Independence to Liberate the Economy
By Frank Worley-Lopez
Independence is the only real option for Puerto Rico. This is not to say that statehood isn’t a valid option, because within the American union statehood represents political equality. The majority of the people of Puerto Rico, however, do not consider themselves “Americans.”
Culture and language aside, the main reason that independence is the best option for Puerto Rico is economic. Under the US flag, as a commonwealth or a state, Puerto Rico is buried under a mountain of federal laws and regulations that inhibit economic growth and forbid the country from experimenting with new economic models and new trade agreements.
While the pro-statehood party will promote the increased money in federal programs Puerto Rico would receive under statehood — which is true — it fails to address the staggering debt burden that the people of Puerto Rico will eventually be required to pay. Today the island territory has its own US$73 billion debt and is not required to pay federal income taxes.
However, as a state the people of the island would be required to pay federal income taxes, and those taxes would increase as the United States’ staggering $18 trillion national debt and $61 trillion total debt starts to bite.
Puerto Rico is currently seeking a bailout from the federal government. If they succeed, other states and jurisdictions will follow suit, significantly increasing the burden in terms of both credit status and actual debt per citizen. Should the US dollar or the global economy collapse under this burden, which many analysts believe is coming, all of the short-term financial gains provided by statehood will evaporate.
Puerto Rico will be left without the promised financial aid of statehood while being stuck with a debt burden of biblical proportions.
The problem with statehood is that it is a short term economic fix that would only increase dependency on federal subsidies, instead of helping Puerto Rico become independently wealthy. Statehood would promote the continued poverty and cultural malaise that comes with a massive welfare state. Yes, it would provide equal representation in Congress, but what about equal representation in the world?
Moreover, independence will free Puerto Rico from the Merchant Marine Act of 1920 (also referred to as the Jones Act; the previous Jones Act of 1917 granted US citizenship to Puerto Rico). These shipping regulations that require the use of US-flagged vessels and crews, which drive up the cost of shipping goods in and out of the island.
Once freed from this burden, Puerto Rico and its businesses could contract with foreign shipping companies or develop shipping companies of their own, which could then lower consumer prices and create more local jobs.
Independence also allows Puerto Rico to free itself from the suicide pact of the War on Drugs. It allows the rewriting of environmental regulations to actually protect the environment instead of focusing on destroying business, which is what most environmental regulations do today.
There is no question that independence brings great risk and responsibility. However, if done correctly, it could herald a new dawn for the people of Puerto Rico.
Frank Worley-Lopez is one of the two founders of the original Libertarian Party of Puerto Rico and its first state chairman. He is the author of Toy Farm Lemonade, a former radio and TV host, and a former aide to the Puerto Rican Senate. Follow @FrankWorleyPR.
Equality Is the Answer
By Kenneth D. McClintock
EspañolFor nearly 117 years, Puerto Ricans have been waiting for equality — equal rights under the United States Constitution, the right to vote for their national leader, equal representation in the national legislature, and equality in the judiciary.
Over 60 percent of Puerto Ricans, over 5 million of the 8.5 million Puerto Ricans on the planet, have chosen not to wait and now enjoy equality on the US mainland. The rest of us — 3.7 million four years ago, perhaps 3.4 million today — are still waiting for equality, but over 100,000 give up and ship out very year.
The current relationship is not an option for those who’ve left, nor for the 54 percent on the island who voted against it in a referendum two years ago. In that same referendum, over 60 percent of those who expressed a preference voted to become the 51st state.
While President Obama recognized that statehood had won, and Congress designated US$2.5 million for a ratification vote, our anti-statehood governor has done nothing to allow our quandary to be resolved.
Independence, rejected by an overwhelming majority, is less of an option, politically, economically, and socially. It is an option that could only be imposed on the few who would not exercise their right to flee. An option that would trigger the remaining millions to leave the island is not, whether we like it or not, an option.
The only option that would keep Puerto Ricans from abandoning Puerto Rico, that would attract stable domestic US investment, and that would increase foreign direct investment, is full equality through admission as the 51st state of the Union.
Puerto Ricans treasure their US citizenship, aspire to political stability, have won on the battlefield full access to all federal programs, and seek an economic regime that will create jobs as each of the 37 admitted states before them have experienced.
Puerto Rico’s political status is no longer a matter of if, but when and how, it will join the Union. In a nation born under the belief of the consent of the governed, equality for all, self-determination, and rule by the majority, a majority of Puerto Rico’s people demand no less.
Kenneth D. McClintock is a former lieutenant governor and secretary of state of Puerto Rico and a former president of the Puerto Rican Senate. He now works as the president of the Puerto Rico Equality Forum. Follow @PRKDMc.
