The Not-Quite States of America

by Doug Mack

  As we finished up, he got out his guitar again and played some Hendrix as a digestif.

  I looked around the room and saw that everyone else was looking around, too. Exchanging glances. This place was like a movie. Fucking crazy, man. But we’re all in it together. You gotta be true to your home, you know?

  SEVERAL TIMES during my travels in the territories, I heard state-dwellers ask locals why they stayed, or why they’d come back. It was meant as idle small talk, but the underlying condescension was tangible: We’ve got it better back in the states.

  The locals heard it. There was always a pause, and for the briefest of moments their muscles tensed before they answered, “Because it’s home.” As dysfunctional as the territories can be—and I met no one who disputes that they can be tremendously dysfunctional—their residents are still proud of their homelands and have no interest in your pity or your patronizing.

  Every time I heard someone like Carlos tell stories of struggling through, I thought, These places are cool. These people are wonderful. Why the hell doesn’t anyone in the states know anything about them? This, in turn, led to the question that had long been nagging me: When did Americans in the states stop caring about the territories? When and why did they drop out of the national discourse?

  My list still started with the factors that I’d been thinking about since Guam:

  1. The primary purpose of the USA’s nineteenth century expansionist push was to show the world that we were a real-deal power. Acquiring an empire was an end unto itself, the geopolitical version of buying a Ferrari or a flashy Rolex. What happened to the places, and their people, was beside the point.

  2. The Insular Cases, in setting up the “foreign in a domestic sense” label and the legal difference between incorporated and unincorporated, added more steps to the statehood process and also set into law the idea that the people of these islands were alien, not true Americans. It set them apart from the rest of the nation, not just legally but psychologically.

  3. The United States moved on to bigger battles (literally) around the world, battles that overshadowed the territories in the realm of foreign affairs, even though the territories are actually a domestic issue.

  To these three factors, I now had more to add:

  4. During the rise of postwar decolonization movements, empire became toxic to the national brand, opening the USA to Cold War propaganda that it wasn’t the beacon of democracy it claimed to be. The federal government didn’t want to get rid of the territories (hence the “commonwealth” label) but it also tried not to talk about them too loudly. Out of sight, out of mind.

  5. In 1959, we hit fifty states. In the process, we stretched the nation beyond its sea-to-shining-sea identity—we fulfilled our Manifest Destiny assignment and got extra credit by doing a bit more. The nation felt complete, numerically and geographically. Today, we have gone the longest stretch in our nation’s history without adding any new states; less than a quarter of Americans were alive when Hawaii and Alaska got the promotion. We’re no longer accustomed to this change occurring.

  6. As the territories have faded from view, ignorance and silence have bred more ignorance and silence. It’s an inertia of awareness: a discussion at rest tends to stay at rest.

  7. As Bob the Gringo would be happy to tell you, the territories haven’t been able to make up their own minds, collectively, about their preferred political status (or, in the case of American Samoa, birthright citizenship). Most territory residents agree that the status quo is not satisfactory, but the solution is in dispute. As people told me time and again, there’s a profound feeling of unsteadiness. And when your footing’s already precarious, every potential major change can seem like a mountain, every slope slippery. With the notable exception of Puerto Rico’s independence movement, there have been few highly visible acts of protest or of political pressure from the territories regarding the political status or, for that matter, any other issue relating to the territories, such as funding disparities in comparison to the states. None of the territories have yet put Congress on the spot and requested statehood or independence. You don’t hear stories of pro-independence sit-ins on Guam or mass marches demanding voting rights in the U.S. Virgin Islands. The status issue is not a celebrity cause, has no series of 5K runs, no annual telethons, not even a social-media hashtag. The lone organization advocating for the rights of the territories, collectively, is the We the People Project, with one employee, founder Neil Weare—and even he has critics in the territories, people who disagree with his court-oriented tactics or, even if they agree, see him as yet another outsider meddling in their local affairs.

