Puerto Rico’s payday loans: The shocking story behind Wall Street’s role in debt crisis

Via DN

On June 30, President Obama signed into law the PROMESA bill, which will establish a federally appointed control board with sweeping powers to run Puerto Rico’s economy. While the legislation’s supporters say the bill will help the island cope with its debt crisis by allowing an orderly restructuring of its $72 billion in bond debt, critics say it is a reversion to old-style colonialism that removes democratic control from the people of Puerto Rico. But does Puerto Rico really owe $72 billion in bond debt—and to whom? A stunning new report by ReFund America Project reveals nearly half the debt owed by Puerto Rico is not actually money that the island borrowed, but instead interest owed to investors on bonds underwritten by Wall Street firms including Goldman Sachs, Citigroup, Merrill Lynch and Morgan Stanley. While the Puerto Rican people are facing massive austerity cuts, bondholders are set to make mind-boggling profits in what has been compared to a payday lending scheme. For more, we speak in San Juan, Puerto Rico, with Carlos Gallisá, an attorney, politician and independence movement leader. And in New York, we speak with Saqib Bhatti, director of the ReFund America Project and a fellow at the Roosevelt Institute. He is co-author of the new report, “Puerto Rico’s Payday Loans.”

“I know what it’s like to make an abandoned building a playground, or take a mattress and turn it into a gymnastics mat”

Rock Steady Crew’s Crazy Legs on his upcoming battle

Rich Colon is 50 years old, an age when thoughts of mortality creep into men’s minds and invitations to join AARP start appearing in their mailboxes. Faced with midlife crises, some men buy sports cars, join the Hair Club or start to prowl nightclubs. Mr. Colon has taken a different approach: He is going to St. Petersburg, Russia, for a dance-off on Friday against Storm, a German break dancer, in what is being called the “Battle of the Gods.”

Mr. Colon is better known as Crazy Legs, a pioneering B-boy (which is what he prefers to call himself) who first gained fame in New York City’s early hip-hop scene, then helped the culture go global through appearances in videos by Malcolm McLaren and movies like “Beat Street,” “Wild Style” and “Flashdance.” He and his friends in the Rock Steady Crew — Mr. Wiggles, Frosty Freeze, Doze and others — went from basement discos, parks and playgrounds to stages in London, Paris and Tokyo. Though he had said his last battle was in 2014, he decided to pull a Michael Jordan (or a “Godfather: Part III” Michael Corleone) and return to compete.

“When I did that last battle, I had bruised ribs, so I felt I had unfinished business,” Mr. Colon said. “Though I know that at 50, I’m either incredibly inspiring or incredibly stupid to be doing this.”

His motivation is more than just to prove a personal point. Though he is part of a culture that rewards bravado, it is also one created by young people who had little in South Bronx neighborhoods that had been reduced to rubble. Improvised soundtracks came from D.J.s who plugged their rigs into streetlamps while dance crews challenged one another, relying on their only possession: supreme self-confidence from surviving hard times.

Thoughts of the 1970s pushed Mr. Colon to go to battle. He divides his time between New York and Puerto Rico, where he sponsors an annual dance event. He has grown concerned about the island’s economic collapse, which has plunged many children into poverty, according to a report released this month. The crisis reminds him of the hardships he witnessed in childhood. So, in a culture where showing off in the spotlight is a given, he is using his turn to speak his mind.

“I know what it’s like to make an abandoned building a playground, or take a mattress and turn it into a gymnastics mat,” Mr. Colon said. “And right now, there are a lot of abandoned homes in Puerto Rico and people are fleeing. The reason I’m doing this is to bring awareness to the situation in Puerto Rico, its economic crisis and how desperate life has gotten there. We need to mentor these kids who are being affected by their parents’ not having any work or even money to meet their basic necessities.”

He has been lucky to make a living dancing, giving workshops and collaborating on other projects. His last regular job was in 1989, when he quit working at a health club near Riverdale in the Bronx. (“You could do a history of what went on behind closed doors,” he said. “From selling people memberships they couldn’t afford, which is why I quit, to after-hours pool parties.”)

When news of the battle was announced, it was done so teasingly, with Mr. Colon saying only that a challenge had been issued to another unnamed dance legend. Many fans assumed — correctly — that the other dancer was Ken Swift, a former member of Rock Steady who parted ways with Mr. Colon in 1996. When he declined, the organizers of the V1 Festival enlisted Niels Robitzky, a German dancer known as Storm.

The battle with Mr. Robitzky will be six rounds. In each, one dancer will perform a routine, and the other will respond with his own moves. Each round could take less than a minute of intense moves, with no breaks in between.

To get into shape, Mr. Colon has spent months at boxing gyms, working with two trainers. His strategy is to be prepared not just physically, but mentally.

“B-boys practice, but very few train,” Mr. Colon said. “Surviving deep in a battle is a whole different thing. You got to understand what walls mean when you hit them. You got to train until you get to the wall and then fight through it. After the second or third round, it’s all mental. I’ll have to take Storm into deep waters.”

And after it is over, win or lose, does he retire?

“I’m not going to say this is my last battle,” he said. “Once you’re hype and in shape, you see a bunch of B-boys and get that feeling about how you want to smoke this dude. How do you quit culture? Just because you say you’re going to do it doesn’t mean you’re not going to react when you hear some James Brown.”

This is where our (Puerto Rico) “Commonwealth” relationship to the US has gotten us: a dictatorship in the Caribbean, owned and operated from Wall Street, all disguised as a “management assistance board”

An analysis by Nelson A. Denis on the “new” Financial Control Board bill

A new Caribbean dictatorship will soon take charge of Puerto Rico. The final PROMESA bill finally arrived…and it is the WORST one of all.

