Shocking the Shock Doctrine: What Recovery in Puerto Rico Could Look Like

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. GP article archive  here. Originally published at DownWithTyranny

The cover of Naomi Klein’s best-seller The Shock Doctrine. The book is available here.
If neoliberalism is the belief that the proper role of government is to enrich the rich — in Democratic circles they call it “wealth creation” to hide the recipients; Republicans are much more blatant — then the “shock doctrine” is its action plan.

Click the link above for more information (or read the book), but in essence the idea is to use any form of disaster, whether earthquake or economic/political crisis, to remake a society in the neoliberal image. To reconstruct the destroyed world, in other words, to the liking of holders of great wealth — by privatizing everything of value held by the public (think water rights, public roads); by forcing austerity on cash-strapped governments as the price for “aid” (think loans, not grants, repaid by unwritten social insurance checks); by putting “managers,” or simply loan officers, in charge of democratic decision-making.

In simple, a “shock doctrine” solution always takes this form: “Yes, we’ll help you, but we now own your farm and what it produces. Also, your family must work on it for the next 50 years.”

This is what happened in Chile after Pinochet and his coup murdered the democratically elected socialist Salvador Allende and took over the government. It’s what’s happening to Greece, victim of collusion between greedy international bankers and the corrupt Greek politicians they cultivated. And it’s what happened in the U.S. during the 2008 bailout of bankers, by which government money was sent in buckets to companies like AIG so they could pay their debts in full to companies like Goldman Sachs. While millions of mortgaged homeowners crashed and burned to the ground.

The populist reaction to neoliberal “reform” is usually social revolt, often or usually ineffective, since creditors are, almost by definition, people with money, and people with money, almost by definition, control most governments. In Greece, the revolt sparked the election of an (ineffective) “socialist” government — plus the rise of the Greek neo-Nazi party, Golden Dawn. In the U.S. the revolt still still sparks universal (and ineffective) hatred of the 2008 bank bailout — plus the rise of the failed Sanders candidacy and the successful Trump presidency.

The form this same revolt will take in 2018 and 2020 is still to be determined.

The Shock Doctrine and Puerto Rico

The “shock doctrine” — the stripping of wealth from the devastated by the already-way-too-wealthy — is now being applied to Puerto Rico. Even before the hurricanes hit it, Puerto Rico was a second-class citizen relative to states of the U.S., even among its non-state territories. In contrast to Puerto Rico, for example, the American Virgin Islands were instantly much better treated when it came to relief from the Jones Act, a sign of already-established prejudice.

The reason should be obvious. In Puerto Rico, English is the primary language of less than 10% of the people, while Spanish is the dominant language of the school system and daily life. In the American Virgin Islands, English is the dominant language, and Spanish is spoken by less than 20% of the population. The fact that two-thirds of the population of the U.S. Virgin Islands is black seems to be lost on most Americans, a fact that likely benefits those inhabitants greatly in times like these.

Thus, to most Americans the citizens of Puerto Rico are conveniently (for neoliberals) easy to paint as “them,” the undeserving, which changes what atrocities can be committed in the name of “aid” — much like it did after Hurricane Katrina devastated “them”-inhabited New Orleans.

In Puerto Rico’s case, they entered the recent hurricane season burdened with load of debt, much (or most) of it bought on the secondary market and held by the hedge funds and the vulture banks you might expect to hold it. I haven’t been able to find specific documentation on this, but I strongly suspect that much (or most) of this debt was purchased for pennies on the dollar by “investors” hoping to make the U.S. government make sure Puerto Rico never defaults on it, thus guaranteeing profit to the tune of many multiples of the original purchase price, profit of many hundreds of percent.

That plan — forcing the U.S. government to force Puerto Rico to make every “investor” whole — was already in effect under the Obama administration, and it’s in effect today. Classic bipartisan neoliberals in action.

Then came hurricane season, with the kind of apocalyptic, lingering devastation you’ve most likely already heard about. Before the storms hit the island, Puerto Rico needed debt relief. Now they need humanitarian relief as well. They need not only to rebuild their economy, they need to rebuild the entire island itself.

Debt “Relief” or Debt Forgiveness?

What’s killing the modern world, as I’ve noted for years and years, is the world-wide overhang of personal debt — not government deficits, which are entirely different, but the mortgage, credit card, payday and student debt that makes it impossible for too many households to return to their pre-2008 “normal,” as constrained as even that that likely was.

Put simply, if U.S. government policy is to “make every lender whole” before anything else is done, the mass of the U.S. population will see no recovery in their lifetimes. No economy in the world can grow at more than a snail’s pace if every dollar earned is taken to pay unpayable debts — which is were we are today despite the illusory signs of “recovery” in many of our cities.

Remember, debts that cannot be repaid won’t be repaid., despite the best effort of creditors to squeeze debtors even to the grave. All that can happen is an escalation of social cruelty. In cases like these, when governments become the creditors’ enforcement mechanism, revolts are bound to follow.

In the U.S., we’re living with the consequences of that revolt today, in the form of the current presidency. (Imagine the state of that revolt if Sanders had been available, and elected instead. Imagine government as the friend, not the enemy, of the long-suffering debtor class.)

In Puerto Rico, the problem is even worse than on the mainland. The “bankers” — a term I’ll use to mean “holders of Puerto Rican debt” — are demanding that Puerto Rico pay them even before it pays its pension obligations, the equivalent of its Social Security checks.

And now, in response to hurricane devastation, those same “bankers” are inducing the U.S. government to offer hurricane “relief” in the form of even more loans. Put simply, to get out of hurricane trouble, they must make their debt trouble worse or live with the status quo.

Climate writer Naomi Klein and Elizabeth Yeampierre, writing in The Intercept:

[T]he fact that the House-approved relief package contains $5 billion in loans for the island, rather than grants, is a special kind of cruelty. Because on an island already suffering under an un-payable $74 billion debt (and another $49 billion in unfunded pension obligations), Puerto Ricans understand all too well that debt is not relief. On the contrary, it is a potent tool of perpetual impoverishment and control from which relief is urgently needed.

