1 00:00:00,120 --> 00:00:03,880 Speaker 1: Before Hurricane Maria made landfall on Puerto Rico three weeks ago, 2 00:00:04,200 --> 00:00:08,320 Speaker 1: the U S territories economy was already in shambles, thanks 3 00:00:08,400 --> 00:00:11,879 Speaker 1: in part to an overload of debt and an exodus 4 00:00:11,920 --> 00:00:16,239 Speaker 1: of residents. Now, after this terrible storm, things are much 5 00:00:16,520 --> 00:00:19,759 Speaker 1: much worse for the three point four million people there. 6 00:00:20,239 --> 00:00:25,600 Speaker 1: Just fifteen percent of residents have electricity, are lacking clean water, 7 00:00:25,960 --> 00:00:29,840 Speaker 1: and nearly half the phone services out. One estimate puts 8 00:00:29,840 --> 00:00:33,760 Speaker 1: the damage at ninety five billion dollars, the equivalent of 9 00:00:33,800 --> 00:00:37,519 Speaker 1: more than one year of Puerto Rico's GDP. So what 10 00:00:37,640 --> 00:00:40,880 Speaker 1: does this all mean for Puerto Rico's economy? Will Puerto 11 00:00:40,960 --> 00:00:44,160 Speaker 1: Rico even have an economy anymore? We'll talk to two 12 00:00:44,159 --> 00:00:46,600 Speaker 1: people who will try to answer these questions and more 13 00:00:46,720 --> 00:00:59,000 Speaker 1: today on Benchmark. I'm Scott Landman and economics editor with 14 00:00:59,040 --> 00:01:01,920 Speaker 1: Bloomberg in wash Ington. Today we're going to look at 15 00:01:01,920 --> 00:01:06,520 Speaker 1: Puerto Rico's economic devastation from two perspectives, One from someone 16 00:01:06,560 --> 00:01:09,040 Speaker 1: who's been on the ground there, and then from someone 17 00:01:09,080 --> 00:01:13,319 Speaker 1: who's very familiar with the territory's economy. So how bad 18 00:01:13,440 --> 00:01:16,280 Speaker 1: is it there? Let's turn to one of our Bloomberg 19 00:01:16,360 --> 00:01:19,880 Speaker 1: colleagues Jordan Holman, a reporter based in New York who 20 00:01:19,920 --> 00:01:23,280 Speaker 1: spent seven days in Puerto Rico after the storm covering 21 00:01:23,280 --> 00:01:26,920 Speaker 1: the situation there. Jordan's thanks for joining us today. Thanks 22 00:01:26,920 --> 00:01:29,320 Speaker 1: for having me tell us a little bit about what 23 00:01:29,360 --> 00:01:31,800 Speaker 1: you saw when you were there and how the hurricane 24 00:01:31,959 --> 00:01:35,520 Speaker 1: disrupted life in Puerto Rico. So, Hurricane Maria very much 25 00:01:35,520 --> 00:01:38,560 Speaker 1: disrupted life on the ground there in Puerto Rico. Like 26 00:01:38,640 --> 00:01:41,240 Speaker 1: you mentioned at the top, most of the island was 27 00:01:41,400 --> 00:01:45,360 Speaker 1: without electricity, cell service was down, a lot of the 28 00:01:45,400 --> 00:01:49,600 Speaker 1: streets were not cleared because of utility poles, trees, and 29 00:01:49,720 --> 00:01:52,040 Speaker 1: a lot of people did not have jobs to go to. 30 00:01:52,520 --> 00:01:55,600 Speaker 1: Schools were out, and people had to bathe in the 31 00:01:55,720 --> 00:01:58,360 Speaker 1: river because they did not have access to clean water. 32 00:01:58,640 --> 00:02:00,760 Speaker 1: So it very much disrupted the way of life down 33 00:02:00,800 --> 00:02:03,480 Speaker 1: in Puerto Rico, and it's going to be a year's 34 00:02:03,480 --> 00:02:06,760 Speaker 1: long recovery until things get back to normal. And speaking 35 00:02:06,800 --> 00:02:10,240 Speaker 1: of what normal life is like down there, from what 36 00:02:10,360 --> 00:02:14,120 Speaker 1: I know about their economy, uh, there's there's tourism, of course, 37 00:02:14,120 --> 00:02:18,120 Speaker 1: I visited there one time. There are some factories, especially pharmaceuticals, 38 00:02:18,760 --> 00:02:22,320 Speaker 1: maybe some other industries too. Is it possible for anybody 39 00:02:22,360 --> 00:02:25,200 Speaker 1: to get to work to get paid to do anything 40 00:02:25,320 --> 00:02:28,639 Speaker 1: these days, so normal will fill dimfer for differ parts 41 00:02:28,680 --> 00:02:31,720 Speaker 1: of the island. In San Juan, where tourism is um 42 00:02:31,800 --> 00:02:36,160 Speaker 1: a big part of the economy more than people working tourism. 