With his failure to provide relief after Hurricane Maria looking increasingly like George W. Bus's too-little and too-late response to Hurricane Katrina in 2005, President Donald Trump's critics are denouncing his most recent tweets on the situation in Puerto Rico, where more than three million American citizens are without electricity and the humanitarian crisis continues to worsen.
" Much of the Island was destroyed with billions still owed to Wall Street and the banks, which sadly must be dealt with." What an insult to the people that are suffering in Puerto Rico!
And to add injury to insult:" Food, water.and medical are top priorities–and doing well".
Only 54% of Americans are aware that Puerto Ricans are fellow citizens. But then, there is a large portion of Americans who are functionally illiterate and are barely aware of anything beyond what they can see, touch, and smell. A sad commentary on the richest nation on earth. That the president is numbered among that group is even sadder.
Your headline might hold true if more mainland USAmericans, especially non-Hispanic and Spanish-Hispanic (the Cruzes and Rubios) White folk didn’t so disdain Puerto Ricans.
If djt had any idea that he could be reelected, he might be in a fret to keep the island from evacuating. Because if all those citizens come settle on the mainland, they’ll be fully eligible to vote in 2020.
“As long as Greed is stronger than Compassion, there will always be suffering.”~Rusty Eric
Since Greed is the driving force behind Trump and the Republicans, those in need are the most vulnerable.
“Rebuild its electricity grid underground to protect it from hurricanes. Give special grants and tax breaks for installation of solar and wind energy and purchase of Tesla power walls.”
Please Juan, “Tesla power walls” are an absurd “high tech” wildly overpriced Muskian marketing gimmick for an ordinary low-tech “backup battery pack”. Far cheaper and more durable ones can be made locally using 120 year old nickel-iron cells.
Katrina hurt Bush politically because before Katrina there was a general belief that the Bush administration was at least competent. What happened after Katrina hit destroyed that belief in competency. Trump will probably not be hurt by failure to adequately respond to this disaster in Puerto Rica due to Hurricane Maria. Trump is not viewed as being competent or even a real president. The office could be said to be almost unoccupied. He scores political points by undoing whatever Obama did. The more he divides the country based on race, the more he undermines the rule of law, the more he substitutes fake facts for truth, the better he looks to his political base. To really hit the jackpot with his base he would need to establish a white nationalist dictatorship, increase the power of local police, and deport as many non-whites as possible.
Trump’s plunk on the string of Puerto Rico’s extortionate debt from Wall Street is all the more egregious as this debt is very much the imperial colonialist crime waged by the U.S. As many Puerto Ricans know, this debt belongs to the Empire, not Puerto Rico. Like all neoliberal schemes, this is debt waged in order to destroy native self-sufficiency and instead cast whole populations and entire governments into debt peonage to foreign capitalists.
One place in history to note, to see how this is true, is the inception of IRS Section 936 in 1976, which allowed US corporations operating in, and profiting from, Puerto Rico, to pay no taxes to the government of Puerto Rico.
While this did for several decades bring a lot of capital investment into Puerto Rico, and some job growth, it also forced the government to borrow money, as well as impose regressive taxes that disproportionately impact lower earners, like very high sales tax. So, for example, while U.S. corporations reaped $14.3bil income in 1995, it was all tax free from Puerto Rico whose government was instead borrowing money.
Overall, it’s important to remember that Puerto Rico is a colony of the U.S. who subjects it to wealth extraction. As late as 2014, the UN has charged the United States as noted this (can’t remember exactly what the designation/charge was, but it was a negative note leveled at the U.S. due to the extractive nature of the economic subjugation).
Around 2006, I think, the U.S. completed the phase out of IRS 936, which caused a precipitous withdrawal of US corporate investment, employment plummeted by about 10%, I think. Suddenly, the Puerto Rican government was left holding the bag, and public debt to Wall St. was on the course to go through the roof. Some say that was the whole point of the IRS phase out, give Puerto Rico’s government a haircut, the classic neoliberal scheme of debt peonage which forces governments to sell of public assets and reduce social spending in order to increase and pay down debt to Wall St., debt that was artificially created in the first place by colonialist refusal to allow Puerto Rico to tax the US corporations making a killing (now literally) off of Puerto Rico’s wage slaves (Puerto Rican avg., I think, annual income is about 20k, less than half, or something like that, than the poorest U.S. state).