The very fact that the House of Representatives bundled that loan into its sweeping multi-disaster bill (up for a vote in the Senate any day now) is symbolic of a deep fear that has lurked in the background for many Puerto Ricans ever since hurricanes Irma and Maria struck. The fear is that however much islanders are suffering in the midst of their ongoing humanitarian emergency, it’s the phase after the emergency passes that could be even more perilous. That’s when policies marketed as reconstruction could well morph into their own kind of punishment, leaving the island more unequal, indebted, dependent, and polluted than it was before the hurricanes hit.

This is a phenomenon we call “the shock doctrine,” and we have seen it play out many times before. A disaster strikes, public sympathy is awakened, and there are grand pledges to “build back better,” bringing justice to those who have just lost everything. And yet almost immediately the emergency atmosphere becomes the pretext to push through a wish list for big polluters, real estate developers, and financiers at the expense of those who have already lost so much. Think of the public schools and public housing closed and torn down in New Orleans after Hurricane Katrina. Think, too, of the way the 2010 earthquake in Haiti became a pretext to push for sweatshops and luxury resorts, while basic housing was neglected and the minimum wage was suppressed.

Neoliberalism at its best — and most obvious. Note the role that racism plays in making this even palatable, here as in New Orleans.

An Anti-Neoliberal Recovery Plan

Which brings us to the real point of Yeampierre and Klein’s article: Not only is an anti-neoliberal recovery plan possible, but it’s starting to happen. The writers offer two data points — about power generation and agriculture — but there are other areas of restructuring that could have been brought up as well.

First, here’s what an anti-neoliberal solution to damaged power facilities looks like — wide-spread installation of distributed solar infrastructure to replace the old fossil fuel generators (emphasis mine):

[T]hese are only the preconditions for the real work [examples include rescinding the Jones Act], which is not reconstructing the island as it was, but reimagining and remaking an economic system that was in direct conflict with both the island’s people and its ecology. Before Irma and Maria knocked out the vast majority of its electricity, Puerto Rico was getting 98 percent of its power from fossil fuels. A just transition would replace that extractive model with a system based on micro-grids of renewable energy generation, a decentralized network that would be more resilient in the face of inevitable weather shocks, while reducing the pollution making our climate go haywire in the first place.

This energy transition is already underway in grassroots relief efforts, thanks to innovative projects, like Resilient Power Puerto Rico, which has been distributing solar-powered generators to some of the most remote parts of the island. The organizers are working toward a full-blown, permanent solar revolution designed and controlled by Puerto Ricans themselves. “Rather than perpetuate the island’s dependence on vulnerable distribution hardware and carbon-heavy fuel,” Resilient Power explains on its website, “we prioritize clean production of energy that allows each household to be self-reliant.”

About the solar solution to rebuilding power generation, note:

  • Decentralized solar generaton helps protect the island against future storm damage by reducing interdependency.
  • Renewable power sources are the inverse of carbon-based sources — they’re climate-friendly, not climate-destructive.
  • The “bankers” and others in the world of the wealthy are heavily invested in a carbon bubble they are desperate to get out of before it collapses. Much of the money world’s money is tied to unburnable in-the-ground carbon, and they need to sell as much as they can before the bubble collapses — preferably after most of them are dead or otherwise financially secure.

    As a result, most of the world of money will hate this idea and work to make it impossible to implement.

Imagine how our donor-bought government will respond to this, even were the government run by donor-beholden Democrats. This will be an interesting battle to watch.

Next, the anti-neoliberal plan for agricultural recovery looks like this:

Many of the island’s farmers are demanding a similar revolution in agriculture. Farmers report that Maria destroyed almost all of this season’s crops while contaminating much of the soil, providing yet another opportunity to reimagine a system that was broken before the storm. Today, far too much of Puerto Rico’s fertile land goes uncultivated, leading islanders to import roughly 80 percent of their food. Before the hurricanes, there was a growing movement to break this cycle by reviving local agriculture through farming methods, such as “agroecology,” that draw on both indigenous knowledge and modern technology (and include the added bonus of carbon sequestration).

Farmers’ groups are now calling for the proliferation of community-controlled agricultural cooperatives that would grow food for local consumption. Like the renewable energy micro-grids, it’s a model that is far less vulnerable to supply-chain shocks like hurricanes — and it has the additional benefit of generating local wealth and increasing self-sufficiency.

As with the solar-powered generators, Puerto Rico’s farmers aren’t waiting for the emergency to subside before beginning this transition. On the contrary, groups like Boricuá Organization for Ecological Agriculture have “agroecology brigades” traveling from community to community to deliver seeds and soil so that residents can begin planting crops immediately. Katia Avilés-Vázquez, one of Boricuá’s farmers, said of a recent brigade: “Today I saw the Puerto Rico that I dream being born. This week I worked with those who are giving it birth.”

Can you imagine what Monsanto, for example, thinks of the dissemination of free “seeds and soil” as a solution to Puerto Rico’s agriculture crisis? Certainly it looks through their lens as the loss of a prime “wealth creating” opportunity. Pay attention to the battle over agriculture recovery in Puerto Rico

As I said, there are other areas that reconstruction could take a decidedly anti-neoliberal shape, but these two show what anti-neoliberal solutions look like.

The Battle for Puerto Rico

The obvious fight in Puerto Rico is the fight to create more seaside golf courses and five-star resorts (“wealth creation”) as part of the price for “recovery.” But there’s so much more to this story. What we’re about to witness in Puerto Rico is an island-wide pitched battle for and against broad-stroke neoliberal solutions to the island’s combined and massive debt and hurricane crises.

As you watch the battle unfold, watch through this wider lens, not just the lens of loans-for-aid and seaside resorts. If the Puerto Rican residents hold firm, as the writers seem to think they might, this could get very ugly fast, but it’s a battle that must be joined everywhere. The Puerto Ricans may not go down easily; and they may even win. Good for them if they do; they deserve all of our help for just that effort alone.

