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CNN'S AMANPOUR

Solving America's Economic Problems; Changes in Cuba

Aired June 4, 2012 - 15:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


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CHRISTIANE AMANPOUR, CNN HOST: Good evening, everybody, and welcome to the program. I'm Christiane Amanpour.

When President Barack Obama said last week that the U.S. encouraged change in Cuba, Fidel Castro responded that the American empire would fall before Cuba did. Fidel has never been one to pull his punches.

In fact, there have been major changes in Cuba, economic ones, introduced by Fidel's brother, Raul. But in my brief tonight, this question: Do the Castro brothers, now in their 80s, have the time or the will to bring about real political change?

Since Raul Castro became president in 2006, Cubans can now own the property they farm, buy and sell their own houses and cars and all jobs are no longer on the government rolls, and there are also small private businesses. But one of the fundamental rights of democracies, the power to choose between different political parties and also to dissent, is forbidden.

Just this spring when the pope visited Cuba, dozens of dissidents were rounded up before he arrived. Tonight, though, we have an extraordinary and rare opportunity to ask a Castro about Cuban reforms.

Mariela Castro Espin is Raul's daughter and Fidel's niece. She herself is an activist fighting for gay rights in Cuba. In the early days of the Castro revolution, gay Cubans were sent to labor camps for reeducation.

Now, largely thanks to Mariela's efforts, gays and lesbians are openly expressing their pride. But we want to know whether this will translate into greater rights in other areas, like political reforms and freedoms. In a moment, I will ask Mariela Castro about all of this. But first, a look at what's coming up later in the program.

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AMANPOUR (voice-over): In the beginning, there was economist John Maynard Keynes. He created the stimulus back in the 1920s. And Keynes begat Nobel prizewinner Paul Krugman, perhaps today's leading proponent of Keynesian economics.

And Paul Krugman says that we can end the world's economic crisis if only the leaders of the world will follow two simple commandments, thou shalt spend now, cut later.

Then 23 years ago the world held its breath as one brave man faced down a tank and the brutal government behind it. Today while the world outside China remembers on the mainland the memory has been officially erased. But some lights are hard to extinguish.

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AMANPOUR: All that a bit later. But first my exclusive interview with Mariela Castro, who's been on a rare visit here to the United States and perhaps in rare agreement with the United States president on the issue of gay rights.

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AMANPOUR: Mariela Castro, thank you for being with us.

MARIELA CASTRO ESPIN, DAUGHTER OF RAUL CASTRO: Thank you.

AMANPOUR: I want to ask you first, who inspired you to this cause of gay rights?

ESPIN (through translator): In the first place, it was my mother.

My mother began to do this kind of work in the Cuban women's organization, first defending women's rights, children's and youth rights and little by little she began to try and have people be respected in the LGBT community that, because of a very patriarchal culture inherited from the Spanish system continues to be our reality, these prejudices are still repeated.

AMANPOUR: Let me show you these pictures that we have found, amazing pictures of you and your family, your mother and your father and your siblings. This is the current president, Raul Castro, your father. And this is your mom, Vilma.

ESPIN: Yes.

AMANPOUR: And which is you here?

ESPIN: Here. Esta.

ESPIN (through translator): I'm right here. This is me. I'm the second child.

AMANPOUR: Given your family's history and the revolutionary hero and the tough guy image in Cuba, was it difficult to take up this cause of gay rights?

ESPIN (through translator): All families in the world are patriarchal families and they're machista families. And in the case of my family, the fact that my mother was already working in this field, she ensured that my father interpreted this reality in a more flexible way.

And for me it was always easy to speak openly with my parents and this idea of fighting against homophobia was really something that I took from them.

But even so, although I found understanding in my family and my family was very understanding, even my father is very understanding right now, it's a very difficult and complex process, and this is why my father always said that I have to be very careful about everything and to do this very attentively and carefully so that I wouldn't hurt other people who don't understand, but that I do have to provide people the instruments with which they can respect other realities, even though they don't understand them.

AMANPOUR: You have written, "As I began to recognize the damage that homophobia was doing to society, I would come home and confront my parents with the issue. And when I got home, I said to my father, `How could you people have been so savage?' My dad said, `Well, we were like that in those days. That's what we were taught. But people learn.'"

So it was an evolution for your father.

ESPIN (through translator): Exactly. I think that Cuban society as a whole has been changing and its political leaders are also changing as part of society.

AMANPOUR: Even in this country, it's taken a long time for politicians to agree, for instance, to gay marriage, same-sex marriage. President Obama has just said that he supports it. You must admire President Obama.

ESPIN (through translator): Yes. And when I heard this news, and I was questioned about it in the press, of course I can say that I support and I celebrate what President Obama has done. I believe that it's very just and I feel a great deal of admiration for President Obama.

