What do General Motors and the Commonwealth of Puerto Rico have in common? Both experienced deep financial distress and organizational dysfunction in recent years, culminating in bankruptcy or the legal equivalent thereof.
And in each case, the fundamental cause was not mistakes or misconduct by the people in charge - though there were plenty of both. The problem was that, in a real sense, no one was in charge.
Clear and consistent lines of authority and accountability are the hallmarks of any well-run organization.
At GM, however, the buck stopped nowhere. Legally binding but conflicting demands of shareholders, unions, federal, state and local governments, even car dealers, buffeted the company for decades, distracting from the basic mission - making popular cars - and forcing it to meet obligations with borrowed cash. Finally GM collapsed into federally subsidized bankruptcy in 2009.
Acquired from Spain by the United States in 1898, and subject to American sovereignty and policy experiments ever since, Puerto Rico is governed by, or financially beholden to (partial list): Congress; the Treasury Department; bondholders, public-sector unions; two machine-like, island-based political parties; and the U.S. shipping industry - which gets rich at Puerto Rico’s expense via a protectionist law barring lower-cost, non-U.S. vessels from supplying the island.
With growth and reform stymied, Puerto Rico lived off artificially easy credit - U.S. law made its bonds “triple tax-free” - until running out of cash in 2016. The devastation of Hurricane Maria in 2017 compounded the catastrophe.
The current uprising against Gov. Ricardo Rosselló, amid corruption charges and anger at his inner circle’s nasty online chat messages about constituents and other politicians, is both entirely understandable, given Puerto Rico’s suffering - and not likely to resolve the island’s predicament.
Whether Rosselló stays or steps aside, Puerto Rico’s incoherent lines of political authority will remain.
Their origins lie in the island’s murky political status - it is neither independent like, say, its neighbor Jamaica, nor a full-fledged U.S. state, but a “commonwealth” with all sorts of cobbled-together rules for receiving federal aid, paying federal taxes and participating (without a vote) in Congress.
True, Puerto Rico has a new pseudo-constitution: the 2016 PROMESA Act, a bipartisan law that gave the island a version of the deal GM got - debt relief via bankruptcy, in exchange for structural reform.
PROMESA created an independent board to supervise the process and guarantee fiscal responsibility, much like the financial control board Congress imposed on the District, when a similar financial crisis struck that semiautonomous city’s government in the mid-1990s.
Like residents of the District of Columbia, Puerto Ricans, including Rosselló himself, resent having to obey an unelected seven-person board, known on the island as “la junta,” and it is a rhetorical target of some demonstrators now.
In reality, though, only the board can mediate competing claims on Puerto Rico’s resources with a measure of impartiality. It remains the island’s best hope of restoring solvency and economic growth, as the now-booming District’s post-control board experience shows.
When and if PROMESA runs its course (perhaps a decade from now), the island will again face the same three choices: perpetuating the commonwealth, statehood - or independence.
Thus far, several referendums among Puerto Rico’s voters have supplied no clear answer. To understand their ambivalence, consider another analogy: Puerto Rico is to the United States as Greece is to the European Union; that is, an economically uncompetitive but not fully sovereign entity, joined in a monetary union with a far larger and stronger neighbor.
It’s an unsatisfactory situation, fraught with indignities, but - because of the access it provides to a strong currency (the dollar for Puerto Rico; the euro for Greece) - not so easy to renounce.
Statehood would give the island a direct say in the federal policies that affect its 3.2 million people (more, it’s worth noting, than the population of some 20 states). This option is increasingly popular on the mainland - 66 percent in favor, according to the latest Gallup Poll. But Republicans resist it as a plan to tilt the Senate to the Democrats; many Puerto Ricans, too, are cool to an idea that could compromise their distinctive identity and culture.
Independence would establish definitively that Puerto Rico runs Puerto Rico. Precedents exist: The United States restored sovereignty to the Philippines, acquired simultaneously with Puerto Rico, in 1946. The problem is that the vast majority of Puerto Ricans, U.S. citizens all, don’t want it.
“Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed,” Thomas Jefferson wrote, in a passage of the Declaration of Independence that explains why the American colonies and the British Empire had to go their separate ways - and why Puerto Rico and the United States cannot.
Charles Lane is a columnist with The Washington Post.