Contributor Post Created with Sketch. Let’s Demagogue Puerto Rico… For Federalism (Seriously)!

 

imageVia today’s Cato Daily Podcast, Puerto Rico is in a bit of a mess. Its economy hasn’t grown in a decade, it has net population loss (among U.S. states, only West Virginia has that distinction), and it’s got a debt-to-GDP ratio of 70%, more than four times that of the average U.S. state. And just this week, its state-run electrical utility is expected to miss a payment on its debts this week. It’s not quite America’s Greece, but it’s doing its best to audition for the part.

While many of these problems are the result of the islands’ own bad choices — among them, a refusal to publish its budget in English as well as Spanish, making it much more difficult for others to review — Nicole Kaeding explains that some federal policies are making matters worse. Specifically, she cites shipping regulations that artificially raise prices there (as well as in Hawaii, I presume) and the federal minimum wage. The latter has an enormous effect on Puerto Ricans: 28% of hourly workers there earn it, which means it likely prices many others out of the labor market entirely; unsurprisingly, Puerto Rico has an unemployment rate of 12.2%. If you have seven minutes, take the time to listen to the whole interview.

I think this has some excellent potential for use in the 2016 campaign. No, I’m not suggesting a “courting Latinos” strategy — though I’m happy for anything that works that way — but for using it as an illustrative, right-on-the-merits way to hammer Democrats on economic freedom that will put them on the defensive. Imagine Scott Walker, Marco Rubio, or Rick Perry saying something like this in a debate:

I’d like to ask Mrs. Clinton why she thinks it’s the federal government’s business to tell a single mom in Puerto Rico that she’s not allowed to sell her time and talents for what she considers a fair price. I’d like to ask Mrs. Clinton why she thinks it’s better for Puerto Ricans to go on welfare than be allowed to work. Heck, I’d like to ask Mrs. Clinton why she thinks the federal government has any business telling any American that it knows what’s better for them than they do themselves.

And, obviously, there’s no reason to restrict this sort of thing to Puerto Rico, though watching Democrats squirm over it would be fun.

There are 13 comments.

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  1. Mike H Coolidge

    Just wanted to point out that if they keep the economy stable while losing population they are still increasing productivity per person. Worrying about the size of the economy in and of itself only really matters when you’re trying to confiscate an ever larger amount of money. Other than that, a local economy isn’t much more than drawing an imaginary line around something and fretting about its interaction with the surrounding reservoir.

    Still, it’s similar to Greece in that it’s probably not wealthy enough to and have its debt denominated in US currency. That, and as you mention, the economy can’t handle the socialistic laws, much like Greece.

    • #1
    • July 1, 2015, at 9:46 AM PDT
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  2. Done Contributor

    Perhaps their opinions are biased as they are inherently a group who left the island, but my Puerto Rican side of the family can (and have for my entire life) rant for hours about what a basket case the government is.

    Also, beware those who prefer the lighter shade of blue on the flag.

    • #2
    • July 1, 2015, at 9:47 AM PDT
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  3. Shawn Buell, Jeopardy Champ! Contributor

    I’m having a hard time coming up with a reason why we shouldn’t just cast them off and make them not-a-territory of the United States.

    What good are we doing them by propping them up?

    • #3
    • July 1, 2015, at 9:52 AM PDT
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  4. Jamie Lockett Inactive

    Brilliant idea.

    • #4
    • July 1, 2015, at 9:55 AM PDT
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  5. Mike H Coolidge

    Majestyk:I’m having a hard time coming up with a reason why we shouldn’t just cast them off and make them not-a-territory of the United States.

    What good are we doing them by propping them up?

    Well, considering they’d be a destitute 3rd world country rather than a poorer 1st world “country” without us, I’d say we’re doing a lot of good for them.

    • #5
    • July 1, 2015, at 9:58 AM PDT
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  6. Done Contributor

    Majestyk:I’m having a hard time coming up with a reason why we shouldn’t just cast them off and make them not-a-territory of the United States.

    What good are we doing them by propping them up?

    There are those in Puerto Rico who would be on board with this, but much like with Scotland’s independence, when push comes to shove, a majority knows they need the outside support.