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66 comments

  1. Charger01

    I do love Naomi Klein. I’ll take issue with one of her “solutions” with decentralized solar as a way of shaving economic power from the status quo. Two issues with the concept:
    First, rooftop solar or small community solar projects need utility grade tie-in equipment (to produce a clean flow of electrons) onto the distribution line. This amount of energy contributes to power already on the line, it does not replace it. You have to specific equipment to maintain the voltage all the way down the line, or it will not provide enough energy for your neighbor or neighborhood. Second, only through PURPA and various State-level incentive policies that small scale solar, geothermal, hydro, and wind are viable. Take away the incentives, and suddenly that distributed power generation is very expensive. I understand Madam Klein’s point about fighting neoliberalism, but I disagree regarding one of her specific solutions.

    Reply
    1. PlutoniumKun

      I have to disagree with you on that point. Decentralised networks are only definitively more expensive and less efficient when there is an existing centralised grid in place and population density is high. This is hardly surprising because you are putting in place a new system on top of an existing expensive AC infrastructure.

      There is plenty of research out there on comparative costs of centralised vs decentralised systems. The answer is entirely locationally specific and dependent on variables such as the status of the existing grid (if it exists), population density, local power needs, local sources of energy and the local cost basis, not to mention how you financially account for issues such as risk and resilience. In many parts of the world, most notably rural areas in India, Africa and China, decentralised grids have proven more cost effective, especially when an unreliable grid forces dependence on diesel generators. And of course the very rapid drop in the cost of solar panels in the past few years has significantly altered the economics.

      It is simply impossible to make any definitive statement on the desirability of one option over another without a full study of the options. Given the catastrophic failure of the existing grid network it would be irresponsible not to at least do a full costing of decentralised or hybrid options before spending the billions that will be required to fix the damage.

      Reply
      1. Synoia

        What is the plan for Night? Batteries?

        Got any examples of what’s proposed? Success stories?

        The devil is in the details, and details are matters of established practice.

        Reply
        1. PlutoniumKun

          Puerto Rico is rich in hydroelectric potential (micro, macro, and in-between), which is the most straightforward and cheapest way of providing balance in distributed systems. Even without hydro generation, pump storage hydro systems are a long proven method of providing balance in small island networks. Bhutan provides a good model for balancing centralised and decentralised systems (they have a very developed lowland system for export to India, but a more decentralised micro-hydro and solar system for more remote villages). Bhutan has a long way to go, but is a much poorer country than Puerto Rico. Much of the Himalayan region, across India and into China, has a series of decentralised systems that work very well, I’ve been in very remote villages in Ladakh, Bhutan and Tibet which have had very workable micro systems based on a mix of solar and micro-hydro.

          As for research work on it, if you search in google scholar you will find literally thousands of academic papers on all aspects of the topic, including long term implementation studies. I’m not going to play the ‘I’ll pick a paper that suits my argument and link to it’ game, you can search yourself. Its an area where developing countries such as India and Indonesia are well ahead of the game, as they have had little choice but to look at alternatives to traditional grid systems.

          Reply
          1. bob

            Pump storage systems are still MILES ahead of batteries. Much more efficient and working with very OLD off the shelf tech. A pump, a turbine, water and land.

            Who can sell that though? Batteries are so much more sexy.

            Reply
          2. Vatch

            You’re right about hydroelectric power in Puerto Rico. Unfortunately, that’s part of their crumbling, neglected infrastructure:

            https://www.washingtonpost.com/business/economy/failing-puerto-rico-dam-that-endangers-thousands-not-inspected-since-2013/2017/09/26/cfd26272-a225-11e7-b14f-f41773cd5a14_story.html?utm_term=.1dbbf0babd40

            Puerto Rico’s faltering Guajataca Dam was completed when Calvin Coolidge was president. It is one of 38 dams in Puerto Rico, and according to an Army Corps of Engineers inventory, every single one of them has been rated as having a “high hazard potential.”

            Yet Guajataca hasn’t been inspected since 2013, according to the National Inventory of Dams, significantly longer than is ordinarily required of dams with high hazard potential.

            Now the 120-foot wall of the earthen Guajataca Dam — finished by the Puerto Rico Electric Power Authority (PREPA) in 1927 — has fissures that triggered evacuation orders for thousands of people who were scrambling to deal with the devastation of Hurricane Maria. Water has been pouring out of one section of the large reservoir into small neighborhoods down in the valley.

            A high hazard rating reflects the damage that could happen from a dam’s failure, and it is not a commentary on the condition of a dam. Nonetheless, one safety expert said he was surprised by the long gap between inspections at the dam.

            . . . . .

            If that article is behind a paywall, here’s another article:

            http://nypost.com/2017/09/23/failing-dam-creates-new-crisis-in-hurricane-ravaged-puerto-rico/

            Reply
            1. PlutoniumKun

              The wierd thing about PR is that despite the number of dams they have, so far as I can work out they only generate a tiny percentage of the islands electricity – it seems its mostly provided by old thermal plants – mostly the most expensive of all, oil plants. I’ve no idea why this should be the situation, although generally a dependence on oil and gas plants are an indicator of a capital starved power company (i.e. they had to buy the plants with the cheapest up front costs, despite much higher long term fuel costs).

              Reply
              1. Eclair

                If we want to keep PR dependent, encouraging a fossil-fuel based power system is a good way to do it. PR has no fossil fuels and must rely on imports; if they make noises about rebellion, we cut off their fuel supplies.

                Driving through Wyoming on Sunday (hanging on to the steering wheel, trying to keep the car on the road in wind gusts of up to 80 mph), we listened to one of the state’s senators extol the need for more fossil fuel extraction in the state; one of the main reasons (other than jobsjobsjobs) was that our export of fossil fuels enabled us to exert ‘influence’ on other countries.

                Reply
              2. Vatch

                I found a chart that shows Puerto Rico’s hydroelectric power generation from 1980 to 2006. It peaked in 1988 to 1989, then it plunged in 1990 and never recovered. Was there a change in rainfall, did someone make an explicit choice to use fossil fuels, or did some of the dams start to have problems?

                https://www.indexmundi.com/energy/?country=pr&product=hydro&graph=production

                I couldn’t find more recent data, but it’s probably at the EIA web site for those who are willing to dig.

