14 February 2014

The "Who Cares?" Investor Weighs In

Found this on a blog called WikiRating.

If you want the short version, skip the italics to My conclusion.

Puerto Rico Rating Downgrades: Enron Redux?
Posted on February 12, 2014  by Marc Joffe  

 On November 28, 2001 Enron lost its investment grade credit rating. Four days later, the company filed for bankruptcy. Those awaiting a similar collapse after Puerto Rico’s descent into junk bond territory last week will have to wait a lot longer to see the Commonwealth’s financial denouement.
 The relatively slow motion nature of Puerto Rico’s fiscal collapse – if, in fact, one is occurring – underscores the differences between various classes of public sector and private sector debt. It also speaks to changes in market conditions.

 As with the 2011 S&P downgrade of the US, rating agency actions had little impact on Commonwealth yields. The New York Times reported last Wednesday that the investors had shrugged off the S&P action. On Friday, the Wall Street Journal reported that Puerto Rico General Obligation debt traded at a lower yield after the Moody’s follow-on downgrade than it had earlier in the week.

 The limited impact of the ratings downgrades might be attributed to market discounting – since the rating agency actions were widely anticipated. It could also speak to the greatly reduced reputation rating agencies enjoy in the aftermath of the Enron/Worldcom scandals of the early “aughts” and the subprime fiasco of 2008.

 Unlike Enron, Puerto Rico can operate for some time without capital markets access. The Commonwealth can get by without financing because its fiscal deficits are relatively low and its debt is predominantly long term. It thus does not need that much new cash to finance ongoing operations or to roll over previous bond issues.

 But, sooner or later, Puerto Rico will have to bring new issues to market, and many doubt whether investors will be around when it does. Commonwealth-related debt accounts for about 2% of overall US municipal bonds outstanding and its fall from investment grade leaves many traditional investors out of the running. So it would appear that there is a lot of debt and not much appetite.

 In my view, this analysis misses some key institutional developments. Hedge funds and certain other classes of investors can traverse multiple markets. Further, Asian investors have accumulated billions of savings and remain on the lookout for alternatives to low yielding US Treasuries. So the constituency for Puerto Rico debt is not merely the $3.7 trillion municipal market, but a much larger audience especially if the price is right.

 Puerto Rico debt is now trading at yields much higher than that of Italy, Spain and Portugal – and is roughly on a par with Greece. In contrast to Greece, Puerto Rico is not a serial defaulter. In fact, it is part of an asset class – US state and territorial bonds – that has not seen a default in over 80 years. Further, the last default – of Arkansas in 1933 – ended in a full recovery for investors. So, from an international perspective, Puerto Rico bonds appear to offer good relative value.

 Thus if new Puerto Rico bonds are offered at 8% or 9%, I expect that they will find a bid. While coupons at that level are not fiscally sustainable, the fact that most Puerto Rico government debt is long dated means that Commonwealth interest expenses as a proportion of revenue will remain low relative to previous default cases.

 Unlike Enron or another private company, a US sub sovereign like Puerto Rico has secure revenue sources in the form of taxes and federal assistance. As Detroit has shown, insolvency is ultimately possible, but the path to ruin for a public sector debt issuer is usually a long one.

Okay, here's the skinny: it doesn't matter a farthing that Puerto Rico's debt makes it an economic example of "fiscal crisis." What really matters is that you can keep buying Our fucking bonds and make money!

The reality of Our situation is a stagnant economy racing to a collapse. But for wikiboy and his ilk, it's a profit-making bonanza!

So the solution is--obviously--switch sides! Right, wikiboy?

My valentine to y'all: Switch sides, Brethren!

After all, We got the "Who cares?" part down pat...

The Jenius Has Spoken.

10 February 2014

What Our Indifference Hath Wrought

What were you doing Saturday? Do you remember? Maybe it was fun.

Here's what The New York Times did, a piece titled "Economy and Crime Spur New Puerto Rican Exodus."

A few fillips from said piece:

* Our debt exploding to over $70 billion (it was under $28 billion in 2008).
* A downgrade of the bond-based debt to junk by Standard & Poor's and Moody's.
* Unemployment listed at 15.4%, which is as accurate as saying I'm 2'8" tall (I'm 5'10").
* Rapidly-rising cost of living, especially in terms of utilities.
* Lousy public schools.
* Rising crime.
* A pathetically-limited workforce. (The article doesn't note that the government accounts for almost 40% of all direct and indirect labor on the Island.)
* Increasing exodus, causing about a 14% population drop in the past decade.
* Increased taxes hitting small and medium-sized businesses hardest.
* A per capita income of $15,200, lower than it was in 2008 and less than half of Mississippi's.