  8. Those rare times when the territories do come to the attention of people in the states, we almost always talk about them separately: Here’s something that’s happening in Puerto Rico or on Guam or in American Samoa. That’s true even in the territories, even among people who are the harshest critics of the political-status setup—there’s an oddly myopic lack of acknowledgment of the parallel histories and shared concerns. In every territory, discussions about political status and its consequences happen in a vacuum (with the exception of Guam and the CNMI, where there’s typically a nod to the Marianas neighbor). Even at the federal level, the territories are treated in a piecemeal fashion. There’s been no single act or piece of governance that lays out an all-encompassing policy for the present-day territories. The Office of Insular Affairs—part of the Department of the Interior—is the official federal overseer of the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands, as well as the American-administered programs in the freely associated states. Puerto Rico, however, is under the purview of the Puerto Rico Federal Affairs Administration. But it’s only by considering the territories as a whole that we—and they—can see the damning common ground: the comparative lack of federal investment or concern, the frequency of local corruption, the ways the early decades of U.S. power follow the same exact template. One instance is a fluke, two a coincidence . . . but five? Five’s an outrage.

  9. Finally—and I think this may be the most significant—we forget about the territories because, quite simply, they’re not states. This puts them immediately outside the collective conversation, because our concept of ourselves is that of a nation of states—that’s what’s on the flag, in the maps, in the songs, in our very name. In 1900, we talked about the territories because they had the potential to be states, but when the Insular Cases effectively shut that door, and they continued to be not-quite states, our attention waned.

  The territories are neither united nor states nor part of either American continent, which makes it hard for them to assert their legitimacy as part of the United States of America. It’s understandable that so many people think of them—implicitly or explicitly—as foreign. But when you consider everything tangled up in the territories—issues of basic human and political rights, issues of immigration and military readiness, issues of regional politics and our reach in the world—it’s clear that they are integral to our national story, even today. And there’s the rub: The territories are the most important domestic-policy issue Americans aren’t talking about, precisely because we don’t think of them as a domestic-policy issue at all.

  MY PLAN for the next day was to drive La Ruta Panorámica—the Panoramic Route—a two-lane-at-best byway both scenic and treacherous, spanning the east-west width of Puerto Rico’s mountainous middle. The route is steep like a roller coaster, coiled like an old-school telephone cord, with mountain vistas that you can’t really enjoy because to take your eyes off the road is to miss the oncoming propane-tank delivery truck that just barreled around the blind curve.

  But it turns out Monday morning is a good time to drive crazy, dangerous roads. The weekend traffic was all gone, the hauling-stuff traffic hadn’t yet begun. It hadn’t previously occurred to me, but Puerto Rico has not only the most urban setting of any territory, but also the most rural—it’s big enough to have wide-open spaces and lonely expanses w
here you only see one house in your field of vision. At one overlook, near the middle of the island, I could see the Atlantic, the Caribbean, and much of the island; with the aid of one of the requisite scenic-vista telescopes, I spotted a broad plain with perhaps forty wind turbines in the compressed foreground, and, far to the east, the island of Vieques.

  I’d expected La Ruta Panoramica to have road-blocking scrums of goats and shells of burned-out cars and more signs of economic catastrophe, visual evidence of the fact that per-capita income in Puerto Rico was half that of the poorest state, Mississippi; and that 37 percent of households received food stamps. But while there were mountain shacks and cinder-block ruins, they were far outnumbered by hale, two-story, freshly painted abodes—many of them just inches off the road—with gleaming Honda Fits and Ford pickups in the driveways. It was a lovely drive.

  And then I got to Ponce.

  On the drive into the city center, I passed countless once-proud Neoclassical manors, their plaster and red tile now crumbling and overtaken with tufts of weeds and bushes and even small trees, more small-scale nature preserve than human habitation.

