One of the appointed officials overseeing Puerto Rico’s government said last week that he hoped the island would finally accept a range of austerity measures after Hurricane Maria, likening the island to “the alcoholic who hits rock bottom and says, ‘OK, we’re bankrupt now, and we really got to change the way we’re doing things.'”
Photo: Juan Luis Martinez/GDA/AP
The comments were made by Andrew Biggs — a resident scholar at the American Enterprise Institute and a Republican member of PROMESA, a board created last June to oversee Puerto Rico’s finances — at an event hosted by AEI to discuss the island’s future after the hurricane disaster.
Biggs discussed what he described as the structural barriers for Puerto Rico’s recovery: minimum wage laws, labor rules requiring just-cause termination, paid sick days for employees, paternity leave, and overtime pay. Even a planned Christmas bonus for employees is problematic, he noted. The labor rules that govern Puerto Rico, Biggs said, are part of an “inherited political culture” from its time as a Spanish colony, which must be reshaped to ensure an economy recovery.
“The reality is, the government doesn’t want to do these things,” he said of labor changes. “If you let them not do them, they won’t do them.” The AEI scholar argued that any additional financial aid from Congress should be contingent on revamping and repealing the island’s welfare and labor regulations.
“I mean, I don’t want to sound pejorative, but I hope this would be like the alcoholic who hits rock bottom and who says, ‘OK, we’re bankrupt now, we really got to change the way we’re doing things.'”
Biggs also suggested extending benefits to islanders in exchange for their help with reconstruction. “A problem with labor supply on the island is the phase out of welfare benefits,” he said. “Congress could say, for the next year or so, anybody who’s receiving, you know, food stamps or TANF (Temporary Assistance for Needy Families), or whatever on the island, if they go to work in some job that is related in some way to the reconstruction on the island, that for some period, they would not suffer a phase-out of their benefits.”
At the end of the panel discussion, Desmond Lachman, another official at AEI, declared, “One doesn’t want a good crisis to go to waste.” Lachman compared post-hurricane Puerto Rico to other countries that have sought International Monetary Fund assistance after “hitting rock bottom.” “They realize they don’t have an alternative,” Lachman said, and “all the difficult kind of reforms” are made “when their back is against the wall.”
The comments were made amid a growing push to implement far-reaching, business-friendly policies in Puerto Rico. As The Intercept reported, there is an effort to use the devastation wrought by Maria to privatize the island’s schools, using a model similar to the widespread charter school reforms that were implemented in New Orleans after Hurricane Katrina.
Republicans in Congress also called last week for Puerto Rico to use natural gas for its energy needs, The Intercept reported. Two senior lawmakers viewed as close to the fracking industry, Reps. Glenn Thompson, R-Penn., and Doug Lamborn, R-Colo., used a hearing to call for the island to revamp its energy needs through natural gas. “We need to look at environmental regulation waivers” to implement energy policy on the island, Lamborn added.
The Biggs remark provoked the ire of Héctor Figueroa, president of 32BJ SEIU and part of VAMOS4PR, a network of labor and community groups in the states fighting for an economy fair for all Puerto Ricans.
“Biggs’s remarks reveal where his sympathies lie, and it is not with Puerto Rico’s working families,” said Figueroa. “He actively seeks to punish people who have lost their homes and their jobs in the wake of Hurricane Maria. We demand that Biggs and the rest of the board, instead of drawing callous analogies, zero-out the island’s debt payment to truly give Puerto Ricans the help they need.”
Top photo: Board member Andrew G. Biggs speaks at a meeting for Puerto Rico’s Financial Oversight and Management Board at the College of Engineering and Surveyors in San Juan, Puerto Rico, on Oct. 31, 2017.
Give us our freedom. We want our liberty. Until that I will suck your dollar SUCKERS. HAHAHAH. We did not request be part of USA .
This is not the 19th C. America’s “possessions” – all of them – should be states (or part of a few states) or should be allowed their independence.
Oh yeah that goes for DC too.
It’s ridiculous that this situation exists. I see these morons down below actually acting like Puerto Rico has “debt.” You know what buddy? You can fuck the hell off with that crap. Because all that has happened to Puerto Rico over the years is that we comfortable Americans have exploited their citizens for cheap labor. And that pretty much applies to the rest of the world south of our border, but with a catch: PR is dependent on us without the opportunity of independent direction.
As in most cases, the USA owes big time —- and while I don’t see those debts getting paid, the next best thing is to make the future right.
Statehood or Independence for all US colonial possessions.
Austerity didn’t work after the financial crisis. It won’t work in Puerto Rico.
AEI is like a drunk who hit bottom, but has sugar daddy who keeps plying him with booze. All the sugar daddy wants is lobbying talking points justifying enriching Wall Street at the expense of everyone else. And the drunk keeps delivering.
But what else can you expect from the same bucket shop that gave us W’s Excellent Adventure in Vietraq. Like austerity, it went soooo well!
As a Puertorrican living in the island i can attest to this.People dont want to work,want everything for free and provided by others,promptly and with no repayment promise.Puerto Rico’s way of life.
As a colonial subject, you have learned very well and buy the image that the colonizer makes of the colonized. Perhaps for you it is an honor to serve him so well.
But what I see are many puertorricans working hard every day –including the kids in the school and the parents both, male and female, who sustain the family.
I hope EVERY billionaire vulture capitalist that’s been squeezing Puerto Rico, Argentina and other poor countries eventually lose the shirt off their backs – and instead find themselves in bankruptcy. Piss on predatory capitalism and its empire of greed valuing investment profit over life on Earth. It’s a true evil that manipulates world markets to benefit the few while harming the many, and the planet itself. That much greed is a mental illness at the highest levels of power and needs – ending.
It seems like Hurricane Maria was just what Mister Biggs and his ilk ordered.
Whose finger is on this trigger?
https://www.nature.com/articles/s41467-017-01606-0
Are we climbing Jacob’s ladder?
https://www.theatlantic.com/photo/2017/10/the-opening-of-the-worlds-most-useless-airport-in-remote-st-helena/543150/
Titanium dioxide and sulfuric acid haze all in my eyes
Don’t know if it’s day or night
You got me blowin’, blowin’ my mind
Is it…
http://rsta.royalsocietypublishing.org/content/370/1974/4263
Let’s put it all out there, why don’t we?
How do Republicans ever get elected without subterfuge and
suppression?
Work requirements, subsidies, and drug testing ought to be required for the people abusing the system most; the wealthy.
They really should not have brought people so out of touch into the board, who live in a bubble of privilege and conservative narratives decontextualized and divorced from reality. This can only Make things worse. If these vulture-enablers want to dismantle the labor rights that took generations of struggle to gain and bring PR back to the feudal age they should at least abolish the Jones Act which artificially inflates the cost of living.
People there will not be able to afford food, rent, schooling for their children and other basic needs by the time this board is done with them.
Lee,
What is your point (beyond perhaps some hyper-PC attempt to shame)? Before the hurricane, Puerto Rico was insolvent — the island had been engaged in bankruptcy discussions with Congress for at least three years prior. Put simply, Puerto Rico spends too much relative to its current tax base, and its debt load is unsustainable.
Of course the federal government should provide Puerto Rico with substantial aid for disaster relief, but the question now is whether to grant a larger package which would ameliorate the island’s solvency issues. It seems wise for Congress to tie such a bailout to reforms which increase the likelihood that the island stays solvent in the future. Those reforms would necessarily be either austerity measures to raise taxes and/or limit spending or regulatory reforms designed to increase the tax base. You call these reforms “business-friendly” as if that’s a bad thing in and of itself. So, I’m curious– which option do you think the island should choose to remain solvent in the coming years?
1) raise personal income taxes substantially
2) decrease public spending dramaticaly
3) expand the tax base by adopting more business-friendly policies
4) none of the above– wait for US taxpayers to bail the island out again
Federal taxes do not fund federal spending. The US taxpayer pays for nothing, ever. All collected federal tax dollars are destroyed.
Federal taxes reduce the money supply, federal spending increases the money supply.
However you are correct that the article is nothing but an attempt to shame. In order to be more than that it would require an explanation to readers that the federal government has unlimited funds and any fiscal problems could be solved tomorrow and all future public goods funded fully by the federal government.
Certainly Puerto Rico is less deserving of a bailout than the banks that gave us the financial crisis. You know, the one that cost us almost $1 trillion in bank and other bailouts.
Remember, since none of the Intercept writers seem to understand this (or consider it worthy of mentioning):
The US federal government has unlimited dollars. The federal government cannot run out of dollars.
Whatever fiscal problems Puerto Rico has could be solved tomorrow because the federal government has unlimited dollars. The same goes for any public good one can think of.
How to pay for 100% free universal healthcare? The federal government has unlimited dollars.
How to pay for 100% free lifelong education? The federal government creates dollars as needed.
How to pay for 100% free childcare? Every time the federal government pays a bill, new dollars are created.
How to pay for clean energy? The federal governnment can cover the additonal costs because it can never run out of money.
How to make nutritious environmentally friendly food avaiilable to all? The federal government can pay whatever is necessary to subsidize the production of such food.
How to provide a universal basic income and retirement stipends? The federal government creates every dollar it needs when it pays a bill.
It does not matter what one thinks of, as long as it is socially beneficial, the federal government can and should pay for it, because unlike you, your town, your state, your business, it can never run out of dollars.
This power, this fact is already acknowledged. Though, rather than using it to help the many, it is instead used to enrich a few, like banks and defense contractors. This is not a debateable concept. Either one acknowledges this or one is ignorant of how money works.
Mainstream economics is a tool for manipulation and control. At one time religion was the prominent ideology fulfilling this function, now it is economics. Regardless of what one calls it, it is a tool of oppression.
Each day your ignorant or malevolent “representatives” cause the many, both human and non-human, to suffer, struggle, die. When will we rise up and put a stop to such injustice?
The empire must be brought down or we are all doomed to a life in chains.
If you’re stupid enough to think this was a sympathetic article maybe you should shut up and not write such long posts.
One needs not be sympathetic to harmful actions and ignorance to aid in the continued injustice and exploitation stemming from them.
If, in fact, we did miss the writer pointing out that the federal government has unlimited funds, and could solve such problems tomorrow, a mistake would gladly be admitted. However, as it currently stands, it would seem that it is not our reading comprehension that is flawed but another’s.
It is not your reading comprehension that is flawed but rather your understanding of basic economics. Yes, the government can print unlimited money. Please do some basic internet research to find out what happened when Zimbabwe took that same approach.
We might recommend you take your own advice.
No commonly cited instance of hyperinflation, Zimbabwe included, was caused by the creation of too much currency. Rather they were caused by the shortage of actual, finite resources. If memory serves, it was a shortage of food in the case of Zimbabwe.
You will have to try harder than that in order to justify the immense injustices, inequality, needless struggle that stems from treating dollars as a finite resource.
You mean the inflation that AEI and its ilk assured us would arrive if we did not cut spending after the financial crisis? The inflation that never arrived?
Harmful actions? See: subprime mortgage origination; TARP.