Tuesday, July 14, 2015

Austerity vs. New Deal Funding: Two different approaches to economic problems in Puerto Rico

(The city hall of Hatillo, Puerto Rico, built with funding from the Federal Emergency Relief Administration (FERA). Photo taken by FERA, ca. 1935.)

Lately, there have been proposals to apply austerity to Puerto Rico's economic problems. For example, a recent report created by supply-side economists (a report that the governor of Puerto Rico has embraced) calls for a reduction of vacation time, medical care, and wages for low-income workers, as well as firing teachers and making it easier for companies to engage in mass layoffs. And, while the report makes some halfhearted attempts to request sacrifices from the super-wealthy too, don't expect too much to come from it. For example, with respect to debt relief for Puerto Rico, "The island’s creditors - some of which are litigious 'distressed debt' hedge funds that specialize in such situations - have indicated that they will not accept even a mild restructuring, and have formed various groups and hired lawyers to protect their interests." 

And this is usually how austerity works in the modern world. Those with money and political connections can avoid the pain, while those without money and political connections shoulder the entire burden. This is why the Forbes 400 has been adding billions of dollars to their already-bloated wealth while, at the same time, the number of homeless children in America has reached record numbers, the American middle-class has shrunk in every state, and "virtually every state" has instituted a system of taxation that disproportionately burdens the middle-class & poor. 

But austerity is not the only policy option. When Puerto Rico faced economic hardship in the late 1920s and early 1930s (because of two highly destructive hurricanes and the Stock Market Crash of 1929) New Deal policymakers decided that, instead of punishing Puerto Ricans, as austerians are eager to do, they would help them. And one of the major ways they helped them was by funding hundreds of work projects through the Federal Emergency Relief Administration (FERA). Here are some examples (see the end of this blog post for source of information & photos)... 

Above: A FERA-funded water line project in San Juan, Puerto Rico, ca. 1933-1935. New Deal policymakers, unlike austerians, felt that public works jobs were a great way to combat both unemployment and infrastructure problems. And much of the infrastructure work they facilitated is still in use today, all across America and her territories - a fact that austerians are willfully oblivious to.

Above: FERA-funded medical services in Jayuya, Puerto Rico, ca. 1935. New Deal policymakers, unlike austerians, felt that medical services for low-income people should be improved not cut back. Hence, FERA enabled "aid to [the] insular health department in combating epidemics, antimalaria and antihookworm campaigns, studies and surveys of health conditions, construction of new hospitals and medical centers, repairs and additions to those already existing, and purchase of hospital equipment and supplies."

Above: This school in Utuado, Puerto Rico, received additions and repairs thanks to FERA funding, ca. 1933-1935. New Deal policymakers, unlike austerians, felt that educational opportunities should be increased during economic down times, not cut back. All across Puerto Rico, FERA gave "aid to established schools by employment of teachers, aid to school lunchrooms, new schools in rural districts, nursery schools, and night schools for adults and through the work relief program, construction of new schoolhouses and repairs to others."

Other FERA-funded projects in Puerto Rico included road construction; bridge construction; farm & garden projects; construction of recreational facilities (e.g., tennis and basketball courts); flood control projects (e.g., levees); resettlement housing (much of Puerto Rico's housing was destroyed by hurricanes in 1928 and 1932); production of clothing for low-income Puerto Ricans; art classes; symphonies; pest control; and much more. 

After FERA wound down, another New Deal program kicked in: The Puerto Rico Reconstruction Administration (PRRA). And, as a recent dissertation from City University of New York highlights: "the PRRA constructed a new public infrastructure capable of addressing three interrelated goals: increasing life expectancy through concrete interventions in public health; providing more egalitarian public access to a safer and more permanent built environment; and limiting the private corporate control of Puerto Rico's natural resources. Designed by Puerto Rican engineers and built by Puerto Rican workers, PRRA public works projects made concrete contributions to the physical security of millions of Puerto Ricans through the construction of hurricane-proof houses, schools, hospitals, roads, sewers, waterworks, and rural electrification networks." And these investments "made lasting contributions to local social and economic life."

In addition to funding from FERA and PRRA, struggling Puerto Ricans also received assistance from programs like the Works Progress Administration and the Civilian Conservation Corps (see my blog post, "A New Deal for Puerto Rico").   

So, what do you think makes for a more equitable and healthy culture: Reducing medical care for low-income Puerto Ricans, while the super-wealthy use their island as a tax haven, or hiring them into programs to improve their lives and their infrastructure? 

(All photos, and all information about FERA, from the combined report, "Second Report of the Puerto Rican Emergency Relief Administration, from September 1, 1934, to September 30, 1935 and Report of the Federal Emergency Relief Administration for Puerto Rico, from October 1, 1935, to June 30, 1936," Washington, DC: U.S. Government Printing Office, 1939. Note: Funding for the Puerto Rican Emergency Relief Administration came from FERA.)

No comments:

Post a Comment