Este artículo no está disponible en español.


Emulating (The Worst Of) The United States

by Lance Oliver

December 3, 1999
Copyright © 1999 THE PUERTO RICO HERALD. All Rights Reserved.

If your idea of a perfect Thanksgiving Day evening consists of a good night's sleep, well fed and properly thankful for the gifts life has provided, then consider the woman in Puerto Rico who set out at 11 p.m. that night to camp in front of the doors to a toy store to ensure she was first in line in the morning to go shopping.

She may have slept on a sidewalk, but she was far from alone. Crowds massed at stores at abnormal opening hours such as 6 a.m. to take advantage of post-Thanksgiving Day sales.

Some shopping malls reported sales that were 10 percent above those recorded last year during the post-Thanksgiving weekend. That increase was larger than what was generally reported in the United States, where record low unemployment, a rising stock market and flush times have consumers feeling very confident indeed.

What is going on in Puerto Rico? Consumerism copied from the world's undisputed champion consumers, the people of the United States.

One of the strengths Puerto Rico has extracted from its five centuries of foreign control is that it has sometimes borrowed the best from other cultures. It retains the family-centered social fabric that other Latin American countries also developed from their Spanish and Catholic origins, but also has the strong commitment to democracy and economic freedom it picked up from the United States.

But the flip side is that sometimes Puerto Rico takes the worst of both worlds, picking up such traits as the Latin America machismo that leads to discrimination against women and domestic violence, along with the materialistic consumerism of the United States.

The Christmas and Three Kings season brings out the latter.

Like the United States, unemployment is low in Puerto Rico, but it is still nearly three times the stateside rate. Incomes are still half that of the poorest state. But many Puerto Ricans are doing their best to spend like the wealthier folks to the north. When they evaluate their standards of living, they do not compare themselves to Mexicans or Costa Ricans, but to Americans.

By any measurement, however, the wealth is not there to support this level of spending. Unemployment is higher, wages are lower, inflation is higher. To live like an American, the average person in Puerto Rico must spend not just tomorrow's wages, but next year's wages, today. To drive a gas-guzzling monster-sized sport-utility vehicle completely unsuited to a small, crowded island, and nearly impossible to park in a normal San Juan parking space, they spend their childrens' inheritance.

Business people in Puerto Rico cry for the need for a local capital market, but there is no local capital reserve. There are no local savings. With few exceptions, the savings rate in Puerto Rico has been negative for decades.

One sad result of all this is the number of bankruptcies. No longer is bankruptcy seen as a stain on one's reputation, as it once was, but as just another financial maneuver.

"There has been a change in values. People are less reluctant to file for bankruptcy," said U.S. Bankruptcy Court Judge W. H. Beckeley. Of course he made those comments about what he saw as a growing problem in 1981, when about 850 bankruptcies were filed.

This year, an estimated 18,000 will be filed in courts in Puerto Rico.

The statistics are worse, in some ways, than they at first appear. In 1991, for example, commercial bankruptcies accounted for about 10 percent of all cases filed. Today, they amount to less than 1 percent.

Virtually each and every one of those 18,000 bankruptcies this year means not a business that failed, but a family that failed.

What future does this paint? Just like the United States, Puerto Rico is undergoing a demographic shift as the baby boomer generation moves into middle age and edges into retirement. Yet what kind of retirement can be expected for people who have almost no savings and are in debt? If they live off their children, their sheer numbers will make it a heavy burden.

How long can Puerto Rico keep spending itself into hock? We will probably learn the answer the hard way, beginning the moment the U.S. economy finally ends its unprecedented peacetime expansion and enters a recession that will burst Puerto Rico's very fragile bubble.

In one of his recent syndicated columns, William Safire wrote about how shopping has become entertainment in the United States. Each bargain found becomes a triumph, another win in the game. Writing after a visit to a popular outlet mall, Safire concluded that this is, increasingly, what Americans do for fun.

In Puerto Rico, people do the same, but on smaller incomes.

Such an attitude may make for a Merry Christmas, a Happy New Year and a lavish Three Kings Day, but the February bills will be somber indeed. Sooner or later, the bills always come due.

Lance Oliver writes The Puerto Rico Report weekly for The Puerto Rico Herald. He can be reached by email at:

Self-Determination Legislation | Puerto Rico Herald Home
Newsstand | Puerto Rico | U.S. Government | Archives
Search | Mailing List | Contact Us | Feedback