INTRODUCTION America''s in Puerto Rico In 2018, Donald Trump was thinking of ways to pay Denmark if the Danes agreed to sell Greenland to America. President Trump''s urge to buy Greenland seemed preposterous at first. It smacked of nineteenth-century imperialism. One "mystified cabinet member was struck by the delusional nature of it," the New York Times reported, and his "advisors tried to keep the idea from leaking out for fear that it would cause a diplomatic incident." But Trump was serious about arranging the giant real estate transaction ("Look at the size of this. It''s massive. That should be part of the United States"), and about finding ways to finance it. Puerto Rico might be the solution.

Why not use all of the federal money we keep sending to Puerto Rico? he mused to John Bolton, his National Security Advisor. Or America could propose a trade--we''ll give Puerto Rico to Denmark in exchange for Greenland. [1] From a Trumpian perspective, trading Puerto Rico for Greenland made perfect sense. Greenland would be much more valuable to the U.S., since the island is teeming with rare earth minerals and is strategically perched at the gateway to the arctic. Puerto Rico doesn''t give us any of these benefits. Its politicians are incompetent and corrupt, in Trump''s view, and all they do is ask for money.

The island is tiny compared to Greenland. And many Americans--including Trump himself, when he became president--don''t even know that Puerto Rico is part of United States. The trade didn''t happen, but it still could if Denmark were willing. If Trump had engineered the wacky deal, my first reaction, I confess, would have been relief. In August 2018, when the president did his musing, I was finishing my second year as one of the seven members of the oversight board Congress created to restructure Puerto Rico''s debt and restore fiscal stability after ten long years of economic crisis. It wasn''t exactly going swimmingly. Puerto Rico lawmakers had just throttled a major structural reform--revisions to the island''s labor laws--that was the centerpiece of our vision for revitalizing the island''s economy. "Wanted" posters with my picture on them had been tacked up all over the campus where I teach, denouncing me as a "mercenary" who "demands the blood of Puerto Rican people to pay rich Wall Street bondholders.

" Although I didn''t intend to quit, I wouldn''t have minded being whisked out of the picture. [2] But I also was surrounded by reminders of what was at stake. Maria Maldonado, a seventy-five-year-old woman, the dear friend of a friend, lost her entire life savings when the Commonwealth of Puerto Rico defaulted on its debt in 2015. A broker at UBS, one of the major banks on the island, persuaded Maldonado to move the money she had saved after working for several decades as a personal assistant following her divorce--nearly $300,000--from federally insured certificates of deposit to mutual funds that held Puerto Rico bonds. The bonds earned much higher interest, the broker said, and the Puerto Rico government would never default on the bonds, since it backs them with its "full faith and credit." (A habitual offender, UBS was sued by numerous clients; Maldonado joined a class action lawsuit, but hers wasn''t successful.) Eduardo Morales, the father of one of our staffers, owned a small stone and tile company--one of many stone and tile businesses clumped on a highway near the interior town of Caguas, forty-five minutes south of San Juan. (I''ve changed Maldonado''s and Morales'' names at the request of their families.

) Morales imports beautiful glass and tiles from Italy, Mexico, and elsewhere. His formerly thriving business was jolted by sudden tax increases imposed by the government of Puerto Rico in a belated effort to tame its massive budget deficits. Morales was later humiliated to see his name in the newspapers on a "wall of shame"--a list of businesses that were delinquent on their taxes, posted by the Puerto Rico treasury as it struggled to collect more tax revenues. ("I don''t know why I appeared in a list of ten businesses," Morales said, holding back tears, "when [Treasury Secretary Juan] Zaragoza started to do this damage to [local businesses by] . announcing to the market, hey, listen; this is a group of guys that don''t want to pay the money that they owe me, don''t buy from them)." [3] Renier Baez, a government employee who conducted psychiatric examinations for the prisons, lost his job when 30,000 government jobs were eliminated in an earlier failed effort to halt the financial meltdown. "[T]hey brought this lawyer," Baez recalled, and "you could present your reasons not to be fired because you''re exempt. I gave him all the information.

