By Robert E. Prasch, Professor of Economics at Middlebury College. Originally published at New Economic Perspectives
Anyone who follows the news periodically, if not more often, wonders about the criteria making certain issues or persons “newsworthy,” and others substantially less so. One reliable indicator of newsworthiness is that the story happens in Washington, D.C. A second is an unusual or counter-intuitive event (“Man bites dog”). A third is the prospect of large losses. This last quality, however, renders the relative neglect of Puerto Rico’s debt crisis an interesting anomaly.
To get a sense of this conundrum, let us reflect back on the extensive coverage preceding Detroit’s Chapter 9 bankruptcy this past July. At the time of its filing, Detroit was a city of 700,000 persons, down from 887,000 as recently as 2005, and 1.2 million in 1980. The mass media began to cover the story months before the city’s formal declaration of bankruptcy. A common feature of these stories was that Detroit’s filing was by far the largest muni-debt bankruptcy in U.S. history, with an estimated $18 billion on the line (Jefferson County, AL and Orange County, CA were a mere $4.2 and $1.6 billions respectively). We saw numerous stories about the demise of a once-great city, the politics surrounding the payment crisis, and a fairly robust investigation into the plight of the city’s pensioners, residents, home owners, and sundry other stakeholders.
By contrast, Puerto Rico has a much larger population with approximately 3.7 million residents. As with Detroit or any other location under economic pressure, its population has been shrinking rapidly, by about 1% per annum since 2010. This is not too surprising since Puerto Rico’s GDP has only recently begun to stabilize after contracting in every year since 2006. A large portion of this contraction is due to greatly reduced levels of investment and construction, along with stagnating “exports” to its primary trading partner, the United States. Unsurprisingly, its “headline” unemployment rate is 15.4%, much higher than any state in the Union. While I have not become aware of any substantive data on the demographics of those who have left and those who have stayed, similar economic stresses across other cities and regions make it safe to presume that those who have departed are younger, more educated, and more employable.
As to the crisis itself, depending upon whom you read, somewhere between $55 and $70 billion of municipal or “muni” debt is at risk of default. Of this, just shy of $1 billion must be paid out or refinanced over the next month. In light of the market’s bearish turn on Puerto Rican debt, this will be neither easy nor cheap. As an index of market sentiment, consider that yields on Puerto Rico’s 20 year bonds, which were around 5% as recently as May, have now surged to over 10%. The market’s sense that Puerto Rico’s debt load is unmanageable was given additional impetus this past week when S&P and Moody’s downgraded the ratings on the Commonwealth’s bonds to “junk.”
With its population and economy shrinking, yields on its debt increasing, tax levels rising, businesses struggling, and bond market sentiment becoming notably bearish, Puerto Rico is in a terrible bind. To add to its woes, legal opinion currently holds that as Puerto Rico is not a sovereign government, it most likely does not have the legal authority to file for bankruptcy. Such an inability means that it cannot use the threat of a filing to garner leverage in working out terms with its creditors, and it cannot count on an informal deal freeing it up from predations by “vulture funds.”
Given all of the above, why is this story not more newsworthy (a late exception is this Sunday’s New York Times)? If we merely consider the size of the problem, it should be evident that more people will be directly afflicted by cuts in government services, lower pension payments, and a weakened labor market, etc., than occurred as a consequence of the collapse of Detroit’s or Jefferson County’s finances.
To be certain, some stories have appeared – almost all of them in the business press. The “angle” has been almost entirely on the financial side – the ratings downgrades, the outlook for investors, the efforts on the part of the government of Puerto Rico to balance its budget, etc. Again, with a few exceptions, we have not seen any “personal interest” or “man on the street” articles featuring interviews with pensioners, residents, small business owners, school officials contemplating more budget cuts, or individuals contemplating migration to the New York, Miami, or elsewhere.
I would speculate that part of the reason for the coverage gap is the absence of two U.S. Senators and a handful of Representatives. Representation in Congress would make this a Washington story, and thereby “on the radar” of all political reporters and most newspaper editors. Another reason may be related to Puerto Rico’s quasi-sovereign status.