After five months of “hearings” and “analysis,” the US Congress announced HR 5278…the law which will officially kill the economy of Puerto Rico. Here is the bill, all 148 pages of it:

http://naturalresources.house.gov/uploadedfiles/promesa_hr_5278.pdf

The economy of Puerto Rico will soon be handed over to a “Financial Oversight and Management Board,” and the billionaires behind them.

AUTHORITY TO RECEIVE GIFTS

One of the more astounding “good government” powers of the Board will be its right to “accept, use, and dispose of gifts, bequests, or devises of services and real and personal property.” There is no explanation of how these gifts will “aid or facilitate” the work of the Board.

This incredible invitation to bribery, influence peddling, and money laundering appears on pages 24-25 of the PROMESA bill.

ABSOLUTE BUDGET POWERS AND POLITICAL CONTROL

The Board will “re-structure the workforce of the Commonwealth government,” ensure “the payment of debt obligations,” and reduce or freeze public pensions.

It will also supervise the budget and finances of the entire Commonwealth government, its pension system, courts, legislature, public authorities, and all leases, union contracts, and collective bargaining agreements.

Anyone (public official or otherwise) who defies or obstructs the Board, will be found guilty of “criminal misdemeanor” and will be subject to suspension without pay, and removal from office.

NO MINIMUM WAGE

Section 403 of the bill contains an extreme wage cut, from $7.25 to $4.25 an hour. It will apply to everyone aged 20-24 in Puerto Rico, whenever they start a new job.

If this bill is passed then over 200,000 young people, many of them paying student loans, will soon be working for $4.25 an hour in Puerto Rico…because that will be their new “minimum wage.”

The supply side argument that this will “create more jobs and economic development on the island” is woefully myopic. At $4.25 an hour, $170 a week, $8,840 a year, a young worker will make 25 percent of the per capita income of a resident of Mississippi, the poorest state in the US. Someone needs to explain to the House Committee on Natural Resources that this is not “economic development.” It is indentured servitude that smells of racism.

No tortured logic, no trickle-down theorist or hedge fund hustler can credibly argue that a minimum wage reduction to $4.25 will help the island — especially when the rest of the US is pushing for $15 an hour in all 50 states.

CREATION OF DEBT, WITH NO ACCOUNTABILITY

The government of Puerto Rico must appeal to the Board for any possibility of bankruptcy. Through a “certification procedure” controlled by the Board itself (see Sections 206 (a) and 206 (b) of the bill), the Board decides if and when any bankruptcy re-structuring will be allowed. The Board will also decide which part of the Puerto Rico physical infrastructure (electrical grid, water supply, roads, bridges, highways, schools, prisons, airports, beaches) will serve as collateral for the debt re-structuring.

The Board can also directly encumber the physical infrastructure of Puerto Rico…because any and all debt issuances of the Puerto Rican government must receive the prior approval of the Board. In other words, the Board will be the debt issuing authority of Puerto Rico.

The physical infrastructure of Puerto Rico (highways, bridges, schools, prisons, electrical grid, water supply, public housing, prime coastal real estate) will all be available as “collateral” for the debt decisions of this Board.

Despite all of this power, neither the chairperson nor any of the seven Board members, will be accountable or liable to the government of Puerto Rico.

The PROMESA bill is careful to mention that “the United States is not responsible for any principal or interest on any bond, note, or other obligation issued by the Board.” This means that Puerto Rico – its taxpayers and its physical infrastructure – will be solely and exclusively responsible for repayment of the Board’s debt decisions.

PUBLIC PROSECUTOR

The Board will also have prosecutorial powers.

It is authorized to “conduct necessary investigations” into the government of Puerto Rico. It is empowered to hold hearings, secure government records, demand evidence, take testimony, subpoena witnesses, and administer oaths (under penalty of perjury) to all witnesses.

Anyone who fails to appear, refuses to testify, or withholds evidence, can be held in contempt of court. The result of any Board investigation can lead to criminal and civil penalties – including, but not limited to, getting fired from your job.

AN EMPTY PROMESA

This Financial Control Board will be the governor, banker, judge, jury, and prosecutor of Puerto Rico.

It will manage the entire Puerto Rican economy, and be accountable to no one on the island. It will tell the entire Puerto Rican government what to do, when to jump, and how high. It will issue debt, spend the money in any manner it sees fit, and leave Puerto Rico to pay the bill.

It will do nothing about Jones Act reform, the privatization of the island’s public schools, or the hedge funds that will own the physical infrastructure of Puerto Rico – its schools, prisons, highways, electrical grid, and water supply.

This is where our “Commonwealth” relationship to the US has gotten us: a dictatorship in the Caribbean, owned and operated from Wall Street, all disguised as a “management assistance board.”

The branding is very catchy, though.

With a wink and a nod to George Orwell, the US Congress took five months of hedge fund bribe money, slapped some lipstick and high heels on Senate Bill 2381, and called it PROMESA for Puerto Rico.

There is no “promesa” in this bill. It simply creates a collection agency in the Caribbean.

It is one great big lie.

America’s Backyard: Puerto Rico (Video)

Via PressTV..

In 1904, President Theodore Roosevelt declared that the United States had to intervene in the internal affairs of Latin America. In his own words: “If any South American country misbehaves it should be spanked.” All US presidents that succeeded him have, in lesser or greater measure, continued to exercise their perceived right over a region often known as “America’s Backyard”.