importance of being internationally aware
Dr. Hayes echoed the President’s appreciation for the opportunity to speak in front of so many students and community members. Hayes’ also hoped his appearance showed students the importance of thinking globally.

“If you are not intellectually aware, if you don’t have a consciousness that is global and international, you will fall hopelessly behind,” says Dr. Hayes. That’s why he encourages students to be global citizens: to get ahead.

“When you get engaged internationally, it’s not just that you master a topic, it’s that you develop into a different person. You will have greater self-confidence. You will have greater knowledge of us and our encounters in the international world. Ultimately, it teaches you a lot about America.”

Learning these skills in the low-stake, informal environment in Brother Willie’s Pub is helping mold countless CSBSJU students into the kind of future leaders our current world so desperately needs.

“Given that we want to train engaged citizens for the 21st century, I think everyone here should take a chance and stop by a Politics & A Pint,” said President Hemesath.

To view the full "Politics & A Pint: Ukraine on the Brink" event on YouTube, click here.

President Hemesath graduated summa cum laude with a degree in economics from Saint John’s University in 1981 and received his master's and doctoral degrees in economics from Harvard University.

Dr. Hayes holds his MA and Ph.D in History from the University of Chicago where he specialized in 20th Century Russia and Europe. Currently, Hayes is a CSBSJU Professor of History and University Chair in Critical Thinking.

The Eugene J. McCarthy Center for Public Policy and Civic Engagement, founded in 2006, sponsors the bi-monthly conversation series on issues relating to politics, public policy and community involvement.

The next Politics & A Pint is scheduled for April 3rd at 5:00 PM in O’Connell’s Coffee House at the College of Saint Benedict and will focus on about the challenges facing women entering politics and the ways in which this generation can close the gender gap in public office.


February 12, 2014

McCarthy Center Director Matt Lindstrom Participates in Local Sartell Debate

Feb 7, 2014

A debate from the "Sartell Says: Town Hall Debate" series, on the motion "Chickens should be able to roost in residential areas." The debate touched on issues related to urban and rural life, local food, personal rights, property values, and more. Moderated by Patty Candella.

Debate Guests:
  • YES: Matt Lindstrom: Professor of political science at St. John's University and the College of St. Benedict. Director of the Eugene J. McCarthy Center for Public Policy and Civic Engagement.
  • YES: Jean Lavigne: Professor and chair, Environmental Studies department, St. John's University and the College of St. Benedict.
  • NO: King Banaian: Professor of economics, St. Cloud State University. Former State Representative.
  • NO: Lisa Schriefels: St. Cloud Health Director.
  • Patty Candella: Moderator, "Sartell Says: Town Hall Debates."

  • To listen to the full debate, click here

    January 15, 2014

    McCarthy Center Hosts Economic Talk With Louis Johnston and Chris Farrell

    A Year End Look at the Economy

    December 19, 2013
    Saint John's University

    Digital Commons @CSBSJU  
    Picture Courtesy of MPR News

    Two economists looked back on 2013 and predicted what's ahead economically for 2014 during a live radio taping for Minnesota Public Radio at noon Thursday, Dec. 19 at the Lecture Hall (room 102), Saint John's University Art Center, Collegeville.

    "MPR News Presents: A Year-End Look at the Economy" featured Louis Johnston, associate professor of economics at the College of Saint Benedict and Saint John's University who holds the Joseph P. Farry Professorship at SJU, and Chris Farrell, MPR's economics correspondent. The discussion was hosted by MPR Editor at Large Gary Eichten.

    "Chris and I will look at the economic scene from state, national and international perspectives," Johnston said. "Gary Eichten and audience members will ask questions that will push us to talk about where we've been, where we are and where we're likely going."

    Johnston writes a twice-monthly column on economics called Macro, Micro, Minnesota for MinnPost.com, reporting on economic developments in the news and what those developments mean to Minnesota. He is a frequent contributor on economic issues on MPR and WCCO Radio.
    Johnston, who has taught at CSB and SJU since 1997, specializes in macroeconomics and economic history.

    Farrell is economics editor of "Marketplace Money," a nationally syndicated one-hour personal finance show produced by American Public Media. He is also an economics correspondent for "Marketplace," the largest business program in broadcasting and chief economics correspondent for American RadioWorks.

    The award-winning journalist and author of two books, Farrell is a graduate of Stanford University and the London School of Economics.

    Eichten, an award-winning broadcaster who hosted the "Midday" program on MPR for over 20 years before retiring from that position in January 2012, is a 1969 graduate of SJU. Eichten began his career at MPR as a student announcer at KSJR in Collegeville (MPR's first station).

    The event was sponsored by the Eugene J. McCarthy Center for Public Policy and Civic Engagement at Saint John's University, serving the College of Saint Benedict and Saint John's University.

    To watch the full interview, click here.

    November 19, 2013

    Central Minnesota experts take academic perspective to political bickering and society

    Central Minnesota experts take academic perspective to political bickering and society

    Saint Cloud Times

    By Stephanie Dickrell

    Little compromise is seen in Washington, experts say, but it's rare in daily conversation although debate in Washington seems to have calmed down for the time being, it’s left many wondering whether compromise is a lost art.


    Attendees gather around economics professors and moderators King Banaian from St. Cloud State University and Louis Johnston from St. John's University on Thursday for the McCarthy Center-sponsored Politics and a Pint discussion on the debt ceiling. / Kimm Anderson, kanderson@stcloudtimes.com

    The struggle to effectively compromise also can be seen in the Minnesota Legislature, which itself triggered a state government shutdown in 2011. And a local professor said he has seen students who think they can argue a point by simply stating an opinion, not realizing they need to back it up with fact. It can even be seen at the dinner table where friends and relatives call for compromise then deride a politician for taking a moderate stand.