Now if you read--or will read--My previous post, and the whore-mongered piece it is based on, you might see some of the same fillips in that """report""" as in the article. So why was I so negatively harsh on Meacham the Bicho and will be appropriately neutral on Times correspondent Lizette Alvarez?

Because Ms. Alvarez stuck to the facts while Carl El Pendejo Republicano is trying to stick it to Us.

Look, I won't argue the facts. My Island is ears-deep in a shithole and no amount of demagoguery is going to erase that reality. But being stuck in a horrible situation is a far cry from saying that those who seek to remove themselves from it will fuck up another country.

Carl's mom may be Chilean and he may speak fluent Spanish, but that doesn't give Carl Mama-Bicho any special insight to what We are in Puerto Rico, who We are as Puerto Ricans or what We are capable of as individuals or a people looking to make progress. He is entitled to his opinion, but when he acts to make that opinion some sort of policy prediction and hires a spineless troll to try to give it legitimacy, he is wrong, he is an asshole and he is worthy only of Our most blistering contempt.

As for the spineless troll cum economist-for-hire Joaquín Villamil, the sooner he drowns in his own slippery scum, the better.

Beyond that, here's the bottom line: We are in this shithole because We let it happen. I repeat: We. Let. It. Happen. It's Our fault. 

We let the Fools play Us and far too many of Us cheered them on. We let the Fools rob Us of Our present and future and cheered on the ones We saw as being "Our thieves" and voted against those We saw as "their thieves." 

We bought the shit sandwich that government jobs were economic growth and that party politics mean more than economic and social progress. And We allowed a double-handful of blood-sucking parasites to multiply into a veritable army of insatiable leeches gnawing at every level of society.

We let it happen. Our bad.

But that doesn't mean that We are now in the business of being drug-addled criminals, Carlambetranca. As Ms. Alvarez noted in her article, much of Our recent exodus is from the middle-class and with professional occupations. People who take their kids and parents and are moving to the States with what little money they can recover from selling in a true buyer's market. Folks who want to build, to create, to forge a new life for themselves and the next generation. People who simply want the chance to do what they were trained, educated and prepared for. 

Will as many as one million of My Brethren leave Puerto Rico, flooding into states beyond Florida, Texas, New York and New Jersey? It's possible. Not likely, but possible.

And will this influx be a crime wave smacking the U.S. of part of A. shores like a hurricane?


It will be an influx of people focused on making a better life because there's a chance, a decent chance, that things will get better in 10-12 years and coming back to the Island will then become a reasonable option. It happened before: the 1940s-1950s exodus of Puerto Ricans to the States is the example--the only example that matters. The situation is virtually the same, a mass of workers looking to create a stronger and brighter future for themselves. The vast majority of these folks aimed to work and most of them made their mark in a positive fashion. To ignore that historical tendency is to be willfully blind.

Then again, willfully blind is the default ocular stance of Republicans like Carl "Mamao" Meacham.

And sadly, of Us when it comes to making sure the Fools aren't raping what We have and need for a better future.

The Jenius Has Spoken.

07 February 2014

Beware Our Cooties

"But the Puerto Rican economy does matter for the United States—and particularly for U.S. security. Given the island’s proximity and ties to the United States—not to mention the perennial (and highly controversial) debate over Puerto Rico’s status as a U.S. commonwealth and the ease of entering the United States once on the island—drug trafficking and violent crime in Puerto Rico have direct implications for U.S. security policy in the region. In the absence of a healthy economy and given the shrinking private sector in Puerto Rico, the growth of informal activities—drug trafficking and organized crime chief among them—is the unfortunate consequence."

That little fillip comes from a recent publication titled "Shit! The 'Ricans Are Comin'!" The actual title of the butt-wiper is "Why Puerto Rico's Economy Matters for U.S. Security," written by local economist José Villamil and with a forward by the above-quoted Carl Meacham.

The report was issued in last week just as the junk-bond bomb of Our overwhelming debt was starting to become a palpable reality to folks who are too dense to absorb news other than from Our gossip-rag media, lamebrain talk radio or the corner bar.

The report itself is a typical Villamil production: up-to-date with data, leaning more on style than substance and the finest expression of the economist-as-whore. When you pay Villamil to write a report for you, he writes the report you want. Satisfying clients is very high on the Villamil short-list of priorities.

As an example of his sloppiness as window tint, here's this quote, from page 5: "Even this complacency came to an abrupt end in 2005, when rating agencies raised an alarm concerning the high level of appropriations debt with no source of repayment. And in May of the following year, the Puerto Rican government had to close for two weeks because of budgetary difficulties."

