Puerto Rican Jubilee

All basic infrastructure in Puerto Rico is down and remains nearly out. Hurricane Maria made a direct hit on the U.S. colonial territory, whose people are American citizens, mas o menos. Maria obliterated Puerto Rica’s electrical grid, destroyed homes, schools, hospitals, and most facilities and supply lines of all kinds. The third record hurricane in the Caribbean this season, Maria had sustained winds at 155 miles per hour when it hit the island.

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Because of the sophisticated satellite imagery, data processing, and computer models of NASA, NOAA, and the National Weather Service, they could forecast its general path and power days ahead of its impact. Yet, U.S. government response was delayed, slow, and partial at best. It appears another Katrina failure is underway, with little or no leadership at the top. The president’s focus on the island’s debt to Wall Street creditors and exorbitant claims of success still accompany “foot-dragging” on mobilizing the assets a genuine response requires.

Yes, 3.5 million U.S. citizens live on the island of Puerto Rico. Well, they are sort of citizens… The U.S. citizens of Puerto Rico cannot vote in presidential elections and their representatives in Congress cannot vote on legislation. Puerto Ricans are by law, second-class citizens, a colonial legacy. They are, after all, mostly Hispanic people of color and former colonial subjects. They are also classic victims of disaster capital.

Modern empire is more subtle in its methods of domination and exploitation than were the colonial powers of the past. Vulture capitalists exercise oppression with financial weapons. One of the most important but largely unacknowledged powers of holding great wealth is the ability to use money to extract more money from others through the imposition of debt structures. In Puerto Rico, as elsewhere, we blame the victim for “decades of poor management.” However poorly managed, a debt trap is a debt trap.

The Empty Clown Suit who stole the presidency through voter suppression, demagoguery, and Russian interference, conveniently contrasts Puerto Rico with Florida and Texas, by implying that in some sense it was their own fault. He tweeted:

“Texas & Florida are doing great but Puerto Rico, which was already suffering from broken infrastructure & massive debt, is in deep trouble..” (Donald J. Trump @realDonaldTrump 6:45 PM – Sep 25, 2017)

“…It’s old electrical grid, which was in terrible shape, was devastated. Much of the Island was destroyed, with billions of dollars….” (6:50 PM – Sep 25, 2017)

“…owed to Wall Street and the banks which, sadly, must be dealt with. Food, water and medical are top priorities – and doing well. #FEMA” (6:58 PM – Sep 25, 2017)

David Dayen in The Intercept, described Trump’s response as “…one of the most historically grotesque responses to a natural disaster, highlighting Puerto Rico’s debt difficulties.” It was not about human suffering or a federal mobilization to help. No, it was all about financial power. It was about doing as little as possible and making grandiose claims of “success.”

The bondholders who bought over 70 billion dollars in Puerto Rico’s indebtedness for pennies on the dollar, have offered new loans that would further indebt the island’s people to the Wall Street predators while contributing a paltry few million toward recovery from the devastation that itself caused over 70 billion dollars of damage. Instead, Puerto Rico ought to have a modern “jubilee” – the debt to vulture capitalists ought to be erased from the books.

Disaster Capital in Puerto Rico

Puerto Rico is a textbook example of Naomi Klein’s concept of “the shock doctrine” applied by the corporate state to weaker countries around the world to gain or retain control over their economies and resources. Puerto Rico is a bit different in that it “is a part” of the U.S. But then, so is the town of Port Arthur, Texas, a “sacrifice zone” near Houston; whose citizens of color suffered toxic devastation by the petrochemical industry long before Hurricane Harvey. FEMA ignored it too while wealthier districts were tended to. Home mortgages are now secured by worthless toxic-chemical infused devastated lots piled with rubble. The impact of the debt hanging over Puerto Rico is little different, though owed by its government and much larger.

To rescue Puerto Rico requires that it we somehow liberate its people and public institutions from the predatory vulture capitalists of the hedge funds and banks on Wall Street, who have squeezed Puerto Rico to the brink of economic death because the corporate state enables their destructive behavior.