                Edit: Eclair’s point about keeping Puerto Rico dependent suggests that my speculation about a conscious decision to use fossil fuels instead of hydro power is very plausible.

                Reply
                1. PlutoniumKun

                  Its an interesting point – its very hard to see how anyone could justify running down hydro capacity on an island like PR when all the alternatives are likely to be so expensive. I see about a quarter of their power comes from gas, which is also likely to be expensive if (as I assume is the case) it has to be from LNG, I don’t think PR is on the interstate pipeline network.

                  I suspect the real reason would be capital starvation – always having to go for the cheapest option in terms of up-front costs, which always favours fossil fuels (gas and oil in particular). But I’ve learned over the years that sometimes the more malign theory is often the true one.

                  Reply
                2. accord1999

                  Even at its peak, PR hydro was a tiny 1-2% of total PR electricity generation (which from the same Index Mundi source shows annual PR electricity demand to be in the 15-20 TWh range).

                  I doubt it was a deliberate decision, just the geographical limitation of a small island. For comparison, the Robert Bourassa hydro power plant in Quebec produces ~25 TWh/year of electricty and requires a reservoir nearly 1/3rd the surface area of PR.

                  Reply
                  1. Vatch

                    Thanks for providing some context. It’s easy for us to miss some of the complexities of our world.

                    Still, I hope that it’s feasible for the Puerto Ricans to get more of their energy from sustainable sources. I hope the same for the mainland U.S., and for all continents!

                    Reply
                  2. PlutoniumKun

                    Actually, the small scale of the island makes hydroelectric more, not less viable. Ireland is roughly the same size and population as PR, but with much lesser hydro potential (no big rivers with a high head), but when it electrified from the 1920’s onwards almost all the investment was in hydro until the 1950’s when all the viable hydro sites were developed. Hydro is much easier to scale for demand and the power outputs are far easier to control than for a thermal (coal) plant.

                    Viable hydroelectric schemes can scale from small 1MW run of the river projects to multiple GW schemes, while coal or other fossil fuel plants are only viable within a relatively narrow band. Water can be held back and stored during times of low demand in a way you can’t with thermal plants.

                    Reply
              3. bob

                Warren Mosler covered/covers Caribbean energy well. He was based there, and may still be. It’s been a while.

                It’s all heavy oil. From my understanding, there aren’t many good/cheap/quick (pick two) alternatives. It’s a island, so they rely on maritime fuel.

                Even with a very, very expensive LNG terminal they would still require a pipeline network, which isn’t there.

                http://www.nytimes.com/2011/10/22/us/puerto-ricos-plan-for-gas-pipeline-has-many-critics.html

                So much for “assuming” gas and a gas pipeline network-

                https://www.nakedcapitalism.com/2017/10/shocking-shock-doctrine-recovery-puerto-rico-look-like.html#comment-2877889

                Reply
                1. PlutoniumKun

                  As my link above shows, actually more than a quarter of PR’s power does come from natural gas. They do have an LNG terminal on the island, it’s sole customer is one CCGT plant. You don’t need a gas pipeline network if your plant is directly tied into the terminal and regassification plant, as is the case in PR.

                  Reply
                  1. bob

                    So all they need is another few LNG terminals?

                    Or, pipelines.

                    This also doesn’t seem to bode well for the “sustainability” of LNG for PR-

                    Production in 2015 was down 19.9% on the previous year due to the longer and greater scope of the scheduled plant shutdown when compared with the previous year; as well as the earlier major shutdown of unit 2 (originally planned for 2016) due to the damage caused by the passage of tropical storm Erika. Its contribution to the consolidated total rose slightly when compared with the same period of the previous year due to the exchange rate effect.

                    Reply
          3. Thor's Hammer

            I trained for Peace Corps near Arecibo PR and hiked all through the mountainous part of the island. I can verify that there are thousands of potential sites for pumped storage hydro— sufficient for a 24/7 decentralized electrical grid system to provide the majority of power for the island.

            At 2018 capital cost pricing,solar-wind/pumped storage hydro will directly out-compete fossil fuel electrical generation. And while oil costs can (and have) varied 300% in a single decade, the cost of a solar-wind /hydro system can be reliably predicted for the entire life cycle of the system.

            Of course “rational” and “future” have no place in how business decisions are made. Think “executive bonuses” and quarterly stock price targets when options can be exercised for the real criteria.

            Reply
            1. Grumpy Engineer

              One thing to consider is how quickly new power generation facilities and distribution infrastructure can be put into place.

              And the sad reality is that a 100% renewables-based grid (with pumped storage for backup at night) would take many years to put into place. Maybe even decades. And unfortunately, 80% of Puerto Rico’s population is without power today. They can’t wait for years. They need a solution now.

              Realistically, this mean gas turbines (fueled with either oil or LNG) and above-ground power transmission lines. Which, of course, will be fairly vulnerable to the next storm that comes along. Maybe this quick-and-dirty grid can be gradually replaced with other stuff once it’s up and running, but getting things “up and running” should be the priority right now.

              Reply
              1. Thor's Hammer

                Of course you are right Grumpy. However the good thing about gas turbines is that they are compact and transportable. From a technical engineering standpoint there is no reason why infrastructure could not be planned around using them as a temporary transition power source to be replaced by solar and wind ASAP.

                Might even be a market for slightly used turbines to maintain line pressure in all the new natural gas lines being fought over in the Middle East—-. (*It takes 5 of the largest available turbines running 24/7 situated every 100 miles or so to keep the NG flowing through a major trunk line.)

                The solar industry in China is so huge that it could flood the island with PV panels in short order if the capital were available. But that would come down to whether GE’s gas turbine division or the Chinese state bank came up with the most favorable bribes.

                But hasn’t the Clinton Foundation already locked in much of the reconstruction funding like they did in Hati? I think the way it works is that Puerto Rico gets more unpayable debt that will be sold on the bond market at pennies on the dollar and then guaranteed by the US Government so the hedge funds that buy it can’t loose. And the Clinton Foundation gets millions for brokering the deal?