  “Ponce is Ponce and everything else is parking,” goes the local saying, and the city has a reputation as being proud, even stuck-up. The central plaza—one of the most famous on an island full of them—bore a lingering air of grandeur, housing a church, a historic firehouse with a striking red-and-black-striped exterior, and a large fountain with spitting lions, moved here from the New York World’s Fair in 1939. But the plaza was strikingly empty of foot traffic—no break-dancing teenagers, no intertwined couples on the benches—while on the surrounding sidewalks, I had to step into the street two or three times per block to get around clusters of people surrounding lottery-ticket vendors. There were countless vacant storefronts with signs reading SE VENDE, For Sale, and a rainbow of graffiti tags on most windows—pink on the onetime law office, white at the former sandwich shop—while others were simply boarded up.

  The roots of Puerto Rico’s economic skid were something of a Greatest Hits of Territorial Dysfunction. They were not a freak convergence of problems so much as the inevitable if especially vicious result of several broader trends that have been occurring in all the territories for decades. Ineptitude and mismanagement at the federal and local levels, narrowly focused economic development efforts built on shaky grounds, issues relating to the political status—it’s all here.

  One of the early cracks in the foundation began to form in 1996, when Congress decided to repeal a set of tax breaks it had set up in 1976 to lure corporations to the U.S. territories. One industry that took advantage of this was pharmaceuticals, with companies such as Pfizer opening manufacturing facilities in Puerto Rico; at their peak, nearly ninety such plants dotted the island. But, just as corporations left other territories once their specially tailored economic incentives dried up (such as the garment factories in the CNMI), Big Pharma didn’t linger in Puerto Rico after the tax breaks were all gone in 2006. Two years later, the Great Recession hit the entire nation. This one-two punch wiped out around half of the island’s manufacturing jobs.

  The Puerto Rican government had a tried-and-true plan for raising funds, though: Let’s sell some municipal bonds! Lots and lots of bonds! Make it rain! As it happens, these bonds were especially enticing because, unlike bonds sold by states, those sold in the territories (which you can buy no matter where you live) are exempt from all local, state, and federal taxes. “It was a lot easier to go out and borrow, as opposed to making tough decisions,” Luis Fortuño, the commonwealth’s governor from 2009 to 2013, said in remarkably clear-eyed (if not quite contrite) hindsight. The result of all this was that, as Bloomberg View observed, “the competitive advantage made it easy for Puerto Rico to double its debt in 10 years by selling bonds to plug annual budget deficits and pay for operating expenses—the combination that brought New York City to the brink of bankruptcy in the 1970s.”

  As bills started to come due, there was another matter that compounded the problems: the Puerto Rican Constitution contained a mandate that, as the commonwealth made payments, bond holders were first in line, even before funding for the basic services that are, really, the government’s core function. This, predictably, meant that problems with those basic services kept spiraling downward, along with the economy. The commonwealth’s government and utilities amassed more than $73 billion in debt by 2015.

  When states have similar crises, they can restructure their debt through Chapter 9 bankruptcy. The territories? Read the fine print: Not applicable. Chapter 9 rules used to apply to Puerto Rico (though not the other territories), until 1984, when a one-line provision was stuck into a congressional bill, eliminating the commonwealth’s access to this protection. Why, precisely, it was added is something that no one seems to be able to identify (not Congress, not various news outlets that have investigated), though it was hardly the first territory-related law to be cloaked in mystery and confusion and to pass without any say from the people of the affected islands. It was also, of course, not the last.

  In late 2015 and early 2016, as Puerto Rican leaders worked with Congress to help the commonwealth restructure its debt, secretive opponents emerged from the woodwork. Two groups, one called Main Street Bondholders and another called the Center for Individual Freedom, lobbied Congress not to assist Puerto Rico. Both were generally believed to be the work of the so-called “vulture” hedge funds that held around 30 percent of Puerto Rico’s debt and were known for their aggressive efforts to extract profits from faltering economies—they thrived on instability. The New York Times reported that the Main Street Bondholders were connected to DCI, “a Republican public relations firm that specializes in ‘AstroTurfing’—orchestrated lobbying campaigns designed to look like grass-roots efforts. DCI’s clients include the hedge fund BlueMountain Capital, which has been one of the most aggressive opponents of federal intervention in Puerto Rico.”

