But we know the debt crisis is their doing.
“We didn’t take out a loan. We didn’t see a dime. We’re not going to pay.” Photograph above: Ricardo Arduengo/AP
The island’s political leaders have been selling its future to Wall Street for decades. They can’t now blame a crisis on US policy and expect us to believe it.
Puerto Rico is neither a nation nor a state: it is a colony where 3.5m American citizens without federal representation languish while local politicians prefer to debate the island’s political status – whether we should be a commonwealth, a state or an independent country – rather than address a starker reality: the island is poor, its population is ageing and its young people are leaving.
And now those poor, ageing people are going to be asked to pay off an enormous debt incurred by their political leaders too lazy or too incompetent to have made forward-thinking political decisions for more than a generation.
For local politicians to directly blame the island’s $72bn “unpayable” – and yet coming-due – debt solely on US economic policy is not a good enough explanation: every colonial master needs an accomplice, and Puerto Rico’s political class has served their masters well.
Jay Fonseca, a noted Puerto Rican political commentator, posted a chart from Carribean Business which shows that from 1949-2014 – the period during which Puerto Rico was afforded a measure of self-rule through their governors – the island’s accumulated debt grew from $910m to $78bn. (It’s now slightly greater than the island’s total GNP.)
Spending and borrowing were always part of the island’s political culture, and Wall Street banks were always more than happy to lend. But having borrowed too much for decades, having spent just as much, having American companies leave after tax incentives expired in 2006, getting hit by the Great Recession and still borrowing more money from Wall Street, no one should be surprised that Puerto Rico is teetering on the brink of financial ruin and draconian austerity measures.
Wall Street firms have already made $1.4bn in fees off of the 86 bond deals Puerto Rico executed to avoid tackling its massive debt problems between 2006 and 2013; firms continued to lend Puerto Rico money despite the risks of a default precisely for the massive profits. But how do you think these firms got the access to sell Puerto Rico a bad deal in the first place? The island’s political class.
Earlier this month, a lawsuit by the island’s Centro de Periodismo Investigativo revealed that more than 30 hedge funds are now involved in the island’s debt restructuring. And, if you think loan sharking is unjust, hedge funds are just legalized loan sharking: Puerto Rico could conceivably get the money it needs to pay off this set of debts, but the fees it will need to pay and the ownership interest in the government’s resources that Puerto Ricans will have to give up will keep the island dependent on hedge fund managers for decades to come. But hedge fund managers have no interest in solving Puerto Rico’s social problems; they simply have an interest in making money – a lot of money – off of them. These are the people the island’s political class has brought it to “rescue” Puerto Rico.
The island’s political leaders are fully aware that getting the money from hedge funds rather than reform will simply further mortgage the island’s future – as are the former politicians now in the private sector – but they don’t want the rest of the world to know from where the money is coming. This modicum of transparency would lead to demands for more transparency and honesty, traits rarely seen in the politics on the Isle of Enchantment.
You can’t blame Puerto Rican politicians for thinking that they can keep their constituents in the dark: Puerto Rico’s political history is all about assuming that we Puerto Ricans are gullible and foolish. Take, for example, what governor Luis Muñoz Marín (mythologized as the Patron Saint of Modern Puerto Rico) wrote in in 1954, three years after his island voted for a commonwealth systemformulated in the halls of the US Congress without their input.
In an essay in Foreign Affairs called “Puerto Rico and the United States: Their Future Together,” Muñoz Marín bizarrely argued that “Puerto Rico [was] developing a new pattern of political freedom”, though it was “not asking for statehood” and “not demanding independence”. Puerto Rico, he wrote, was “deadset against colonialism”, even though the US had invaded the former Spanish colony in 1898 and only bestowed American citizenship to Puerto Ricans in 1917.
The crux of Muñoz Marín’s ridiculously illogical argument – one cannot achieve “political freedom” and be “deadset against colonialism” when one is not “demanding independence” or “asking for statehood” – illustrates how the island’s mostly white, male and affluent political class never had a real vision for Puerto Ricans or Puerto Rico, even from the outset of Muñoz Marín’s failed “commonwealth” experiment that he sold his fellow boricuas. That failed experiment has led to this current ecomonic catastrophe.
And, for an island “deadset against colonialism,” Puerto Rico’s neo-colonial politicians have perpetuated the island’s dependence to US financial markets. A century ago, US sugar barons raided the island’s resources and the political class acquiesced to their masters; when resistance occurred, the political class sided with the US to eliminate dissent. Wall Street is simply the new sugar barons, and the island’s politicians seek to offer them new sugar.
The “political freedom” Muñoz Marín espoused in 1954 has now been revealed as political slavery; the current debt crisis is a direct product of our subjugation to US business interests, and the island’s political class for decades has been playing Puerto Ricans for their own benefit. As Luis Gallardo wrote in La Respuesta this week: “Government inefficiencies, paternalist politics, clientelism, and short-term politicking are the primary causes of Puerto Rico’s public debt; characteristics that would persist no matter the island’s political status.” There is also talk of the US instituting a financial control board to run the island’s finances. Can this get any more colonial?
My fellow boricuas living on the island now have no say locally, federally or even internationally. We are just dazed bystanders watching as our political class caters to soul-sucking investors who will never put Puerto Rico first. Sadly, we Puerto Ricans have allowed this all to to happen.
It needs to stop. We Puerto Ricans need to make it stop. And the world needs to know that we will not give up until it stops.
Varela, J. (julio 23, 2015). Politicians think Puerto Ricans are dumb. But we know the debt crisis is their doing. Recuperado el 23 de julio del 2015 de http://www.theguardian.com/commentisfree/2015/jul/23/politicians-puerto-ricans-debt-crisis-at-fault