The Roots of Puerto RicoŐs Economic Disaster
To get to the bottom of the growing economic calamity in Puerto Rico, one really needs to go back to the mindless act of 1898 when the United States took control of the island as part of the spoils from the Spanish-American War. With a distinctive Afro-Spanish culture very much like that of its Caribbean neighbors, Cuba and the Dominican Republic, Puerto Rico, on balance, has always been an economic and political burden to the United States. The economic burden had been somewhat ameliorated by Puerto RicoŐs industrialization program known as Operation Bootstrap. The main shot in the arm for that program came from Puerto RicoŐs own Industrial Incentives Act of 1947 that took advantage of its unique territorial situation in the U.S. tax code in which U.S. corporate profits were not taxed, even if the Puerto Rico government should choose not to tax them. One can read a reasonably good brief summary of the program at Encyclopedia.com.
Here is how I summed up the arrangement in ŇCIA Plots Puerto Rico StatehoodÓ:
A U.S. company excused from a tax in a foreign country would no longer have the foreign tax credit and would have to make it up dollar for dollar with U.S. taxes. Similarly, such a company excused from state taxes would lose the state tax deduction and his federal taxes would be just that much higher. No one, in short, could offer what Puerto Rico could in terms of freedom from the taxman, and advertisements were begun to welcome manufacturers to "Profit Island USA."
This relatively enlightened economic development program, though, eventually fell victim to the bane of the island, its political status politics. Most commentators on the change in the U.S. tax code that took place in1996 describe it as just the natural reaction of the U.S. government to the loss in federal tax revenue that resulted. In fact, the real culprits were Puerto RicoŐs own political leaders at the time, its governor and its resident commissioner, the non-voting delegate in Washington. Obsessed with finalizing the U.S. conquest of the island by having Puerto Rico become a U.S. state—against the wishes of a very large percentage of the islandŐs population—they saw the tax arrangement that had gone a long way toward rescuing the island from its poverty as an impediment to their statehood goal and stopped defending it against its attackers from the U.S. Treasury.
This supreme act of folly had very predictable consequences, which I in fact predicted with my early 1998 article, ŇPuerto Rico Statehood: Imminent Danger,Ó reproduced below. What I failed to anticipate were the borrowing gymnastics that the Puerto Rico government would engage in to turn the economic disaster into a financial one and delay their day of reckoning.
Now in their desperation the people of Puerto Rico have turned to the son of the man who bears the greatest responsibility for their plight and elected him governor. He is the 38-year-old statehooder Ricardo ŇRickyÓ Rossell—, who assumed office at the beginning of this year. Right off the bat he did the predictable and conducted a new status referendum, apparently seeing statehood as the cure for all the islandŐs ills. One may read the warning I wrote back in 1998 and readily conclude that not only would Puerto Rico statehood make the island a bigger economic and political problem for the United States than it is now, it would also worsen Puerto RicoŐs economic problems substantially.
It was a treat for me as well as for our visitors from the U.S. Department of the Treasury. It was 1979 and I was in my second year working as an economist for Puerto Rico's Economic Development Administration, the industrial promoters, and I was accompanying a couple of my federal counterparts from Washington who were in San Juan primarily to look into the question of the effectiveness of federal tax breaks for U.S. companies on the island. We were given a V.I.P. tour of La Fortaleza (the fortress), the oldest continually occupied chief executive's residence in the Western Hemisphere. Our tour guide was one of Governor Carlos Romero Barcel—Ôs top aides. His pride in his heritage was palpable as he took us around the old structure, whose outer ramparts constitute one of the earliest parts built of the wall that still surrounds the oldest part of Puerto Rico's capital city. This part, as the city has grown and spread is known in this century as Old San Juan. Just a few houses away, it was pointed out, is another impressive and venerable structure, La Casa Blanca, the home of the family of the founder (in 1508) of this long-time Spanish colony, one of the officers in Christopher Columbus' voyages of discovery, Juan Ponce de Le—n. Ponce de Le—n's remains are in a cathedral just up the street.
Our tour ended beside an old grandfather clock that stands in a prominent place on the main floor of the residence. It was not running. In fact, the aide told us, it had not run since the last Spanish military governor struck it with his sword in anger when the Americans began their naval bombardment of San Juan in the Spanish-American War of 1898. The time had not been changed since then, we were told.
Riding back to the office in our car, one of the Treasury officials asked, in puzzlement, "Are you sure this is a pro-statehood government? Listening to that guy I would have thought they were for independence."
And so would most Americans, given their concept of what it means to be a state of the United States and, consequently, what they imagine a pro-statehooder in Puerto Rico to be like. It is a misunderstanding that the statehood advocates lobbying in Washington have done very little to correct, though Romero, now Puerto Rico's resident commissioner (non-voting House delegate) in Washington, did tell a Congressional panel conducting a hearing on Puerto Rico's political status a few years ago that he rejected the metaphor of the melting pot for the United States, preferring instead the metaphor of a salad bowl. The remark was intended for home consumption--only Puerto Rican newspapers hang on every word spoken by their politicians in Washington. For U.S. mainland consumption statehood advocates usually stress the fact that residents of Puerto Rico have been U.S. citizens since 1917 and ever since that time they have been drafted and have fought in U.S. wars as a part of the U.S. Armed Forces.
Mutual misunderstanding has been a hallmark of the U.S.-Puerto Rico relationship since the U.S. took the island from Spain along with the Philippines and Guam as war booty in a war that was ostensibly fought over Cuba's independence. Spanish governance had been harsh, and as unenlightened as their rule at home, and the Americans were, for the most part, welcomed with open arms. Initially, almost all of Puerto Rico's politicians were for statehood, misperceiving the U.S. as a sort of republic of republics and thinking that as a state they would at least have the sort of autonomy they had just been granted, on the Cuban coattails, by Spain. The Americans, for their part, were shocked by the widespread poverty and illiteracy they encountered and quickly convinced themselves that these people were not fit for self-government and perhaps never would be. They immediately clamped down upon the island their own form of military colonial government. The Army government lasted little more than a year, but Puerto Rico remained under the War Department until 1934 when it passed to the Department of the Interior, and its governors, U.S. mainland politicians all, were appointed by Washington for a half century (The first native Puerto Rican to be appointed, Jesus T. Pi–ero, was named by President Harry Truman in 1946. Puerto Rico was permitted to elect its own Governor for the first time in 1950, and the current commonwealth status giving Puerto Rico more apparent autonomy than they had ever had went into effect in 1952).
