Senator Bernie Sanders has discovered the source of debt ridden Puerto Rico's woes. It's Wall Street of course. Quoting from The Hill, "But Sanders said Puerto Rico is in a situation where it cannot pay all its debts due to “the policies of austerity and the greed of large financial institutions.”
To be sure there are some very greedy financial institutions on Wall Street. Just today MF Global settled a lawsuit for $64.5 million after its founder, Jon Corzine, former Democratic senator from and governor of New Jersey looted his customers' accounts to pay off some risky bets he had made. It's funny we never heard about his greed and ethical challenges when he was in public office. Under a honest government Corzine would be wearing an orange jump suit but instead Obama and company appear to have saved the suit for New Jersey Bob Menendez who is at odds with the administration on Cuba and Iran.
Turning to the other cause of Puerto Rico's dismal plight the alleged "austerity". WTF! Say what you want about Puerto Rican politicians but don't dare call the austere. You may call them bumbling, corrupt or just down right stupid but not never austere. The island territory is on the hook for $74 billion of that $8.6 billion is owed by PREPA, the publicly owned electric utility. Here's the deal. You have an absolute monopoly on electric power. It' both legally and technically impossible for anyone to compete against you and you lose 9 billion bucks. How do you say stupid in Spanish?
It's always the same rhetoric. It's never the debtor's fault whether the debtor be Greece, Puerto Rico, Detroit or New York City. In 1975 New York survived a near death experience. Its lawyers were in court with the bankruptcy paper in hand hoping that a bailout would come. It did come and it was from the municipal unions who bought the "Big MAC Bonds" but the last holdout, the last person to consent, was Albert Shanker of the teachers union. Shanker had editorialized and inveighed against the "flint hearted bankers" right up until the city suggested he put up his own money.
These morality plays always have an unlikely character in the cast and the most unlikely in this cast may be Republican Congresswoman Elise Stefanik. Yes, that Stefanik. The one from New York, the youngest person ever elected to Congress and new best friend of John Boehner. Stefanik has raised $17,535 from Puerto Rico which is better than its non voting delegate Pedro Pierluisi did. It accounted for about 11% of her total fund raising effort. Her district is 3.1% Latino. So how does she explain the connection?
“Congresswoman Stefanik accepted an invitation from supporters from her previous campaign to do a fundraiser earlier this year which she was grateful for,” her spokesman Tom Flanagan, said. “She is supportive of outreach to all kinds of diverse communities for engagement in the political process.”
You don't say.