I believe that if President Obama had fewer limitations in his mandate, he could do much more for his people and for international law and international rights. Yes, I think that I dare to say that, because I'm not American. That's really a right that the American people have. But I feel the right to express what I feel, and if I was an American citizen, yes, I would vote for President Obama.

AMANPOUR: On this issue of same-sex marriage, do you think that will become legal in Cuba?

ESPIN (through translator): Already several years ago, my mother began to promote this bill and even trying to propose changing legislation. First we were proposing the freedom of same-sex marriage.

But since there's been such a debate on this and there are so many diverse opinions in Cuba, what is being proposed right now are civil unions, where gay couples have the same rights as heterosexual couples. However, this hasn't happened as yet, and people who are in same-sex couples do not have any protection.

AMANPOUR: You can see these pictures of gay rights marches in Cuba itself. When do you think this law will be taken up? When do you think that there will be progress from the Cuban parliament on this?

ESPIN (through translator): According to what had been planned, it's this same year that this still has to be presented, which recognizes the rights of same-sex couples.

AMANPOUR: As we've been talking, you've talked about human rights and you've talked about the limits of the state. So let me ask you about the rights in your country and whether you think that gay rights, civil rights, could lead to more different kinds of rights, political kinds of rights. Where do you see this trend going, opening up the space for civil rights?

ESPIN (through translator): At present, in the last few years, there's been a big debate that the Cuban people have participated in in many sectors. And there have been criticisms and suggestions of what we have to change in Cuban society.

And many valuable ideas have come from this. And what we've seen is what the population believes should be our socialist transition process in Cuba. And we want to include everything that we believe to be our need. And of course, this translates into rights, civil rights.

AMANPOUR: Well, let me ask you about that. I've been in Cuba several times over the last 14 years, and I can see that under your father, President Raul Castro, there's been opening on the economic front, but not so much on the political front. Again, do you think these civil rights will lead to more political diversity, more political rights?

ESPIN (through translator): As to political rights, what are you talking about?

AMANPOUR: Obviously, there's one party in Cuba, so that's one issue. But Human Rights Watch says that Cuba remains the only country in Latin America that represses virtually all forms of political dissent. So I'm trying to figure out whether there is space in Cuba for broader political rights, where people, for instance, can dissent without being sent to jail.

ESPIN (through translator): All right. Human Rights Watch does not represent the ideas of the Cuban people and their informants are mercenaries. They're people that have been paid by foreign governments for media shows that do not represent Cuban positions correctly.

However, the presence of a sole party in Cuba came from the fight against colonialism, from Spain. Jose Martin had the merit of creating the Cuban revolutionary party in Cuba as a sole party, specifically to achieve independence and to avoid domination by the United States. So that's the line that we followed in Cuban history because conditions haven't changed.

And it hasn't been easy. We've been working for many years to achieve this. We've achieved it in many spheres, in human rights, the rights of women, health, in many areas. But in other areas, where we haven't reached that, we're still working. That demand, that Cuba have various parties, no country has shown that having plural parties leads to democracy.

So the suggestions that they want to make to us aren't valid. Conditions haven't changed. Cuba is a country that for over 50 years have been subjected to the violation of international law with the financial blockade which has not allowed Cuba to access development.

AMANPOUR: I think I heard you suggest that if the embargo was not there and if you were not under pressure, that there would be a different political reality or there could be a different political reality in Cuba. Is that right?

ESPIN (through translator): Exactly. That's right. If Cuba weren't the subject of an economic and trade embargo, which has created so many problems for us, then Cuba, it wouldn't make sense to have a sole party, just one party. But it's when our sovereignty is threatened that we use this resource, which has truly worked in Cuban history.

AMANPOUR: As you know, there are many people, even inside Cuba, who feel that if the embargo was lifted, it would actually cause the one-party system to collapse. It would cause, perhaps, socialism to collapse.

ESPIN (through translator): I don't think it would collapse. I don't think socialism would collapse. I think it would become stronger. This is why they don't lift the embargo.

AMANPOUR: To be continued, this conversation.

Thank you very much for coming in.

ESPIN (through translator): Thank you very much.

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AMANPOUR: And, indeed, we will continue that conversation tomorrow. We'll talk about the controversial case of American prisoner in Cuba and the five Cubans who are here in American jails. We'll also talk about travel restrictions from Cuba.

And before we go to a break, I want you to take a look at this picture. That is Raul Castro, Mariela's father and Cuba's president, driving a Jeep for his brother, Fidel, El Presidente himself. And that was 50 years ago. Raul turned 81 this weekend, and who will get behind the wheel of state after he's gone? That remains a mystery. We'll be right back.

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AMANPOUR: Welcome back to the program. And now to the economy.

Paul Krugman, Nobel prize-winning economist and "The New York Times" columnist is nothing if not consistent. Since the earliest days of the current economic crisis, he's been shouting for a targeted approach to reversing the recession and raising employment over and over again. Just take a listen.

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PAUL KRUGMAN, ECONOMIST: You look at the basic structure of what's been happening, it does look like the beginning of the Great Depression.

The textbook answer is spend now, cut later.

We've had an overwhelming vindication of the ideas that say that this is the time for governments to spend. This is the time not to cut back. The urgent priority is jobs. Deficits should wait. And this whole notion that, you know, once you increase spending, you never bring it back. The experience of the last three years is that perfect refutation.

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AMANPOUR: In other words, John Maynard Keynes, Krugman's economic role model and the creator of the economic stimulus, was right all along. Now with the Eurozone in crisis and the rest of the world poised for economic decline, Krugman feels increasingly like Cassandra, the Greek prophet, cursed with a clear vision of the future and yet was never believed.

Krugman's new book, "End This Depression Now," is both a policy prescription and a cri de coeur. Paul Krugman, welcome, thank you for being here.

KRUGMAN: Thank you for having me on.

AMANPOUR: I don't know about Cassandra, but, my goodness, this is a - - this is a bad situation here.

KRUGMAN: Yes, terrifying.

AMANPOUR: So "End This Depression Now," how?

KRUGMAN: The economics, as I've been saying for years, as you just pointed out, the economics is easy. We need a burst, a temporary period of more spending, which is relatively easy to arrange in terms of the actual economics of the administration.

We need a commitment by central banks, by the Federal Reserve, by the European Central Bank, that they will not pull the trigger on -- that they will not worry about inflation for a while yet. And it could be over quite quickly. The politics --

AMANPOUR: Well, I was going to say, the politics, yet everybody's agonizing over this. And it looks like President Obama, who is really pilloried as the biggest spending liberal of all time, the great leviathan state, and yet you say the critics have got it all wrong.

KRUGMAN: Yes. So, seems we have a chart here.

AMANPOUR: OK.

KRUGMAN: So the red line here is -- these are both real per capita. So they're the rates of growth of two things. The red line is GDP. And what you see is, of course, this gigantic crash, which is the Great Recession and then our alleged recovery, which is, however, slow.

It is what you're supposed to do after a terrible crash like this, is have a period of very high growth, mourning (ph) in America, when you recover. We have not had that because the aftereffects of a financial crisis are very large.

What you're supposed to do in that case is for the government to spend, when the private sector won't, to support the economy until balance sheets have been repaired, until the housing excess has been worked off, so that the economy can come back.

What's actually happening -- so the blue line is the rate of growth of government spending in the United States, all levels of government, again, real per capita. And after a fairly modest stimulus, fairly modest in the beginning, now it's actually plunging.

So -- and this, by the way, this only shows us back to 2000. But we haven't had a cut in government spending on this scale for 60 years, not since we were demobilizing from the Korean War. This is exactly what the doctor says you should not do.

AMANPOUR: And yet this is the Republican prescription here in the United States.

KRUGMAN: That's right. They have -- this is what they want. They say -- it's what they said they will do after the election if they win. But in fact, it's what's happening already because they won't pass anything Obama wants, because state and local governments are cash-strapped and they won't let Obama give them more aid.

And so we are doing, in effect, quite harsh austerity in the United States right now.

AMANPOUR: So austerity, as we've seen now in this -- in this graph, is actually hurting the very thing that everybody says they want to increase, which is jobs and all the rest of it.

KRUGMAN: That's right, because the private sector is still overleveraged, too much debt. There was a lot of private sector excess. People are -- feel they can't spend.

The trouble is that doesn't work when everyone tries to cut spending at the same time. My spending is your income; your spending is my income. So we get into this downward spiral that the government is supposed to break, and instead the government is adding to it.

AMANPOUR: And we have the same situation in Europe. And let's just keep it in the United States for a moment before we go to Europe, because clearly President Obama is really worried now, because what's happening in Europe is blowing back against his election chances.

KRUGMAN: That's right. The United States was never -- we didn't have a boom by any means, but we had something which could plausibly be construed as, well, at least we're on the road back. Now that has slowed to a crawl. At least some of that is the backwash from Europe, so, sure, and of course, none of this has anything to do with anything he's done.

AMANPOUR: So what does he do, because he's been having calls with the major European leaders. Obviously, he's trying to get them to do something to help his reelection chances and, presumably, the global economy.

KRUGMAN: Yes, very little. I mean, they -- Europe is a gigantic economy. It's like the United States. We can no more really push them into doing something they don't want to do than they can do -- push us into doing something we don't want to do. We are marginal players here. This is a European problem.

AMANPOUR: All right. Well, the -- it is a European problem, and the head of the European Commission, Jose Manuel Barroso, has said recently about austerity, quote, "I can say the medicine is beginning to work." He basically says the good news is that budget deficits are coming down, and therefore, apparently, they're insisting on more of the same.

KRUGMAN: Wow. I mean, it's -- I mean, budget deficits have come down some. But that's -- you know, that's like asking how many bombs you've dropped. The question is, what about the results? And the results are terrible. The European economy is clearly now in a second wave of recession, unemployment is soaring. And it's coming apart politically, economically, because this is unsustainable.

AMANPOUR: It's a disaster, you say, and does this -- is this going to affect the euro? Do you see Greece exiting? Do you see a contagion, and there would be no more Europe?

KRUGMAN: I think Greece exiting is, by far, more likely than not. It's just hard to see any plausible route for Greece. Exit from the euro is going to be devastating, confusing, but the current course is unsustainable and an exit might possibly give the Greeks a chance to recover after a year or two.

Then once it's been shown that the euro is reversible, that it was not a permanent arrangement, then there will be enormous pressure. There will be runs on the banks in Spain and Italy, and then the question is what do the European -- policy will be to do then?

AMANPOUR: Well, you were just in London and you wrote quite a powerful column in "The New York Times" about what you see going on. Obviously you say that austerity should happen in boom times, not bust. But you've also said that these austerians seem to be talking about shrinking the state.

KRUGMAN: That's right.

AMANPOUR: Is that an excuse?

KRUGMAN: To a large extent, certainly in Britain and here. When people say, oh, we believe that budget -- you know, look, many if not most people who go on and on about budget deficits are really not all that obsessed with budget deficits.

They certainly don't mind tax cuts for rich people. What they really want is they want an excuse to shrink the state. They want an excuse to bash social programs, which is funny, because you know, who are the -- who's actually doing well in this crisis? Not a long list of countries.

But it includes, for example, Sweden, with its famously generous welfare state. So they're using this crisis as an excuse to pursue an unrelated agenda.

AMANPOUR: We remember back in 2008, when this just seemed like the world was going to go off a cliff, the United States government, other governments poured money into their economies. But it doesn't seem to be happening at -- is there a sense that our political leaders are unsure about what to do?

KRUGMAN: Well, definitely, there's -- in a way, 2008 was simpler, because it was an immediate banking crisis, and it, for the time being, at least, it was only a banking crisis. So throw money at the banks, save the banking system. People could understand that.

Now that's not enough. There is a banking crisis in Spain and elsewhere, but it's tied in with a whole broader macroeconomic crisis, and dealing with it requires that people drop some of their preconceptions.

The Germans have got to stop treating this as a morality play. The ECB, the European Central Bank, has to stop being so obsessed with the notion that even a little bit of inflation is a terribly dangerous thing.

The Fed, to some extent, too, and so this is requiring that people change their fundamental world outlook, that they change underlying policies, not just throw some money at the banks. And they do it fast.

AMANPOUR: And what if they don't?

KRUGMAN: Then Europe can break up fast. I mean, Europe can break up in months. It -- we've reached that point. It doesn't have to be a prolonged process, could be almost unbelievably quick if it happens. That will have huge financial backwash. It will have backwash on the U.S. economy. We're not doing so well ourselves. It could lead to --

AMANPOUR: Around the world, too, we hear China, India, Africa, everywhere, suffering.

KRUGMAN: Right. I mean, I still -- I guess I can't bring myself to believe that we're actually going to have a full replay of the Great Depression. But a second leg, a second Great Recession, a second leg of this one is all too possible.

AMANPOUR: Paul Krugman, thank you very much indeed for joining me.

KRUGMAN: Thank you.

AMANPOUR: And a chilling prognosis indeed. We'll be right back with our final thought.

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AMANPOUR: And finally tonight, tens of thousands gathered for a candlelit vigil in Hong Kong, remembering 23 years ago when the Chinese government crushed the protest that had inspired the world.

The day was ignored on the mainland -- or was it? Imagine a world where a revolution lives on by the numbers. The Shanghai stock exchange fell 64.89 points today. Those numbers also represent June 4th, 1989, the day the tanks rolled into Tiananmen Square.

CNN was there, the eyes of the world, when one lone protester, whose name has never been known, took on those tanks. The image is still awe- inspiring as one man challenges his country's military might.

Chinese authorities want to pretend those days never happened. They have blocked Internet access to search terms like 23, for the 23rd anniversary, or 6/4 for June 4th, and even the word "candle," as in candlelight vigil.

That's it for tonight's program. Thank you for watching. Goodbye from New York.

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