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Latino Politics in the U.S.

Latino Politics in the U.S.
Kendall-Hunt, 2012 (2005)

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Thursday, July 23, 2015

#PuertoRicoDignityoverDebt NYC Committee for Dignity over Debt in PR

After Greece, Puerto Rico: Another Crisis Created by Capitalism
Saulo Colón and Daniel Vila for the NYC Committee for Dignity over Debt in PR

In 2013 teachers took over the legislature
  On Monday June 29, the Governor of Puerto Rico, Alejandro García Padilla, delivered a live message to the people of Puerto Rico stating that the government’s $73 billion debt is unpayable. The governor stated, “The public debt, considering the present level of economic activity, is unpayable”.

  Several analysts in the corporate media, and also on the liberal left  who are not very familiar with Puerto Rico, have stated that his message came as a shock to the country. This is not true.  Articles and editorials in El Nuevo Día, El Vocero and Primera Hora, the country’s three major newspapers as well as television and radio broadcasts in the days subsequent to the Governor’s message express the general consensus that the people of Puerto Rico were not surprised by his words.
 What did shock many was the payment of almost $1 billion two days later to pay off debt fees. An article in El Vocero July 3 goes into this matter.

  This is a fabricated crisis.
 The colonial government of Puerto Rico is simply bowing to the demands of international financial forces which, like in Greece, have been demanding that taxes on working people be increased, that the labor rights enjoyed by some be eliminated and that remaining productive sectors still in hands of the government be privatized.

  Since the privatization of the Puerto Rico Telephone Company in 1998, the people of Puerto Rico and in particular the working class have been resisting countless efforts by the two ruling political parties, the Popular Democratic Party and the New Progressive Party, to eliminate labor and democratic rights in order to tighten the screws of neoliberal economic policy and maintain wealth accumulation for a small predator elite.

 Similar to the Greek peoples’ long struggle against austerity, two years ago teachers and other public sector workers and supporters occupied the Legislature building of Puerto Rico in response to the government’s decision to reduce the benefits for retirees. Videos and pictures of the dramatic takeover electrified the country as an example of popular resistance and indignation (see picture).

  Instead of supporting the people, Governor Padilla has been telling the country that the way to solve this crisis is to implement the recommendations in the Krueger Report, developed by a group of economists headed by Ann Kruger, a former bureaucrat for the IMF (the International Monetary Fund) the same financial institution that the Greek people rejected in their recent NO vote.

  This Report proposes that Puerto Rico:
 a) Reduce the number of hours worked by government employees;
 b) Privatize government owned agencies specifically the electric company (Autoridad de Energía Eléctrica), the water resources company (Autoridad de Aqueductos y Alcantarillados), the State Insurance Corporatio (FSE) and the public  education system;
 c) Reduce the minimum wage which is now $7.25 an hour;
 d) Reduce the number of sick days;

 In addition, the July 11 edition of El Nuevo Día says it has confidential information that the government intends to fire public sector employees. The previous governor already fired 20,000 workers.

 As evidence of the preference by elites to attack workers via "disaster capitalism" and Puerto Rico's inability to remedy its economy due to its lack of sovereign power, the colonial governor said, as quoted by El Vocero on July 3: “We will not get Puerto Rico out of this mess by taking sun on the beach.” With these words he was referring to his intention of reducing the number of vacation days won by public sector unions. However, regarding the corporate sector he has a different tone, putting forward a plan to grant multinational corporations even more tax breaks.

  This is what capitalism is, a plan of attack by Wall Street, by the hedge fund investors who profit off these debts and the misery they cause and by the international capitalist financial institutions like the IMF and the World Bank to dominate the economies of many countries thru imperialist debt.

 In his book, Confessions of an Economic Hitman, John Perkins states: “Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars. They funnel money from the World Bank, the U.S. Agency for International Development (USAID), and other foreign ‘aid’ organizations into the coffers of huge corporations and the pockets of a few wealthy families who control the planet's natural resources. Their tools included fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalization."

  He explains in detail that the goal of these hitmen is to first sink countries in debt. Then since the debt is not payable, the international loan agencies takeover and privatize a country’s public sectors and are also granted access to mineral deposits and given other corporate incentives or privileges.
  In a nutshell, that is what Wall Street, the banks and international finance institutions are attempting to implement in Puerto Rico.  But our fight has just begun!
Workers protesting in front of the Legislature
 Last week several labor leaders met with the governor. After the meeting, Pedro Maymi, President of the Puerto Rican Workers Central Union, declared that they have already given back all that they can. The new President of the Teachers Federation Mercedes Martínez urged teachers to prepare for a renewed fight against the privatization of schools in August.