                Or is the Tillerson Foundation in the drivers’ seat now?

                Reply
              2. bob

                Yup.

                OK, we have batteries now. What did that change? It added hundreds if not thousands of ton of cargo at the ports, requiring giant trucks to move.

                Those ports and trucks could be delivering food and water.

                Even after the batteries would have reached their brand new, eco-friendly, fully vegan smart grid, they would still have to be charged. With electricity. From where?

                Instead of getting power to people, to use, they would be ADDING demand to a system that can’t maintain 20% of it’s capacity, at the moment.

                I’m a Luddite.

                Reply
          1. bob

            It’s all BS. But this was one of my favorite pieces of “tech”

            “But the solar farm is useless during the day if it’s not connected to a grid and useless at night if it’s not connected to an energy storage system.”

            A solar farm is useless at night, even with storage.

            The rest is typical vapor ware from SV.

            “A government official now says that they are indeed considering the solution and thinking about launching a competitive bidding process.”

            Thinking about launching…

            “has proposed similar in PR.”

            That’s all they propose anything in – PR speak. That link is a great example. Nothing concrete, no cost discussed, and no limits on the scale and size.

            They can’t make enough batteries for his tiny car company, but he’s going to make enough batteries for the entire island of PR.

            Which still doesn’t deal with the major problem there….GETTING THE ELECTRICITY TO WHERE IT’S NEEDED.

            “Electrek’s Take”

            Sell for ELON. ELON is GOD. GOD IS ELON.

            Never let a crisis go to waste. Plenty of PR can come of it.

            Reply
            1. doug

              well the australia project is up and working and providing much needed power. Not vaporware at all. You may want to read about it?
              What is all BS? Electric storage using batteries? Solar power? distributed grids?
              All of it? Could you be more specific?

              Reply
              1. bob

                “well the australia project is up and working and providing much needed power.”

                That’s BS too. It’s thick around this subject. Batteries do not provide power, they are a net user of power, both in manufacturing the battery and in using it. You get less electricity out than you put in.

                “All of it? ”

                Yes. All of it. It’s a PR field day.

                Reply
              2. Grumpy Engineer

                @doug: Tesla’s energy storage project in South Australia is up and working? Are you sure about that?

                I can’t find anything online that indicates that the battery station has actually been energized. The most recent articles I’ve found online are from the end of September, where the station was described as being half-built.

                Reply
                1. jo6pac

                  It hasn’t been turned on and there not much time left to make his due date or it’s free.

                  Those that say solar isn’t the answer you most think people in PR live in mcmasions. These are small homes one sun tracking solar tower with six panels and 12 jell cell batteries and you’re off grid. A small windmill works also.

                  You all need to get out more.
                  https://cleantechnica.com/
                  https://www.ecowatch.com/

                  Reply
                  1. bob

                    So the tech answer is to use less. Of everything. Get off the grid, as it were.

                    “You all need to get out more.”

                    Not if you want to leave home in the cold. You’ll be feeding the fire and wringing your clothes out, after you hand wash them.

                    Me calling out very real problems with batteries, and the lack of understanding of what they do, and how they do it, does NOT mean that I don’t see the benefits of solar.

                    But, solar again introduces other problems…like storage. See above, while you’re out.

                    Any criticism of part of the tech is a criticism of all of the tech. Take your smug self satisfaction back to your cave with 2 LED lights and a composting toilet. Keep wondering why everyone else is such a Luddite while you hand wash, wring, then dry your clothing without using anything more than a car battery.

                    Reply
                    1. Joel

                      “Not if you want to leave home in the cold…”

                      How often does it get cold in Puerto Rico?

                      I’ve lived in a number of years in Latin America and it’s amazing how little energy the typical home uses. Even those of the professional class typically don’t have heating, hot water, clothes dryers, or air conditioning. Those who can afford it use a small electric hot water heater for bathing (everything else done in cold water). Washing machines actually don’t use much electricity and the poor usually hand-wash anyway. The biggest energy consumer is the refrigerator.

                      Also, even if solar means there’s less energy at night *there’s less energy demand* at night, especially if you give up on A/C and heating.

      2. Grumpy Engineer

        Decentralized grids are almost always more expensive, as they restrict the ability of regions with surplus power generation capability at a particular point in time to share power with regions experiencing unusually high demand at that same point in time. As a result, all regions must over-provision their generation facilities to handle their most stressful times on their own.

        The only exception to this is when population density is low and the costs of the lines that link the various regions together become excessively expensive relative to the overall system costs. Here, micro-grids make more sense.

        Puerto Rico has a high population density. Over 1000 people per square mile. If it were a state, only Rhode Island and New Jersey would have a higher population density. A conventional centralized grid will provide power significantly less expensively than micro-grids would.

        And how to harden it against storms in the future? Put the high-voltage (70+kV) transmission lines on taller and sturdier towers. Bury the low-voltage (120/240V) per-household lines underground. And go with a hybrid approach on the medium voltage (13kV) distribution lines: Bury them in regions with lots of trees, and hang them from sturdy poles in regions with less vegetation.

        Reply
        1. PlutoniumKun

          Its not necessarily an either/or choice. On the island of Ireland for example, which is of similar size and population to PR, there has been a lesser reliance on an internal grid network thanks to a greater proliferation of smaller power stations (mostly wind, but also CHP, etc). Essentially, if you have a ‘spiders web’ pattern of a grid the outer parts are less resilient and its expensive to maintain surplus circuit capacity. But an increase in localised load (a sort of hybrid system mixing large and small generators) has reduced the need for longer distance connectors. Several proposed 110, 220 and 440kV lines have been cancelled or postponed for precisely this reason.

          BTW, the benefits of shifting power loads are very limited on a small island where everyone is on the same time and climate zone – the benefits relate more to the pattern of generating capacity than patterns of demand. The peaks and troughs tend to be the same all over the island. Its more important to have dense internal links than long distance connections, unless those interconnectors go to very different markets with different patterns of use.

