Forbes’ Puerto Rico Post That Pissed Off Island’s Senate President

Jan 6, 2014
10:53 PM

Now everyone in media knows that the Forbes.com editorial model is not truly transparent journalism, but that isn’t stopping the incredibly raw reaction to a viral January 3 opinion piece by contributor Larry McDonald about Puerto Rico’s incredibly messed up economic crisis.

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You can read McDonald’s entire 6-page column here, but if you don’t want to read the entire piece, here is a quick summary: the United States’ “Socialist experiment” is over and it has created chaos on the island. A ridiculous debt level, high unemployment, a workforce that lives off entitlements, etc. Granted, McDonald comes across as a bit of a superior snob in his characterization of Puerto Rico, but there is no denying the fact that the current colonial system is dead. It ain’t working, folks, and the United States has a problem, whether it likes it or not. As the author writes (with the bad Miami joke to boot):

Texas’s state government debt is relatively modest, near $40 billion, or $1,577 per resident. Puerto Rico’s public debt of $53 billion is nearly $15,000 per person, but when we add inter-governmental debt the mountain rises to $70 billion, or $17,500 per person. Throw in a violently under-funded pension and healthcare obligations, the noose approaches $160 billion. That’s $46,000 per person, enough to make one think about trying a swim for Miami.

Then there is this:

Politicians can only promise so many goodies as they try to get elected, but in the end somebody has to pay the bill. Why would you lend money to any person, organization or country that doesn’t provide timely information of their finances?  There’s less transparency on Puerto Rico’s true financial health than there was coming out of Lehman Brothers in 2008.  As someone who wrote the New York Times bestseller on Lehman’s demise, I’m here to tell you, Puerto Rico’s accounting smells to high heaven. Audited financials for the fiscal year ending June 2012 only became available to investors a year and a half late, finally arriving in September 2013. Five years after Lehman, this is outrageous.

And the whole Puerto Rico is a socialist country theme? Hilarious. Has McDonald ever been to Plaza Las Américas? Socialists don’t wait for hours to eat at The Cheesecake Factory.

We digress.

Listen, much has been written about this crisis before McDonald’s opinion piece/business pitch got published on Forbes.com. Very few people can say that life is all fine and dandy in one of the world’s last colonies. But apparently, McDonald’s piece pissed a lot of people off, including Eduardo Bhatia, the island’s Senate president and one of the leaders of Puerto Rico’s pro-commonwealth, status quo party.

Read the tweets (h/t Viviana Mudd):

That was sad to see. McDonald can take a lesson in humility and ease up on the Wall Street Savior bit (look, Mom, my blog post went viral!) because in the end, the post offers very little about how this entire problem is a direct consequence of U.S. policy since 1898. The irony of some Wall Street Guy warning us about Puerto Rico is rich. Weren’t you guys the cause of the problem in the first place?

As for Bhatia? Ease up on the smart phone and stop defending a colonial system that does not work.

Puerto Rico has failed because of mediocre politicians and U.S. business interests. The Twitter exchange between McDonald and Bhatia is a microcosm of 115 years of a relationship gone bad.

Who loses from all this?

Puerto Ricans.

Now, imagine if such frustration could actually be transformed into actual change for the island. Why rely on arrogant Wall Street Guys and second-class politicians?