Or, is it that we are becoming accustomed to such stories? Perhaps we have quietly given up on the notion that the United States is or should be a first-world nation with the ability, capacity, and obligation to ensure that all of its states and territories have the wherewithal to support a decent standard of living. If the latter is true, then the lack of interest in the prospects facing the people of Puerto Rico is just one more signal that plutocratic values and perspectives are increasingly dominating our politics and media.
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I’d go with mainstream journalists being useless hacks. I’m not sure there’s been a decent journo since they stopped making films with cub reporters as heroes.
Since the U.S. media is largely a stenographer and teen gossip organization, what politician or group will send out talking points? MSM reporters won’t write this story on their own while some injustice occurred at the teen choice awards.
OMG did you hear what Tina Fey (wahoowa) said about Taylor Swift? Also, we have the updates on a major vote in Congress, but did you see what a tourist thought was the white house first?
simple reason: racism
Yes, that struck me as the elephant in the room.
If racism were the problem, then the Federal Government would have abandoned black cities like Detroit or New Orleans to their fate.
oh.
It sort of did.
But even though Detroit and New Orleans are majority “the other”, Puerto Rico is considered a foreign country in most people’s political, social, and cultural imagination. In other words, it doesn’t really count.
Being less or non so-called “creditworthy” can easily be self-sustaining so what might have started as pure prejudice now might continue as merely “prudent” lending.
i bet that the overwhelming number of Americans (and many news editors) don’t know that Puerto Rico = USA territory.
A friend from New Mexico told me that she had to constantly explain to other Americans that New Mexico was not part of Mexico-Mexico.
I thought that was incredulous until I kept on hearing the same story from other New Mexicans.
racism may be a bottom-tier reason, but good ole’ American ignorance on geography is probably number 1.
“simple reason: racism”
Then explain the above mentioned extensive coverage of Detroit.
your remark is an oversimplification. A good bit of the coverage of Detroit, and the so-called plan to right its fiscal woes, is linked to racism, or classism as perhaps the even deeper non-consciuos motive. In addition, much of the coverage is written from the banker’s point of view: you must pay your debts! Shared sacrifice! and so forth…
Detroit city government has been deeply corrupt for decades, even as its economic base steadily eroded owing to competitive pressures in the auto industry where brand loyalty depends on demonstrated performance and reliability. Once lost to competitors, a lost reputation can be recaptured only by a near miracle of excellence. (This is a reality the USG will eventually discover also.)
As to “racism”, you may have a point, but not likely the one you imagined:
http://www.huffingtonpost.com/2013/11/05/-mike-duggan-detroit-mayor-_n_4221656.html
Detroit’s decline began ca. 1950 when the auto industry was still in its ascendancy. Economic geography is core, both in an initial effort to place assembly plants closer to markets and because there was literally no space in Detroit to replace multistory plants with single-floor plants with good road access and parking for workers. Racism was a factor; it was hard for minorities to find jobs in plants outside of Detroit proper. (I went through Detroit Public Schools, and depending on the school was on both the majority and the minority end). Municipal corruption is hardly unique to Detroit, and the worst [documented] abuses were both well after decline was apparent, and too small in scale to explain anything other than anger.
I have been following the news for many years, much like many of you who frequent this blog and others. Not to sound self aggrandizing but I think most “awake” people have eschewed the mainstream media corporate apparatus for real news from sites like naked capitalism.
In all my years I RARELY hear mention of Puerto Rico, even the blogosphere rarely mentions anything about PR…..
So of course when I read “b’s” simplistic (at best) charge of racism my head wanted to explode.
Whenever “racism” is uttered all rational debate and conversation is destroyed.
And as a side note their lack of representation is self inflicted, as they have voted to maintain their current status……….. they made the choice. Maybe they are racist against the USA!!!<—absurd comment intended to show absurdity of racism charge
It’s not simplistic if you look at the history of US/Puerto Rico relations. The arc from colonialism to neo-colonialism, ghettoization, endemic poverty, underdevelopment. lack of access to resources, redlining… is not “liberal” BS. I’ll grant you racism is not a precise word and overused, but still, Also, “they did it to themselves” is shallow. “They” are not in control of the electoral system, TPTB are.