Once the reality of American rule, economically generous but politically stingy, set in, so did disillusionment among Puerto Rico's leaders. Unlike the firebrand Cubans, the Puerto Ricans, whose lamb on their official seal is said to symbolize their obeisance to Spain, had never wanted more than greater autonomy, of the sort it appeared their founding country had granted them in 1897. Now that they saw they weren't going to get it, the manner of adaptation to the new reality split the old Autonomist party into two new parties. The Unionist Party, led by Luis Mu–oz Rivera, which claimed most of the island's political and economic elite and demanded greater political autonomy, of the sort that had just been wrested from Spain, and the Republican Party of Dr. JosŽ Celso Barbosa. As unattainable as the Americans had made it appear from the very beginning, the Republicans continued to have statehood as their objective.
The two dominant political parties in Puerto Rico have changed leaders and have changed names through the years, but their make-up, their personalities, and their goals and objectives have remained surprisingly consistent.
Though Barbosa was a black, his Republican party included poor whites from the coast; his political trajectory, as he himself claimed, was diaphanous' in its consistency. He had always stressed equality within Spanish sovereignty; he now claimed equality as an American subject. He sought collective American citizenship for Puerto Ricans as a precondition for the ultimate acceptance of Puerto Rico as a state of the Union. Statehood and citizenship were, to Barbosa, not the demands of a subservient people, but an assertion of dignity. (Raymond Carr, Puerto Rico, a Colonial Experiment, Vintage Books, 1984, p. 48)
Talk about a misunderstanding! There is something truly quixotic and sad about a black man, an accomplished physician and political leader in a society with great class discrimination but free and open racial intermarriage, particularly among the lower classes, and thus with no perceptible color line, demanding, for the sake of dignity and equality, to be integrated into the United States of the early 20th century. Even today U.S. racial divisions amount to a caste system compared to Puerto Rico, but the United States of the early 1900s was a country in which the Jim Crow laws, the Ku Klux Klan, and the lynch mob were still powerful forces. And strong racism and discrimination were not just a Southern phenomenon. None of the cities where major league baseball was played were in the Old South, but the teams were still many decades away from permitting blacks to participate, and Hollywood had not yet even created the unthreatening, "yassuh, nossuh" talking, bug-eyed ghost-fearing subservient black male stereotype that dominated the screen for so many years.
The statehood cry had everything to do with Puerto Rican realities, not U.S. ones. At the risk of oversimplifying only a little, Barbosa and his followers were the "outs," always demanding to be treated with greater equality and dignity versus the smug, comfortable, elite "ins." The autonomist "ins" looked wistfully back to aristocratic Spain for their model. And in the Latin American pattern, wealth and privilege were hardly worth having if not to lord it over the "outs." The pro-commonwealth Popular Democratic Party, so long dominant in Puerto Rican politics, is the inheritor of this autonomist tradition. It received an infusion of egalitarianism from the early leadership of Mu–oz Rivera's son, Luis Mu–oz Mar’n, but in his later years and afterward, it has reverted to type. One of the main reasons for the massive rejection of the Populares in 1992 was not that pro-statehood sentiment was on the rise but that, in his second consecutive four-year term (third overall), Governor Rafael Hern‡ndez Col—n had begun to take on regal airs and had spent too much time off the island, particularly in Spain. He even went to live in Spain after his retirement and his party's crushing defeat.
The pro-statehood New Progressive Party is in many ways just like Barbosa's Republican Party. Even in its U.S. advertisements in favor of the new legislation that would push Puerto Rico along toward statehood, one can see that it is energized not by a love of all things American but by a profound dislike for its Puerto Rican political opponents and a revulsion over the existing political status in which Puerto Ricans lack the dignity of full, first-class U.S. citizenship. In this latter consideration it is like the long-term mistress who really doesn't love the sugar daddy she services but demands to be made his wife for respectability's sake. And though in their advertisements in the conservative Washington Times they try to paint the Populares as socialists for some of the muddle-headed statist schemes the leaders of that party have hatched in the past, they are very much true to the traditions of Barbosa in their own simplistic populism. Statehood is for the Poor, after all, is the title of Romero's book, and the main reason given is that, as a state, Puerto Rico would, on balance, get a lot more in federal transfer payments. As soon as he settled into his current Washington office he joined in with fellow Democrats in the Congress in railing against the U.S. manufacturing companies that form the backbone of the Puerto Rican economy, calling the federal tax breaks that lured them to the island in the first place mere "corporate welfare." And the New Progressives have always had close ties with organized labor. They have consistently favored the application of all federal minimum wage laws to Puerto Rico, and, most recently, Governor Pedro Rossell— introduced legislation that would permit the unionization of all Commonwealth government employees.
As for the better-known welfare, even though out of power, the pro-statehood lobbyists were the biggest single force behind the Congressional action that has largely given Puerto Rico its transfer-payment dependence. I speak of the food stamp program. Using the dignity-of-American-citizens argument they persuaded the Congress to treat Puerto Rico as though it were a state in 1974, a move that the incumbent governor, Hern‡ndez Col—n, initially opposed. Soon the cupones rained down upon the island like manna from heaven, though the demonstrated need hardly compared to that of the Israelites in the desert. By 1982, with the annual food stamp tab for Puerto Rico about to crest one billion dollars, the Congress realized that things were a bit out of hand. They took Puerto Rico off food stamps and replaced it with a block grant, initially capped at $825 million and misleadingly entitled the Nutrition Assistance Program. Actually it was not misleading until Romero, who by that time was in his second term as governor, got through with it. To "save administrative costs," he did not institute his own program of food stamps with the money. He simply had his Department of Social Services send those families deemed eligible a monthly check in the mail. Now, with the annual expenditure for the program over a billion dollars and with the appropriation still part of the mammoth agriculture bill, as though its purpose were to help U.S. farmers by giving poor people the wherewithal to buy their output, this is still how the program is administered.
