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Vulture Capitalists Circle Above Puerto Rico
You've said that Puerto Rico was in trouble long before the hurricane.
Puerto Rico's been in an economic recession for over a decade. The great American recession that was so debated in the United States during the early Obama administration after the collapse of the banks in the US -- all of that started in Puerto Rico much earlier, and whereas the US is said to have recovered to some extent for certain populations, Puerto Rico's recession has only deepened. That is in part due to the lack of a strong economic base and to tax incentives that were put in place to bring foreign -- "foreign" meaning US companies -- to Puerto Rico. After the crash a lot of companies left and a base of employment in Puerto Rico was gone.
So even before this last hurricane, already Puerto Rico had huge unemployment, huge poverty rates -- poverty rates that double any poverty rate in the US, even that of the poorest states of the US -- and a very neglected infrastructure that was not ready for the storms.
Why was the inequality in Puerto Rico so great?
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 Walmart 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.
You've described these Caribbean societies, including Puerto Rico, as protected markets for national corporations.
Yes. If you look at the Jones Act, the only goods that can arrive in Puerto Rico have to be on US-made ships, and owned by US citizens, with a US crew flying a US flag. So this means that if the Dominican Republic wants to sell food to Puerto Rico, which it does, it has to send that food first to Jacksonville, Florida, unload it, put it on another ship that is allowed to bring it to Puerto Rico. So this makes it very difficult for Puerto Rico to engage in trade with other countries. We're not an independent nation, so we can't make our own trade arrangements. And that means that we have to buy mostly from the US.
You have described Puerto Rico and the other Caribbean societies as important economic cover for their colonial centers. What do you mean?
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 health care 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.
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.
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.
How did Puerto Rico get its unique privilege to offer triple tax-exempt bonds?
It's basically written into its cons ution. 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 cons ution 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 cons ution 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 The New York Times "The Bonds That Broke Puerto Rico."
http://www.truth-out.org/news/item/4...erto-rico-prey
LV shooter just ed PR. Their week of press coverage is over.