Yes there is a deeper history but the voting population has continually voted for the status quo. Just as we in the US have voted for the 2 party status quo here, and the results are not quite as stellar as PR’s but we are trying to close the gap for sure.
Whenever “racism” is uttered there will always be one person who says “whenever racism is uttered all rational debate and conversation is destroyed”. Some observations.
1) Why is that person always from the same race?
2) I infer from your comment that it is impossible to rationally debate racism. We should definitely give up trying
3) My favourite form of proof has always been proof by assertion. I see you are a fan too!
4) Feel free to allow your head to do what it wants to do.
Harry,
What race am I? And why would that have any bearing on what I had to say? Are there racial qualifications needed to post opinions on racial matters? My head is spinning can you help it stop with some answers?
So I dont know what race you are. However I was referring to people of European extraction, who (in my experience) tend to be unique among races in feeling that merely mentioning the word “racism” ends all chance of rational discussion. In much the same way as rich people hate discussing appropriate taxation. But if you are not of European extraction then I have met my first non-European who thinks that there is no possibility of discussing racism rationally. Congratulations. Me personally I think its a cop out. You can discuss it rationally. You just choose not too. Probably because your head will explode.
I also tend to downgrade the comments of those of European extraction on the subject of racism given I suspect they have had limited exposure or understanding of it. But thats just me. For all I know there are loads of Swedes who have been discriminated against because of their Swedishness. Similarly I dont listen too much to car drivers on the subject cyclists, or suburbanites on the inner city. Its probably because Im prejudiced.
Of course, you may well have a very sophisticated understanding of the issue. Its just that your comment didnt seem to be suggestive of that. So if you are in fact an expert on matters of race etc forgive me for doubting you.
After all, you had the disadvantage that your head was about to explode. It must make clear thinking difficult.
Well Harry I am of mixed race background, my wife is latina and my 2 daughters are even more mutt then me.
And by the way your generalizations of people of european descent is quite racist.
And I will also add that racism is a human condition, as well as greed, envy, and a host of other weaknesses. And in my 50 years of travels and interactions with many people I have found these traits to be well represented in people of all backgrounds.
However I was referring to people of European extraction,
In Europe, The Racism Card has been pulled so often and for such trivial and idiotic reasons by idiots, bigots, well-intentioned people and even authorities (who should certainly know better) that whenever it is uttered, the entire debate is invalid. It is well known that only people so incapable of reasoning that they must be considered a gross waste of protein will still insist on using it.
That ends the discussion because reasonable people do not like to be “seen hanging together” with the protein wasters, in case the stupidity leave a smear.
We have to come up with a better word, I guess.
Race/ethnicity is an effective red-herring, it seems like the criteria for “prioritizing the geo-sequencing” of the neo-liberal water-lilies (Financialization).
“French children are told a story in which they imagine having a pond with water lily leaves floating on the surface. The lily population doubles in size every day and if left unchecked will smother the pond in 30 days, killing all the other living things in the water. Day after day the plant seems small and so it is decided to leave it to grow until it half-covers the pond, before cutting it back. They are then asked on what day half-coverage will occur. This is revealed to be the 29th day, and then there will be just one day to save the pond.”
–Porritt, Jonathan (2005). Capitalism: as if the world matters. London: Earthscan.
First they came for the Parthenon, but I didn’t give a shit because I wasn’t Greek. Then they came for Detroit’s paintings but didn’t give a shit because I wasn’t a “Pistons” fan. Then they came for ……….a city/town near you!
Racism is a facile charge to make. But a much more obvious reason is a language barrier.
Puerto Rico’s largest circulation newspaper is El Nuevo Día. Today it carries an article about a third rating agency, Fitch, downgrading Puerto Rican bonds to junk:
http://www.elnuevodia.com/fitchratingsdegradaelcreditodepuertorico-1709345.html
Most Americans aren’t going to read this article, because they don’t read Spanish. Their monolingualism doesn’t make automatically them racistas.
