Cuban confusion: Embargoed truths. (Citings).

How WELL HAS the decades-old U.S. embargo of Cuba worked? The official story is that the 39-year-old time-out imposed on our island neighbor to the south of Florida has successfully isolated Fidel Castro and friends from the rest of the world. Cuban officials are all too happy to agree: They need someone to blame for the foundering economic conditions that their people face.

A new study by the Cato Institute's Jonathan G. Clarke and the Hoover Institution's William Ratliff takes both sides to task. In "Report from Havana: Time for a Reality Check on U.S. Policy toward Cuba," Clarke and Ratliff detail their recent trips to Cuba and interviews with officials, dissidents, and regular citizens. The authors argue that despite almost four decades of American opprobrium, Cuba has managed to make solid economic ties with close U.S. allies such as Canada and the United Kingdom.

They also show how Castro has failed to harness those lucrative connections by squandering resources on bankrupt socialist schemes. For instance, the report notes that while housing is "virtually free," it is also in extremely short supply, with extended families often packed into cramped quarters. Wages are also a problem, with the average state employee bringing in about $12 a month. According to Clarke and Ratliff, "an attractive lady can earn more in two nights than a state-paid neurosurgeon does in a month."

The report recommends engagement through free trade and allowing private citizens to travel freely between the two countries. (The latter is already happening despite continued restrictions, according to the report. Americans who can't get into Cuba legally through cultural, journalistic, or educational exceptions can easily slip in through a third country.) It also suggests dropping U.S. government support of anti-regime activities within Cuba, especially a proposed Senate bill that would deliver $100 million to Cuban political and human rights activists. Castro's policies are bad enough to fail on their own, say the authors. Removing punitive American policies would rob him of the one thing he needs most--a scapegoat.