Note, also, that while U.S. corporations were raping Puerto Rico, the U.S. judiciary repeatedly ruled that Puerto Rico must allow U.S. corporations unfettered access to Puerto Rican markets. Yes, the U.S. in every important way prohibited the growth of Puerto Rican economic self-sufficiency. The U.S. often made the decisions from Constitutional precedent vis-a-vis states and equal protection, I think, even though Puerto Rico, of course, is not state, and doesn’t enjoy the same federal protections or funding to states, e.g., federal healthcare spending in Puerto Rico is something like half of what a comparable State receives, yet payroll taxes are the same.
I’m no expert, but I don’t think anyone who is, and who is not a neoliberal apologist, denies that Puerto Rico is an abused colony of the U.S.
For Trump to be noting Wall Street debt from Puerto Rico is disgusting and shameful, but he is just the icing on many layered cake, and if there is one positive to take from the disaster of Maria, it is the present opportunity for American journalists to proclaim loud and clear that Puerto Rican colonialism must end.
Twice successively, Puerto Rico has voted in favor in statehood, in 2012 and last June, but because the action lies entirely with U.S. Congress, and conflicting political and economic interests favor the status quo. Plus, their are some wrinkles in the historical process of statehood that can complicate the path, still the decision is the discretion of Congress. But can you imagine Republicans voting in favor of a U.S. Spanish-speaking state, with a sizable House delegation (about the 30th biggest state, though they are more Puerto Ricans CONUS than the numbers counted for that 30th ranking) likely to be strongly Democratic? Can you imagine the neoliberal Democrats voting to end the Wall St. trough?
Unfortunately, all MSM journalism I’ve seen, while rightly amplifying the calls for aid and decrying Trump’s sour, are completely ignoring the bulk of U.S. responsibility for Puerto Rico’s debt. It’d be nice to see Common Dreams staffers and contributors address it.
But I got my sense of the background by searching “Puerto Rico” at Counterpunch.org
This is a hodgepodge cut&paste from a handful of articles I read at Counterpunch (which I love re-posting to knee-jerk reactionary right-wing media boards):
Puerto Rico’s relationship with the United States continues to be one of colonial-style dependency, serving to assure the overwhelming influence of powerful U.S. economic interests. The twentieth-century colonial policies, which allowed corporations to extract wealth from the island through foreign ownership of land and other productive property, have helped pave the way for a new chapter in the history of colonialism, characterized by exploitative debt obligations which largely benefit Wall Street.
“Porto Rico (sic) is not forgotten and we mean to have it.” Senator Henry Cabot Lodge was reassuring his friend Theodore Roosevelt. According to the New York Times, Puerto Ricans are an “uneducated, simple-minded and harmless people who are only interested in wine, women, music and dancing.” The subject at hand for the Times, one year after the U. S. military invasion of 1898, was “Americanizing Puerto Rico.”
The new rulers quickly changed Puerto Rico to their liking. By 1901 both U. S. exports to and imports from the island had quadrupled. U. S. owners controlled 70,060 acres in tobacco – up from 5529 acres – and 141,248 acres in sugar cane – up from 21,505 acres; 85 percent of the island’s manufacturing was in U. S. hands. As of 1928, four sugar syndicates owned over half of all arable land.
Upper –class haughtiness set the stage for victimization of the many by the wealthy few. Now the U. S. Congress is forcing Puerto Rico’s government to make payments on $72 billion in debt owed to U. S. banks and hedge funds. How did this happen?
Modern U.S. capital has taken several steps to ensure its domination of the territory’s wealth. The infamous Jones Act of 1920 still requires that all goods shipped between U.S. ports be carried on U.S. ships. Since the mainland is the island’s primary import and export partner, the Jones Act ensures that the domestic U.S. shipping industry remains protected from foreign competition and obtains enormous profits through this trade partnership. Moreover, Puerto Rico’s notorious tax policies, including the Revenue Act of 1921, have turned the island into a corporate haven. In 1976, the creation of IRS Section 936 tax code enhanced the tax breaks that U.S. corporations enjoyed. To promote investment, the law allowed U.S. companies to operate in Puerto Rico without paying corporate taxes at all, attracting especially pharmaceutical companies.
Initially, the 1976 provision was successful in making the commonwealth a hub for U.S. investment and pharmaceutical manufacturing. However, in 2006 the tax break expired, setting off a recession that has helped fuel the current debt crisis. Companies deserted the island in droves, causing employment to fall 10 percentage points between 2006 and 2010, and an emigrating labor force drained the island’s tax base.