Like Latin American populism of the Peronist stripe, the Puerto Rican version also comes tinged with authoritarianism. Romero is nicknamed El Caballo (the horse) because of, let us say, his forceful qualities, and as governor from 1977 through 1984 he behaved very much like the traditional Latin American caudillo, or strong man. Never before had the agencies of government been so thoroughly politicized, and though any Puerto Rican governor who also controls the legislature is like a four-year dictator in that there is always the strictest party loyalty in all-important votes, Romero carried the loyalty requirement one step further. Party loyalty for him was not enough; personal loyalty was what counted. Dos jueyes macho en la misma cueva (two male land crabs in the same cave), was the commonly heard, very Puerto Rican expression about his clashes with cabinet officials with the slightest sign of an independent thought.
His governorship eventually foundered when the opposition won control of the legislature beginning his second term in 1980. They held public, televised hearings that revealed that two young independence advocates, one the son of a prominent pro-independence writer, ostensibly killed in a "shootout" with police in an attempt to sabotage a television relay tower had actually been set up by a police provocateur, captured alive, and summarily executed. No personal legal blame was ever pinned on Romero for the political murders, but his opponents did not shrink from reminding the voters that he had very quickly showered the police with praise when the killings occurred and his appointees had orchestrated the ensuing cover-up. The episode was a major factor in his defeat in his attempt at re-election in 1984.
Another factor in his defeat might have been the political status question. He ran in 1976 on a "good government" platform, promising that political status would not be an issue with him, but once he was in he soon made it the issue. There was a great deal of quite infuriating, insulting talk from the Romero camp about educating the people on political status, as though all those people who favor independence or continued commonwealth status do so out of simple ignorance. Never mind the quite perceptive observation of noted dramatist RenŽ MarquŽs that there is no such thing as a Puerto Rican intellectual who is not an independentista. Romero also promised that if reelected he would immediately call for a new referendum on political status, something that had not taken place since 1967 when Luis Mu–oz Marin was at the crest of his power, and commonwealth had won overwhelmingly. If statehood were to win by a majority of only one vote, he said, he would forthwith petition the U.S. Congress for admission to the union as the 51st state.
Trinidadian novelist and social commentator, V.S. Naipul, has written that in Argentina people "live for their enemies." Robert Crassweller, the biographer of Dominican dictator Rafael Trujillo has noted that the English word "compromise" really has no exact counterpart in Spanish, and that at least in the Dominican Republic, the concept comes across as something akin to cowardice. The culture of Puerto Rico, especially among its political leaders, one is constantly reminded, is not too far removed from that of these other Latin American societies. Sometimes one gets the impression certain actions are taken not because they will make governing any easier or even that it will make reelection any easier but simply because it will be so galling to one's political enemies. Those in power seem to take a particular pleasure in rubbing the noses of those out of power in the fact of their powerlessness by going out of their way to do what will irritate their opponents, that is to say their political enemies, the most.
The current governor and statehood leader, former physician Pedro Rossell—, has shown many of these same compromise-and-consensus-be-damned, authoritarian tendencies as well. He is the only governor in the nation who has used the National Guard for massive drug busts, sealing off public housing projects with troops for extended periods of time. Most recently, in January of this year, he was personally accused by Inter-American Press Association (IAPA) delegation chairman Danilo Arbilla, a Uruguayan publisher, of dictatorial tendencies for actions he has taken against Puerto Rico's leading newspaper, El Nuevo Dia. Upon hearing the remarks, Rossell— rushed up to the podium and physically confronted the publisher. "My people told me that I should hit him," he told a radio interviewer. Rossell— was accused of violating an IAPA declaration that he signed in 1995 that states, "Withdrawal of government advertising may not be used to reward or punish the media." That appears to be precisely what he has done to El Nuevo D’a at considerable expense to that paper. In Puerto Rico the government owns such normally private functions as the telephone company and the one electric power utility and their advertisements are substantial. The paper's offense was pointing out instances of government corruption and mismanagement.
There are several ironies here. One, of course, is for a governor elected under the flag of the world's leading democracy, the United States, and the leader of a movement to add a star representing his state to that flag, should be in violation of the democracy norms of an international, largely Latin American press body. Another is that he should be lectured on his own turf by a man from a country not noted for its strong democratic traditions. A final irony is that the newspaper he appears to be trying to bring to its knees for having the temerity to criticize his government has a strong pro-statehood editorial position.
From the U.S. perspective this episode is but one more illustration of the misconception that those in Puerto Rico who most want to be "part of us" are necessarily the ones who are "most like us," or even that they are the ones who like Americans the most. Romero's dignity-based call for statehood often has the ring of the strongest pro-independence rhetoric. He has written that if rejected by the Congress in a statehood petition he would see no other option but to turn toward independence. He has also written, and repeated many times, that Puerto Rico's Spanish language and its culture are non-negotiable. The message seems to be, "I want to be closer to you not because I like you but because I don't like what you've been doing to me (apart from giving me a lot of money, though less than my due) all these years." One detects no indication in his rhetoric that he can empathize in the least with any Americans who might be wary about taking the unprecedented step of adopting as a state an entity of a different culture on the basis of one bare majority vote. "I know that I have never asked you to marry me, but if I do you'd better say yes quickly, or I will leave." Is it love?