Being a Puerto Rican who currently lives on the island, my verdict is the government is nuts:
The language barrier was my first thought as well so I compared Google News Estados Unidos vs United States and there were far more articles on the English edition, albeit mostly in the business papers. Most of the articles on the Spanish version concerning Puerto Rico had to do with sports and not human interest stories about the Puerto Rican debt crisis (which just happens to be one of the richest areas of Latin America). I suppose the racialists would say this means the members of the Spanish language press are all self-loathing racists. Or maybe there really are some nefarious white guys creeping around every newsroom in Latin America deleting all the human interest stories from Puerto Rico the brave Latina reporters are desperately trying to get out to the public.
But I did laugh when I saw the racism accusation because a colleague had just been going on about how racist all the coverage of the Detroit bankruptcy was. To a racialist everything and anything is conformation of racism. In fact one potential reason if there was a lack of reporting in the normal press would be that for the past few weeks the Billionaires of America were rolling out their Cheap Labor Act of 2014 in the form of opening the borders and the last thing they wanted were their domestic news consumers reading about another potential wave of cheap labor coming stateside.
My question though is where are all the MMTer’s on this issue? Surely they have a twenty point plan about how Puerto Rico should immediately get out of the dollar zone, become a sovereign issuer of currency (the Puerto Rican peso?), and stimulate their economy by declaring independence and renouncing all this colonial era debt, and implementing a guaranteed job for all. Or something like that.
Thats racist!
How about the language of bull-shit? How can these so called “credit Rating agencies” retain such quasi-mystical credibility, given their role in the GFC (which is FAR FAR FAR from over)?
http://en.wikipedia.org/wiki/Credit_rating_agencies_and_the_subprime_crisis
How? Here is how:
1) Without credit rating agencies it would simply not be practical to issue bonds and derivatives outside of the regulated markets. Nobody would bother to buy them, the 300++ prospectus’s of these things would eliminate 99.999% of the speculators and most people investing “other peoples money” would be legally prohibited from investing in them.
2) Credit Rating Agencies allow outsourcing of responsibilities for bad investments – everybody *knew* it was probably at bad idea to use Greek Bonds as reserve capital, The Authorities (and Basel 2) said it was OK and Proper to do so — one can always use an extra 6% in interest … so?
3) Of course The Market (which is our saviour reincarnated, selfless provider of all goodness) could not possibly *want* the sloppiest ratings of complex derivative deals and even shop around for those, could they? I mean, that would be wrong and it is heresy to suggest that The Market can favour bad outcomes, that would make “efficient” mean “more bad” or something.
4) LALALALALALALALALAAL . … can’t hear you,. All the noise in here!
Have seen this coming in NY for years, islanders who tried to make it back home giving up and returning to the continental US.
“While I have not become aware of any substantive data on the demographics of those who have left and those who have stayed, similar economic stresses across other cities and regions make it safe to presume that those who have departed are younger, more educated, and more employable.”
In his article “Puerto Rican Migration in the 21st Century: Is There a Brain Drain?” published in Centro’s new book The State of Puerto Ricans 2013, Birson counters the prevailing brain drain notion, noting that yes, there is an exodus of mostly younger Puerto Ricans leaving the island, but the data does not support that they are – as it has been long perceived, widely accepted and commonly reported in the media – largely professionals. Just recently the Wall Street Journal ran just such a story on its front-page, focusing on how the island’s woes are sparking an exodus, particularly among many of the young professionals.
Here is parsing of that NYT article on PR.
My hunch is the US Congress will be very careful in it’s application of austerity on Puerto Rico if it prompts an even more massive migration of Puerto Ricans to the USA. With sentiments already negative among the US public about illegal migration from Mexico, there is much to “fear” from a massive (however very legal) migration of hispanics from Puerto Rico.
How about … it messes with “their” story that everything is fine.
Perhaps Holder will enter into private discussions with JPM et al and solve the problem for us. After all the government only has our best interests at heart. We are just too dumb to recognize their superior intellect.
What’s $60 billion when Bernanke/Yellen print more than that each month. Besides this isn’t an insolvency issue … all they need is some liquidity.
Who are the holders’ of PR’s debt? Detroit Pensioners?
Re: “Who are the holders’ of PR debt?…
One vehicle where I believe you will likely find they’ve loaded the boat is in state-specific tax exempt funds. It w/b interesting to get some color on how Puerto Rico debt and that of other U.S. territories was granted exclusion from states’ income taxes and how fund managers were enticed to buy the debt.
Isn’t there a SCOTUS ruling potentially limiting class action lawsuits expected around March 5th?
Btw, I agree with Yves that the limited coverage this issue has received h/b overly focused on finance.
Very keen observation. I’ve personally concluded that the legal “system” is more about “hegemonic “logic”” than “reason without passion” much less “Justice”.
Yves, I think the answer is that Puerto Rico, a ‘poor’ country having a debt crisis doesn’t fit the media narrative of spoiled people in the 1st world living beyond their means.
A couple of thoughts.
Media Coverage: Just like the Detroit coverage before the bankruptcy the media starts paying attention to the problems after the trend has been in tact for a long,long time. The beginning of the end for Detroit started when the car industry moved to the Southeast in the late 90’s. Where was the coverage then? PR has been in recession for over 6 years, the problem started when the tax laws changed in the late 90’s and US corporations moved operations to Singapore and Ireland. The migration to the states has been occurring for a long time. I ask myself why is the media paying attention now? Why has the NY Times run 2 front stories in the past 2 months. Why was CNBC transmitting from Old San Juan a couple of weeks ago? New laws in PR have made it beneficial for financial firms to set up shops in PR. Over 90 of these licenses have been granted in the past several months. Coincidence? There is a lot of money to be made here and Wall Street is sniffing around…
PR Status/Politics
There is a very long history and its extremely complicated. General thoughts are that 45% want Statehood, 45% want current status and 10% want independence. Generally elections are won 48% to 44% by one party against the other. The PR population has to have majority of population to petition to become a state. But it gets more complicated as the US Congress/Senate has to agree to the petition. US Politics play a part as well as PR is larger than Rhode Island and can swing Senate/Congress as PR would most certainly swing toward the Democrats. So again its a very complicated situation that will not be solved in my lifetime. Its an emotional issue that helps both parties and shields them from having to deal with more pressing matters like education, jobs, etc… Note: most of the migration has been to Florida where democrats have had a small majority, so this migration can definitely shift politics in various counties etc…
By the tone of this piece it seems that this author is pro-statehood (which is fine). Senators and congressmen did not help Detroit avoid its end, why does this author think it would be different for Puerto Rico. Why does this author question a “quasi-sovereign” status that took a sugar cane economy in the 40’s to a industrialized nation of today? This author is hiding his politics when comparing our situation to Detroit. Thank you for providing a great service with your blog
Did Puerto Rico get involved in the creative municipal financing that brought down Jefferson County, Alabama and Detroit and other municipalities? Are there other US territories with the same exposure? Are there US states with the same exposure?
Why is the public debt crisis being reported as local malfeasance instead of Wall Street fraud?
This issue is not more newsworthy to whom? The usual suspects who right now are agonizing over Beyonce?
I think ArkansasAngie is mostly right. But the political implications are also important.
Republicans don’t want any association with PR and probably (gleefully) see this as Democrat/Obama Administration problem. The fact that S&P wast the first to downgrade may not be surprising as it is owned by a Republican and the firm has clashed with the Obama Administration (after downgrading the US despite Geitner’s public assurance that there was “no chance of that”. Only days ago S&P Chairman testified that Geitner threatened S&P with retailation for that downgrade (and his humiliation).
This comes at a bad time for Obama/Democrats as the 2014 election “pre-season” is now underway (as demonstrated by such things as Reid’s statement on Obamatrade). Obama “owns” this mess but how does he respond when he is cutting benefits to US citizens, implementing austerity, and not offering aid to Detroit? The Republicans will howl that any aid/support to PR adds to the deficit and talk up Democratic/Obama mismanagement of PR over many years.
Could it be that the Democrats/Republicans are both working to loose the next election so the competition will get stuck with the mess?
Surely some crisis is brewing, since just about everything today is either too sensitive or too complicated for the citizens to be informed about. On top of that, “They” seem to need mass surveillance and para-military police to “protect us”. Against what? And Who?
It is my understanding that PR has some fairly posh resorts and some great Caribbean island features, like beaches and reefs. It is my guess that the plutocrats don’t want PR to make good on its debts so much as they want to pick over its bones. I take the ethics of Mr. Paul Singer to be the archetype of plutocratic thinking. And making a lot of noise about the plight of the island’s current residents merely delays the days when it becomes, not a territory of the United States, but an asset of the likes of Singer.
THE FRAUDULENT CONVEYANCE PRINCIPLE
“A broad guideline for writing down debts was developed more than two centuries ago in the American colonies. British speculators and sharpies eyed the rich farmlands of upstate New York and refined the practice of making loans to farmers against their crops. Their strategy was to call in loans at an inconvenient time (e.g., just before harvest), or simply to loan the farmer more than could realistically be repaid in the epoch’s low-surplus economy. They then would foreclose.
To cope with this problem, the colony of New York passed the Fraudulent Conveyance law. This was retained when New York joined the United States, and remains on the books today. Its principle is that if a lender makes a loan that the borrower cannot reasonably be expected to pay off in the normal course of business-that is, without forfeiture of property-the loan should be declared null and void, and the debt cancelled. The legal assumption is that such a loan was a ploy to gain control of property pledged as collateral, over and above simply earning interest.
The aim is to keep debts within the ability to pay, by placing an obligation on bankers and other creditors to make viable loans rather than covert property grabs………………………..
The Fraudulent Conveyance principle may be applied to the public sector with regard to pressure brought on debt-strapped governments to sell off public enterprises to pay creditors…………….Banks and bondholders have lent governments credit as if this were risk-free……………… Banks and bondholders are thus in the position of the British financial sharpies making ostensibly reckless loans in the belief that the local sheriff and other colonial officials would back up their property grab……”
–Excerpt from “The Bubble and beyond” by Michael Hudson
I am not sure what the charge here is- is Puerto Rico’s coming bankruptcy not being covered like Detroit’s because of racism against Puerto Ricans, or was Detroit’s covered more extensively because of racism against Detroit’s residents? You need to clarify, especially given the reply to b’s comment.
The question is who hold’s Puerto Rico’s debt? That could explain the lack of interest by the media.
Do any of you people actually know anything about PR? Have you ever spent any time there (apart from tourist areas)?
Puerto Rico politics have long been far more polarized than out on the relatively staid US political landscape. Aggressive prejudice against opposite political positions reaches right down into daily life, including association of specific colors with presumed political attitudes. Politics is highly concentrated on “the question of status” (whether PR should become a state, remain a commonwealth, or go independent). Being on the “wrong side” politically in a particular workplace can get you canned from your job, I’m told, and wearing the wrong (party) “colors” can evoke hostility little different to making the same mistake made in certain neighborhoods of big cities in the US.
While PR is legally “part” of the US, any idea that it’s similar to the rest of the US is utter bosh. One excellent drywaller in our US city is a Puerto Rican whose adult son refers pointedly to PR as “my country”. That PR is under US administration is anathema to him, even though he earns his income here. That said, few Puerto Ricans favor independence (because most realize the island would likely collapse economically), and other attitudes are evenly divided between those for and against statehood. According to a politically aware friend who was born and raised there, that’s the only important political debate in PR — and it is conducted at all times with long knives, well sharpened. It’s blood sport.
Anyone assuming little or no significant prejudice exists in PR against non-Spanish-speaking norteamericanos needs to spend some time there and mingle with ordinary people other than those staffing tourist hotels. Very nice folks and all that, but some hold strongly-held opinions which directly conflict with naive expectations of mainlanders. Hawaii it is not.
When the US acquired PR, it was an economic and ecological basket case. Think Haiti. Spain left it largely denuded of forests and stripped it of any wealth that could be carried away. The only value it had for the Spanish were the port and defensive facilities in San Juan. If you visit PR and admire the vast and abundant forests, thank generations of effort solely by the USG Forest Service and American tax dollars poured in to achieve that result.
PR is dependent economically on the US for tourism and as a tax-advantaged location for big American industries (especially Big Pharma). PR has it’s own IRS separate from the US one and many differing rules. The only question for most Puerto Ricans is whether economic advantages of statehood would outweigh advantages of continuing as a commonwealth. Apart from the few folks favoring independence, about half the population are decidedly convinced statehood would be best and the other half are decidedly convinced it would not. Stale-mate.
Anyone inclined to swoon over the notion that statehood will somehow magically change the fundamental outlook for PR may want to check their hole card. The US cannot successfully mediate this perpetual knife-fight or deliver prosperity to PR on a silver platter of Anglo wisdom and imperialist hubris.
Wow, you seem like such an expert. When, where and how long did you live there? Anyway, thanks for the generalized and superficial analysis.
P.S.: We know how raid and plunder works-but how can prosperity be “delivered”?
P.P.S.: “Anyone assuming little or no significant prejudice exists in PR against non-Spanish-speaking norteamericanos needs to spend some time there and mingle with ordinary people other than those staffing tourist hotels.”
Are you aware of the difference between “self-confidence” and arrogance? I haven’t seen the Gallop poll on this one but I’ll speculate and say that most people respond best to humility. I believe even the Pope is aware of this trend.
Prosperity cannot be “delivered” to either PR or Detroit. That’s precisely the point. Expecting the US taxpayer to erect a Potemkin village of pretended “prosperity” for which there is no underlying economic basis is simply absurd, wither in PR or Detroit.
Deliberately snubbing people who don’t speak Spanish isn’t “confidence”. It’s bad manners (just as snubbing people who don’t speak English is likewise). Since manners are a cultural attribute, it’s reasonable to draw conclusions about a culture based on its attributes. And yes, that applies no less to cultural attributes of the imperial American culture which is steadily running down its credit line.
Most of the remarks I passed on about the politics of PR came directly from a native Puerto Rican and long-term resident of the island who is also a dual-certified translator for both languages. It’s unlikely he’s missed any of the subtleties of either culture. Since you don’t actually deny the accuracy of that analysis (and offer none yourself), it’s left to the imagination what your point may have been (if any).
It is also not “superficial” to point out the US has buried tons of taxpayer dollars in Puerto Rico over the past century. It’s simply a fact. A continuing relationship will therefore also be a continuing, one-way financial obligation.
If Jamaica and other independent Caribbean island nations could go it alone, why not PR? If such a huge “confidence” buoys up PR national pride, as you suggest, then why do a majority of Puerto Ricans disagree only about the specific basis upon which they prefer to remain a dependency of the US?
As to someone else’s comment about the necessity of Congress approving any change of status for Puerto Rico, that decision has been laid entirely in the hands of the Puerto Rican people. So far they are still muddling through referenda, but it appears the popular trend is now toward statehood (which would add yet another net dependent state to others already within the Union). http://en.wikipedia.org/wiki/Proposed_political_status_for_Puerto_Rico
I’m sorry you were snubbed for not speaking Spanish. I was merely suggesting that maybe you were wrongfully perceived as arrogant and the language was possibly a secondary issue.
May I humbly suggest a reading list for you and the “dual-certified translator of both languages”.
1-ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism by Yves Smith(There is a link on this page)
2-THE BUBBLE AND BEYOND by Michael Hudson
3-Debt: The First 5,000 Years by David Graeber
These three books more than anything, changed the way I see and think about these issues and specifically “debt” (which was the issue of today’s particular article). Hopefully they can help you and your friend find context for the current “Debt-Crises”.