As the Center for the New Economy points out, in Puerto Rico today “both production and consumption are dominated by the foreign sector,” and, therefore, “most of the income derived from the manufacturing and sale of exports accrues to and is repatriated by absentee owners, with little impact on the local economy.” In addition, Jacobin Magazine notes that, “a substantial amount of wealth created in the island is extracted and not reinvested,” and about one-third of the island’s GNP is “repatriated back to the U.S.” Meanwhile, Puerto Rico has turned to regressive imposts to gather revenue, with its sales tax two percentage points higher than that in Tennessee, the state with the next highest rate. This is a particularly harsh impost on the poor, given that the island’s GNP is less than half that of Mississippi, the mainland’s poorest state.
Due to the tax breaks on U.S. subsidiaries in contrast to the island’s high domestic corporate tax rates, Puerto Rico never had the opportunity to develop its internal private sector. As a result, when Section 936 expired, the government became the island’s largest employer but found itself in desperate need of investment to fund its projects.
Left over effects of Section 936 are ravaging the daily lives of most Puerto Ricans. Regulations imposed in 1976 exempted U.S. companies operating in Puerto Rico from paying taxes on income or capital gains. U. S. investors would pay no taxes on dividends paid by those companies. And taxes weren’t due on U. S. investments deposited in Puerto Rican banks.
Section 936 was “nothing but a welfare program for the Fortune 500,” said a tax attorney. U. S. companies in Puerto Rico generated $14.3 billion in income in 1995 alone. The island’s economy grew. Meanwhile successive governments were relying on “multi-million” dollar loans to make up for sharply reduced tax collections. Federal monies flowed to the island and public -sector hiring increased. Government leaders and citizens fell into dependency.
Then, beginning in the 1990s and ending in 2006, authorities in Washington phased out Section 936. U. S. companies closed operations in Puerto Rico or cut back production. Industrial jobs fell by one third. Between 2006 and 2014 Puerto Rico’s GDP contracted by 13 percent, thus “provoking a new wave of migration,” with heavy middle class representation. Soon “Puerto Rico [was] essentially running on bonds held by U.S.-based banks and corporations” – and hedge funds.
The real culprits are the Wall Street banks who have parasitically, and quite handsomely, profited from Puerto Rico’s financial straightjacket. Barclays, Morgan Stanley, Goldman Sachs, JP Morgan, Bank of America-Merrill Lynch, and many others rushed to underwrite massive loans in the form of bond purchases in order to then turn around and sell those bonds to hedge funds and other investors in the US and around the world, thereby raking in tremendous profits on the underwriting fees. Essentially, Wall Street banks came in with enormous capital then transferred the risk on to other speculators, while making handsome profits as middlemen.
Recently the Puerto Rican government implemented a “Walmart tax” on big-box retailers. The special tax would apply to businesses with revenue of more than $2.75 billion. Hugely profitable foreign companies, who send most of their earnings to investors on the mainland, would thereby face a greater responsibility for contributing to the territory’s coffers. This would in turn alleviate the financial burden on working people and local businesses in Puerto Rico.
But a judge in the United States District Court in Puerto Rico struck down the tax as a violation of the Equal Protection Clause of the U.S. Constitution. The clause prohibits states from giving advantages to their own businesses at the expense of those located in other states. Puerto Rico, which is not even a state, must give corporations like Walmart the same unfettered access to its domestic markets as companies owned and operated by locals.
This directly subverts Puerto Rico’s self-sufficiency. Several years ago, a federal judge sided with milk processors and blocked Puerto Rico from enforcing regulations that allowed locally produced milk to be directed to a state-run company to produce dairy products like yogurt, cheese, and UHT milk, and determined how to divide up the proceeds of milk sales between producers and distributors. The decision struck a blow against the viability of Puerto Rico’s dairy industry, one of the only successful industries producing foodstuffs locally for the population.
Most Puerto Ricans have been used to troubles since the U. S. take-over in 1898. Now, the overall poverty rate is 45 percent; 57 percent of children live in poverty. Unemployment officially is 12.6 percent of the workforce, but only 40 percent of adults belong to the workforce. Food prices are high partly because Puerto Rico produces only 10 percent if its food. Puerto Rico’s median average income of less than $20,000 is 50 percent less than the poorest American state. Puerto Rico only receives half the rate of federal healthcare funding as the 50 states, even though its residents pay the same rates in payroll taxes. This strain was further exacerbated when the U.S. government cut payments to Puerto Rico’s Medicare Advantage program by 11 percent.