43 00:02:36,160 --> 00:02:38,919 Speaker 1: In Puerto Rico, the hotels are starting to open up. 44 00:02:39,200 --> 00:02:41,960 Speaker 1: You can see some cruise ships um, you know, docking 45 00:02:42,000 --> 00:02:45,600 Speaker 1: in the waters there, and there's a huge concerted effort 46 00:02:45,760 --> 00:02:48,800 Speaker 1: to try to jump start the economy with tourism and 47 00:02:49,040 --> 00:02:51,720 Speaker 1: trying to tell people that uh, Puerto Rico is open 48 00:02:51,800 --> 00:02:55,680 Speaker 1: for business. The Bacardi uh distillery down there, it's open 49 00:02:55,800 --> 00:02:59,320 Speaker 1: and running. But outside of San Juan and the villages 50 00:02:59,400 --> 00:03:02,520 Speaker 1: and the more mouth to this areas, that's where people 51 00:03:02,520 --> 00:03:05,239 Speaker 1: are really trying to look for jobs and for opportunities. 52 00:03:05,480 --> 00:03:08,720 Speaker 1: Because less of the roads are cleared there, schools aren't 53 00:03:08,760 --> 00:03:11,359 Speaker 1: open and so parents are put in a tough spot 54 00:03:11,560 --> 00:03:14,720 Speaker 1: of what to do next. So what you're saying, Jordan's is, 55 00:03:15,040 --> 00:03:17,760 Speaker 1: you know, San Juan might be able to get back 56 00:03:17,800 --> 00:03:20,840 Speaker 1: on its feet and get some touristspect but you know, 57 00:03:21,040 --> 00:03:24,560 Speaker 1: for the vast, vast majority of the island is just 58 00:03:24,600 --> 00:03:27,240 Speaker 1: going to be a very very long road back, And 59 00:03:27,440 --> 00:03:30,720 Speaker 1: who really knows when things will ever get back to 60 00:03:30,800 --> 00:03:34,880 Speaker 1: some normal stage off at all. Right Right now, many 61 00:03:34,920 --> 00:03:37,880 Speaker 1: people are just looking for the commodities in life. They're 62 00:03:37,920 --> 00:03:42,000 Speaker 1: looking for clean water, they're looking for housing, electricity. UM 63 00:03:42,160 --> 00:03:45,520 Speaker 1: is huge issues right now, so focusing on getting those 64 00:03:45,560 --> 00:03:48,680 Speaker 1: back up and running is very key. UM. Further outside 65 00:03:48,680 --> 00:03:51,720 Speaker 1: of San Juan, and when it comes to the people 66 00:03:51,800 --> 00:03:55,240 Speaker 1: that you talked to down there, even though its residents 67 00:03:55,280 --> 00:03:59,960 Speaker 1: are American citizens, Puerto Rico has no representation in Congress. 68 00:04:00,720 --> 00:04:03,720 Speaker 1: Do people there feel that Puerto Rico has been kind 69 00:04:03,720 --> 00:04:08,560 Speaker 1: of invisible in some ways in this aftermath of the disaster. 70 00:04:09,080 --> 00:04:11,440 Speaker 1: I mean, not that people don't know about it, but 71 00:04:11,720 --> 00:04:16,480 Speaker 1: given its distance, the fatigue with other hurricanes like Irma 72 00:04:16,600 --> 00:04:19,800 Speaker 1: and Harvey, that it's it's not really getting the attention 73 00:04:19,800 --> 00:04:23,560 Speaker 1: and help that the people there deserved. The people I 74 00:04:23,600 --> 00:04:26,200 Speaker 1: spoke to down there definitely acknowledged that there are a 75 00:04:26,200 --> 00:04:29,840 Speaker 1: lot of other natural disasters happening right now. Um. There 76 00:04:29,920 --> 00:04:33,560 Speaker 1: was Harvey UM in Texas and Erma and Florida and 77 00:04:33,640 --> 00:04:36,400 Speaker 1: other parts of the Caribbean. Right now, there's forest fires 78 00:04:36,400 --> 00:04:40,280 Speaker 1: in California. But everyone's stressed to me that while they 79 00:04:40,360 --> 00:04:43,120 Speaker 1: understood that they still needed a they were still part 80 00:04:43,400 --> 00:04:47,679 Speaker 1: of this country American citizens. They felt that Trump's visit 81 00:04:48,080 --> 00:04:49,960 Speaker 1: it could have been a positive thing since he's the 82 00:04:50,000 --> 00:04:54,760 Speaker 1: president and it brings media attention and resources. But as 83 00:04:54,880 --> 00:04:57,640 Speaker 1: aid is still coming in, not everyone's receiving it in 84 00:04:57,720 --> 00:04:59,560 Speaker 1: all parts of the island, and so that's a big 85 00:04:59,560 --> 00:05:02,000 Speaker 1: focus right now to make sure that the aid is 86 00:05:02,040 --> 00:05:05,800 Speaker 1: getting in reaching the people who need it most. Just 87 00:05:05,880 --> 00:05:09,400 Speaker 1: one last question before we move on to our other guests. 