  In the long run however, Puerto Rico, which was invaded by the USA in 1898, must break the chains of colonial capitalism. Puerto Rico is covered with shopping malls and fast-food chains. These corporations make more than $60 billion annually in profits and pay no taxes, unlike its low-wage workers who, contrary to capitalist myth, pay many local and sales taxes (just not federal).
 These corporations also receive many government subsidies. Capitalism makes billions in profits from the colonial status of Puerto Rico. That is why Puerto Rico is a colony of the USA: to transfer wealth from the people to the capitalists. This is why Puerto Rico needs independence.
 We believe resistance is the only solution. Only a militant and united fight back against the international capitalist gangsters who prefer profits instead of democracy can stop this corporate offensive against people and the planet. We therefore urge solidarity among all working people.
 We support the Greek and Black Lives Matter movements for dignity and life.
 Puerto Rico owes nothing.

 We will not pay. We will fight. #PuertoRicoDignityoverDebt

Wednesday, July 1, 2015

Puerto Rico’s Economic and Fiscal Crisis: Manufactured by the U.S.

Puerto Rico’s Economic and Fiscal Crisis: Manufactured by the U.S.

Why Puerto Rico can’t push itself out of the fiscal and economic malaise…
Victor M. Rodriguez, Professor, California State University, Long Beach. He is the author of Latino Politics: Race, Class, Ethnicity and Gender in the Mexican American and Puerto Rican Experience (Kendall Hunt, 2012).

On Tuesday June 23, the Special Decolonization Committee of the United Nations heard 30 petitioners who came to denounce from various perspectives the colonial situation of Puerto Rico. For the 34th time the UN committee approved a resolution requesting that the United States allow Puerto Rico to exercise its right to self-determination and independence. In 1953, the U.S. and colonial administrators lied to the U.N. in order to get Puerto Rico off the list of territories which still had not achieved self-determination. They told the UN that Puerto Rico in 1952 had drafted a constitution and now was exercising self-determination. This despite the fact, as Jose Trias Monge who was the Attorney General of Puerto Rico from 1953 and 1957 and a central actor in the colonial government, revealed in his book Puerto Rico the Trials of the Oldest Colony in the World (1997) that the government of the United States, through the state department and the department of the interior said “Puerto Rico should still be considered a territory.”  Through political pressure in a smaller United Nations, the US petition to remove Puerto Rico from the list was approved with 26-16 and eighteen abstentions.

Despite the vote and since then, Puerto Ricans, increasingly from various political perspectives have trekked to the U.N. demanding that the U.S. fulfill international law with respect to the island. In recent years the number of United Nation members supporting Puerto Rico’s request has grown from the time when Cuba and the Soviet Union and its allies where the only ones supporting Puerto Rico’s efforts. Now, with the political and economic changes that have taken place in Latin America and the partial diplomatic retrenchment of the U.S. in Latin America, the issue has received broad support from Ecuador, Nicaragua, Venezuela, Bolivia and other nations who before were on the margins on efforts to denounce Puerto Rico’s colonial status. In the recent Summit of the Americas in Panama last April, attended by President Obama and President Raul Castro, expression of support for Puerto Rico were again expressed broadly.

But, the increasing fiscal and economic crisis ailing the island has brought more attention to Puerto Rico’s colonial situation. Already some stocks have experienced a decline especially those related to municipal bonds, or insurers of municipal bonds. The recent comments by Gov. Alejandro Garcia Padilla of the Popular Democratic Party (supporter of the commonwealth status) that Puerto Rico would not be able to pay its $73 billion debt caused strong reaction in the capital markets. That lack of liquidity because of lower tax revenues may even cause a government shutdown like in 2006. In addition, a possible default could take place in September 2015 and will hit Wall Street investors who have played casino with Puerto Rican bonds which are not subject to local or federal taxes. But, also, Puerto Rican elites have served as intermediaries for the financial predators from Wall Street engaging in corruption and enabling predatory lending policies. A recent report commissioned by the government by Anne Krueger and two other former International Monetary Fund directors provided prescriptions that will be worse than the disease which ails the economy. One of the problems the colonial government faces is that its tax revenues continue to shrink as the economy stagnates and large numbers of Puerto Ricans, including professionals emigrate. One of the suggestions was to reduce the minimum wage which will have a deleterious impact on poverty and the capacity of the working population to pay taxes. In sum, the report places the weight of the economic crisis on the backs of the working people of Puerto Rico.

