Puerto Rico is in bad trouble.
Governor Alejandro García Padilla says that the commonwealth cannot pay its roughly $72 billion in debts, that he is not prepared to kick the can down the road with additional higher cost borrowing from the always ready hedge funds.
He is backed up by a recent World Bank-IMF study.
But that means the Governor and the municipal bond market – that already has been suffering from bankruptcies in Detroit and Stockton, California – are caught between a rock and a hard place.
What happened? Last time anyone in Washington and on the Mainland looked, Puerto Rica was zipping along solving its problems by enticing manufacturing and other Mainland industries with tax holidays, including those voted on federal taxes by the Congress. Manufacturing nearly doubled between 1970 and 1980, as firms, especially pharmaceutical companies, opened plants across the island.
It made remarkable progress, too, in other ways. It moved into all the forms and realities of a republican government, not that different from the 50 states – except that Puerto Ricans are second-class American citizens, obligated to pay federal taxes, eligible for the draft but denied full protections of the Bill of Rights and the right to vote for president.
It was always assumed that territories acquired from Spain as spoils of the Spanish-American War at the turn of the last century would either be given freedom [immediately Cuba, post-World War II for the Philippines, etc.] or integrated into the union. Puerto Rica, Guam and American Samoa are still waiting.
One reason was that the Puerto Ricans had stuck close to the Democratic Party ever since Franklin Roosevelt sent his leftwing dingbat protégé Rex Tugwell as the then appointed governor in 1941. Remember that Hawaii and Alaska only came in, finally, when there was a compromise on admitting a traditionally Republican Alaska and a traditionally Democratic Hawaii. No such deal has turned up for Puerto Rico, and meanwhile, all kinds of fixes have been invented by the lobbyists in Washington.
Now two things have happened: globalization has made a lot of other places around the world more attractive as cheap labor manufacturing sites even with all the subsidies. And a two party system has, more or less, emerged in Puerto Rico.
It’s time the Congress grabbed the issue. Wipe out Puerto Rico’s current special “Commonwealth” relationship and either go for independence – which only a very vocal Puerto Rican minority wants – or statehood. Yes, Spanish is still the family language of most Puerto Ricans – but that is true of an increasingly large minority in the U.S. and most of the islanders do speak English.
Give a state of Puerto Rico the opportunity fully to exploit its resources as a part of the union – some of the best beaches in the world, a tourist paradise in many ways [despite high crime in some areas], and other opportunities which would come with statehood. Will it take a class action suit by Puerto Ricans going to this new legislating Supreme Court to decide what should have long ago been a clear-cut issue?
Tag Archives: solving Puerto Rican porblems
Puerto Rico is in bad trouble.