  In the meantime, Puerto Rico had tried a few other tactics to bolster its economy, using methods that had also been tried in other territories: increase certain everyday taxes (as Carlos the chef had lamented) but offer tax breaks to rich people. The tax breaks came in 2012, through Acts 20 and Act 22, and were intended to woo investors. Act 22 offered full tax exceptions on capital gains, dividends, and interest to anyone who lived in the territory for more than half the year. Supporters of the laws boasted that that would bring fifty-five thousand new jobs to Puerto Rico. Reality, however, missed the mark: according to later assessments, the true number was around fifty-eight hundred jobs. According to some observers, Acts 20 and 22 also increased income inequality, which was already higher than in any state, according to U.S. Census data. (The rates in the other territories were not measured, but it’s safe to assume they were also quite high.)

  A subtler and more long-term issue was the 1920 Jones Act (the law that Mars had told me about during our barbecue-feasting on Guam), which mandates that to deliver goods directly from one U.S. port to another, a ship must be American-built, American-crewed, and sail under an American flag. Almost all ships do not meet this criteria, so they can’t go straight from the U.S. mainland to Puerto Rico. Inefficient routes lead to higher prices, including an extra fifteen cents per gallon of gas, according to a 2015 Manhattan Institute report. Eliminating the Jones Act wouldn’t be a panacea—the USVI, the CNMI, and American Samoa are exempt, but prices are high on those islands, too—but it would be a start.¶

  Back in Ponce, there were some signs of hope. My hotel, a colonial-era classic, had recently been refurbished, as had the Museo de Arte de Ponce, the latter to the tune of $13 million. An architecture school buzzed with students working on models in a streetfront workshop; their brightly colored fixed-gear bikes were locked out front. A few doors down, there was a long line every night for the sublime fruit ices at King’s Creams on the plaza.

  And right outside King’s, every night, sat a gregarious disabled military veteran named Felix, who was adamant that
he didn’t want money, just a meal. He went to the Veterans Affairs clinic for diabetes treatment every day, he told me, and he was happy with his care. But he couldn’t work, didn’t have a home, couldn’t travel in search of other opportunities elsewhere.

  “When the United States gets a cold, Puerto Rico gets, like, double pneumonia,” one longtime Ponce resident, an academic, told me. “Here [in Ponce], maybe triple.” He sighed. “People in the government here have not been doing a very good job.”

  As in the CNMI, the situation made for unexpected political positions. In Washington, D.C., many congressional Republicans wanted the federal government to simply take over the commonwealth’s finances, while Democrats favored letting Puerto Rico work it out on its own, including allowing bankruptcy restructuring without conditions. Puerto Rico’s government, for its part, won no new fans when, in early 2016, it failed to reach an agreement with lenders, and the power company “warned that failure to make payments on that debt could lead to delays in fuel shipments and blackouts across the island.”

  As a New York Times editorial put it, Puerto Rico’s financial problems are “a reminder that benign neglect has terrible consequences for millions of Americans.” What the editorial didn’t note was that, although these consequences have been particularly acute for Puerto Rico and affect an especially large number of people there, the problems and their roots are similar across the territories.

  AFTER TWO DAYS in Ponce, I pressed on. Although there were entire regions of Puerto Rico I hadn’t visited—another trip, I promised myself—there was one place I needed to see now, a place that seemed to call me with a particular urgency: the island of Vieques. It’s a “double territory,” as César in Arroyo had put it, not quite part of Puerto Rico, which is not quite part of the United States. Vieques has a population of nine thousand on its twenty-one-mile-wide landmass—twice the land area of Saint Thomas, a fifth of the population—with two small towns, Isabel Segunda and Esperanza, and a scattering of other houses and developments. Some 70 percent of the island is a U.S. Fish and Wildlife refuge. Wild horses roam about and a traffic jam is one other car ahead of you.