On the political status front, Governor Rossell—'s actions have been completely in the Romero mold. In fact Romero, who has become an even greater statehood militant as resident commissioner than he was as governor, has probably tugged him along. Mistaking the huge election victory in 1992 as a statehood endorsement rather than a repudiation of the leadership of Hern‡ndez Col—n and his party, Rossell— called for a plebiscite on political status, which commonwealth won by a vote of 48.6 percent to 46.3 percent, with 4.4 percent choosing independence.
There is an irony here in that another reason for the pro-commonwealth Popular Democratic Party's defeat is that the little attention Governor Hern‡ndez Col—n gave to his job in his second term mainly went toward an unsuccessful and thoroughly ill-considered push in Washington to gain an improvement in the terms of commonwealth. Rossell— apparently did not see that status partisanship is not an electoral winner, or perhaps he was driven by the even stronger imperative, to take care to do that which will most anger one's opponents. Hern‡ndez Col—n's big nod toward that imperative, in addition to his misbegotten greater-autonomy push, had been his party's formal elimination of English as one of the two official languages of Puerto Rico. That move was certainly not popular with the statehooders and they quickly undid it when they got back into power. Unfortunately for Mr. Hern‡ndez Col—n, it was also quite unpopular with most of the citizenry, especially with the business community, which found itself having to submit paperwork in Spanish when previously English had been acceptable.
Not to be outdone when it comes to actions pleasing to one's status partisans, galling to one's domestic opponents, but also broadly unpopular because it is harmful to the basic interests of the populace, Rossell— and, even more enthusiastically, Romero soon acquiesced in the elimination by the U.S. Congress of the federal tax incentive, Section 936 of the Internal Revenue Code. This very favorable tax arrangement which evolved from a provision originally designed simply to put U.S. businesses on an equal tax footing with foreign competitors in the U.S. possession of the Philippines in the 1920s, is almost completely responsible for transforming Puerto Rico from a backward agricultural island to a reasonably advanced industrial one. The U.S. companies lured by the tax deal also account, directly or indirectly, for a substantial share of the island's jobs. The statehood leaders' rationale was pure status politics. As a state, Puerto Rico could not get a tax break unavailable to the other states, which makes for a pretty strong economic argument for not becoming a state. If the tax break were to be eliminated so, too, would be that argument, and so it was, regardless of the long-term risks to the economy.
That had been one excuse for the loss of the status plebiscite, the commonwealthers had played greatly on the fears of the voters that their jobs would be lost with the loss of Section 936 that would accompany statehood. Now with it gone, that took care of that. The other excuse had been that each of the parties had been permitted to define its status as it chose, and the commonwealthers had offered up a pie-in-the-sky enhanced commonwealth of a type that the Congress would never buy, and the gullible voters, as the statehooders saw it, had gone for it. Now that had to be fixed. But how?
Governor Rossell—'s enthusiastic endorsement, and work for the passage of, the North American Free Trade Agreement (NAFTA) was a big mystery to many economists and business people in Puerto Rico. When the Caribbean Basin Initiative (CBI) had first been proposed by the Reagan administration they recognized that the concerns of Puerto Rico might be a problem. They sent a large delegation down to smooth any possible ruffled feathers and eventually put in a provision to assure that the island lost none of its rum excise tax because of new Caribbean competition. But the CBI was no danger to Puerto Rico at all compared to the NAFTA. Both eliminated quotas and duties on imports for the favored countries, but virtually the only industries in which the quotas and duties make a significant difference are the low-wage industries of apparel and footwear. The CBI made an exception for those industries and kept their restrictions in place. The NAFTA did not.
Clearly, the industries most endangered by NAFTA-enhanced Mexican competition would be the low-wage industries of apparel and footwear. Puerto Rico, as it happens, with the lowest wages in the country, also has a higher percentage of its manufacturing work force in apparel than any state. A governor loudly speaking up for Puerto Rico's clear economic interests and opposing the NAFTA, as close a thing as its passage was, could have at least gained leverage for some kind of compensation for the damage the NAFTA was certain to do to Puerto Rico. It made no sense that the governor would throw that leverage away and turn cheerleader for the NAFTA right off the bat.
But then, too, it does not seem to make a lot of sense that a Republican Congressional leadership would conspire in the crafting of unprecedented legislation heavily tilted toward making Puerto Rico, with its poverty, its heavy welfare dependency, its statist liberal-Democratic leanings, and its different language and culture, a state. It is also puzzling that the national news organs who did not stint on their coverage—all favorable—of the NAFTA, would hardly report at all on legislation concerning another southern, Spanish-speaking neighbor that is of much greater consequence for the future of the nation.
Let us now put two and two together. The powerful triumvirate of Democratic leadership, Republican leadership, and big media pushed through the generally unpopular NAFTA. Big media, in this case, did their part by providing massive favorable publicity. The latest in a long string of corrupt Mexican presidents, Carlos Salinas, was painted as a veritable saint, and anyone with NAFTA doubts was tarred as a misguided "protectionist." There was no way the media could sell Puerto Rico statehood, however, so they just stayed silent while the Congress attempted to put a mechanism in place that would virtually make statehood inevitable over a period of years.
The United States-Puerto Rico Political Status Act
The legislation of which we speak, H.R. 856, the United States-Puerto Rico Political Status Act, passed the House of Representatives on March 4, 1998, by a vote of 209 to 208. It has the enthusiastic backing of President Clinton, who has promised to sign it if it passes the full Congress, and House Speaker Newt Gingrich, who is one of the bill's co-sponsors. Senate Majority Leader Trent Lott has said he will not take it up, but at least the first major hurdle has already been crossed.
The bill, which characterizes itself as the first-ever "step in the process of self-determination" for Puerto Rico takes care of the second main statehooder explanation for the commonwealth victory in 93 by taking the power to determine the definition of the three choices out of the hands of the local parties. Claiming to set in place "procedures through which the permanent political status of the people of Puerto Rico can be determined," the plebiscite definition of commonwealth is prescribed this way:
(1) Puerto Rico continues the present Commonwealth structure for self government with respect to internal affairs and administration;
(2) provisions of the Constitution and laws of the United States apply to Puerto Rico as determined by Congress;
(3) Puerto Rico remains a locally self-governing unincorporated territory of the United States.
