Vol. 79/No. 30 August 24, 2015
“It’s obvious that this crisis is the result of colonialism,” longtime Puerto Rican independence fighter Rafael Cancel Miranda said by phone Aug. 8. “The Puerto Rican government has no real power, not even to declare bankruptcy. The real government here is the Yankee government.”
Puerto Rico Gov. Alejandro García Padilla, backed by the Wall Street Journal and some politicians in the U.S., is supporting legislation before the U.S. Congress that would allow the 18 different Puerto Rican agencies and state-owned utilities that issued the bonds to declare bankruptcy — supervised by a federal court.
The Journal called García’s July admission that the debt is unpayable an “open secret.” The paper said in a July 2 editorial that the 2013 Chapter 9 bankruptcy of Detroit should be a model because it allowed the courts to “rewrite labor contracts, trim pensions, restructure public agencies.” In other words, it’s a model for making the working class bear the brunt of “restructuring.”
The paper also backed key proposals in the Krueger report, which was commissioned by the Puerto Rican government and released in late June. These include not applying the federal minimum wage, currently at $7.25 an hour, on the island and exempting Puerto Rico from the 1920 Jones Act, which requires all maritime trade to be carried on U.S.-flagged ships, doubling shipping costs.
Over the last five years the colonial government has cut pensions, laid off thousands of government workers, raised sales taxes and slashed social programs.
Since 2005 Puerto Rico’s gross national product has shrunk by some 10 percent. Labor participation is only 40 percent of the adult population, compared to 63 percent in the United States. Mississippi, the poorest U.S. state, has a per capita income nearly double that of Puerto Rico.
Some 300,000 residents of Puerto Rico, especially youth, have fled the island over the last decade, with most heading to the U.S. More than 3,000 doctors left over the last five years, with a devastating impact on health care. More than 60 percent of the island’s residents receive Medicare or Medicaid, while reimbursement rates for doctors are 40 percent lower than in the U.S., the New York Times said, and more cuts are on the way.
In San Juan, the paper notes, “beds in hospital emergency rooms line the hallways. There are so few nurses that people often hire their own private nurses during hospital stays.”
A July report paid for by 34 hedge funds titled “For Puerto Rico, There is a Better Way” called for more drastic cuts in government spending to ensure full payment of the debt. Co-author Jose Fajgenbaum, a former International Monetary Fund economist, told the Guardian newspaper that the Puerto Rican government had been “massively overspending on education” while attendance had been falling. The Puerto Rican government has already closed nearly 100 schools this year and 60 in 2014.
U.S. colonial rule
Puerto Rico has been a U.S. colony ever since U.S. troops landed in 1898, wresting control of the island from Spain.Bourgeois economists and capitalist politicians often claim that Washington “sustains” Puerto Rico, because of the high percentage of people there who depend on food stamps and other welfare programs to survive.
“But we’re the ones who sustain the financial vultures and multinational corporations,” Cancel Miranda told the Militant. U.S. pharmaceutical companies, hotels and agribusiness have made hundreds of billions of dollars of profits from Puerto Rico. Annual interest on bonds is currently at 12 percent.
In the early decades of the U.S. occupation, thousands of small farmers were pushed off the land, and a once-diversified harvest was replaced by sugar. Today Puerto Rico — with three or four growing seasons per year compared to just one or two in most of the U.S. — imports nearly 90 percent of its food, lining the pockets of U.S. agribusiness.
Some defenders of Puerto Rico’s colonial condition used to say “the Island of Enchantment had the best of both worlds,” Cancel Miranda said. “But even they are now opening their eyes.”
Related articles:
Independence for Puerto Rico!
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