Let me suggest in reply that you are making unwarranted assumptions. I’ve very likely lived longer than you outside my native land (not yet in any Spanish-speaking country, I readily admit); countries do differ, but people everywhere tend to be very annoyed by uppity, brash Americans with attitude. I’m not one of them. Most people get that pretty quickly and people in most countries are both friendly and accommodating to a fault when you are respectful of them. In most civilized countries, rude and contemptuous behavior is frowned on. Puerto Rican people I’ve know over the years (some of them admittedly New Yoricans) were no exception.
My point: I did not find that to be inevitably true on the island of PR.
Since you have not directly contradicted a single specific statement I originally made, it’s therefore reasonable to assume you went off half-cocked. Let me suggest to you the ancient wisdom that attempting to invalidate someone else’s experience invariably becomes a fool’s errand.
As to the debt-based financial system originally concocted by the Bank of England and spread like a cancer thereafter, its persistent evils are apparent everywhere in the Western world — nothing to do specifically with PR.
As long as governments incur more debt than citizens’ taxes can reasonably sustain during future economic falloffs, the outcome is always the same — again nothing to do specifically with PR.
Resistance is futile because the politician who promises the most free stuff also most likely gets elected by foolish people who believe in political promises of something for nothing. The politicians prosper, the bankers prosper, and eventually the people go bust to bail them all out. Again nothing to do specifically with PR. Or Detroit. Or California. The bankers are corrupt but cannot be enabled except by corrupt politicians. And (in Western societies) politicians can only be enabled by naive collectivist faith in the ballot box.
People get the government they deserve. And the consequences. Nothing to do with PR. Or Detroit. Or California. Or corrupt cronyism rebranded as “capitalism”.
Point taken of “unwarranted assumptions”. I just didn’t know how to interpret comments like “this perpetual knife-fight” and “Since manners are a cultural attribute, it’s reasonable to draw conclusions about a culture based on its attributes.”
However I stand by the suggested reading list.
Perpetual knife-fight describes the social depth of PR political struggle over the question of “status” which (according to my sources) can be quite savage by comparison to mainland politics. That said, mainland politics appears to be steadily progressing in that direction. (A couple of generations ago, the idea of a US president requiring protection by a three-deep phalanx of heavily armed Pretorian guards would have been thought absurd.)
I cannot imagine how pointing out manners as a cultural attribute can be either confusing or controversial since manners are taught. Judging a culture by its manners doesn’t appear to be controversial, either. Americans with churlish manners generate an (entirely correct) opinion about deficiencies of American culture. Puerto Ricans with bad manners do also.
As to the human debt cycle, there’s not much new to be understood. The same pattern of social gullibility is blatantly obvious and pathetically uniform over a very long period of human history going back at least to the Greeks. Even the Chinese had their own fling with fiat money and with the same result Voltair so elegantly summed up: “paper money eventually returns to its intrinsic value.”
One of the great vanities of modern economic thinking fostered by the tenured class is their amusing idea that consequences of a political fraud as old as civilization (debasing the currency) can somehow be thwarted by exacting economic analysis and expert tinkering of the markets. They completely misunderstand the basic problem:
“No warning can save people determined to grow suddenly rich.” – Lord Overstone
This, of course, includes all warnings by economists. The gods laugh.
Can I make a bald-faced attempt at publicity for any of my courses on Puerto Rico? I teach at the Rio Piedras campus of the University of Puerto Rico and at the rate they are downgrading our university’s bonds, I may likely have to strike out on my own in the not so distant future.
By the way, anyone interested in becoming proficient in Puerto Rican history will have to read my late father’s book in it’s entirety.
Its all about Cuba
PR has been treated well by the US in the past because of the desire to make it look good in comparison with Cuba. PR residents in the past (not sure about now) received subsidies for schooling and such that if brought into the public eye would not fit with the current austerity meme….like why don’t we treat US citizens the same as we did PR folk.
PR is a pawn in a much larger game of empire that “we” don’t want to “coddle” anymore.
The suggestion of statehood appears to me to be the only sensible way ahead for US reputation and PR’s survival.
Puerto Rico also suffers from terrible violence. Macho Camacho was murdered
down there.
Now if sovereignity allows Puerto Rico to dump debt maybe they will vote
for statehood