[Many thanks to Miguel Luciano for bringing this item to our attention.] As people in Puerto Rico are dying and President Trump lashes out at San Juan’s mayor Carmen Yulín Cruz, Bill Moyers talks with social anthropologist Yarimar Bonilla about the challenges Puerto Ricans face in the wake of the storm. Here are just a few excerpts from this exceptionally informative read; see the full interview at Moyers & company.
Puerto Rico is devastated. Two hurricanes plunged the island into darkness and despair. Crops perish in the fields. The landscape of ruined buildings and towns resemble Hiroshima after the atomic bomb was dropped on it. Over three million people are desperate for food, water, electricity and shelter. [. . .]
Last night on NBC, San Juan Mayor Carmen Yulín Cruz made a spontaneous statement expressing her frustration with insufficient relief efforts that went viral. Before you read my interview with Yarimar Bonilla please take two minutes to watch this video. You will understand even more clearly Ms. Bonilla’s explainer of what is happening in Puerto Rico.
Bill Moyers: What’s the first thing you would want us to know about Puerto Rico?
Yarimar Bonilla: That it is a US territory — as are the Virgin Islands, American Samoa and Guam. That it has a greater population than 21 other states – more residents than Utah, Iowa, or Nevada — and is geographically larger than Delaware or Rhode Island.
However, rather than wanting folks to know something in particular, I would want them to ask why is Puerto Rico part of the United States, to investigate the question and come up with their own answers. I think it would be more interesting for people to start out wherever they are — be it with no knowledge at all — or people who grew up in Puerto Rico and have long lived this political relationship without fully understanding it, to ask themselves why the island is part of the United States and what explains the particular ambiguity of its situation today.
[. . .] Moyers: Why was the inequality in Puerto Rico so great?
Bonilla: Because there’s been an erosion of the middle class. And so you have a lot of people at the bottom who can’t find work, who can’t start their own businesses. Many of them depend on government assistance, but there’s also a huge number who are working poor, who live paycheck to paycheck, who are supplementing their incomes with the gig economy. Retailers like Wal-Mart offer no job security. Most of the people working for them can’t predict their shifts — their shifts change from week to week. They have to keep their schedules completely open. They are paid for part-time labor, but have to be available full time.
And so all of this means that leading up to the storm, people already did not have enough money to prepare, to buy the supplies that they needed. Ideally, you would prepare for a storm of this nature by having a well-stocked pantry, plenty of water, lots of batteries, and if you can afford it, a generator. Also, your car would be full of gas and you would have a good amount of cash, because as can be expected and as we’re seeing now, ATMs are down. People who are just making ends meet, they don’t have the kind of money that is necessary to prepare for these storms.
There’s a lot of talk about the island’s environmental precarity and vulnerability. It’s true that the Caribbean is on the front lines of effects from climate change. But there are other forms of vulnerability, like socioeconomic vulnerability. And also a political vulnerability because Puerto Ricans don’t really have anyone in Congress advocating for them. They’re nobody’s constituents. They have no representation and no one who can leverage votes and trade deals with other states in order to get things expedited on the ground there.
[. . .] Moyers: I understand the Jones Act goes way back to World War I, when German submarines were sinking so many American ships that Congress decreed the US maintain a shipbuilding industry second to none, with, as you say, ships carrying provisions to be owned, manned and built by America. This not only strangles Puerto Rico’s economy, but one writer called it a shakedown, a mob protection racket, with Puerto Rico as a captive market. Puerto Ricans have to buy mainly American products and pass the higher cost on to the consumers, who are then paying higher prices. Donald Trump has temporarily suspended the Jones Act, as you know.
Bonilla: That will help momentarily in terms of letting a few ships arrive and letting Puerto Ricans find more inexpensive methods of procuring the items that they need right now. A lot of us are very offended that it was only lifted for 10 days, as if you could resolve the humanitarian crisis in Puerto Rico, which is of a devastating scale — as if you could resolve that in 10 days. It’s absolutely offensive for it to be so limited. A small crumb.
What I hope is that there are now a lot of people who have become educated about the Jones Act. Most people in the United States didn’t know anything about it before this. Maybe now there can be enough pressure to fully repeal it.
Moyers: You have described Puerto Rico and the other Caribbean societies as important economic cover for their colonial centers. What do you mean?
Bonilla: I mean that a lot of things happen in these places that aren’t supposed to happen — that’s what I mean by cover. The United States can claim to offer certain kinds of guarantees to its citizens, but those guarantees are suspended when it comes to the Virgin Islands and Puerto Rico. So veterans benefits are less, guarantees of healthcare are less, guarantees of public education, all these things are reduced. And in addition, wealthy people who are supposed to pay their share, they’re able to completely evade their taxes and not contribute to the national interest by setting up companies in Puerto Rico.
