Yes. Yet another article about “The Puerto Rico problem,” but I couldn’t bear to include only excerpts, so here is the full article—see link to the original in The Economist below. Very interesting, indeed.
POLITICIANS do love a morality tale. Just ask the Greeks. American political leaders, in common with so many around the world, relish casting Grecian agonies as an Aesop’s fable for modern times (pitting northern European ants against Mediterranean grasshoppers). That makes it striking—and revealing—that mainland political bosses seem reluctant to sermonise about a debt crisis much closer to home, in the autonomous American territory of Puerto Rico.
The island’s governor, Alejandro García Padilla, last month conceded that public debts of $72 billion are “not payable”. For politicians on the right, Puerto Rico’s fall looks like a ready-made parable. It is a tale of big government and policies that look kindly but instead trap the poor in listless dependence. To take just one measure, the island’s workforce-participation rate is a dismal 40%, thanks in part to rigid labour laws and welfare schemes that too often pay better than taking a job. For those on the left, this is a chance to preach against investment funds which piled into Puerto Rican bonds in search of high returns, and now want islanders to take the pain after that gamble went wrong. Republicans and Democrats hardly held their tongues when similar debt crises broke in Europe, or in such American cities as Detroit.
Yet among mainland political leaders, debate about Puerto Rico has been distinctly cautious and technocratic—when bigwigs discuss the island at all—and centres on such questions as the island’s bankruptcy laws, which are in the hands of Congress in Washington. On July 7th Hillary Clinton, the Democratic front-runner in the 2016 presidential contest, ended days of equivocation and called for Congress to grant Puerto Rico the same access to federal bankruptcy protections that the 50 states enjoy when trying to save indebted municipalities or public services. Some conservative groups call that approach a “taxpayer bail-out”, and accuse Democrats of plotting to let Puerto Rico walk away from its debts like Argentina, Venezuela or other leftist scofflaws. Those critics would be on stronger political ground if Mrs Clinton’s ideas were not almost a carbon copy of a proposal by one of her main Republican rivals, Jeb Bush. Mr Bush, a former governor of Florida, argues that Puerto Rico should be granted the same bankruptcy rights as the 50 states—not least because he thinks the island should one day become state number 51.
In part, this bipartisan mood of caution is explained by a crude calculation: Puerto Ricans have become too important to offend. Though the 3.5m inhabitants of Puerto Rico cannot vote in presidential elections and only send a non-voting delegate to Congress, they are American citizens and enjoy full voting rights if they move to one of the 50 states. For decades, the votes of the Puerto Rican diaspora hardly swayed national elections, because most lived in New York or New Jersey where Democrats romp home in presidential contests. But since 1990 legions of Nuyoricans, or Puerto Ricans living in New York and the north-east, have migrated to the battleground state of Florida, drawn by sunshine, cheap homes and jobs. In the past decade they have been joined by hundreds of thousands of islanders fleeing economic stagnation and high crime. There are about 5m Puerto Ricans on the mainland now, a fifth of them in Florida. One last quirk gives these new arrivals extra influence. In Puerto Rico, political parties are organised around such local issues as statehood, and match up imperfectly with America’s partisan camps—though leftists are in general more sceptical of statehood, possibly because the island’s bloated public sector would have to shrink and taxes fall to converge with mainland norms. In Floridian elections, this makes many Puerto Ricans that rarest of animals: true swing voters, willing to elect both moderate Republicans (especially if they are Puerto Rican) and Democrats.
Darren Soto, a Democratic state senator from central Florida, represents a sprawling suburban district that 20 years ago was cow pastures and orange groves. Though a quarter of his constituents are Puerto Rican, he has not heard one of them advocate a federal bail-out for the island. His voters include educated workers who yearn for institutional changes on the island. They do not want federal tax dollars “thrown at the crisis”, says Mr Soto.
Alongside electoral maths, there is another reason why mainland politicians may be reluctant to talk too much about Puerto Rico. It involves guilt. America is proud to be a superpower that never built an empire. But Puerto Rico was, in essence, grabbed as a colony in 1898, after a brief war ended four centuries of rule by Spain (islanders went from being “fervently Spanish” to “enthusiastically American” within 24 hours, grumbled one of the vanquished Spanish commanders at the time).
To this day goods must be shipped between the mainland and Puerto Rico on expensive American-flagged vessels, under a law of 1920 that Congress declines to repeal. Under Rexford Guy Tugwell, appointed governor by Franklin Roosevelt in 1941, the island was one large experiment in central planning, down to the creation of favoured industries, from tuna canning to pharmaceuticals. The island was further subsidised during the cold war as a counter-example to Cuba, but never became competitive.
Luis Fortuño, a conservative who tried to boost growth by cutting taxes and public payrolls as the island’s elected governor in 2009-13, says he often felt he was “fighting Tugwell’s phantom”. Today, some on the American right want Congress to create a “financial control board” with powers to impose reforms on debt-ridden Puerto Rico, as was done to Washington, DC in the 1990s. That sounds unblushingly colonial, and is no way to craft reforms that might stick.
Small wonder that many American politicians prefer to ignore Puerto Rico. Alas for them, the debt crisis is muscling into the 2016 race. Sooner or later, this tale will need a moral ending.