          Reply
          1. Alejorrican

            Just a note:
            Puerto Rico: 3,500 sq miles
            Ireland: 32,000 sq miles
            Population is in the same range of 3-4 million, but 10x the size for Ireland.

            Reply
    2. Hiho

      The same could be said about coal or nuclear power. Take away the incentives or actually just make them include the so called externalities in their costs and all of a sudden they become way more expensive, even unviable.

      Reply
    3. rd

      Puerto Rico’s topography would lend itself to using localized solar energy and wind power to power pumped storage with water tanks uphill. Those water tanks can double as drinking water supply during disasters if the water is managed safely. Battery storage could complement the pumped storage. So a village could become self-sufficient for power and water even if cut off from the world like they are now. local geothermal would probably also work.

      I think this is the future for energy in the decades moving forward where natural gas and nuclear power plants would be predominantly used for powering large concentrated energy demands and peak load demand. Unfortunately, the rate schedules in the US are generally not set up to permit this type of approach. It is not the big mega-utility approach, unless the utilities want to become consumer-friendly all of a sudden, which is not in their DNA.

      Reply
      1. bob

        “Those water tanks can double as drinking water supply during disasters if the water is managed safely”

        No. Water that is good for drinking is very corrosive. They are closed loop systems, almost by definition. In practice, lots of additives that aren’t people friendly are added to keep corrosion away.

        The breezy way in which *that guy* enters into a conversation after reading popular mechanics a few times is why we are where we are. Enter Elon and his Eco-friendly, vegan-vapor fueled rocket to mars. I’d bet he owns stock.

        Almost every single idea you dropped is not currently viable in advanced economies, with advanced infrastructure.

        But, PR, after a disaster, should have no problems. None at all. Just order it up on amazon and wait for the FedEx truck. There’s a kickstarter, if you want to help with the wish list….

        Reply
        1. PlutoniumKun

          No. Water that is good for drinking is very corrosive. They are closed loop systems, almost by definition. In practice, lots of additives that aren’t people friendly are added to keep corrosion away.

          I have no idea where you get this idea from, there is only an issue with water quality if there is a specific issue with the water source, such as when mine workings are used as a reservoir. There are numerous schemes around the world which combine potable water supply, pumped storage and hydro generation – the Senator Wash reservoir in California just to take one example. True closed loop pumped storage systems are very rare, the great majority are hybrid to some extent.

          Reply
    4. nonclassical

      ..and I’ll “take issue” with fact “neoliberalism” is not mentioned or discussed in her book, as origins are historically documented here (George Monbiot-“The Guardian”):

      “The term neoliberalism was coined at a meeting in Paris in 1938. Among the delegates were two men who came to define the ideology, Ludwig von Mises and Friedrich Hayek. Both exiles from Austria, they saw social democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual development of Britain’s welfare state, as manifestations of a collectivism that occupied the same spectrum as nazism and communism.

      In The Road to Serfdom, published in 1944, Hayek argued that government planning, by crushing individualism, would lead inexorably to totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom was widely read. It came to the attention of some very wealthy people, who saw in the philosophy an opportunity to free themselves from regulation and tax. When, in 1947, Hayek founded the first organisation that would spread the doctrine of neoliberalism – the Mont Pelerin Society – it was supported financially by millionaires and their foundations.

      The movement’s rich backers funded a series of thinktanks which would refine and promote the ideology. Among them were the American Enterprise Institute, the Heritage Foundation, the Cato Institute, the Institute of Economic Affairs, the Centre for Policy Studies and the Adam Smith Institute.

      Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that “the market” delivers benefits that could never be achieved by planning.

      Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.”

      https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

      Reply
    5. pat

      Puerto Rico already had an expensive grid.

      It’s all blown away.

      A decentralized system that works 80% of the time beats a central grid that is working 12% of the time.

      Reply
  2. Ned

    Please note, Puerto Ricans pay no U.S. income taxes on income earned in Puerto Rico but they expect all the benefits of citizenship.

    Yes, they are being treated unfairly, but the rules are different for them.

    Reply
    1. Huey Long

      Please note, Puerto Ricans pay no U.S. income taxes

      The median income in PR was $19,429 in 2012 compared to $51,371 for the rest of the United States. In short, if one were to levy the income tax on the people of PR, the levy wouldn’t raise very much money, and lots of the money raised would be refunded in the form of the Earned Income Tax Credits. That federal income taxation is even relevant is questionable in light of MMT.

      they expect all the benefits of citizenship.

      Yes they most certainly should expect all of the benefits of citizenship and should receive such benefits, otherwise why be America’s colony? It begs the question; why not go rouge, declare independence, take the Cuban path, ink a deal with Russia or China for a big trade deal and aid in exchange for let’s say military bases? They’d get to simultaneously poke Uncle Sam in the eye and get a better deal from a third party.

      Screwing Puerto Rico is a propaganda disaster and undermines the public perception of the United States in all of our de facto colonial possessions in the Caribbean region and around the world. It makes other third world nations ask the question “if this is how they treat their citizens how will they treat us?”

      We no longer have the capability nor the goodwill to pull a Grenada/Panama on every small nation in the region that steps out of line. We’re stretched thin around the globe in many questionable military endeavors as it is.

      Yes, they are being treated unfairly, but the rules are different for them.

      You’re 100% right. The rules ARE different. Puerto Rico has no meaningful congressional delegation nor any senators yet they are roughly equivalent in population to Connecticut. They can’t trade horses with the other states to get aid sent their way. The relatively people-free jurisdiction of Wyoming has more congressional juice than PR does.

      Reply
      1. Ned

        Thank you for your reply.
        Hadn’t thought of the Standard Deduction/Earned Income Tax Credit calculus.

        Puerto Ricans residing and paying taxes in the U.S. certainly are entitled to it as is any math literate undocumented immigrant who uses a federal taxpayer I.D. number and who claims it for children here or in her country of origin, thus playing the same game and getting a subsidy from taxpayers that U.S. corporations do.

        The venomous juice of Dick Cheney is like arsenic in the blood of American foreign policy.