Jubilee for Puerto Rico

The answer, which those who would protect the criminals of Wall Street at all costs will immediately characterize as “impractical,” or “utopian,” is to declare a Puerto Rican Jubilee. Congress had already intervened several years ago in favor of Puerto Rico’s predatory creditors by establishing an outside “fiscal control board” that now governs Puerto Rico’s finances. Created by 2016 legislation called the Puerto Rico Oversight, Management, and Economic Stability Act, or PROMESA, it favors the Wall Street predators over Puerto Rican children’s health and education. Desperately needed normal operation of schools, hospitals, or other social services shrink to pay vulture capitalists. The island is bankrupt. Only relief from debt will allow a genuine recovery for Puerto Rico. It is time for the criminals of Wall Street to take a loss too.

Biblical references to “Jubilee” reflected formal, even legislative, return of land to its original owners, release of slaves, and cancelation of debts. Even the ancients recognized the ultimate dysfunction of excessive accumulation and concentration of wealth by the few and unbearable debt of the many, for the larger society. The combination of extreme wealth, computational technology, and political influence, has produced equally extreme inequities in the final phases of the industrial era. Puerto Rio’s plight epitomizes this process.

“Babylonian kings … occasionally issued decrees for the cancellation of debts and/or the return of the people to the lands they had sold. Such ‘clean slate’ decrees were intended to redress the tendency of debtors, in ancient societies, to become hopelessly in debt to their creditors, thus accumulating most of the arable land into the control of a wealthy few.” (See Wikipedia for a brief description of these ancient practices.) That is the exact position of Puerto Rico as a U.S. territory today.

The oppressive debt structure that Puerto Rico endures, demonstrates that there are no bounds to the rapaciousness of the modern creditors of nations. Puerto Rica’s marginal status – not quite a nation, not quite a U.S. state – makes it even more vulnerable, especially with the congressional collusion with the powerful Wall Street financial interests that enrich themselves through the suffering of millions. The history of our debt-based economy is a sorted one. It has produced great wealth and great poverty.

Economies do not have to be debt-based, but the power of the super-rich has forced the model of debt-funded economic growth upon most of the world. It cannot last, for very physical reasons having to do with resource depletion as well as ecological and climate destabilization. Harvey, Irma, and Maria reflect both normal weather patterns and their intensification by warmer seas resulting from global warming, which jacks up the energy and destructiveness of storms. And, this is only the beginning.

A Puerto Rican Jubilee is the only chance for the people of the island to rebuild and live on. Otherwise, mass migration may ensue. A number of scientists have studied the emerging risks of chaos and conflict when mass migrations respond to intolerable environmental conditions. Armed conflicts (such as in Syria) become more likely. Many great changes are in store for us all.

The sooner we recognize the mess the fossil-fueled societies have caused, the sooner we can mitigate them and adapt to the damaging effects already “in the pipeline.” In that sense, Puerto Rico could be a test case, an opportunity to rebuild in an ecologically sound way that will not contribute to the worsening climate destabilization we now experience. A Puerto Rican Jubilee would have to be a first step in establishing a model for the ecological communities necessary for human survival. The more likely “business as usual” course portends even greater disasters, mass migrations, food insecurity, suffering, and armed conflict around the world.

The Trouble with Economics: William Nordhaus and Pope Francis

Economics is perhaps the one social science “profession” that is most entrenched in the political economy of contemporary nations. Little economic thought escapes the halls of academia without the neoliberal stamp of theoretical approval. The trouble with most of the social sciences is that it is very difficult for them to actually be scientific. In the first place, complexity is amplified exponentially by the fact that human behavior is mediated by language. Moreover, the language of human affairs is saturated with concepts and terms that have implicit political content.

Economics, like sociology, political science, and psychology, is a “discipline” that is disciplined by ideology. In particular, in its contemporary form economics is a powerful influence over national and international political policies, especially as applied to economic forces in society. Economics is in turn powerfully influenced by the most prevailing societal forces in the world today – the machinations of financial elites. Academic economics is dominated by the so-called “free market” theories for which Milton Friedman is most famous. From his intellectual throne at the University of Chicago, Friedman and his minions have dominated the economic framework of U.S. international as well as domestic policies for decades. Of course, there is little human freedom in the corporate-controlled “free markets.” Many of these policies have been at the heart of U.S. imperial strategies of foreign domination in the later twentieth century right up to today. U.S. geopolitical strategies have been driven largely by attempts to control world fossil-fuel markets.