88 00:05:09,839 --> 00:05:14,359 Speaker 1: Is it possible to even rebuild Puerto Rico in a 89 00:05:14,440 --> 00:05:17,440 Speaker 1: reasonable amount of time? We have a article out from 90 00:05:17,600 --> 00:05:20,680 Speaker 1: some of our colleagues about how, uh, you know, the 91 00:05:20,720 --> 00:05:24,760 Speaker 1: dead burden was so large that public employees like like 92 00:05:24,839 --> 00:05:28,520 Speaker 1: police officers were already cut. I mean, everything was basically 93 00:05:28,800 --> 00:05:33,520 Speaker 1: shambles already. Is it even possible to rebuild? You think 94 00:05:34,120 --> 00:05:38,040 Speaker 1: Maria definitely didn't help the financial situation down in Puerto Rico, 95 00:05:38,600 --> 00:05:42,840 Speaker 1: and the electrical grid needs to be rebuilt. Um the 96 00:05:42,839 --> 00:05:46,719 Speaker 1: water situation needs to be handled as well. Right now, 97 00:05:47,279 --> 00:05:51,560 Speaker 1: they're still in an emergency rescue recovery stage. But this 98 00:05:51,640 --> 00:05:54,200 Speaker 1: is also could be looked at as an opportunity for 99 00:05:54,279 --> 00:05:57,560 Speaker 1: a clean slate for rebuilding the infrastructure in a more 100 00:05:57,640 --> 00:06:01,320 Speaker 1: durable way. Tesla said that, you know, they are looking 101 00:06:01,320 --> 00:06:05,680 Speaker 1: into possibilities of rebuilding, and um Google has said that 102 00:06:05,680 --> 00:06:07,640 Speaker 1: they're going to help with the cell service, so this 103 00:06:07,720 --> 00:06:10,160 Speaker 1: could be a place where corporations can step in and 104 00:06:10,480 --> 00:06:12,880 Speaker 1: help this effort. But it's definitely going to be a 105 00:06:12,960 --> 00:06:16,640 Speaker 1: year's long recovery. That's uh, definitely what Friema impressed upon 106 00:06:16,680 --> 00:06:18,560 Speaker 1: me while I was down there, that this is going 107 00:06:18,680 --> 00:06:21,200 Speaker 1: to be a slow recovery and not everyone's going to 108 00:06:21,240 --> 00:06:23,760 Speaker 1: fill it at the same time. So that's one thing 109 00:06:24,000 --> 00:06:27,240 Speaker 1: that's gonna be a year's long recovery. Definitely sounds like 110 00:06:27,279 --> 00:06:30,960 Speaker 1: a very, very difficult situation. Thanks, Jordan's so much for 111 00:06:31,240 --> 00:06:34,400 Speaker 1: coming on today. Thanks for having me. All right, well, 112 00:06:34,480 --> 00:06:38,120 Speaker 1: let's bring in Arthur McEwen. Now. He's a professor emeritus 113 00:06:38,160 --> 00:06:42,520 Speaker 1: of economics at the University of Massachusetts in Boston. He's 114 00:06:42,680 --> 00:06:45,799 Speaker 1: studied the Puerto Rican economy for more than twenty years, 115 00:06:46,120 --> 00:06:50,359 Speaker 1: consulting to government and non government organizations, and publishing several 116 00:06:50,480 --> 00:06:54,760 Speaker 1: articles for both academic and general audiences. Thanks for joining 117 00:06:54,839 --> 00:06:57,640 Speaker 1: us on Benchmark today, Professor. I'm glad to be here. 118 00:06:58,320 --> 00:07:01,440 Speaker 1: So from your person affect, can you just give us 119 00:07:01,440 --> 00:07:05,839 Speaker 1: a little background here before this storm struck. If we 120 00:07:05,880 --> 00:07:08,599 Speaker 1: can talk about Puerto Rico in some normal state, what 121 00:07:08,760 --> 00:07:11,880 Speaker 1: have been the major components of Puerto Rico's economy over 122 00:07:11,920 --> 00:07:15,640 Speaker 1: the years. Well, for the last ten years, Puerto Rico 123 00:07:15,760 --> 00:07:19,640 Speaker 1: has essentially been in a recession. The economy has declined 124 00:07:20,200 --> 00:07:23,360 Speaker 1: by well, there are various measures, but probably about fift 125 00:07:24,520 --> 00:07:28,280 Speaker 1: since two thousand and six. You've mentioned, or your previous 126 00:07:28,360 --> 00:07:32,520 Speaker 1: guests mentioned that there's been a large exodus. Hundreds of 127 00:07:32,520 --> 00:07:37,080 Speaker 1: thousands of people, perhaps uh five hundred thousand have left 128 00:07:37,120 --> 00:07:40,280 Speaker 1: the country and come to the United States as citizens. 