        Reply
        1. Eclair

          Umm, Ned, I think you will find that a taxpayer must have a valid social security number to be eligible to claim the Earned Income Credit. As must his/her spouse (if filing jointly) as well as any qualifying children. An ITIN will not work for purposes of EIC.

          In addition, a ‘qualifying child’ must have resided with the taxpayer for more than half the year.

          So, really, please do not cast slurs on undocumented immigrants by accusing them of receiving unearned Earned Income Credits. The rules are easy to check on the IRS site.

          Reply
          1. Ned

            The child does not need a social security number for the parents to claim the per child tax credit. There’s no way to prove the 6 month residency of the child, nor does it say where that residency is.

            I’m discussing numbers and policy, you are are attempting to humanize those it by virtue signaling.
            Akin to
            “Stop attacking corporations, they are people too!”

            Reply
            1. Eclair

              Ned, the Earned Income Credit and the Child Tax Credit are two very different credits. If you are discussing numbers and policy you might want to keep them straight in your mind.

              Reply
    2. rd

      My understanding is that PR would like to become a state. It is Republicans in Congress that do not want that because it would come with voting senators and representatives who would potentially be Democrats, especially if a Republican Congress and President screw them in a lifetime defining disaster. PR has a bigger population than Alaska, Montana, and Wyoming combined, yet they have no voting power in Congress or the Presidency.

      So yes, they would like the benefits of citizenship. It is the United States that is preventing them from exercising the rights and obligations of citizenship.

      Reply
      1. Joel

        The statehood issue is extremely controversial in Puerto Rico. The last referendum was a bigger joke than the Catalan independence referendum; most people stayed home.

        Considering that statehood is irrevocable, pushing statehood on PR when a large part of the population doesn’t want it is a bad idea.

        On the other hand, there’s no reason they can’t have Congressional representation like D.C. does.

        Reply
    3. Vatch

      As I pointed out here, they do pay some federal income taxes, but not all federal income taxes. They also pay Social Security taxes, several other types of federal taxes, and local taxes.

      But since they don’t have effective representation in Congress, we run into the old truism:

      No taxation without representation.

      A war was fought over that issue.

      Reply
  3. TMoney

    Wrong way round Ned. Puerto Ricans don’t make the rules under which they live, Congress does. A Congress in which they have no voice (their representative can’t vote). They are subject to the tax rules (whatever they are) but no representation. History suggests revolutions can come from that sort of thing.

    Reply
    1. GlobalMisanthrope

      Correct. And this is the point. A feature, not a bug.

      The US pays a pittance through tax “breaks” for Puerto Rico’s silence. No taxation, no representation goes the argument.

      Reply
    1. Huey Long

      Congress passed a law back in the 80’s prohibiting PR from defaulting. Repudiation of PR debt would entail getting our current congress and prez to pass legislation to repudiate it, so in other words divine intervention ;-).

      Reply
    2. rd

      The one place in the US that did get hammered by NAFTA was Puerto Rico. http://www.nytimes.com/1993/01/03/us/trade-pact-threatens-puerto-rico-s-economic-rise.html?pagewanted=all

      When NAFTA was passed, Congress also stripped companies of tax benefits for having operations in Puerto Rico. In addition, the Jones Act makes shipping to and from Puerto Rico more expensive than shipping to and from Mexico. Oddly enough, many companies moved operations from Puerto Rico and Puerto Rico has been in recession/depression ever since.

      Reply
  4. Norb

    I think Puerto Rico will be interesting to watch to see if anti neoliberal sentiment can take hold and survive. In one sense, every individual abandoned or ensnared in debt is in the same boat. Once put in a situation of debt servitude, the only recourse to extricate oneself is to become self reliant and attempt to build supporting networks. The trouble is, once those networks start to form, the traditional game plan is to bring in force and break them up.

    If strong, self-supporting communities can form in PR, it will provide inspiration for communities on the mainland.

    It will be also interesting to see if self-funded initiatives can make headway against the banking and financial interests.

    This situation in PR is important in that it can change the focus of community building away form personal self-interest as now exists in America, and towards the common good, as it should be. The same is happening all across the mainland in economically devastated communities, but successfully blacked out in the media.

    This truly is a long term endeavor, but tragically, climate change will increase the opportunities for proper action. The proper long term investment is in people and life skills. Lets roll up our sleeves.

    Reply
    1. flora

      an aside:
      ” Once put in a situation of debt servitude, the only recourse to extricate oneself is to become self reliant and attempt to build supporting networks. ”

      US people born 1880 – 1900 were adults/young adults with families when the Great Depression hit. Their children, sometimes referred to as The Greatest Generation, were children or teens during the depression and saw how debt destroyed families. When those children grew up they were debt averse. The Depression/Greatest Gen’s children, the Baby Boomers, would often joke their parents, who were Depression kids, could squeeze a nickel until it screamed. Boomers, having no memory of systemic economic bad times, took on large debts for school and housing on the theory their income would always increase as it had for their parents. Now the Boomers children are facing a wholly different economy, more like the Great Depression than the Booming 50’s and 60’s.

      I expect today’s younger generation will become debt averse. That would hurt the FIRE sector’s reliance on ever increasing debt payment rents. Reducing the FIRE sectors influence would be good for both the Main Street economy and individuals, imo.

      Reply
    2. diptherio

      It will be also interesting to see if self-funded initiatives can make headway against the banking and financial interests.

      See my comment below. Puerto Rico already has a thriving, self-funded co-op movement, so I think they’ve got a better chance than most.

      Reply
  5. Jim Haygood

    “What’s killing the modern world … is the world-wide overhang of personal debt — not government deficits, which are entirely different.”

    This is an odd claim to make in an article about Puerto Rico, whose troubled debt is entirely governmental. Pie chart:

    https://en.wikipedia.org/wiki/Puerto_Rican_government-debt_crisis#/media/File:Distribution-puerto-rico-outstanding-debt.png

    In turn, Puerto Rico’s govt debt crisis led to the imposition of a crushing 11.5% sales tax, making retail prices already jacked up by the Jones Act even more unaffordable.