Moyers: So things were really made worse by tax incentives to wealthy investors. I believe Puerto Rico’s Act #22 allows wealthy investors to evade both federal and local income tax by spending a minimum of 183 nights a year on the island.
Bonilla: Yes, it’s true. It’s hard to comprehend, but it’s true. You have a lot of wealthy Americans who say, “Oh, this is great for us, it’s the thing that can get you out from under the US Internal Revenue Service without having to renounce your citizenship.” So they retain their American voting rights, they retain all their benefits of US citizenship, but they do not contribute anything to the US, nor do they contribute anything to Puerto Rico because they’re also not paying local taxes.
Moyers: How did Puerto Rico get its unique privilege to offer triple tax-exempt bonds?
Bonilla: It’s basically written into its constitution. When Congress established Puerto Rico’s civil government in 1917 it decreed that any bonds issued by its government would be free from taxation. In addition, it is written into the 1952 constitution that the repayment of any kind of public debt must take priority over financing public services. In 1952, when Puerto Rican politicians tried to convince Puerto Ricans that they were no longer a colony, and they convinced the United Nations to take Puerto Rico off the list of non-self-governing societies, this constitution was put into place and one of its founding principles was that Puerto Rico was going to be a site for US economic investment. And so you can purchase these triple tax-exempt bonds and not pay any federal tax, any tax in Puerto Rico, or any tax in the municipality in which you live. This made these bonds incredibly seductive for US. I urge everyone to read the great story in New York Times “The Bonds That Broke Puerto Rico.”
Moyers: Earlier this year Puerto Rico officially became the largest bankruptcy case in the history of the American public bond market. In another tweet Trump points out how indebted Puerto Rico is to Wall Street and the banks and reminds Puerto Ricans that it “sadly must be dealt with.” He’s acknowledging this is the first thing Puerto Rico taxpayers have to do.
Bonilla: It was so offensive. Puerto Ricans have been kicked by Irma, then kicked by Maria, and now kicked by Trump. We’re really suffering. In the middle of our humanitarian crisis, he tells us, “It’s a shame but you have to pay back that debt.” It’s clear that was a message to Wall Street not to worry, they’ll get paid back. Puerto Ricans need to worry, however.
Moyers: Something I’ve learned from you: Wal-Mart and Walgreens have more stores per square mile in Puerto Rico than anywhere else in the world. How did that come about?
Bonilla: Wal-Mart has negotiated a series of benefits from the Puerto Rican government such as free or subsidized land to build on, subsidies for their payroll, and for the training of new employees. So they basically get to set up shop almost for free. In addition, we are a captive market. There’s not a lot of competition for them. So they’re the biggest employer, and the biggest retailer. Also, Wal-Mart USA sells to Wal-Mart Puerto Rico, at surprisingly inflated prices so that then it appears as if Wal-Mart Puerto Rico doesn’t have much profit, which means they pay very little taxes to the Puerto Rican government.
The Puerto Rican government wanted to raise the taxes but Wal-Mart threatened to sue and leave and then a federal judge decided that the tax would be discriminatory because Wal-Mart was the only operator of the scale to which these taxes would apply.
Moyers: So when the government tries to raise taxes on goods brought to the island from foreign sources because those taxes would help local improvement, the companies threaten to leave?
Bonilla: Yes, exactly. They don’t want to pay the government any of the profits that they’re making off the Puerto Rican people.
Moyers: So does this helps explain why the infrastructure in Puerto Rico has been so long neglected — the first priority is to serve this foreign debt and tax breaks for the wealthy?
Bonilla: Absolutely, and it’s only going to get worse because of the PROMESA Act [NB: Passed by Congress to deal with the financial crisis and bankruptcy]. Some critics have dared to describe it as a kind of bailout or aid package, but that’s not so. There is absolutely no transfer of money from the federal government to Puerto Rico as part of the PROMESA Act. If anything, there’s an imposition of an economic burden on the Puerto Rican government which now has to pay the overhead of the PROMESA board – which is estimated to cost 200 million dollars in its first year alone – and an astronomical, unjustifiable salary of over half a million dollars a year to its manager Natalie Jaresko. This completely overpaid expensive board arrives in Puerto Rico and the first thing that they say is that everyone has to tighten their belts. There are “furloughs” of government workers, the government has to reduce its payroll by about 30 percent. Now they are going to privatize a lot of the services. The first target was the University of Puerto Rico, which they completely gutted leading to a massive strike at the university. [. . .]
For full interview: http://billmoyers.com/story/vulture-capitalists-circle-puerto-rico-prey/