Poverty of leadership: Must remove carcasses of dead policies

The impending deluge of increases in the cost of living would drown family pocketbooks in the filthy swamp of abject poverty. It simultaneously cuts household purchasing power far more significantly than meets the eye. The hardship intensifies as dystopia—where nothing works—devours the entire archipelago.

Retirees could add the cut of 25 percent in pension pay to increases in health premiums of some 45 percent next year, including a 45 percent increase in medication, food cost, power bills, etc. It’s fandango time in 2014 as we wrestle with a huge increase in the cost of living.

But what’s the culprit behind the deepening misery? At the top of the heap is the poverty of leadership. The exodus of about $7 billion in foreign capital in recent past didn’t spin out of thin air. It’s the combined result of internal and external predatory policy decisions that robbed investors of the enthusiasm to tough it out for the duration. In the process, we grandly ignored the pioneering role and sacrifices of investors from the Land of the Rising Sun.

This arrogance was doubled up when the local government started “cherry picking” who comes in and who is kept at the front door. It may have been glossed by inexcusable historical ignorance. But the egregious decision didn’t leave much room for our friends to reconsider thinking with their feet. They simply picked up their luggage and headed to jet ways returning home. Has there been any investment from Japan since 2005?

The net effect of cherry picking investors panned out into the eventual and complete plundering of the livelihood of the people Marianas-wide. Has the reunification of the Covenant and Republican enabled an organized development of governance? Or is the resignation of the former governor a major derailment of its suspect unity wandering aimlessly?

I felt wounded in that it is only through sure-footed investments could the resource-poor NMI regroup and move the needle forward. Japan is the most experienced country when dealing with investments beyond her borders. Appalling how we’ve instantly ignored the affinity we’ve had with our friends, jointly nurtured for decades before and after the war.

A lot of its largest investments are now headed to Singapore, Thailand, Malaysia, the Philippines, Indonesia, Papua New Guinea, Australia, among others. The gain of these countries is our loss! We’ve failed to employ mindfulness as we dropped a major player on investments here since the late ’60s.

As revenue generation headed Deep South, we found the inevitably prohibitive cost of fossil fuel forcing closure of a sizeable number of small businesses, the backbone of our community. Caught with our pants down, we piled up more taxes in the belief that more of it would exact more revenues. Nah! It exacted the complete opposite. With power bills skyrocketing plus more taxes, small businesses, especially marginal ones, had no other option but to put up shutters. They did and headed elsewhere where investment is conducive.

Imagine the complete inability to recoup some $133 million in revenue losses. Imagine the larger task of reviving economic recovery via reinvestment after the exodus of some $7 billion in foreign capital. Imagine rebuilding and mending the loss of trust in the NMI as an investment venue. The asymmetric economic shock remains hugely disorienting as fiscal contraction deepens.

Nothing decisive has been undertaken to fix the self-inflicted mess. With pervasive debts it becomes untenable domesticating spending or finding additional revenues to meet obligations. Why do we grandly refuse to remove the carcasses of dead and regressive policies? Therein lies the poverty of leadership!

With a reported $70 billion debt and “weakening liquidity, increasing reliance on external short-term debt, and constrained market access…” Moody’s is ready to junk Puerto Rico’s general obligation rating to Baa3. It’s the company’s lowest investment grade rating, according national columnist Mike Shedlock.

“These developments exacerbate the longstanding financial strain brought by the commonwealth’s very high debt load and pension obligations, as well as its chronic budget deficits,” wrote Shedlock.

The economic mess at home has prompted an exodus of Puerto Ricans (so far 138,000 of them) to the U.S. mainland.

“How did Puerto Rico get into trouble? The short answer is the same way as Detroit: loss of industry coupled with lavish pensions. Job flight, high crime rates, and huge pension woes in Puerto Rico seem similar to the problems in Detroit. However, there is no constitutional provision that allows U.S. states and commonwealths to declare bankruptcy.

“Compounding the problem, Puerto Rico passed a massive set of tax hikes including corporate taxes, a broadened sales tax and a new gross receipts levy, hoping to get its budget under control. Given that tax hikes in the middle of a recession are about the worst possible choice, the situation is ominous.

“So how is Puerto Rico’s debt going to be paid back? The answer is it won’t. Although, bankruptcy is out of the question, nothing can stop a default except a bailout by the U.S. Given that handouts from this Republican Congress are unlikely, look for Puerto Rico to default.”

About a third of its 3.7 million people rely on food stamps and some 41 percent of its working-age either have jobs or looking for one.

Both commonwealths ought to begin practicing the mea culpa and stiff genuflection. This would require a full dress rehearsal. I mean you have to look like some ragged beggar from Pennsylvania Avenue with hats out literally begging for donations, any donation!

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The revelry of Christmas and New Year’s would fill our hearts with joy. Let’s remember our brothers and sisters in the Pearl of the Orient who are rebuilding their lives. Recovery is a poignant reminder of the wraths of destruction from a recent vicious storm. They’re rebuilding slowly as they keep watchful eyes at the dawn of 2014 with hope that through divine providence they’d be able to see brighter tomorrows. Our prayers!

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