Tag: Puerto Rico

Categories
Accountability folly free trade & free markets too much government

Jonesing for Disaster

Puerto Rico, Jones Act, protectionism, hurricane, unintended consequences, folly

First, do no harm. Second, stop harming.

You might think that these would be the Two Commandments of Government.

But no.

Politicians make a good show of saving us, sure. Sadly, appearance alone suffices. For them. Much easier to announce a new program than get rid of a harmful old one. 

Latest case? Courtesy of a storm and a new president, we now get to witness hurricane recovery mismanagement all over again, but this time outside the continental United States.

“The administration announced some bad news for Puerto Rico,” writes Scott Shackford at Reason. It will not, Mr. Shackford explains, “be waiving the Jones Act, which significantly restricts the ability of foreign or foreign-​owned ships from bringing goods to Puerto Rico.” 

The “unincorporated U.S. territory” that is the island must take its lumps.

The Jones Act* limits foreign ships port access … down to one. The mandate allowing port-​to-​port commerce only to American-​manned ships is designed to save a few jobs and grease a few union wheels in the mainland.

And now, especially, that old, ongoing “centralized government planning for the benefit of a small group of powerful U.S. shipping interests” amounts to a real kick to a people already devastated by Hurricane Maria.

Closing ports to much needed help doesn’t help. An emergency order could suspend the ongoing harm of throwing roadblocks in the way of a swift recovery and rebuilding.

Or Congress could repeal the Jones Act entirely.

Neither is likely.

So the wounded Puerto Ricans — prior to the storm hobbled by years of territorial misgovernance — can expect more fake government help. 

This is Common sense. I’m Paul Jacob.

 

* Not to be confused with the Jones-​Shafroth Act of 1917, which set up territorial  governance of the island.

PDF for printing

 

Categories
Accountability free trade & free markets ideological culture moral hazard national politics & policies

Puerto Rico’s Debt, Our Problem

“We have an important choice to make,” presidential candidate and Senator Bernie Sanders recently wrote to Congress. “[D]o we stand with the working people of Puerto Rico or do we stand with Wall Street and the Tea Party?”

The bill in question has been dubbed Paul Ryan’s “first big victory as Speaker,” but was written in tandem with the White House. The plan attempts to rescue Puerto Rico, a United States territory, from financial collapse with both bailouts and austerity — the latter including a lowered minimum wage.

I hadn’t heard any Tea Party squawk about this, so that reference must be just signaling on Bernie’s part.

Puerto Rico is $72 billion in the hole. Basically, Sanders wants to partially repudiate that debt: “The billionaire hedge fund managers on Wall Street cannot get a 100 percent return on their bonds while workers, senior citizens and children are punished.”

Of course our sympathies are almost entirely with the people of Puerto Rico. But it was their government that racked up the debt, and repudiating sovereign debt is a tricky and parlous thing.

What happens when the United States itself faces similar (or worse) straits? Would Bernie then, again, plan to stick it to the government’s creditors — even after he, himself, had voted to increase spending above revenues and periodically raise the debt ceiling — and think that this wouldn’t have consequences?

Meanwhile, the possible minimum wage reduction is one of the stickiest of the issues. Bernie sees it as “sticking it” to the poor.

In truth, it would help increase employment, thus help the poor get out of poverty.

This is Common Sense. I’m Paul Jacob.

Printable PDF

Puerto Rico, debt, loan, Bernie Sanders