129 00:07:40,280 --> 00:07:43,200 Speaker 1: Of course they can move here easily, and that's made 130 00:07:43,600 --> 00:07:47,520 Speaker 1: a big difference. That people leaving doesn't doesn't help the economy. 131 00:07:47,600 --> 00:07:51,840 Speaker 1: To be sure, the recession itself has to be put 132 00:07:51,880 --> 00:07:55,920 Speaker 1: in context in the sense that the Puerto Rican economy 133 00:07:56,200 --> 00:07:59,360 Speaker 1: was falling further and further behind the US economy, growing 134 00:07:59,400 --> 00:08:03,560 Speaker 1: slower than the US economy ever since uh and now 135 00:08:03,600 --> 00:08:06,600 Speaker 1: of course it's going down well however slowly. The United 136 00:08:06,640 --> 00:08:11,560 Speaker 1: States economy is going up. Um. There are several reasons 137 00:08:11,560 --> 00:08:14,600 Speaker 1: for this that uh, that is, several reasons for the 138 00:08:14,680 --> 00:08:18,520 Speaker 1: slow growth and then the development of the recession. All 139 00:08:18,600 --> 00:08:22,040 Speaker 1: this comes before the hurricanes of course, although it's had 140 00:08:22,120 --> 00:08:25,520 Speaker 1: hurricanes before, never never anything like this. In Puerto Rico, 141 00:08:26,520 --> 00:08:30,640 Speaker 1: the the US government and the Puerto Rican government have 142 00:08:31,080 --> 00:08:38,160 Speaker 1: focused excessively on manufacturing and attracting US firms manufacturing firms 143 00:08:38,200 --> 00:08:42,040 Speaker 1: to Puerto Rico with very large tax breaks um. This 144 00:08:42,120 --> 00:08:46,840 Speaker 1: has led to a distortion of the economy, a failure 145 00:08:46,880 --> 00:08:49,960 Speaker 1: to focus on other industries, and hasn't done very much 146 00:08:50,080 --> 00:08:55,520 Speaker 1: for employment in Puerto Rico. For example, manufacturing accounts for 147 00:08:55,600 --> 00:09:00,800 Speaker 1: about forty of the Puerto Rican economic out would, but 148 00:09:00,960 --> 00:09:05,680 Speaker 1: only eight of employment. You know that something is weird 149 00:09:06,000 --> 00:09:10,000 Speaker 1: when those you hear those numbers. How is that possible? Well, 150 00:09:10,360 --> 00:09:14,600 Speaker 1: it's possible because the firms operating in Puerto Rico have 151 00:09:14,800 --> 00:09:19,320 Speaker 1: huge profits and because they basically don't pay any US 152 00:09:19,400 --> 00:09:23,400 Speaker 1: taxes or Puerto Rican taxes very little on their activities. 153 00:09:23,440 --> 00:09:27,160 Speaker 1: So what this is under particular U s laws. Some 154 00:09:27,240 --> 00:09:29,679 Speaker 1: of those laws have been changed, but the situation has 155 00:09:29,720 --> 00:09:34,679 Speaker 1: not changed dramatically in in recent years, so it's not 156 00:09:35,000 --> 00:09:39,880 Speaker 1: And it costs more in lost taxes UH to to 157 00:09:39,960 --> 00:09:42,880 Speaker 1: increase a job, to make a job in Puerto Rico 158 00:09:43,320 --> 00:09:47,480 Speaker 1: than the salary of the job. So it's not a 159 00:09:47,559 --> 00:09:53,000 Speaker 1: very good policy. But also this focus on manufacturing, which 160 00:09:53,040 --> 00:09:55,520 Speaker 1: I don't think has paid off that well for Puerto Rico, 161 00:09:55,880 --> 00:10:00,600 Speaker 1: has led to neglect of other sorts of industry on 162 00:10:00,600 --> 00:10:04,320 Speaker 1: on the island. I mean, you mentioned earlier that they're 163 00:10:04,360 --> 00:10:06,959 Speaker 