In short, Puerto Rico is owned by Wall Street. Any investment or other input of money into the island’s economy via investment in industry, agriculture or services is removed at a greater rate than it was put in. No matter what form this colonial approach takes and no matter what it is called, the fact is that the history of the people of Puerto Rico is one where their poverty only increases along with the debt. Because it is a colony and not a full-fledged independent nation (or a state), Washington controls much of Puerto Rico’s political system. This has meant that the islands are not only home to large military bases, one island was used for bombing practice for decades. This has also meant that the minimum wage in Puerto Rico is not subject to the same restrictions. So, if the dominant industries want lower wages to make a profit, the wages have been dropped. Indeed, this possibility is part of Washington’s current efforts to get Puerto Rico to repay the banks that own Congress and have bled the Puerto Rican nation over the past years via an economic development program set up for US industry and banking.
Hello ncycat, Sometime in the future we won’t be the richest country despite the extreme top of the food chain will have more than a great deal of the wealth of the planet. When added to those in other countries in the same group I can see a global uprising occurring. Since the global right wing will prevent things from changing the result is inevitable!!!.
Trump and his types, i.e. “Vulture Capitalists”, always put debt above people. Naomi Klein’s “Shock Doctrine” is not a theory. It is a well-established fact! Someone posted recently on this forum the fact that she does not have a Ph. D. So what! She was smart enough to ascertain the motives and methods used by the rich and powerful who cannot look at a tragedy without scheming to make money off of other people’s death and suffering. I’m sure that many Ph. D.'s also know this,
but don’t dare mention it for fear of
offending their masters.
"Thomas LaCrosse, the Pentagon’s director of defense support to civil authorities, said U.S. officials discussed deploying the USNS Comfort to Puerto Rico over the weekend but decided that it should stay in Norfolk because it could not get close enough to any port to avoid using helicopter support to get patients to and from the ship.
True enough, the behemoth ship’s deep draft of 30+ feet bars it from San Juan harbor’s 32 to 35 foot channels even at the best of times (and these are far from San Juan’s best times). But, unmentioned in the WaPo article quoted above, that’s nothing new for the Comfort, which routinely anchors a mile or two offshore to serve disaster sites, as it did following Haiti’s devastating earthquake or, again, as it fearlessly did in 2007 in the teeth of a “storm of a decade” off Corinto, Nicaragua, where it anchored 1.5 miles offshore to receive patients.
It is such a common fact in the life of this ship of mercy that militaryfactory.com notes as a mere aside that:
Comfort has a deep draft and, in many ports, she has to stand offshore at least a mile. To receive wounded, Comfort has a large day-and-night helo pad."
I’m not familiar at all with Puerto Rico, perhaps in part because I am a Canadian.
But I am becoming a little more familiar - thanks for your post.
It appears to me that Puerto Rico, as a modern political and economic entity - has just collapsed. Shades of things to come, here in Canada and the USA, and around the world.
Juan Cole has the right way of thinking, even if his technological expertise is wanting.
But I wonder - wouldn’t this be the time for Puerto Rico to become the newest nation on Earth - perhaps aligned with Cuba, or some other alternative ?
Or do the people of Puerto Rico have an identity suitable to this new nation idea ?
Could something like this be used to restore cellphone coverage?
There are microturbines that could be sent and used to every neighborhood to provide electricity. Do not know why they are only used for the frackers. Puerto Rico could become a laboratory of rebuilding sustainably. From rebuilding infrastructure, homes, hospitals etc. with climate-change-in-mind technology. Providing jobs, rebuilding the food supply creating community networking for the people of Puerto Rico.
Alas we have zero humane leadership. Our leader is concerned about the fake debts created by the very,very wealthy corporations. Our Congress is owned by those same parasitic corporations.
Fortunately, he does not have the power to do any of that. And he doesn’t know how to use the power he does have.
djt announced today that the ship was being sent. Still pretty cold comfort, a week later.
Thanks for letting me know! I agree, a fatefully late decision. After I got your message, I searched for the news, myself, and read that FEMA says it’ll be another 5-9 days until the ship sails. Shocking they hadn’t anticipated and been prepared to depart immediately.
Here is one thing Homeland Security could do:
I think the Jones Act needs to be repealed. It is ridiculous, anyway. No wonder Puerto Rico is so much in debt.
Had Puerto Rico been a state, the whole debt issue would have had a different outcome. The problem is with their ability to file under chapter 9: