Republican Plan to Address PR Debt Crisis Is a Disaster

6283852078_e987c237b5_b
El Morro with Old San Juan in the background. Most media stories about PR Debt Crisis use tourism stock shots like this
Okay let’s get this straight. Last week Obama free-styled on the White House lawn, apparently said he had the Oscar López Rivera matter “on his desk,” then took off for Havana, where he watched a baseball game and then on to Argentina to throw down with some tango dancers. Prominent members of the Puerto Rican/diaspora elected officials community showed up in Washington to suplicar for some semblance of bankruptcy proceedings to restructure the 72 bil, there was some smarmy wink-wink soborno involving Hamilton tickets chatter and a tweeted photo op with Orrin Hatch.

Meanwhile, check this New York Times insider-y Deal Book feature, “Plan to Rescue Puerto Rico Advances, Led by House Republicans,” in which “rescue” is used in the most ironic fashion since Operation Rescue. The story announces that House Republicans have devised a violent subjugation of Puerto Rico and its people, using a legal and finance capital language that could easily be sold as a screenplay adaptation of Discipline and Punish,  American Style. I’d suggest casting Christian Bale for the role of Scott Walker, by the way.

Here’s the plan, suggested by the NY Times with the matter-of-factness of a gentrifier barbecue on the Bed Stuy-Brownsville border:

The plan, being drafted as legislation by House Republicans, would not grant Puerto Rico’s most fervent request: permission to restructure its entire $72 billion debt in bankruptcy. It would, however, give the island certain crucial tools that bankruptcy proceedings can offer — but only if it first comes under close federal oversight and meets other conditions.

Certain crucial tools–a vague concession–in return for close federal oversight (direct surveillance) and “other conditions.” The specter of “other conditions” is unsurprising, given Puerto Rico’s powerless position, but exactly what kind of oversight?

The oversight would be provided by a five-member voting board, selected by the president of the United States from candidates with expertise in finance, law or other relevant fields; at least two would have their primary residence in Puerto Rico. The Secretary of the Treasury and the Governor of Puerto Rico would also serve on the board, but would not have a vote.

At least two would have primary residence in Puerto Rico! I guess that means it could be anybody, even John Paulson. And of course the secretary and governor of Puerto Rico wouldn’t have a vote. After all, Puerto Rico has a representative in Congress called the Resident Commissioner who doesn’t vote. This would be an excellent opportunity for self-starter who knows how to lobby, and that is clearly an essential skill given Puerto Rico’s lack of voting representation in Congress.

The financial control board proposal is also reminiscent of the good old days of the Foraker Act (also known as the Organic Act, long before there was organic farming or Whole Foods, because of course, Puerto Rico is a “foreign-body” problem that must be dealt with organically). This plan for governmental administration, devised in 1900, set up an executive and legislative council of 11 members, of which only 5 were required to be Puerto Ricans. Yet the new plan, according to this tweet by PPT gubernatorial candidate Rafael Bernabe, has even worse implications, because under the Organic Foraker Act, the budget had to be approved by the lower house of delegates, who were elected by the Puerto Rican people.

Screen Shot 2016-03-26 at 10.45.25 AM

At this point, the Deal Book section of The Times senses the encroaching violence, and acknowledges that there might be unfairness afoot, but quickly turns it into a buzzword that can be repudiated by any mid-level representative the new neoliberal order.

The creation of such a board has been highly controversial on the island, where some residents and officials have called it an act of “colonialism,” and expressed some concern about outsiders making financial decisions — like budget cuts — that could adversely affect island residents.

“Colonialism” will always be in “quotes” because “colonialism” is something that of course, the U.S. has never engaged in, or if it did, it didn’t really mean it, just the way it never really meant to have slaves, and never meant to take over 1/3 of Mexico’s territory by force in 1848. The U.S. invented the fight against “colonialism” as a way of avoiding British tyranny and could therefore never be accused of “colonialism” because it’s simply incapable of “colonialism”by definition. It just compromised on slavery for several decades and pursued its Manifest Destiny.

But while the House Republicans drafting the rescue package have worked closely with Treasury, they remain skeptical of Puerto Rico’s financial disclosures and want the oversight board to first audit each unit of government, allowing restructurings only “in certain areas” and “where necessary,” according to a legislative summary reviewed by The New York Times.

The beauty of American exceptionalism is that by virtue of its exceptional brilliance, it is exempted from self-criticism. The fact that the US’s federal deficit is between $19 and $20 trillion in no way merits an audit of each unit of its government. After all, the U.S. is “exceptional” and has never engaged in “colonialism.” Nor has it “played the victim,” like Puerto Rico’s government, which grew its debt to its current “crushing size because for years it took out new long-term debt just to get enough cash to get through the year.” America merely ran up further deficits with China and complained about their nasty currency devaluation while continuing to look the other way regarding its own casino-style Wall Street speculative financial capital system and balance the budget on the backs of the poor, which failed to shrink the deficit.

So, the bad news is that, hegemony talks, colonies walk.

If Puerto Rican officials are unable to make the budget balance with existing resources, the oversight board would have the power to do it for them — which could mean cuts in services.

Look it’s not like they’re saying “Republican House to Puerto Rico: Drop Dead,” it’s just that they are convinced, through their exceptionalist myopia, that giving Puerto Rico access to Chapter 9 is ill conceived and would undermine the rule of lawIt doesn’t matter that the law was different for decades until 1984, when Puerto Rico’s access to bankruptcy law was mysteriously taken away  either because there was an unexplained brain fart about what the legal definition of a “state” was, or who knows, somebody figured out that triple tax exemption bonds sold with the guarantee that there was no bankruptcy protection could be a great thing for the ’80s Wall Street revival that would serve as a popular culture touchstone for Oliver Stone’s Wall Street and Bret Easton Ellis’s much-maligned and now “mainstream” novel American Psycho, which is, according to the New York Times’ theater section, “us,” and in that case I have never been so glad to be “them.”

The process, is of course, not without irony.

Although the Natural Resources Committee might seem an odd place to resolve an offshore financial collapse, the committee has jurisdiction over America’s territories, which include Puerto Rico.

Hah. Natural Resources Committee. Of course, Puerto Rico is a national resource. It’s Organic. An organ that provides much needed blood, or sugar, or whatever to the rest of the exceptional Body. It has historically provided enormous profits for US corporations in terms of capital extraction, and has been an laboratory for everything from population control, mass sterilization, to free trade zoning, failed petrochemical industry experiments, and the mass dumping of forgotten soft drinks like Fresca. If you’re going to be a problematic “them” and sit there and use epithets like “colonialism,” well you’d better lawyer up right now and consider yourself a threat to national security, yo.

So we’re left clamoring for a glimpse of spectacle.

Obama tango

I haven’t heard anybody mention the black roots of tango. This shouldn’t have seemed awkward.

And then there was this:

Rolling Stones Cuba

Got me thinking. What if they had played “Miss You” from 1978’s Some Girls? Would Mick have changed that lyric to “What’s the matter man? We’re gonna come out at 12 with some Cuban girls that are just dying to meet you!”?

Hope

Of course there still might be “hope,” in the form of the Supreme Court. Last week it was reported that they were “aggressive in their questioning” and “seemed perplexed about why Congress–in 1984–denied the island bankruptcy protection.”  This Bloomberg View report  makes the case that the Bronx’s own Sonia Sotomayor can make a diff by arguing that Puerto Rico can write its own bankruptcy laws because since it can’t enable its municipalities or utilities to enter Chapter 9 bankruptcy, it should have the power to create its own bankruptcy code. Oddly enough, while this article argues that Sotomayor argued the points in the case even better than Puerto Rico’s own lawyers, her “interpretation depends on a highly doubtful reading of the statute, one that stretches credulity when read into the text.”

This argument falls into the ambiguity of the legal definition of a state, through which Puerto Rico has been long exploited by being considered a state for some purposes and a territory for others. Therein lies the semantic sorcery of American colonialism, the mysterious ruling of 1984, for instance: Sometimes a state, sometimes a territory; sometimes a commonwealth, sometimes an estado libre asociado, yet always, in the end unincorporated. An expendable part of the Body.

The law is clear and it’s not clear. That’s why you have to go to an international body like the UN Special Committee on Decolonization to argue it’s a colony, when it clearly is. There is no world historical legal or political discourse internally about Puerto Rico and it’s this lack of clarity that is the basis of the Federal Government’s ability to turn 3.5 million into second-class citizen colonial subjects.

The bottom lines are these: Governor Alejandro García Padilla, who is not running for re-election, says Puerto Rico will default on a $440 million payment on May 1, the Supreme Court isn’t going to rule on Puerto Rico v. California Tax-Free Trust until the end of June, and the Republican plan for Puerto Rico’s debt will “allow restructurings only ‘in certain areas’ and ‘where necessary.'”

Yet save for one Supreme Court justice’s “highly doubtful reading” of federal bankruptcy law, (unless you want to count the lugubrious Raul Labrador) the Puerto Rican people will have no chance of weighing in on any of this. Not a pretty picture.

 

 

 

 

 

 

3 Comments

Add yours →

  1. Excellent article Senor Ed Morales.
    Also read your article on Marc Lasry-
    Vulture Fund Investor and his involvement in President Obama campaign 2012. Also in Obama interest in Wooing Mr. Marc Lasry in donating for his presidential library and foundation. Nuestra gente, Y puerto rico son “Sitting Duck”. How dirty is this system of poltics. The ones that truly suffer are “El Pueblo”.
    It seems Puerto Rico is fighting for its life!

  2. Gloria M. Alvarez March 31, 2016 — 8:28 am

    I agree excellent article well documented and very revealing. I have felt our island has no options and we are sitting ducks in our isla del encanto. We are hard working die hard boricuas and we will find our way back to prosperity without losing our dignity. Oscar will be free physically because they never imprisoned his heart and soul it is in Borinquen.

  3. The Actions of Congress had brought us back to 1898!

    A Finacial Control Board is a Collection Agency and the title “Promesa”, is a insult #

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: