BRUNELL: Perhaps America should take its cues from Cuba and cut the government

In the classic children’s story “Alice in Wonderland,” a little girl falls down a rabbit hole and finds herself in a strange world where everything is upside down, where all the rules have changed and peculiar people do inexplicable things.

In the classic children’s story “Alice in Wonderland,” a little girl falls down a rabbit hole and finds herself in a strange world where everything is upside down, where all the rules have changed and peculiar people do inexplicable things.

I know how she feels.

According to a Sept. 14 BBC broadcast, Cuban President Raul Castro will lay off at least 500,000 state employees by mid-2011 and boost opportunities in the private sector to help those workers find new jobs. He suggested that as many as 1 million government workers will be laid off to ease the burden on the Cuban government. Currently, the state employs 5 million people, 95 percent of the Cuban workforce.

The move is seen as an attempt to stabilize the Cuban economy, which has suffered from economic boycotts and the loss of subsidies from the now-defunct Soviet Union.

Castro’s privatization plan includes allowing more Cubans to run their own businesses, form nongovernment cooperatives and shift more state land, businesses and infrastructure into private hands through long-term leases.

The Cuban Workers Confederation, the only labor union allowed by the government, supports the move, saying, “Our state cannot and should not continue supporting businesses, production entities and services with inflated payrolls.”

Here in the United States, we seem to be going in the opposite direction. Government employment is increasing while private-sector employment is decreasing, and while the Cuban government is expanding private enterprise, our government is steadily encroaching on the private sector.

Take government jobs, for instance. The Obama administration says the federal payroll will grow to 2.15 million workers this year. The federal government has added almost 200,000 jobs during the recession while private employers have shed some 8 million net jobs.

And while the Cuban government is easing its grip on private businesses, the U.S. government is broadening its reach into the private sector. Bailouts, financial reform legislation and aggressive federal regulators are all increasing the government’s control of the private sector.

At a minimum, the situation is ironic. At most, it is unfathomable.

While Cuban officials warn of the danger of supporting bloated inefficient businesses, our government borrows billions to prop up companies deemed “too big to fail.”

While the Cuban government vows to promote private-sector opportunities, our new health-reform law and the proposed cap-and-trade legislation threaten to trap private employers in a complex and costly web of mandates, restrictions, fines and penalties, and regulations that will continue to drag our economy down.

Like Alice, we find ourselves in a mystifying world where down is up and up is down.

Cuba, one of the world’s most high-profile communist nations, appears to be recognizing that government control of the economy doesn’t work. Propped up for decades by billions in Soviet subsidies, Cuba is now on its own and its economy is crumbling. Even the revolution’s old guard acknowledges that things must change, so they are beginning to embrace capitalism and economic freedom as a way to save their country.

Cuba is realizing that stifling federal control of the private sector doesn’t work, period. Castro found out the hard way that individual economic freedom to innovate and be creative is the key to growth, prosperity and just plain making family life better.

I know this sounds bizarre, but perhaps the U.S. should take its cue from Cuba.

Don Brunell is the president of the Association of Washington Business.

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