    The causes of the shutdown deal with political realities, but also how Americans argue and disagree with each other and how groups work through conflicts.

    Local experts examined the shutdown from their academic perspectives, suggesting factors that contribute to gridlock in Washington, whether it can be fixed and what it says about American culture.

    The answer? It’s complicated, and no, there’s no silver bullet.

    Matt Lindstrom, a political science professor and director of the McCarthy Center at the College of St. Benedict and St. John’s University, said it’s hard to say whether a “culture of no compromise” at the national level trickles down to state and local politics, but he said it would be an intriguing research project.

    He regularly has group discussions on contentious issues, such as the Politics and a Pint discussion last week where local experts discussed the debt ceiling debate with students and the public.
    “Most people don’t like the bickering and no compromise; they see the dysfunctionality of the shutdown,” he said. “But at the same time, they go to their dinner tables and Facebook and continue zero-sum dialogue.”

    “There’s a cognitive dissonance in our culture ... I see it over and over again,” he said. Lindstrom said it’s common to hear assertions that compromise is beneficial, followed by, for instance, labeling an anti-abortion Democrat a sellout or some Republicans RINOs — “Republican in name only,” he said
    “That whole definition of RINO is a deadly word. ... It’s a destructive acronym ... it’s driven by the underlying assumption that compromise is bad,” he said.

    It reminded him of a Ronald Reagan quote, he said: “The person who agrees with you 80 percent of the time is a friend and an ally — not a 20 percent traitor.”

    He harkened back to the oft-cited relationship between Reagan, a Republican president, and Tip O’Neill, a Democratic speaker of the House, one where they disagreed over policy but got along personally.

    “At least they were talking and respecting one another,” he said. “We need a lot more of that these days.”

    Lindstrom attributed the crisis in Congress largely to two facts: the lack of cross-party socialization between members of Congress, and electorally “safe” legislative districts. In safe districts, candidates and office-holders don’t have to worry about appealing to the middle. Instead, they worry about losing a primary to someone with a more extreme position to the right or left.

    Can't they all just get along?

    Arik Putnam is an associate professor of communications at St. Ben’s and St. John’s. He regularly teaches students the dynamics of debate and how to debate to resolve conflict.

    He said the knee-jerk reaction to crises like those in Congress is “can’t they just get along?”
    Humans incorrectly believe we’re good at dealing with conflict, he said, but we’re not. Simply asking Congress members to put aside personal interests won’t work.

    “It won’t work. That’s an insane expectation for a human being,” he said. “The notion to put aside differences and come together is so naive and ahistorical and a bad idea.”

    “The idea is not to get rid of difference but to find better ways of dealing with it.”

    And the fact we complain about their inability to compromise means we’re implicated in that culture, and that it’s part of a larger cultural trend.

    “We like to feel judgmental. There’s a lot of pleasure in judgment,” he said.

    He likens it to obsession with the foibles of celebrities, because we can say to ourselves at least we’re not like that.
    “It’s the same kind of titillation in scandal, conflict and disagreement,” he said. “Conflict itself is good, but the titillation around it is not.”

    The blame game

    Putnam contends much of the rhetoric around the shutdown wasn’t focused on resolving the conflict, but rather to blame the other side.

    “I think appearing to disagree is more profitable. In the contemporary debate about shutdown ... it has everything to do with blame,” Putnam said. “Blame is a really profitable thing to do. ... Accusing other people is really useful.”

    “By posturing, you put off loss,” he said. “We need to find better of ways dealing with not winning everything we want.”

    St. Cloud State University Professor of Political Science Steve Frank said accepting loss as part of the political process informs how he approaches another of his roles: that of a St. Joseph City Council member.

    And when you do things incrementally, it’s sometimes easier to get consensus.
    “You don’t have to change everything at once.”

    Putnam high worries events such as the shutdown and debt ceiling deadline could make students less politically engaged and more cynical.

    He said he is now seeing students who fail to realize the need for evidence to support an opinion.
    “People don’t even tend to justify things anymore,” he said, behaving as though an opinion and an argument carry equal weight.

    “The process of justification ... is more important than the assertion itself,” he said.

    Work with the 'enemy'

    Lindstrom said the lack of socialization between Congress members “dehumanizes the opposition.”
    “When you don’t know the other person as a human being, but just as a ‘D’ and an ‘R,’ that incentivizes the culture of no compromise because you’re working with the enemy,” he said.

    To get his students to humanize another position, Frank encourages students to change their media habits.

    To students who primarily watch Fox News, he suggests reading New York Times editorials. Students who watch MSNBC are encouraged to check out The Wall Street Journal’s editorials.

    “That doesn’t mean you accept those ideas,” Frank said, but “if you get a better understanding of where people are coming from, you see where the common areas of understanding are.”

    Opening minds

    “In order to engage in genuine debate, you have to prepare to be wrong,” Lindstrom said. “You have to be open to what they have to say to you.”

    That’s a trait that isn’t widely encouraged.

    “We’re more committed to assertiveness and conquest,” he said.

    How do we fix this? Experts agree: There’s no quick fix.

    Making legislative districts more “purple” — less dominantly Democrat or Republican — could lead to political moderation, Lindstrom said.

    But redrawing of legislative districts is years away and in some ideological strongholds probably wouldn’t change much.

    House seats, with their shorter terms, were designed to be in touch with the political winds of the day, Lindstrom said. “However ... because of the safe seats, the political winds are not as impactful,” he said.

    As for an open mind?

    “Both parties are guilty of that bunker mentality,” Lindstrom said, because interest groups are watching closely and scoring votes.

    “If you see 360 degrees, that doesn’t mean you’re selling out,” Lindstrom said. “It means you’re talking to other sides.”Central Minnesota experts take academic perspective to political bickering and society