Sunday, August 20, 2017

[Column] The power of political correctness

By on August 2, 2017

When I visited Fomento plants and talked to management as a reporter for the San Juan Star in the early 1960s I felt there was something that didn’t make sense.

Two big stories then were the remarkable industrialization of Puerto Rico and the growth of the statehood movement.

By 1960 Fomento, the Puerto Rico Industrial Development Co.,  had established 530 plants and had 91 more on the way. In the elections that year, the statehood party grew to 252,364 from 172,838 votes.

They were seen as related. The statehood movement’s growth was the result of Hawaii and Alaska becoming states, but more so of the rapid growth of the middle class. The result of thousands of Puerto Ricans working in those Fomento plants throughout the island.

But this relation didn’t make sense to me. Fomento plants existed because of federal tax exemption that was possible because Puerto Rico was a Commonwealth, not a state.

So logically, Fomento plants should have been creating Commonwealth supporters. But when I visited these plants I saw for myself they weren’t.

In the 1960 campaign, covering Luis A. Ferré, seeing so many statehooders enthusiastically greeting him at Fomento plants, employees and professionals alike, I asked myself: Don’t they connect that if Puerto Rico had been a state, this plant would not exist?

President Dwight D. Eisenhower (second left) with Luis A. Ferre, Vice President of Puerto Rico’s statehood party, (to his left) at a reception at Ramey air force base, Puerto Rico, Feb. 22, 1960. Others not identified. (AP Photo)

Why? Part of the answer, I found, was political correctness.

Because the golden rule for all industrialists, especially from the U.S., was, “Don’t get into the swamp of Puerto Rican politics,” political correctness dictated that management act and talk as if it were absolutely neutral.

Of course. Management should not appear to be telling employees how to vote. But I imagined the owners and managers, in the privacy of their corporate offices, saying to themselves: “Of course, we all know that if we lose federal tax exemption, we start packing – but we mustn’t tell anybody!”

So many Fomento plant employees did not make the connection: If I vote for statehood, I am effectively voting against my plant, my job.

Years later, in the mid-1990s, I saw something similar.

It became evident that Governor Pedro Rosselló and Resident Commissioner Carlos Romero Barceló were going to succeed in getting Congress to eliminate Section 936 of the Internal Revenue Code. In fact, they were breaking the 1992 party campaign pledge to support 936 until an alternative was found.

On August 20, 1996, Section 936 was phased without an alternative. A month later, Rosselló was overwhelmingly reelected, the first ever to get over a million votes.

As Section 936 plants closed, by 2016, 37,556 manufacturing employees had lost their jobs, one-third of the total. I asked myself, how many were 936 workers who didn’t make the connection in 1996 and voted for Rosselló?

And we have another example of the power of political correctness.

When Congress created the Promesa fiscal board in 2016, it also created the Congressional Task Force on Economic Growth for Puerto Rico, composed of eight members of Congress, four from each party.

Its task could not be more important: to recommend to Congress legislation to revive economic growth. And it seemed obvious that its most important recommendation would be precisely to enact a substitute for 936.

Wrong.

The section of the report on 936 described what it called a “debate” among Puerto Ricans: some saying it was important, that its elimination was “detrimental,” others saying no, that it was not, that it was “overstated and inefficient.” And the Task Force is not taking sides.

Of course there was and is a “debate.” Statehooders always opposed 936 and finally killed it as “incompatible with statehood.”

But to do its job, the Task Force had to cut through island politics and ideology to get to Puerto Rican economic reality? And if it had, how could it not make the connection that killing Section 936 is what caused the recession?

There is a lot in the 125-page report to Congress that would help Puerto Rico. But instead of recommending a substitute for 936, this is what it “recommends”:

“The Task Force is open to the prospect of Congress providing U.S. companies that invest in Puerto Rico with more competitive tax treatment as long as appropriate guardrails are designed to ensure the company is creating real economic agreement activity and employment of the island.”

What does this “recommendation” recommend?

The Task Force was a ray of hope that Congress, having created Promesa, would take the single most important act to revive economic development. Instead, apparently wanting to offend no one in the 936 “debate,” fell victim to political correctness.

And this brings us to still another example of the power of political correctness – I think, the most important, the most damaging.

The word “impossible” is usually avoided as politically incorrect.

Just as Fomento plant owners and managers wouldn’t tell their employees the whole truth, neither has the U.S. told Puerto Rico. I have long believed that the U.S. should have told Puerto Rico: Look, you are free to vote however you want, free to want whatever political status. But you should know that entering the union as a state is today, and for as far as we can see, is economically impossible.

Of course it hasn’t and it won’t. It’s true. But can one imagine something more politically incorrect?

Yet it would have saved Puerto Rico, and itself, a lot of grief.

–A.W. Maldonado was a reporter and columnist for the San Juan Star, executive editor of El Mundo, and editor and publisher of El Reportero.

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