Notice how the bond debt crisis is juxtaposed directly with the government shutdown, a gross over-simplification of what was undeniably a party politics shitfest between a dickhead governor and a dickhead senate president. (No. No capital letters for these assholes.) Was the debt part of the problem? Yes. But the shutdown was totally unnecessary and caused mainly by an infantile bout of dick-swinging between guys with microcephaly and micropenises.

But of course, what Carl pays for, Carl gets. He wants to paint a picture of Puerto Rico as a rogue narco-estadolibreasociado whose millions of cocaine-infested criminals are poised to swarm the pristine shores of the U.S. of part of A. in a mindless rampage of raping and pillaging. It will come as no surprise to smart folks that Carl is a true-blue Republican. Or as their ilk is known in Jeniusville, a dickwad.

Carlitos, whose mom is Chilean, speaks fluent Spanish, so I can make My point to him in a language We both can enjoy: Cágate en tu madre, cabrón.

Google Translate for the rest of you.

The Jenius Has Spoken. 


05 February 2014

The Sky Fell Long Ago


Puerto Rico bonds are now junk.

But that's just Standard & Poor's opinion, right? The other two bond rating agencies are bound to see it differently, right?


But the U.S. of part of A. is going to step in, right?



Ain't gonna happen.

But We have solutions, right?


Is there any ray of light?

A few. Here's one. Here's another.

But what's going to happen?

Exodus. More of it.

Stagnation. More of it.

Multimillion dollars losses suffered mainly by those who worked most of their lives to build this economy so that hyenas could feast on it, fucking hyenas with names like Rosselló, Pierluisi, Acevedo, Rivera, González, Hernández, Ferré, Burgos, McClintock, Fortuño, Calderón, Cordero, Corrada, Romero, O'Neill, Miranda, Santini, Colorado, Cintrón, Rodríguez, Martínez, Crespo, De Castro, Pérez, Fajardo, Jarabo and many more. Fucking chancre-covered hyenas that idiots amongst Us cheered and slaved for, waved flags and honked horns for, slobbered over when they appeared on TV or in person and for whom We ultimately spread Our cheeks to for the reaming of Our futures.

Now The Ova and his late-to-the-party hyenas are trying not go all Pollito Chico and scream the obvious.


The sky isn't falling.

It fell long ago.

We're just noticing it now.


How stupid We were.

The Jenius Has Spoken.

31 January 2014

Stupid Math = FUBAR Sales Tax

There are times when My Brethren act like the problems We have in Puerto Rico are absolutely, unequivocally, indisputably, undoubtedly, unreservedly and entirely Our own. We act and think that nowhere else on Planet Earth is there a problem like the problem We have or a FUBAR situation like no other FUBAR situation those vaguely-existing people out there ever went through.

Most of the time I react with a restrained "Get over it" attitude, and every once in a while I'll actually engage a few people in a brief round of "Reality check: read something other than lottery numbers." The latter often gets Me a larger "Cone of Silence" than normal, occasionally hedging into "Zip Code of Indifference."

However, there are times when I have to shake My head (known in some parts as "The Crib of Jenius") and concede that, yes, We have problems that no one else on Planet Earth has. In the most recent case, Our revolting excuse for an (un)government is incapable of doing first-grade arithmetic. In their crabbed, greed-lusty, lizard-on-a-bender brains, 6 + 6 = 6.

Allow Me. The local sales tax, called IVU, as in Intravenous Urine, is 7%. However, 1% of that is a Municipal tax, with the proceeds ostensibly going back to the town coffers at some undefined point in time, often related to (A) party affiliation, (B) backdoor politics and (C) whim. The other 6% is the, ahem, National tax, charged at the point of sale.

The current scheme thought up by the Ova, (un)governor Alejandro "Deer in Headlights" García and his sub-moronic ilk, is to "align" the tax rates all over the Island because some municipalities don't charge the 1%. The new system, such as it is, is supposed to "move" the tax from one point to another, using tax credits to "stabilize" prices. So when an item arrives at an Island port, it gets a 6% tax, that the supplier charges the wholesaler (of course), who receives an equivalent tax credit. When the wholesaler sells to the retailer, he pays the tax and gets a credit, and then the customer buys the item and pays the tax. See? """It's just moving the 6% from the end to the beginning!"""

In a "search for consistency" with the acumen of a slug doing Sudoku, the (un)government wants to "relocate" the tax from the point of sale to the moment of import, extend it to all items, without exclusions, and they say that nothing will change.

