Puerto Rico Needs a Paradigm Shift

On May 31, 2016, The New York Times published “How to Save Puerto Rico,” wherein the Times’ editorial board encouraged the passage of HR 5278 and the imposition of a Financial Oversight and Management Board in Puerto Rico.

The editorial board acknowledged that the bill “has flaws,” is “facing opposition on many fronts,” has disturbing labor provisions and installs a board that will “override many decisions made by the island’s elected lawmakers” and may resort to “old policies that have proved to be unworkable.”

Despite all these the problems, the Times’ board supported HR 5278, stating that “at this late hour it offers the island its best chance of survival” and hoping that “perhaps Democrats can improve the bill.”

But Puerto Rico needs more than dysfunctional “late hour” solutions from Washington, and “Hail Mary” editorials from The New York Times. After 118 years of US congressional and corporate hegemony, Puerto Rico has a hemophiliac economy: it bleeds money every day to US corporate interests. Eleventh-hour Band-Aids will no longer provide even palliative care, let alone an essential cure.

The Times needs to undergo a paradigm shift with respect to Puerto Rico. The titles of the outlet’s well-meaning but inherently futile editorials tell the story: “Puerto Rico Needs Debt Relief” (7/1/15); “Save Puerto Rico Before It Goes Broke” (10/24/15); “Congress Needs to Throw Puerto Rico a Lifeline” (3/12/16); “Only Congress Can Rescue Puerto Rico” (4/23/16); “How to Save Puerto Rico” (5/31/16). All of these editorials place Puerto Rico at the curative mercy of a US government and economy which — for 118 years — have been at best ignorant, and at worst, violently opposed to the best interests of Puerto Rico.

The patronizing is not limited to The New York Times.

Here are some recent articles from The Washington Post, all of which treat Puerto Rico as a helpless and infantile territory: “Puerto Rico Urges US to Help Save it from Default” (6/29/15); “A Way Out for Puerto Rico” (2/5/16);”House Committee Unveils Puerto Rico Rescue Bill” (4/12/16);

“Meet Rob Bishop, the Man who Might have Saved Puerto Rico” (6/12/16).

The Wall Street Journal piles on in the same manner: “Puerto Rico has No Easy Path Out of Debt Crisis” (6/28/15); “Puerto Rican Debt Parade” (4/7/16); “Puerto Rico at the Brink” (4/22/16); “Puerto Rico’s Debt Portent: The Refugee Exodus Builds and Will Add to the US Dole” (5/2/16).

Other “mainstream” publications all chime in: Bloomberg (“Puerto Rico Invites Chaos as Debt Moratorium Upends Progress” 4/6/16); Forbes (“Puerto Rico Needs Both Fiscal Austerity and Pro-Growth Tax Cuts” 4/15/16); Barron’s (“A Control Board for Puerto Rico” 4/30/16); and NBC News (“House Passes Bill to Help Ease Puerto Rico’s Debt“6/9/16).

Fox News and Associated Press trumped everyone with this reportorial gem: “US to Cut Water Monitoring Because of Puerto Rico Debt” (6/10/16).

This editorial and political myopia strips Puerto Rico of its ability to create any solutions and renders it vulnerable to endless waves of carpetbaggers, who conspire with insular and beltway elites to defraud both the US taxpayer and the Puerto Rican people … while generating quarterly profits, stock splits and Christmas bonuses.

On August 6, 2015, The New York Times published my own editorial “Free Puerto Rico, America’s Colony.”

Rather than relying on congressional largesse or corporate altruism, I recommended in that editorial that the 1920 Jones Act (Section 27 of the Merchant Marine Act of 1920) must be repealed, right away. This will lower consumer prices in Puerto Rico by 15-20 percent, enable the island to develop its own shipping industry, create hundreds of large and small businesses, and produce tens of thousands of jobs.

Puerto Rico must be permitted to negotiate its own international trade agreements.

In addition, I argued:

All import fees levied on foreign-flagged vessels should be paid into the Puerto Rican Treasury, not the US merchant marine.

Any tax abatement deals for US and foreign corporations should require the reinvestment of a stipulated percentage of profits into Puerto Rican infrastructure and industrial development.

There are many more proactive economic solutions, such as re-invigorating the island’s agricultural sector; developing solar, wind and water technologies (all three elements abound throughout the island); and offering the same 20-year tax exemptions that John Paulson, Nicholas Prouty and other US billionaires are enjoying in Puerto Rico, to small businesspersons from the island itself.

But none of these empowering solutions appear in HR 5278, the editorial pages of The New York Times, The Washington Post, Wall Street Journal, or the 118-year history of US-Puerto Rico relations.

So long as Puerto Rico is treated as a victim, and forced to remain a victim — with a Jones Act around its neck for 96 years, no control over its international trade, no entrepreneurial class, and no private sector economy — the hemophiliac economy of Puerto Rico will continue to bleed … straight into the blood banks of Wall Street.

“Mainstream” media and editorial boards can help to change this. By shifting their emphasis from last-minute congressional fixes — designed by lobbyists, manifestly dysfunctional and subject to Citizens United corruption — to organic solutions which can only come from the island itself.