1: counting on tourism to do something. Well, it's a little late, 164 00:10:07,000 --> 00:10:11,240 Speaker 1: I'm afraid. UM. For the last twenty years, the amount 165 00:10:11,520 --> 00:10:15,120 Speaker 1: the number of tourist arrivals has been basically flat in 166 00:10:15,200 --> 00:10:19,800 Speaker 1: Puerto Rico since about If you compare this with the 167 00:10:19,880 --> 00:10:26,320 Speaker 1: Dominican Republic, which started off with less tourism than Puerto Rico, 168 00:10:26,440 --> 00:10:28,720 Speaker 1: now is much larger in terms of the number of 169 00:10:28,760 --> 00:10:32,719 Speaker 1: tourists that come there. The reason behind this looks very 170 00:10:32,800 --> 00:10:37,480 Speaker 1: much like the government of the Dominican Republic has increased 171 00:10:37,520 --> 00:10:42,080 Speaker 1: its spending year after year in support of tourism. In 172 00:10:42,160 --> 00:10:47,120 Speaker 1: Puerto Rico, the government spending on tourism has been basically flat. 173 00:10:47,520 --> 00:10:51,800 Speaker 1: The kind of infrastructure that might develop Puerto Rico, the 174 00:10:51,880 --> 00:10:56,000 Speaker 1: advertising campaigns that might develop tourism and Puerto Rico, those 175 00:10:56,040 --> 00:10:59,760 Speaker 1: haven't been there. UH. And the other examples come up 176 00:10:59,760 --> 00:11:03,920 Speaker 1: for UH. One case is agriculture, which has just been 177 00:11:03,920 --> 00:11:07,280 Speaker 1: devastated in Puerto Rico over the years of course it's 178 00:11:07,320 --> 00:11:11,120 Speaker 1: even more devastated now with the with the hurricane UH. 179 00:11:11,160 --> 00:11:13,680 Speaker 1: And of course the decline in agriculture is part of 180 00:11:13,720 --> 00:11:17,800 Speaker 1: economic progress has shift to a more urban and industrial economy, 181 00:11:18,120 --> 00:11:21,520 Speaker 1: but in Puerto Rico it went much further. UH. There 182 00:11:21,640 --> 00:11:26,080 Speaker 1: is no attention, little government extension programs to build up agriculture, 183 00:11:26,440 --> 00:11:30,160 Speaker 1: to find the appropriate things. Puerto Rico now imports, by 184 00:11:30,200 --> 00:11:35,000 Speaker 1: some estimates, over of its food. UM. Now it's not 185 00:11:35,520 --> 00:11:37,679 Speaker 1: the best place in the world for agriculture. A lot 186 00:11:37,679 --> 00:11:43,000 Speaker 1: of the island is is very mountainous. Nonetheless, there's certainly opportunities. 187 00:11:43,040 --> 00:11:46,880 Speaker 1: And furthermore, UH, there's very little export of crops to 188 00:11:46,880 --> 00:11:50,600 Speaker 1: the United States, whereas there are plenty of crops that 189 00:11:50,840 --> 00:11:53,120 Speaker 1: could be grown in Puerto Rico, and some are some 190 00:11:53,160 --> 00:11:56,800 Speaker 1: are it's not totally zero UH for export to the 191 00:11:56,880 --> 00:11:59,960 Speaker 1: US market, but very little has been done by government 192 00:12:00,040 --> 00:12:03,280 Speaker 1: to help with the finance, the marketing, the extension programs 193 00:12:03,840 --> 00:12:06,120 Speaker 1: that agriculture needs to get going. Those are just a 194 00:12:06,160 --> 00:12:09,200 Speaker 1: couple of examples of the neglect that has been there 195 00:12:09,360 --> 00:12:12,800 Speaker 1: for for quite a while. Well, they're always figuring out 196 00:12:12,800 --> 00:12:16,640 Speaker 1: new ways to give tax breaks to manufacturing, which is 197 00:12:16,679 --> 00:12:19,839 Speaker 1: not driving the economy. Now let me let me interrupt you. 198 00:12:19,920 --> 00:12:21,920 Speaker 1: Let me interrupt you for a second. So we we've 199 00:12:21,920 --> 00:12:27,600 Speaker 1: had these decades of failed economic policy experiment basically in 200 00:12:27,760 --> 00:12:31,400 Speaker 1: Puerto Rico, like Jordan was saying, companies like Google and 201 00:12:31,440 --> 00:12:35,520 Speaker 1: Tesla are looking at ways of getting the electrical grid 202 00:12:35,559 --> 00:12:39,520 Speaker 1: back online or the telecom infrastructure. Is a