    As for why we should prop them up, the democrats remain hopeful to add the island as a state eventually, giving them two extra senators and a representative or two. They would demagogue any such effort to cut ties with Puerto Rico with all of their might.

    The present situation is better than rocking the boat.

    • #6
    • July 1, 2015, at 9:58 AM PDT
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  7. Richard Fulmer Inactive

    Mike H

    Majestyk:I’m having a hard time coming up with a reason why we shouldn’t just cast them off and make them not-a-territory of the United States.

    What good are we doing them by propping them up?

    Well, considering they’d be a destitute 3rd world country rather than a poorer 1st world “country” without us, I’d say we’re doing a lot of good for them.

    You may be right, but it’s possible that taking the island off the “dole” would do far more good than harm. More and more economists are realizing that the flood of foreign aid sent to Sub-Saharan Africa over the years has done far more harm than good. It has bankrolled corrupt governments and siphoned off local talent to work on centrally-controlled projects that are little more than wastes of time, resources, and effort.

    • #7
    • July 1, 2015, at 10:07 AM PDT
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  8. Shawn Buell, Jeopardy Champ! Contributor

    Mike H:

    Majestyk:I’m having a hard time coming up with a reason why we shouldn’t just cast them off and make them not-a-territory of the United States.

    What good are we doing them by propping them up?

    Well, considering they’d be a destitute 3rd world country rather than a poorer 1st world “country” without us, I’d say we’re doing a lot of good for them.

    To be fair, written in invisible text next to “What good are we doing them” is “or for ourselves.”

    It seems to me that Puerto Rico has a lot of opportunities for enhancing their tourist economy which are currently stifled by the fact that people have non-work alternatives funded by… us.

    • #8
    • July 1, 2015, at 10:08 AM PDT
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  9. JimGoneWild Coolidge

    Something like 70% of the PR receives some form of assistance (welfare, food stamps, ..) and 40% of the citizens work for government. Don’t quote me on any of these but it’s crazy.

    • #9
    • July 1, 2015, at 10:15 AM PDT
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  10. Tuck Inactive

    Tom Meyer, Ed.: …it has net population loss (among U.S. states, only West Virginia has that distinction)…

    Er, they’ve got company

    Sherrie Taylor, a researcher at Northern Illinois University’s Center for Governmental Studies (CGS), said six states lost population from 2013-2014: Illinois, West Virginia, Connecticut, New Mexico, Alaska and Vermont.

    “Of those, Illinois easily had the largest numerical population decline – 9,972 people – followed by West Virginia with a loss of 3,269 residents….”

    • #10
    • July 1, 2015, at 10:38 AM PDT
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  11. Gumby Mark (R-Meth Lab of Demo… Thatcher

    I think conservatives should back the granting of independence to Puerto Rico. In doing so we will be showing we have evolved and want to be on the right side of history by supporting progressives like New York City Council President Melissa Mark-Viverito in her campaign for Puerto Rican independence (she is also insisting on the release of jailed Puerto Rican terrorists unjustly imprisoned for their opposition to Yanqui imperialism).

    • #11
    • July 1, 2015, at 11:43 AM PDT
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  12. Masked Man Member

    Travel around the U.S. almost any place besides the metro bubbles and consider our rampant real unemployment, boarded up downtowns, meth labs and hopelessness before patronizing Puerto Rico. At least they are attempting to deal with their debt, which is less than half of ours on a per capita basis. But whistle past the graveyard if you must.

    • #12
    • July 1, 2015, at 6:29 PM PDT
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  13. Kermit Hoffpauir Inactive

    Post WWII socialism, with government owned corporations owning power and much of agriculture. A climate that can produce two harvests annually of sugar cane, instead of only one annually along the Gulf Coast, has shuttered most if not all of its sugar mills, which are in the process of being demolished.

    Another problem is the electric utility raising rates on industrial consumers instead of other consumers. This is what caused the domino effect at Penuelas (west of Ponce) to a refining/petrochemical complex in 1982. First down was PPG’s olefins cracker, then the others all shutdown. This precipitated the downfall of Union Carbide when its largest complex had to close.

    At least there is a lot of quality skilled blue collar labor to fill part of the 2 million needed in TX and LA.

    • #13
    • July 1, 2015, at 8:43 PM PDT
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