Empire of Emissions

Anyone so naïve as to believe that U.S. foreign policy is meant to “bring democracy” to other nations must read Confessions of an Economic Hit man, by John Perkins (2004). As an “economic hit man,” it was Perkins’ job to persuade leaders of developing nations to accept huge loans to build massive infrastructure projects that did little to aid the development of those nations. Instead, they were designed and structured to bring poor countries with rich resources into submission to U.S. corporations and indebtedness to the U.S. government and the Big Banks. The deals required the money from the loans to be spent with U.S. construction companies on projects that would never generate enough income to pay off the loans. Pressure was then brought to bear on such nations to comply with U.S. political demands for resource exploitation and political subservience. Perkins’ book is a fascinating on-the-ground account of the workings of the expansive imperial structure, the larger picture that Naomi Klein characterizes as “disaster capitalism” in her book, The Shock Doctrine: The Rise of Disaster Capitalism (2007).

Despite the exposure of the massive economic and social failings of the growth-at-any-cost form of predatory extractive capitalism that is ideologically propped up by the neoliberal economic theorists, not much has changed in “modern economics.” This is also true of the specialty of “environmental economics.” The latest effort to stand firm supporting “market mechanisms” as the means to solve all problems in the world, is made by William Nordhaus. His essay in the New York Review of Books, October 8, 2015, tries to destroy the economic credibility of Pope Francis’ recent encyclical, Laudato Si’: On Care for Our Common Home (Vatican Press, 2015. Available at w2.vatican.va).

Nordhaus is Sterling Professor of Economics at Yale University and a well established environmental economist. His attack on Pope Francis’ encyclical pretends to be grounded in supposed rock-solid economic facts of “effective” market approaches to restraining carbon emissions. He entirely ignores the strong evidence that carbon trading in Europe has been a dismal failure. Rather than having a basis in scientific findings, his analysis is actually grounded only in neoliberal economic ideology. It ignores both the severity of the economic and ecological facts of our destabilizing world and the moral questions raised by Pope Francis’ argument.

At least ecological economists examine economic systems as operating within the living earth systems that sustain all life, including economists and other humans. Norhaus’ failure – and that of economics in general – is that he treats earth systems as mere economic factors to be incorporated in the economists’ models of market forces. In fact, economies are human systems operating within and now seriously disrupting the earth systems upon which they rely. This is a direct result of the propagandistic role of economics in the political culture of the U.S. and most of the other industrially overdeveloped nations.

Immoral Economics

Nordhaus wants to protect the failed economic system by tweaking its damaging impacts. However, living earth systems are being so severely destabilized by the fundamental ways that system operates, that only a massive reorganization of human economic life will be sufficient to allow those systems to re-stabilize.

Nordhaus concludes his essay by chiding the pope for not endorsing a “market-based solution” such as carbon pricing (and the disaster that is carbon trading) as “the only practical policy tool we have” to turn back the dangerous trends of climate change. Certainly, such “solutions” would constitute the limit of action if we had to accept the corporate free market ideology. But Pope Francis has other ideas. He asserts the social immorality of a system that destroys climate stability and all that depend on it while creating more plutocracy and poverty. Pope Francis calls upon the people to turn away from compulsive consumerism. He calls upon world leaders to abandon the “magical conception of the market” and to turn away from the failed economic system they have allowed to rule us and severely damage the planet.

Nordhaus will have none of it. He dismisses economists like Anthony Atkinson, Thomas Piketty, and Joseph Stiglitz, who recognize in different ways the relationship between capital gone wild and increasing inequality. By attacking the idea that climate disruption causes poverty, Nordhaus attempts to deflect attention from the fact that unrestrained predatory global capital causes both. He optimistically asserts that utilizing assumed magical qualities of market mechanisms can somehow undo the damage that unbridled global capital markets have wrought. That is the trouble with economics.