I showed him the law that said . we were essential employees. And he said yes, yes, yes, yes . and at the end, they fired me." The crisis had left its ugly fingerprints on the lives of families everywhere on the island. [4] (Since Puerto Rico is a cluster of islands--one large island and a number of smaller ones--it is more properly called an archipelago, as recent commentators on the far left do. I will refer to Puerto Rico as an island, since it''s simpler and this is the traditional term.) In 2016, Congress gave the oversight board a toolkit for responding to the crisis, the fiscal equivalent of the black bag doctors carried around back when they used to make house calls.

The instruments we were given may not have been the best. I''ll have plenty to say about this in due course. But I happened to be familiar with the biggest and most powerful of the surgical tools: bankruptcy. I''ve been a bankruptcy teacher and scholar for decades. This was why I was appointed to the oversight board. I felt a particular responsibility for the debt restructuring facet of the board''s work, which was just getting started in summer 2018. *** Puerto Rico''s a ghost that haunts America from time to time. If a massive hurricane clobbers the island or a Puerto Rican nationalist tries to shoot the president of the United States, as two nationalists did in 1950, the three million U.

S. citizens who reside on a 3500-square-mile island floating in the ocean a thousand miles south of Miami make an appearance. (To put the island''s citizenry in perspective, these three million citizens would rank Puerto Rico as the thirty-third most populist state, eclipsing Nebraska, Kansas and fifteen others.) Puerto Rico moments don''t last for long. The sirens go off for a few days, then the ghostly presence disappears. The territory we''ve held for a century and a quarter--and whose citizens don''t vote for president or have voting representation in Congress--is forgettable and forgotten. [5] The irony of this vanishing act is that Puerto Rico, for both better and worse, is no ordinary American apparition. It''s more like a Charles Dickens ghost, every bit as revealing as the ghosts in A Christmas Carol.

Puerto Rico is the ghost of America''s past. And the Puerto Rico crisis is a harbinger, a case study, of America''s future. The ghost of America''s past? Ghost of America''s past because Puerto Rico still bears the visible imprint of the attitudes--including the racial attitudes--and strategic needs of twentieth-century America. Puerto Rico is the embodiment of a seemingly bygone era. The great tide of American imperialism ebbed nearly a century ago, but Puerto Rico is still a territory, with all the complexities and indignities that brings. The ghost of America''s future? The island''s catastrophic decline looks remarkably like developments now unfolding throughout America. Puerto Rico lawmakers politicized its once glorious civil service decades ago, under a Republican governor (from the island''s pro-statehood party, the New Progressive Party) who, unlike traditional Republicans, also curried favor with the island''s public employee unions. As a result, neither of Puerto Rico''s two major parties (the other party, the Popular Democratic Party, is pro-Commonwealth, advocating enhanced territorial status for the island) stands for, or even cares about, fiscal responsibility.

When unexpected shocks threw the Commonwealth''s budgets out of balance, Puerto Rico lawmakers didn''t cut spending or increase taxes until it was too late. Instead, they kept borrowing until the markets finally cut them off, much as America''s federal government is doing with the $37-trillion national debt now. The tools that will be available if a state (I''m looking at you, Illinois, but you aren''t alone), another major city (Chicago, perhaps), or even the federal government were to default are the same ones that Congress gave to us, the Puerto Rico oversight board, a decade ago. "Puerto Rico''s in America," one character reminds another in the musical Westside Story , the one thing that comes to mind for many Americans when they think of Puerto Rico. But the opposite is equally true: America''s in Puerto Rico. *** America''s relationship with Puerto Rico can be traced to an urgent missive from Theodore Roosevelt to Senator Henry Cabot Lodge of Massachusetts on May 25, 1898. Roosevelt and his regiment of Rough Riders were training in San Antonio, waiting for the call to join the attack on Cuba that had been triggered by the mysterious sinking of the Maine, an American battleship docked in the harbor at Havana. Cuba, the Philippines, and Puerto Rico were Spanish colonies at the time, and Cuba had been agitating for independen.