I have been searching for some of the truth in the debacle in Puerto Rico. I was sure the story being told in the mainstream newspapers was likely incomplete (isn’t it always a spin by corporate media hacks to shut everyone down). One had to read a lot of materials and then connect the dots.
Well, the dots are close to being connected.
For one, a hedge fund recently sued Governor Alejandro Garcia Padilla because the government failed to make some bond payments that are due. The government of Puerto Rico did make some payments to junior obligation bonds and also made pension fund payments in excess of what was due to pension holders but those hedge funds? In other words, the government stiffed the hedge funds and they sued for their bread.
But there is some recent history here. According to one recent report, Puerto Rico was set up for failure by a President Bill Clinton and the GOP controlled Congress back in 1996 when a tax exemption for manufacturing companies was repealed. It was basically a tax and was passed to try to reduce the deficit (there goes that deficit reduction strategy again rather than investment in people). The many companies on the island at the time hot tailed it out of the Caribbean and the economy slowly went into a freefall.
According to most reports, life there has deteriorated and when Congress sought to work things out for these U.S. citizens, they did not do much. They didn’t fix the problem or offer a path to a more solvent situation. Congress did what Michigan has been doing to Flint and Detroit and many areas where people of color reside: they canceled the people’s voice and imposed austerity. In this case, add in an incoming control board to be appointed by President Obama in September. Sounds like the Emergency Manager Law in Michigan which is a disaster and an insult to democracy. Puerto Rico is some combination of D.C. when that city (my hometown) had a Financial Control Board put in place and Greece just recently, I guess.
We all have seen this model. It has been done to American cities except in a different way. When the manufacturing companies departed the island and credit dried up, the hedge funds stepped forward to assist. They were the lender of last resort and Puerto Rico had no other options and so here we are.
So once again, it is Wall Street (remember those guys) who are behind the mess on the island. I am hardly surprised. Most of all, read between the lines or read this or this . Every time something like this goes down, the media usually makes it look like the darker people’s are stupid and irresponsible and the good old former colonial masters have to step in and fix things. Like D.C. Like Greece. And now like Puerto Rico. The hedge fund lawsuit tells us it is a crock. It is just another parasitic money grab.