    Puerto Rico’s recovery will depend almost entirely on how much of a haircut is imposed on bondholders … versus restructuring and extending in the Greek fashion, which would doom PR forevahhhh.

    Reply
  6. Thor's Hammer

    It would be interesting to compare the pace of recovery in Cuba with that of Puerto Rico. Both were hit by category 5 hurricanes within days of each other. In the case of Cuba, Havana was every much at the center of the bulls eye as San Juan Puerto Rico if I am correct. But I’ve not been able to uncover a single scrap of reporting that draws the comparison. Perhaps it would be embarrassing to the defenders of “free market” capitalism and social organization?

    But hurricanes are last month’s news. We’ve moved on to the startling revelations that fat pig movie directors are pussy grabbers just like our President.

    Reply
      1. GlobalMisanthrope

        Thank you posting this!

        I have always believed that one of the primary aims of the Cuba travel ban was to keep us Puerto Ricans from traveling there to see what isolation and poverty—the constant threats leveled at those who support PR independence—could look like.

        Reply
      2. Thor's Hammer

        Thanks for posting this journalism from an Indian source. While it may be accurate, the writing style reads like it was copied straight from the Ideologe’s Bible. So I’ll file it along most commentary from outlets like the Washington Post– assume it is fraudulent propaganda until proven otherwise.

        Reply
  7. Jeremy Grimm

    It’s very nice to talk about how to rebuild Puerto Rico … but how long will it be before Puerto Rico is hit by another major hurricane? And while we’re thinking of Puerto Rico what about Houston, and Florida? What about the North Carolina sea coast — or New Jersey — NYC? I don’t expect anything reasonable will be done in rebuilding any of these places or beginning an orderly retreat to higher ground.

    Some parts of these areas may remain habitable — at least long enough to make it worthwhile to build infrastructure but I believe it will be a mistake to simply “rebuild”. Replacement infrastructure should be built to better withstand the future storms and rising seas. I am aware that not “rebuilding” is neither socially nor politically viable. It just seems a shame to waste what time and resources remain.

    Reply
  8. diptherio

    I was fortunate enough to get to meet a number of Puerto Rican cooperators at this year’s Assoc. of Cooperative Educators Institute in Denver. Puerto Rico has a very strong cooperative sector/movement. Co-ops in Puerto Rico don’t pay tax to the gov’t. Instead, each co-op provides (iirc) 2% of net revenues to Liga de Cooperativas de Puerto Rico, the apex co-op organization for the island. This provides an internally funded support mechanism for co-ops and has helped create a thriving co-op ecosystem.

    So I’ve got some optimism that my Puerto Rican friends will be able to replace at least some of the failed systems that have been afflicting them with cooperative, sustainable, alternative solutions.

    Reply
  9. Watt4Bob

    Things are moving fast, from MSN;

    Puerto Rico has agreed to pay a reported $300 million for the restoration of its power grid to a tiny utility company which is primarily financed by a private equity firm founded and run by a man who contributed large sums of money to President Trump, an investigation conducted by The Daily Beast has found.

    Whitefish Energy Holdings, which had a reported staff of only two full-time employees when Hurricane Maria touched down, appears ill-equipped to handle the daunting task of restoring electricity to Puerto Rico’s over 3 million residents.

    As usual, donate a few thousand, reap millions.

    FEC data compiled by The Daily Beast shows that Colonnetta contributed $20,000 to the “Trump Victory” PAC during the general election, $27,000 to Trump’s primary election campaign (then the maximum amount permitted), $27,000 to Trump’s general election campaign (also the maximum), and a total of $30,700 to the Republican National Committee in 2016 alone.

    Colonnetta’s wife, Kimberly, is no stranger to Republican politics either; shortly after Trump’s victory she gave $33,400 to the Republican National Committee, the maximum contribution permitted for party committees in 2016.

    Bears repeating, we’re not only ‘ruled’ by whores, we’re ruled by cheap whores.

    Of course I make apologies to all ladies of negotiable affection.

    Reply
  10. Scott

    I’ve long said that the thing with energy capture & renewables is that solar is the basic number one solution since the Sun simply shines in the most places.
    Then what you have to do is ask Civil Engineers what is the best system, for the demands & specific place. It takes Systems Engineering.

    What is fastest? Can it be built upon? , added to and what does it cost?

    Musk’s Power Wall systems appear to be fast & robust. For a land owner achieving some level of income from either labor or agricultural production I would think the systems desirable.

    Even with a simple 100 dollar marine battery & a 50 dollar solar panel to recharge it, one could run room lighting & computer & and maybe an efficient, small refrigerator, from what I know.

    I forgot to add an inverter to make AC power. I got a raw one that makes 10 amps for 100 bucks.

    A propane bottle is probably required for cooking.

    Still, key to the lives of a state, the Territory, are Systems Engineers charged with & willing to figure out the best system of best practices that will give the most power for the least expense, fastest.

    There are Systems Engineers & Financial Engineers.

    We know from the smartest economists of our times who have the advantage of real empirical evidence that our banking practices, where it is real estate that composes 80 percent of what they do, are destructive as hell. It is Marx’s Industrial Service Bank where industry is 80 percent of what is done is superior.

    The one thing that recommends to Puerto Ricans continued status as a Territory is that they either own their land, or they don’t. They do not pay property taxes.
    At least that is what I was told was at issue by a Puerto Rican.

    Flanking the failing US Treasury, stolen from Americans by Finance centered in NYCs Wall St. neighborhood, is what North Dakota has begun with the Bank of North Dakota. Essentially there is the model of a bank serving the people of the state as a “Utility”.
    Revolt? Could real revolt simply be their own Utility Bank?

    The issue with even rain water is cleaning it of a bug called Clystospridium which I have spelled phonetically here.
    South Carolina’s Clemson University Shipping Container housing plans include a 55 gallon drum that filters the water to be safe to drink for women.
    From my studies with other engineers the shipping containers, or Habitflex folding homes which could be helicopter delivered at 60 grand a piece were recommended.

    Reply

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