Tuesday, April 14, 2015

Anybody Got Twenty Grand to Lend Me?

OK—here’s the problem: If we wanted to get rid of our debt, down here in Puerto Rico, every single last one of us—including the neonates in Centro Médico and all the viejitos in I Love You Lord Home Center (could I make this up? Click here and find out!) would have to pay … all right, take a look.

Wow—over 21,000 bucks! And so how many people work in Puerto Rico? Well, here’s the Latin American Herald Tribune:

SAN JUAN – Only 40.2 percent of people in Puerto Rico are working or actively seeking employment, a structural problem that is amplifying the effects of the severe recession afflicting the Caribbean island.

Right—and what’s the norm in developed countries? According to the article, it’s 65 to 70 percent. So roughly half of the people who should be working are. But no problem, because that must mean our population must be insanely rich, and hence have no need to work. And our average gross domestic product? It’s $21,233.33.

Hey, no problem! $21,470 that we owe, and the $21, 233 that we “make”—well, we’re only two hundred bucks plus change short. So what’s the big deal?

Well, in the first place, I could adduce the person who makes the best tuna fish sandwich in the café. And how much does he make per hour? Probably not much more than $8.00 an hour; I can’t be sure and wouldn’t ask him. But what I do know is that he is both on food stamps—called down here la tarjeta del la familia—and on the government health plan. So he’s one of the 40% who has a job—but does he have $22, 000 to pay off the government debt? Don’t think so, and if he does, I’ll be pissed, because when his car breaks down? He hits me up for a loan!

Oh, and the abuelitos and abuelitas and the neonates? Right…they’re out.

And the other problem? Well, if memory serves, our major newspaper came out with the news that—as I remember it—the actual debt is not a mere 73 billion (OK—a trifle more than Detroit’s 18 billion) but is actually substantially more than twice that amount, since our government is not bothering to calculate how much interest we will have to pay to finance this debt, but only the debt itself. But anyone who has a credit card can tell you: paying—if we possibly can—the monthly minimum on the principal? Well, we’ll be an abuelito or abuelita in I Love you Lord Home Center before we pay off the debt.

And the other problem? Using the completely scientific and statistical method for which this blog is famed, I have asked four people—three employees and a gringo customer—in the café how much we would have to pay. Curiously, all of the Puerto Ricans were completely at sea: One declined to answer, the other thought the sum would be one dollar per person, and the third asked the question about the size of the debt versus the size of the population. On hearing the numbers, his eyes glazed over, and it was up to the gringo to speculate: $100,000 dollars was his guess.

But there’s another problem, which is that the simple trick that got me through arithmetic—eliminating zeros—nobody seems to have taught people here. If we eliminate five zeros from each sum, what do we get? 

73,000,000,000                                         730,000
---------------------                                        ----------                                           
            3,400,000           is basically                   34

“It doesn’t matter if we all could pay the 21,000 dollars,” said one person, “since the politicians would steal the money and not pay off the debt anyway, like they always do.” This from a person who is also on the government health plan, and is also getting subsidized housing from the government.

“Jorge, do you have $21, 470…”

Wrong, it was more like….

“…Jorge, do you have $21, 4”


Notice what he didn’t say: “I’ll have to check my balance….”

So now the wolf is at the door, since we told our creditors that we would pay them on the first of this month, and did we? No, we sent the woman whose company is getting ten million bucks for six months to sort the mess out at the electric company to go and plead time. Remarkably, she—right, her name is Lisa Donahue—has gotten not one extension but two. So now we have until the first of June to tell the creditors what the restructuring plan is going to be. And today, Ms. Donahue faced the Senate commission in charge of all this and answered questions.

Well, she did and she didn’t, since the party in charge of hiring her treated her with great deference, but the opposing party? Well, the senator María de Lourdes Santiago, from the party favoring independence, came out and said that Donahue’s plan was nothing more than what any Puerto Rican could cook up in five minutes over coffee. Oh, and she said all this in Spanish, after explaining—in perfect English—that she believed all state business on the island should be conducted in the lengua franca.

In fact, I listened to Donahue for an hour or so, since it was the kind of thing my journalist father would have done: I vividly recall him listening to the Madison City Council meetings over the radio. That, of course, was when he could listen, since there were hills between the station and our house, and sometimes they got in the way, and sometimes they didn’t. Or perhaps it was that some radio signals were higher than others—even then, technology was defeating me.

But Donahue seemed bright enough, and managed to answer each question with the appropriate level of vagueness and general inapplicability that would allow her to deny anything at all in the future. She did, however, point out that no infrastructure company anywhere in the world can operate when the top 200 people running the company change every time the government changes. So what to do?

She didn’t say, and couldn’t say, because the answer is completely unpalatable; she did say, however, that she believed in appointing people who were qualified for the position and retaining them in that position until they were no longer needed or effective.

Well, the senators asked question after question, but I waited in vain for the question to be posed that I’ve been mulling for days: Given that we have a massively indebted company run by 200 politically-appointed friends of the governor, and actually run by two unions with a stranglehold on the company, and this company is operating under completely inefficient circumstances (the EPA is demanding, among other things, that we close two of our worst plants), and the populace is poor and cannot afford to pay a penny more, and there’s no way to borrow since our credit rating is firmly embedded in junk status, and that’s a problem, since the governor wants to throw out our 7% sales tax and put in a 16% value added tax, and…

…I’m probably forgetting something, here, but anyway, Lisa….

…have you ever seen a mess like this?