time for 203 00:12:40,000 --> 00:12:45,200 Speaker 1: more radical economic experiments that could encourage that sort of thing, 204 00:12:45,480 --> 00:12:47,760 Speaker 1: or do we really need to go back to basics 205 00:12:47,840 --> 00:12:50,800 Speaker 1: and see, all right, you have a tropical location, let's 206 00:12:50,800 --> 00:12:54,800 Speaker 1: put in a tourist infrastructure that that's that really works 207 00:12:54,800 --> 00:12:57,480 Speaker 1: and that could actually attract visitors. Well, I think the 208 00:12:57,520 --> 00:13:00,600 Speaker 1: answer is both. That is, it would be fine to 209 00:13:00,840 --> 00:13:04,240 Speaker 1: start developing the tourist industry, but at the same time, 210 00:13:04,640 --> 00:13:07,440 Speaker 1: there has to be something done about the electrical regrid. 211 00:13:08,040 --> 00:13:10,720 Speaker 1: You shouldn't let a good crisis go to waste, uh, 212 00:13:10,840 --> 00:13:14,240 Speaker 1: as somebody has many people have said. But the look, 213 00:13:14,840 --> 00:13:19,839 Speaker 1: the electrical system in Puerto Rico has been very inefficient 214 00:13:20,120 --> 00:13:25,480 Speaker 1: and very expensive. Uh. This is an opportunity to rebuild 215 00:13:25,480 --> 00:13:28,319 Speaker 1: it in a way that is not only less expensive, 216 00:13:28,559 --> 00:13:34,319 Speaker 1: more efficient, but also it will withstand hurricanes to a 217 00:13:34,440 --> 00:13:38,400 Speaker 1: degree possible and also could be green. After all, green 218 00:13:38,600 --> 00:13:44,440 Speaker 1: energy is becoming competitive in the United States, where where 219 00:13:44,559 --> 00:13:48,120 Speaker 1: energy costs or energy prices are much lower than in 220 00:13:48,160 --> 00:13:51,440 Speaker 1: Puerto Rico. Puerto Rico recons pay about twice what we 221 00:13:51,520 --> 00:13:55,320 Speaker 1: pay in the States for electricity, so certainly green energy 222 00:13:55,800 --> 00:13:59,800 Speaker 1: is viable. It could also be decentralized in a way 223 00:13:59,840 --> 00:14:03,480 Speaker 1: that you wouldn't have the whole island being out as 224 00:14:03,520 --> 00:14:06,400 Speaker 1: it virtually is is now. Just put in a whole 225 00:14:06,400 --> 00:14:08,960 Speaker 1: bunch of solar panels and you could probably produce a 226 00:14:08,960 --> 00:14:11,560 Speaker 1: lot of power, right Solar planels and wind as well 227 00:14:11,640 --> 00:14:16,400 Speaker 1: could could be very important. And incidentally, uh, you mentioned 228 00:14:16,400 --> 00:14:18,959 Speaker 1: Tesla and Google. I don't know about Google, but not 229 00:14:19,000 --> 00:14:22,960 Speaker 1: only Tesla, but also a German firm is already bringing 230 00:14:23,000 --> 00:14:27,520 Speaker 1: in many units for local generation of electricity through a 231 00:14:28,000 --> 00:14:32,240 Speaker 1: some sort of U sun and power and also with 232 00:14:32,480 --> 00:14:36,640 Speaker 1: battery systems that I frankly can't can't explain to. But 233 00:14:36,800 --> 00:14:39,520 Speaker 1: that's already going on. So it does seem like they're 234 00:14:39,560 --> 00:14:43,000 Speaker 1: going to need, you know, real major work to rebuild 235 00:14:43,000 --> 00:14:46,200 Speaker 1: the economy, rebuild the electrical grid, and some probably some 236 00:14:46,240 --> 00:14:49,520 Speaker 1: pretty innovative solutions. Let me turn to a topic that 237 00:14:49,880 --> 00:14:52,880 Speaker 1: interests me personally. Actually as part of my day job. 238 00:14:52,920 --> 00:14:55,800 Speaker 1: For the nine of the time that I don't actually 239 00:14:55,840 --> 00:15:00,120 Speaker 1: spend recording the Benchmark podcast, I edit our dated a 240 00:15:00,240 --> 00:15:06,120 Speaker 1: coverage of US economic indicators like employment, GDP, inflation, and 241 00:15:06,160 --> 00:15:09,480 Speaker 1: so on. So when I was thinking about this topic, 242 00:15:09,560 --> 00:15:13,200 Speaker 1: I was saying, well, let's look at economic data and 243 00:15:13,240 --> 00:15:15,880 Speaker 1: Puerto Rico. And