And if that is not sufficient reminder of how truly politically unsatisfactory anything other than statehood or independence is, and will continue to be, we find the following summarizing statement in the "Findings" section:
Full self-government for Puerto Rico is attainable only through establishment of a political status which is based on either separate Puerto Rican sovereignty and nationality or full and equal United States nationality and citizenship through membership in the Union and under which Puerto Rico is no longer an unincorporated territory subject to the plenary authority of Congress arising from the Territorial Clause.
Instead of finally completing the process of conquest of the Puerto Rican people begun by the United States military in 1898, the Congress, one is led to believe, is finally getting around to cleaning up its colonialism problem. However, the reader cannot help wondering why, if this lack of "full self-government" is now, for the first time, so intolerable in Congressional eyes for the people of Puerto Rico, it still remains perfectly tolerable for the foreseeable future for the people of Washington, D.C., the U.S. Virgin Islands, Guam, American Samoa, and the Northern Marianas.
The bill calls for a referendum by the end of the year and if statehood should gain a majority of just one vote, a mechanism for making Puerto Rico a state is set into motion. Should Puerto Ricans remain obstinate and still not read the writing on the wall and continue to favor commonwealth, another referendum is prescribed for ten years hence, and for every ten years thereafter, as regular as the census. One final reminder of how powerless and helpless before the will of a capricious benefactor Puerto Rico continues to be as long as it is not a state is provided by the following passage:
AUTHORITY OF CONGRESS TO DETERMINE STATUS- Since current unincorporated territory status of the Commonwealth of Puerto Rico is not a permanent, unalterable or guaranteed status under the Constitution of the United States, Congress retains plenary authority and responsibility to determine a permanent status for Puerto Rico consistent with the national interest. The Congress historically has recognized a commitment to take into consideration the freely expressed wishes of the people of Puerto Rico regarding their future political status. This policy is consistent with respect for the right of self-determination in areas which are not fully self-governing, but does not constitute a legal restriction or binding limitation on the Territorial Clause powers of Congress to determine a permanent status of Puerto Rico. Nor does any such restriction or limitation arise from the Puerto Rico Federal Relations Act (48 U.S.C. 731 et seq.).
So, the act that created the commonwealth arrangement that went into effect in 1952 was not really "adopted in the nature of a compact" between two peoples as both U.S. and Puerto Rican leaders proclaimed at the time. It was, in effect, a sham, as has been the U.S. claim before the United Nations ever since that Puerto Rico is no longer a colony. Most important to the Puerto Rican voter is the chilling reminder that the only guarantee against Puerto Rico being involuntarily kicked out into the cold, cruel world and made independent against their will, or for Puerto Ricans to be stripped of their U.S. citizenship, is to agree to become a state.
Having set things up so it is highly likely that Puerto Rico will be pushed over the hump and those remaining few votes will, at one time or another, be picked up, the bill then provides for a ten-year transition-to-statehood phase within which time there will be two additional referenda to make sure that the terms worked out are acceptable to the Puerto Rican people. No, let's put that another way. Though all Puerto Rican political parties are to be conferred with, the only Puerto Ricans who ultimately have to be pleased by this monumental and irrevocable change in political identity are the ones who voted for it in the first place, because only the same simple majority is required for approval.
The astute reader will have noticed that while that same group of voters, the simple majority, that might have been coaxed into choosing statehood is appealed to time and again for their approval—and all the while the losers, one could be certain, would be growing as mad as hornets—and another important group is ignored altogether. That is the American people. While a big show is made of respecting the wishes of some of the Puerto Rican people, none of the American people are taken into account. To those who would say that the actions of Congress reflect the wishes of the American people we present as a counter-argument the recent example of the passage of the NAFTA, pushed most vigorously and shamelessly by a president who seemed to be against it when he campaigned for the presidency, the strengthening of the GATT by an extraordinary lame duck session of the Congress, and the little-heralded passage by the House of this Puerto Rico statehood legislation itself.
Even with all these recent examples, all of which would seem to be high on the global-government agenda, a thoroughly unwarranted complacency seems to exist among the general public about the prospects for Puerto Rico statehood. Some of this complacency rests upon the erroneous belief that the acceptance of a new state into the union by the Congress is more difficult, constitutionally, than is the passage of any run-of-the-mill bill. It is not. And most shockingly of all, Congress with H.R. 856 actually goes so far as to set passage of statehood on a fast track by giving itself a short deadline for action as soon as Puerto Rico should produce its simple majority and by curtailing in advance various ways in which bills are often slowed down such as extended debate, the raising of points of order, the offering of extraneous amendments, and the referral to numerous committees.
Admitting a new state into the union is not like a treaty and it is not like a constitutional amendment. The founding fathers were wary of "foreign entanglements" such as George Washington warned against, so they put in a requirement that any treaties, which are negotiated by the executive, be ratified by a vote of two thirds of the Senate. They feared the "rule of the mob" represented by majority vote on everything and they were duly proud of their handiwork, so they made it difficult for the Constitution to be amended. Two-thirds of both the House and the Senate had to approve and then three-fourths of the state legislatures. But they were looking at a largely empty continent to their west, and they saw no reason to make it difficult to expand the nation through the addition of new states.
Still, we hardly need to be reminded that the adding of continental states didn't always go smoothly, the dispute over whether new states would have legal slavery or not having been the fuse that ignited the Civil War. The framers of the Constitution might well have anticipated that problem, having wrestled with the slavery question when they formed the Union and then having simply pushed the thorny issue off onto posterity. But it is doubtful that they ever envisioned that we would evolve into an imperial power. Had they done so, given their wise "entanglement" phobia, there is a good chance that they would have put some Constitutional obstacles in the way of Congressional attempts to digest permanently any little nations that we might have swallowed.
