If you haven’t read the article about Puerto Rico in yesterday’s NYT, I would strongly recommend it as a case study on American politics. It isn’t pretty.
The background of the story is that the island’s debt is unsustainable, which means that some creditors are going to lose a lot of money, the federal government will have to provide a bailout, or both. The story tells us that hedge funds with big speculative investments (at very high interest rates, naturally) are fighting through the political system to make sure that they aren’t the losers in this process. Their weapons are campaign contributions, lobbyists, and Astroturf political groups. Thus far, they are at least holding their own in the battle.
According to the article, Rubio, given his large number of Puerto Rican constituents, is in the middle of this discussion. He initially supported the idea of a bankruptcy process, but changed his mind after some of the hedge funds in question started contributing money to his campaign. He now sees bankruptcy only as a “last resort,” whatever that means.
There are a number of things to take away from this:
- Bernie Sanders really should jump on this article if he truly wants to make his case that the system is rigged against the average citizen.
- Notwithstanding their rhetoric, Republicans do not oppose bailouts as long as they go to their kind of people.
- Rubio didn’t exactly cover himself in glory by repudiating his previous commitments on immigration. This is additional evidence that his backbone is a lot more flexible than he would have you believe.