EspañolSometimes you have to laugh to keep from crying, and Venezuelan Twitter users have sought to make light of the nation's crisis with #AdoptaUnVenezolano (adopt a Venezuelan). This new hashtag comes in the wake of measures to restrict citizens' travel abroad, dubbed "El Cadivazo," after the state system of access to foreign currency. With more than a touch of irony, Venezuelans have called on foreigners to take pity on them in the face of the regime's wide-ranging failures. At the same time, their desperation is very real, as the latest measures make it even harder for them to escape the country. https://twitter.com/zula8/status/586609690177572864 "Shortages of food, medicines, and currency. #AdoptAVenezuelan" https://twitter.com/YohanderN/status/586595598477963264 "#AdoptAVenezuelan: I wash up, iron, cook, and can bathe myself. " https://twitter.com/HeeyItsMonica/status/586592829033570306 "#AdoptAVenezuelan: If you're from Germany, Holland, Denmark, Japan, the United States, or the United Kingdom, I'm up for adoption." For many Venezuelans, emigration is fast becoming the only solution to overcoming Venezuela's problems. April 18 will see the ExpoMigra 2015 take place in Caracas, with the objective of informing residents of the capital about "the myths and realities about a possible destination, so that the challenge of leaving becomes solid and allows a good quality of life studying, working, or engaging in business." Many have already made the move. The Venezuelan Medical Federation recently sounded the alarm over the exit of 13,000 doctors in the last 12 years. Federation President Douglas León Natera argued that the majority had decided to abandon their country "as a consequence of labor instability, low salaries, and insecurity." In February, Venezuelan sociologist Iván de la Vega reported that some 1.4 million of his compatriots had left the country in the last 20 years, adding that the professional profile of those in exile "is the highest in Latin America." De la Vega explained that Venezuela has lost "its most important capital, its intellectual capital," with the mass emigration of scientists, technicians, doctors, and other professionals. Tomás Páez, a professor of planning at University College London, argued in October 2014 that "almost 90 percent of Venezuelan emigrants decided to leave in the last 15 years, with an increase in the last four." The dire warnings issued by experts have been confirmed in part by Ombudsman Tarek William Saab, who revealed on April 9 that 60 percent of those Venezuelans who received foreign currency to pursue studies abroad in 2013 and 2014 didn't return to the country after finishing their courses. Although Saab argued that such students should return "to help the fatherland with their talent," but the Venezuelans have reported that the "serious crisis in the country" is far from encouraging them to do so. Venezuelans Mired in Misery On March 2, Bloomberg's Misery Index reported that Venezuela is the most miserable country in the world. She leads the list of 15 economies that feature the greatest privations for consumers, with reported inflation at 78.5 percent annually, and unemployment at 8 percent — although official numbers underestimate the magnitude of the problem. Venezuela's key indicators more than double those of Argentina, the second most miserable country, and outrank South Africa, Ukraine, and Greece. In terms of a "painful" quality of life, Bloomberg highlighted the key role of monetary instability and rampant inflation in the case of Argentina and Venezuela's woes. Washington, DC-based think-tank the Cato Institute’s World Misery Index similarly found in January that Venezuela's is the worst economy in the world. In February, the Central Bank of Venezuela reported that inflation reached 5.3 percent in December 2014, registering levels of 68.5 percent for the entire year. The next-worst economies are Iran (20 percent) and Belarus (16.9 percent), which remain far behind even Venezuela's official numbers. Industry Embroiled in Crisis Víctor Maldonado, executive director of the Caracas Chamber of Commerce, told the PanAm Post that Venezuela is facing a widespread crisis across multiple economic sectors. Maldonado argues that the government is unable to guarantee the legal purchase of foreign currency reserves via the state for those that want them, and that "there's not enough confidence to encourage production in the country." The commercial-sector representative says that "in Venezuela there's no boss who's winning, and everyone's losing," adding that the crisis extends to the agricultural, health, foodstuffs, chemicals, plastic, and textiles sectors. The PanAm Post similarly highlighted earlier this week the grave shortages affecting the pharmaceuticals sector due to the lack of liquid currency reserves. Maldonado blames the Venezuelan authorities for their "poor management, poor focus, and poor economic imagination." In particular, he says the majority of productive sectors are paralyzed due to the lack of currency reserves. The knock-on effects, he explains, extend to greater unemployment, scarcity, and diminished growth. Manufacturing is running at half of its capability, Maldonado believes, and the country's 500,000 private firms represent the "smallest entrepreneurial density" of any country in Latin America. Those companies expropriated by the government are similarly in a parlous situation, he adds, "because the state doesn't know anything about [business] and hasn't made an effort to make them productive." Damiano del Véscovo, president of the Carabobo State Chamber of Commerce Federation (Fedecámaras), explains that the manufacturing sector in his region — which contains the greatest number of industries in the country — is operating at 40 percent of installed capacity. Véscovo emphasizes that the automotive sector, in particular, slumped by 85 percent in 2014, and the tire manufacturing sector is working at 18 percent of capacity. The regional industry leader reports that the business sector hasn't received any dollars since 2014, arguing that the failure to give firms the dollars they need will only bring diminished production, and greater scarcity and unemployment. Translated by Laurie Blair. Edited by Fergus Hodgson.