A Curious Sort of Pride
It is not too late to start thinking about correcting their oversight. The dignity-based demand for statehood for Puerto Rico is fraught with dangers for both the people of Puerto Rico and for the United States. It must puzzle most of the world, with one Western power after another having given up its colonies in this century and with so many new nations just having been created because of the break-up of the Soviet Union and Yugoslavia. "Where is the dignity in surrendering yourself utterly to a conquering nation of a vastly different culture?" they must wonder. And there is a chance that the old Barbosa-like misunderstanding continues. A German diplomat related to me an amazing conversation she had with a pro-statehood official in the Romero administration during a state visit. "What happens if you try statehood and you don't like it?" she had asked. "We will simply request to get out of it," came the reply.
Also baffling to many is how one can proudly make of one's society a sort of beggardom based on the concept of pride and dignity, a beggardom which, as promised in Romero's Statehood is for the Poor, would likely be made greater, that is to say, made worse by the advent of statehood. As noted previously, the continuing argument of the statehooders for being treated like a state for any federal program is that as U.S. citizens, it is nothing more than their due. Their pride, as it were, demands that they demand U.S. taxpayers' money. To their eternal discredit, the commonwealthers, too, have found it politically expedient, after initial resistance on ideological grounds, to join in this refrain. Free money is a hard thing to resist, especially when one's political opponent is trying to hog the credit for it.
They and the American public need to be reminded that the heavy dependence of Puerto Rico on the federal dole is of fairly recent vintage. We do not have a case here of a bad situation that is growing steadily better. U.S. proponents of statehood seem to have the fuzzy-headed notion that the push for statehood, growing prosperity and Americanization, as well as greater use of English among the populace somehow come to us in one large pleasant package.
If only a quarter of Puerto Rico's population shares the national language in any meaningful way, the island is no more ready for statehood than someone who can't read English is ready for a citizenship exam.
But all that is changing, and should change even more, as English classes expand from 50 to 90 minutes a day in Puerto Rican high schools. When all courses can be taught in English, as they are in most American classrooms, Puerto Rico will be ready for statehood--if its people want it. (Paul Greenberg, The Washington Times, March 9, 1998).
Here's news for Mr. Greenberg: Citizenship exams in the U.S. are now being passed every day by people who can't read English, and not even the strongest Puerto Rican statehooder has any intention of making English the dominant medium of instruction in school. What does he think, "Our language and our culture are non-negotiable," means? For the first half of the century the U.S. attempted to make little Americans out of Puerto Ricans. Our appointed governors had them use English-language textbooks and many native English speakers were brought down from the states as public school teachers. It may not have been the same as the Japanese with their colonial occupation of Korea, where all Koreans were given Japanese names and teachers beat children if they were heard speaking Korean. And Puerto Rico manifested nothing like Korea's 1919 nationwide nonviolent uprising that provoked violent reprisal in which thousands were killed. The closest they have come was the Ponce Massacre of 1937 in which 20 died and the Nationalist troubles of 1950 that took 32 lives.
Eventually, cultural resistance and the advent of self-government in the 1950s caused the velvet-gloved Americanization policy to be scrapped. That, and the general deterioration of the quality of the public schools, along the same lines and for many of the same reasons as the worst U.S. inner-city public schools, means that someone under fifty years old is less likely to be proficient in English in Puerto Rico than someone over fifty. Statehooders like to blame the problem on the commonwealthers, saying that they intentionally keep the people ignorant of English for partisan reasons, but the teaching of English in the public schools improved not one iota during the eight years that the arch-statehooder Romero was governor, and one is hard-pressed to find results these days that match the current rhetoric.
Bleak Economic Outlook
The economic backslide has been comparable. In 1965, at the height of the success of the famous "Operation Bootstrap" industrialization program, a success that dampened much of the political unrest, federal expenditures in Puerto Rico were 15.6 percent as great as total personal income. In 1996 after the coming of food stamps and other programs, the $10.4 billion in total federal expenditures (about $28.5 million per day, some half of which were pure transfers, as opposed to earned rewards like social security toward which Puerto Ricans contribute and federal workers' salaries and retirement benefits) were 34.5 percent of personal income. During the decade in which the food stamps and other federal programs were introduced, from 1975 to 1985, Puerto Rico's GNP grew in real terms by a total of 24 percent versus a 40 percent increase in the U.S. By contrast, from 1960 to 1970 real GNP in Puerto Rico had grown by 90 percent in Puerto Rico versus 47 percent in the U.S. With cause and effect running in both directions, as transfer-payment dependence has grown, the wide gap between the economies of the U.S. and Puerto Rico has grown as well. At Puerto Rico's high water mark in 1971, its GNP per capita was 35.0 percent of U.S. GNP per capita. In 1996 it was 28.5 percent of U.S. GNP per capita. Per capita income, long stuck at half that of the poorest state, Mississippi, has now slid a bit under that level.
Unfortunately, the chances are very small that we have seen the worst of it. What Puerto Rico had to sacrifice on the road to statehood and statehood itself bid fair to leave those behind this pride-based quest with very little to be proud of, at least of a material nature. Depriving the commonwealth advocates of their most powerful argument next to the cultural one by acquiescing in the elimination of the Section 936 tax treatment has left Puerto Rico without a basis to attract very profitable industries like pharmaceuticals, medical instruments, and electronics. The effect has hardly been felt yet because the U.S. economy has been doing well and the price of imported crude oil, on which Puerto Rico is much more dependent than the U.S., is at an all-time low in real terms, and the companies already on the island negotiated a quite generous ten-year phase-out of their tax benefits. The main effect will be felt as very few new employers come to replace those that in due time run out of after-tax competitiveness on the island. At the low end of Puerto Rico's manufacturing sector the passage of the NAFTA is certain to have major negative consequences, and here, too, because the NAFTA provides for a phasing out of the tariffs and quotas, the greatest effect will be felt down the road a ways.