then I was looking at economic data 244 00:15:15,920 --> 00:15:18,440 Speaker 1: and Puerto Rico, and there there really isn't much to 245 00:15:18,480 --> 00:15:22,800 Speaker 1: speak of. Either it either doesn't exist or the estimates 246 00:15:22,800 --> 00:15:26,920 Speaker 1: that are there are not really reliable. Um, why don't 247 00:15:26,920 --> 00:15:32,680 Speaker 1: we have any real reliable current estimates of GDP, labor market, 248 00:15:32,760 --> 00:15:35,520 Speaker 1: consumer spending like we do for the rest of the 249 00:15:35,600 --> 00:15:39,840 Speaker 1: United States. First of all, the United States agencies such 250 00:15:39,880 --> 00:15:43,200 Speaker 1: as the Bureau of Labor Statistics and the Bureau of 251 00:15:43,200 --> 00:15:48,320 Speaker 1: Economic Analysis are only responsible for parts of of Puerto 252 00:15:48,400 --> 00:15:51,440 Speaker 1: Rican data. Puerto Rico by and large has its own 253 00:15:51,560 --> 00:15:56,480 Speaker 1: own data system, and being outside the U S data system, 254 00:15:56,480 --> 00:15:59,400 Speaker 1: a lot of data is not well collected. I mean, 255 00:16:00,040 --> 00:16:03,800 Speaker 1: we have the gross national product data, for example, which 256 00:16:03,840 --> 00:16:07,200 Speaker 1: is the measure of growth and so on in the 257 00:16:07,240 --> 00:16:11,680 Speaker 1: Puerto Rican economy, but they use nineteen fifty four prices 258 00:16:12,480 --> 00:16:18,200 Speaker 1: in order to calculate currentum current output in the economy 259 00:16:18,360 --> 00:16:22,200 Speaker 1: nineteen fifty four. Now, I think the US government, the 260 00:16:22,200 --> 00:16:24,680 Speaker 1: Bureau of Economic Analysis, they they look at I think 261 00:16:24,760 --> 00:16:28,360 Speaker 1: it's prices, for example. Well, they're always updating it. I 262 00:16:28,360 --> 00:16:31,240 Speaker 1: mean in the United States. But as long as I've 263 00:16:31,280 --> 00:16:34,120 Speaker 1: been looking at Puerto Rico, it's nineteen fifty four. Well, 264 00:16:34,120 --> 00:16:38,280 Speaker 1: that's absurd. Things change tremendously. New products are produced that 265 00:16:38,360 --> 00:16:41,640 Speaker 1: weren't even in existence in nineteen fifty four. Uh, and 266 00:16:42,160 --> 00:16:45,280 Speaker 1: old products that were important in nineteen fifty four go 267 00:16:45,400 --> 00:16:49,040 Speaker 1: out of use. Those data are very unreliable. Puerto Rico 268 00:16:49,160 --> 00:16:53,080 Speaker 1: is invisible in the main economic statistics like the unemployment 269 00:16:53,160 --> 00:16:56,040 Speaker 1: rate and GDP that pertain to the whole US, even 270 00:16:56,080 --> 00:16:59,640 Speaker 1: though even though it's residents are considered US citizens, but 271 00:16:59,680 --> 00:17:03,360 Speaker 1: it's part of this status. This the status in the 272 00:17:03,440 --> 00:17:05,720 Speaker 1: United States where it's part of the United States but 273 00:17:05,760 --> 00:17:07,760 Speaker 1: not part of the United States. Well, it's a colony 274 00:17:07,760 --> 00:17:11,240 Speaker 1: of the United States. I mean that even though it's 275 00:17:11,280 --> 00:17:16,159 Speaker 1: meant it's people are are citizens. Um, it's controlled by 276 00:17:16,160 --> 00:17:19,320 Speaker 1: the United States. Ultimate authority is with the United States government, 277 00:17:19,720 --> 00:17:22,560 Speaker 1: but it has a certain degree of autonomy, and one 278 00:17:22,560 --> 00:17:24,000 Speaker 1: of the areas in which it has a great deal 279 00:17:24,040 --> 00:17:27,720 Speaker 1: of autonomy is in statistics, and the government simply has 280 00:17:27,760 --> 00:17:31,480 Speaker 1: not given priority to the development of good statistical systems. 281 00:17:31,520 --> 00:17:35,960 Speaker 1: And moreover, those the statistics that are gathered are often 282 00:17:36,000 --> 00:17:40,560 Speaker 1: politically used and politically controlled. I'll give you one example, 283 00:17:40,640 --> 00:17:44,080 Speaker 1: when the head of the Institute of Statistics in Puerto 284 00:17:44,160 --> 00:17:47,520 Speaker 1: Rico realized that there were serious problems with the consumer 285 00:17:47,600 --> 00:17:52,120 Speaker 1: price index and recalculated it. The government told him not 286 00:17:52,200 --> 00:17:55,040 Speaker 1: to let this go public, and after a while he 287 00:17:55,160 --> 00:17:58,000 Speaker 1: let it go public anyway, and they tried to fire him. 288 00:17:58,920 --> 00:18:01,000 Speaker 1: They didn't succeed, but because it had a certain amount 289 00:18:01,040 --> 00:18:05,520 Speaker 1: of autonomy. Another example is that the the legislature in 290 00:18:05,560 --> 00:18:09,960 Speaker 1: Puerto Rico passed the law that said the government Development 291 00:18:10,000 --> 00:18:13,520 Speaker 1: Bank should not release any economic statistics in the year 292 00:18:13,920 --> 00:18:17,960 Speaker 1: before up leading up to an election. If we got 293 00:18:18,000 --> 00:18:20,440 Speaker 1: any of that in the United States, you would you 294 00:18:20,440 --> 00:18:25,160 Speaker 1: would have the endless congressional hearings and recriminations and so on. Right, So, 295 00:18:25,520 --> 00:18:29,879 Speaker 1: those were clearly efforts to use the data system politically 296 00:18:29,880 --> 00:18:32,280 Speaker 1: which were problems. Now, I mean, I don't mean it's 297 00:18:32,320 --> 00:18:36,760 Speaker 1: all absolutely useless. I think that the employment data, for example, 298 00:18:37,040 --> 00:18:40,199 Speaker 1: are of some use. Then I just we mentioned that 299 00:18:40,280 --> 00:18:44,560 Speaker 1: before the storm's hipped. The August data showed that which 300 00:18:44,600 --> 00:18:47,119 Speaker 1: is the most recent data we have, that unemployment was 301 00:18:47,200 --> 00:18:51,760 Speaker 1: running at almost twelve in Puerto Rico. Now I hesitate 302 00:18:51,840 --> 00:18:55,480 Speaker 1: to guests. I mean, if they're twelve percent employed, that 303 00:18:55,520 --> 00:18:58,720 Speaker 1: would be high. The Puerto Rican debt is you know 304 00:18:58,760 --> 00:19:02,679 Speaker 1: that that's the overhang on this whole situation. But if 305 00:19:02,720 --> 00:19:06,600 Speaker 1: you can boil that down to uh ten seconds, how 306 00:19:06,680 --> 00:19:08,520 Speaker 1: how is that going to play out? Well, I just 307 00:19:08,520 --> 00:19:12,280 Speaker 1: say with the debt, the President said it has to 308 00:19:12,280 --> 00:19:14,400 Speaker 1: be wiped out. He hasn't got authority to do that, 309 00:19:14,600 --> 00:19:17,320 Speaker 1: but they have to find some way to greatly reduce 310 00:19:17,400 --> 00:19:19,399 Speaker 1: the burden of the debt and Puerto Rico or the 311 00:19:19,480 --> 00:19:23,840 Speaker 1: situation is basically hopeless. Well, on that note, on that 312 00:19:23,920 --> 00:19:27,320 Speaker 1: hopeful note, we're gonna have to leave it there. Arthur, 313 00:19:27,440 --> 00:19:30,480 Speaker 1: thank you so much for speaking with us today. Thank you. 314 00:19:33,320 --> 00:19:35,679 Speaker 1: Benchmark will be back next week and until then, you 315 00:19:35,680 --> 00:19:38,600 Speaker 1: can find us on the Bloomberg terminal, Bloomberg dot com, 316 00:19:38,680 --> 00:19:42,440 Speaker 1: or Bloomberg app, as well as on Apple Podcasts, pocket casts, 317 00:19:42,480 --> 00:19:45,000 Speaker 1: and Stitcher. While you're there, take a minute to rate 318 00:19:45,000 --> 00:19:47,320 Speaker 1: and review the show. Some more listeners can find us 319 00:19:47,560 --> 00:19:49,040 Speaker 1: and let us know what you thought. Of the show. 320 00:19:49,200 --> 00:19:52,040 Speaker 1: You can follow me on Twitter at at scott Landman, 321 00:19:52,359 --> 00:19:54,920 Speaker 1: and Jordan Holman is at at j O R t 322 00:19:55,240 --> 00:19:59,439 Speaker 1: y N Journals. Benchmark is produced by Sarah Patterson, the 323 00:19:59,480 --> 00:20:03,159 Speaker 1: head of Burt Podcasts Instagrancesca lead. Thanks for listening, to 324 00:20:03,240 --> 00:20:04,000 Speaker 1: see you next time.