In addition some political sectors, especially the conservative pro-statehood groups are trying to leverage influence to get congress to consider statehood for Puerto Rico. In order to gain support from members of congress they have allied themselves with the most conservative members of congress who attend fundraisers for their political campaigns despite the fact Puerto Ricans can’t vote for congress or the president of the U.S.  Recently in June Sen. Don Young Republican from Alaska chaired the Natural Resources Committee where he heard petitioners on the issue of Puerto Rico’s political status.  A few days before he had participated in a fund-raiser in San Juan, Puerto Rico hosted by a Pro-Statehood Organization, Igualdad. The timing of the fund-raiser and the hearing was critiqued by many, Sen. Young has raised close to $147,000 from island donors in the last two decades. As before no positive steps came out of that hearing.

But visits to the United Nations while important to keep the world’s attention to Puerto Rico’s colonial plight have not produced changes in U.S. policy. Ironically, 60 years of no diplomatic relations with Cuba is beginning to change, including the re-opening of embassies but the stalemate in Puerto Rico continues. The efforts of political parties of the left and of civic organizations have become repetitive rituals that have not led to solving the 117 years colonial relationship between the United States and Puerto Rico. This issue becomes more pressing given the chaotic economic situation of this island of more than 3.5 million inhabitants who, as defined by the Supreme Court inhabit a special legal space as an “unincorporated territory” of the United States. In layman’s terms Puerto Rico “belongs to but it is not part” of the United States. This new legal space was created, the “unincorporated territory” to facilitate the acquisition of territories if the United States so desired without having to grant statehood. The court members during most of the insular cases where almost the same justice which handed down the Plessey vs Ferguson decision which legalized segregation in the United States in 1896. The consequences of these decisions were that an unincorporated territory “could be kept in subordination indefinitely without the prospect of future statehood.” (1)

The Supreme Court decisions called the Insular Cases are the legal structure that has legitimated the subordination of Puerto Rico for the last 117 years and served as the genealogy of the economic, social crisis that Puerto Rico faces today. With a public debt of $73 billion, which is 96 per cent of Puerto Rico’s Gross National Product, just to service the debt the island has to use 44% of its revenue, unemployment is rampant (14.4% 2014), labor participation rate is among the lowest in the world (40.6% ), poverty is 46% (higher than any other state). This critical economic situation is worsened by the fact that Puerto Rico is totally dependent on the U.S. merchant marine, the most expensive in the world. The Jones Act, enacted in 1920 prohibits the island, which imports 85% of its food, from utilizing any other cheaper shipping alternative which according to one study increases the cost of living for the residents by about $200 million. (2) 
While there have been comparisons between Greece and Puerto Rico the reality is that they are totally distinct situations. Greece has sovereignty, Puerto Rico does not. Puerto Rico is unable to declare bankruptcy, cannot devalue its currency and cannot go to international financial institutions under the present colonial system. In fact one of the solutions offered in the United States to solve the chaotic economic crisis is to place the entire island in receivership. In other words to go back to an even more rigid colonial system so that the bonds market can protect their investment.  It seems that the sentiment expressed by Simeon Baldwin in an analysis of the constitutional questions related to the acquisition of territories in the Harvard Law Review in1899 are still dominant  “it would be unwise to give … the ignorant and lawless brigands that infest Puerto Rico … the benefit of the constitution.”  The belief in the inferiority of Puerto Ricans to be provided their powers to find solutions was stated since the beginning by President Taft in 1909, this was in the midst of another economic conflict when the Puerto Rican legislature in an act of resistance against the colonial system refused to approve the colonial budget. President Taft said in a message to “congress that Puerto Ricans were given too much power than it was good for them.” (3). It seems that the culture and attitudes about Puerto Rico have not changed.


1. Gerald Newman “Introduction” in Reconsidering the Insular Cases: The Past and Present of the American Empire, Harvard University Press, 2015. 

2. Puerto Rican Senator Rossana López presided a commission of the Puerto Rican legislature which approved a resolution and a report (Senate Resolution #237), which finds that cabotage law (Jones Act) cost Puerto Rico $200 and increases the cost of living by 40%.

3. Juan R. Torruella “The Insular Cases: A Declaration of their Bankruptcy and My Harvard Pronouncement” in Reconsidering the Insular Cases: The Past and Present of the American Empire, Harvard University Press, 2015.