And though Romero is right that statehood would bring, even on balance with Puerto Rico's federal tax payments figured in, a quite large increase in federal expenditures, the effect, in the final analysis, on Puerto Rico's economy is still likely to be negative. The big new expenditures will come in Supplemental Security Income for Aged Disabled and Blind (SSI), from which Puerto Rico is currently excluded, and from the removal of the cap on Nutrition Assistance and putting Puerto Rico back on food stamps. Those two alone are likely to account for an additional two billion dollars or so. Removing the quite low caps on Aid to Families and Dependent Children and Medicaid will also produce a big increase in expenditures, but it is difficult to say how much. These are matching programs that depend on how much Puerto Rico would be willing and able to ante up, and in this ability to ante up comes the rub. Puerto Rico supports a bloated, inefficient government sector mainly through income taxes that are higher than federal and state combined and a hidden sales tax in the form of an excise tax that is higher than most state sales taxes. The income tax base is very narrow, so that not all that much could be expected in gross revenues would be added to the U.S. Treasury, but those who do pay, pay heavily. Unless Puerto Rico drastically lowers its tax rates when federal taxes are imposed, those even with modest incomes will face a much-increased tax burden, and those with higher incomes will find the burden crushing. Income earners with skills will be forced to seek out employment in the mainland where they will be left with something in their pay checks after withholding, leaving the island more and more to the dole earners. Wealth-creating business venturers will find Puerto Rico one of the most uninviting places on the face of the planet to reside.
If, on the other hand, Puerto Rico does bring its taxes into harmony with those of other states, something will have to be done to provide for the huge government work force that it would no longer be able to support. They, too, would face either emigration or, along with the no-longer-competitive industrial workers, the ever-inviting, burgeoning federal dole. And given the wrenching difficulty that governments everywhere face in downsizing, there is a very good chance that vital services would suffer rather than bureaucratic fat being trimmed neatly away.
In sum, the prospect of Puerto Rico becoming the 51st state is chilling, not only to patriots from Aguas Buenas to Akron, but also to the colder, green-eye-shade types concerned about the dollars and cents of the matter. There is no magic wand in statehood. The island state of Hawaii, dominated by Anglo-Asian culture, is supported primarily by tourism and U.S. military spending. Puerto Rico, lacking Hawaii's strategic significance, has a negligible U.S. military presence, and what there is has generated great conflict with local residents. As for tourism, with more than three times Hawaii's population to support, it has less than one tenth the number of hotel rooms; less than half as many, in fact, as the single Caribbean resort of Cancun, Mexico; fewer even than Fairfax County, Virginia. The counterpart twin pillars of Puerto Rico's economy have been the low-tax-and-wage-induced U.S. manufacturers and the federal transfer payments—the dole, if you will. Now, sacrificed on the altar of statehood, it would appear that the former are not long for this world, leaving only the latter, surely not an appealing prospect for a 51st state already shockingly poor by U.S. standards and heavily welfare-dependent by anyone's standards.
The Cultural Wrecking Ball
As big as these problems are, bigger by far is the problem of culture. Just as not much has changed in the nature of the two dominant political parties in Puerto Rico in a century, surprisingly little has changed in the perceptions, misperceptions, and conflicts between the two peoples since the end of the Spanish-American War, and statehood would likely magnify those conflicts to an unimaginable degree. Like the first Americans arriving on the island, modern Americans, more materialistic than ever, are simply convinced that Puerto Ricans, being poorer, are inferior, and knowing less history than ever, they have no appreciation of how far the island has come and how much it has accomplished in the last forty years. This, at least, is how a substantial share of Americans think about Puerto Rico when they think of it at all. For the most part, it is simply out of sight and out of mind. Come statehood and the mounting U.S. taxpayer cost of this "four-million person Indian reservation in the Caribbean" (more densely populated than any state except New Jersey) as it could well be widely perceived, and Puerto Rico's absence from the public consciousness would no longer be possible. The fact that Puerto Rico would have six Representatives in the House and two Senators would guarantee their notice. These representatives would replace six current state Congressmen because the law caps the total at 435. Such a situation would hardly be likely to engender kind feelings toward Puerto Rico and Puerto Ricans on the mainland. And what if Americans could witness the eternal, fractious, uncompromising political squabbling that goes on on the island, where Clausewitz is turned on his head and "politics is war by other means"? How could Puerto Ricans say with any confidence, "To know us is to love us," when the impression given is that they dislike one another very much?
From the Puerto Rican perspective, statehood is not at all likely to mean that love of all things American is likely to grow. They are likely to continue to feel estranged and different from the cold, efficient, very foreign invaders from a thoroughly alien, unfathomable culture, regardless of the face pro-statehooders currently try to present. "Yes, we have deep and bitter divisions among us, they will say, "but isn't divide and conquer' always the method of the colonial master?" The often-repeated saying that "every Puerto Rican is an independentista after two drinks" will contain as much truth as ever, and the battle among the contending Puerto Rican parties for the Puerto Rican soul will go on with at least as much emotion as before. Certainly that existing bare majority of Puerto Ricans who oppose statehood are not likely to feel more charitable toward those whom they accuse of wanting to sell out la patria once the deed has actually been accomplished. The happy notion of a society as a "salad bowl" with widely differing cultures at the same time keeping their distinctiveness and blending harmoniously is an even greater fiction in Puerto Rico, one of the least cosmopolitan, most insular of societies, than it is in the United States. Not very different from Japanese families who have lived too long out of the country, Puerto Ricans who move to Puerto Rico from the States often have a very difficult time adjusting and being accepted.
The balanced interaction between all the single norms of social behavior characteristic of a culture accounts for the fact that it usually proves highly dangerous to mix cultures. To kill a culture, it is often sufficient to bring it into contact with another, particularly if the latter is higher, or is at least regarded as higher as the culture of a conquering nation usually is. The people of the subdued side then tend to look down upon everything they previously held sacred and to ape the customs which they regard as superior. As the system of social norms and rites characteristic of a culture is always adapted, in many particular ways, to the special conditions of its environment, this unquestioning acceptance of foreign customs almost invariably leads to maladaptation. Colonial history offers abundant examples of (cultural interaction) causing the destruction not only of cultures but also of peoples and races. Even in the less tragic case of rather closely related and roughly equivalent cultures mixing, there usually are some undesirable results, because each finds it easier to imitate the most superficial, least valuable customs of the other. The first items of American culture imitated by German youth immediately after the last war were gum chewing, Coca-Cola drinking, the crew cut, and the reading of color comic strips. More valuable social norms characteristic of American culture were obviously less easy to imitate. (Konrad Lorenz, On Aggression, Bantam Books, 1963, p.253)
Puerto Rico falls a bit farther along the continuum of a culture adversely influenced to a culture completely destroyed than does post-war Germany. If, as is likely, Puerto Ricans after statehood were to cling as doggedly to their language and culture as do the people of Quebec today, attempting to stamp out what English is currently tolerated, it would not be the worst eventuality, even from the American perspective. The most realistic alternative, you see, is not the Puerto Rican turned into the pragmatic, frugal Yankee, rather it is the dispirited Puerto Rican "reservation Indian," with all the complicated social norms that gave his life meaning having been destroyed, resigned to living on the conqueror's handouts. And don't expect that he will feel appreciation for all that Americans have done for him. Instead, he will more likely resent Americans for what he perceives that they have done to him.
It would not take long after the achievement of statehood, either, for the awareness to set in that the age old dream of JosŽ Celso Barbosa, that is, simply to be treated as equals, was as distant as ever. At this point we could anticipate, wonder of wonders, a coalescing between the "moderate" autonomists, who had not joined with the former independence advocates--by this time called secessionists--in more militant action, over one important thing that they could agree upon. That is that many of their persistent problems in getting along in American society are caused by the fact that their language and culture don't get the proper respect. That is because, they will likely conclude, the larger society is monolingual in English. The true descendants in spirit of both Barbosa and Mu–oz Rivera would then turn their attention to the effort, as the Quebecois have done in Canada, toward making the United States a bilingual and bicultural society. Down that road lies national Balkanization.
In 1945 Wenzell Brown, one of the many American mainlanders brought down to Puerto Rico to teach in the schools in the 1930s published a memoir that was in equal parts charming and alarming. The title was Dynamite on our Doorstep. Very few people yet know it, but the United States Congress is very close to bringing the dynamite into the living room.
March 13, 1998
Fortunately, we escaped by the skin of our teeth in 1998. Senate Majority Leader Trent Lott did not even bring the Puerto Rico status bill up in the Senate. Maybe it had nothing to do with his fall from power, but in 2002 a big fuss was made over some kind words that Lott had for segregationist Strom ThurmondŐs run for president in 1948 and he was forced to relinquish his Senate leadership. If one believes that statehood for Puerto Rico is a major item on the globalistsŐ agenda, then it is not hard to believe that this was a manufactured scandal done as an act of retribution for LottŐs audacious act of defiance.
June 16, 2017
In spite of Puerto RicoŐs economic collapse, the danger that the U.S. Congress will make it the 51st state has not passed. Republican Don Young of Alaska, who was the principal sponsor of the United States-Puerto Rico Political Status Act discussed above, is still in the Congress and heŐs still pushing for statehood for the island. This is from his press release of yesterday:
Congressman Young speaking on the House floor in favor of Puerto Rican statehood
ŇI had the privilege last Sunday to be an observer in Puerto Rico for the plebiscite and I watched the people of Puerto Rico make the decision that theyŐd like to be the 51st state,Ó said Congressman Don Young. ŇI think itŐs time for this Congress to make our 3,400,000 American citizens part of the United States – in full grandeur, as every one of us has the chanceÉ I think itŐs the time America should stop colonizing. If IŐm not mistaken, this is one of the last nations that has a colony. The great nation of the United States has a colony. I think itŐs time that we change that and vote in Congress to make sure we have the 51st state.Ó
House Minority Whip Steny Hoyer (D-MD) joined Congressman Young on the House floor to share his support for Puerto Rican self-determination and addressing the decades old issue of political-status.
ŇThe Puerto Rican election that was held overwhelmingly voted for statehood as the option of governance they would like to pursue,Ó Minority Whip Hoyer stated on the House floor. ŇIt is now, it seems to me, the responsibility of the United States Congress and the administration to recognize the overwhelming sentiment of the Puerto Rican people expressed in a free and open election. I want to thank my friend from Alaska for his leadership on this effort."
The statement from the Maryland Democrat and House Minority Whip Hoyer is on his web site here. Both congressmen ignore the fact that Puerto RicoŐs statehood opponents boycotted the referendum. Young also seems to be unaware of the U.S. territories of Guam, American Samoa, the U.S. Virgin Islands, and even the District of Columbia. This is in spite of the fact that they all, like Puerto Rico, provide him with colleagues in the Congress who have precisely the same powers as does Puerto RicoŐs resident commissioner, though they are called Ňdelegates,Ó instead. They can vote in committees but not on the House floor, and they tend not to be appointed by the House leadership to the most powerful committees.
The unholy alliance between the news media and much of the U.S. Congress continues. The article from The Hill on Puerto RicoŐs status referendum to which we link extensively quotes a supposed independent Ňexpert on territorial affairs,Ó Jeffrey Farrow. Farrow is a native of the U.S. Virgin Islands and was staff director for the subcommittee that deals with the territories when the Democrats controlled it during the early years of the Clinton administration. From my 14-year experience with the government of Puerto Rico in Washington, in which I interacted with Farrow a great deal, I can tell you that he has consistently been little more than a shill for Puerto RicoŐs statehood proponents. If they were paying him to do it I donŐt see how he would act any differently.
June 17, 2017