Really. No, really?

Oh, they tout "the benefits." They trumpet "the simplicity." They parade "studies," none of which--none--are actually verifiable outside of their own number-twiddling.

And they are flat-out lying. Viciously lying.

In a well-oiled model of lying in the face of overwhelming facts, the Ova and his rotten yolkies are ignoring three very salient and well-documented facts:

1) Our prices are already at "6% level," meaning that they have long factored in the added cost of the tax itself.

2) That added cost is not eliminated by moving the tax. Under this scheme it increases because it now affects several steps of the transaction from port to buyer, rather than just one step. Call it "friction" and in business...

3) "Friction" is a cost that gets passed on as higher prices.

Back when The Jellyfish, Anibal "I Was Really Guilty of Campaign Funding Fraud" Acevedo set-up the IVU tax system, I predicted its impact would not be a 6%-7% rise in prices to offset the new imposition, I said it would ultimately swing prices about 13%-14% and it did.

I'm not an economist: I think for a living. But any brief search about the impact of taxation on consumer prices will show that (1) the price increase is inevitably higher than the tax itself and (2) that consumption goes down wherever the tax takes effect.

So The Ova's awful yolk of a system that """promises""" to equalize taxation is actually going to have a larger, broader impact on prices, close to another 12-15% over the course of the next two years.  And overall tax revenue--what the Ova and his rotten egg-sucking hyenas really want to filch--will go down on a per capita basis.

If they really--chuckle-chortle-scoffing guffaw--wanted to help Our economy, why not equalize the system by eliminating the 1% tax so that folks living in smaller towns get a tiny-but-useful break? If these FUBAR pinheads looked at anything beyond the length of their pockets, they'd notice that the municipalities that eschew the 1% are large, with relatively extensive economic activity. But in terms of population, they account for less than 36% of the total living here. Tax cuts stimulate growth, but they lack the sexy appeal of grabbing the cash at the onset, rather than down the longer road of potential progress. 

Great. We're bankrupt, the hyenas are still hungry, and the corpse We call Our economy will now cost Us more in order to keep hiding from Ourselves the ferocious stench of its abject failure.

Yeah, sometimes We have FUBAR situations that are uniquely Our own...

The Jenius Has Spoken.

29 January 2014

Solving Puerto Rico 008: Michael Castro

There are only a handful of local bloggers that I admire. First, because I know it is not easy to blog extensively and with quality content. And second, because I stand upon My (self-defined) lofty perch and seek to use My standards, more journalistic than entertainment-oriented, to evaluate other blogs.

To use an analogy, I'm more "BBC than MTV." Deal.

At the top of the very short list is Michael Castro, a teacher whose passion runs in broad but well-defined channels. His blog, Poder 5, not only exceeds The Jenius' output, it also is a closer reflection of local zeitgeist. My Brethren are emotional folk, and Michael often captures and expresses these emotions with a keen critical eye.

In Our vidcast, Michael discusses how We can solve Our status problem, beginning with a change in Our educational focus. If you've watched other Solving Puerto Rico episodes, you will have noticed how often "education" crops into the equation. That gives people who don't live here the barest glimpse of how some of Us feel about a system that has consistently and purposefully undermined Our Island.

Click below to watch Michael and I discuss his solution, or check it out on YouTube.

It may take many more years, but someday, most likely by external fiat, We will dump the colonial status My Island currently """enjoys""" and finally move forward to being something more than an afterthought.

The Jenius Has Interviewed.

27 December 2013

The "World Peace Game"

I'll get to the truly important fact about the World Peace Game: the recent well-received book about it mentions Me in the Acknowledgements.

Yeah, Me. Makes Me proud.

The World Peace Game was developed by John Hunter, as a teaching tool in the areas of problem-solving, creativity and current events. John's TED talk about it is amongst the most-viewed videos of that ever-growing series of events.  Here it is, and it's well worth 20 minutes of your day:


In his talk, John describes how he developed a simulation involving four countries and what is now over 50 major problems that the world faces, from hunger, epidemics, bigotry and destruction of the rain forests to lack of water, pollution, religious strife and economic inequality. The countries have different resources, random events can alter the game in drastic fashion, and to win, every problem has to be solved and all countries must show progress.

Oh, and the players? Fourth graders.

Yeah, what were you doing in 4th grade?

In his over 30 years of using the World Peace Game, John has made changes to the game, to not only reflect new realities, but also to accommodate the impact of new technologies. In early versions, John provided the students with binders filled with information on the problems to be solved. Now, the players do most of their own research, working off a descriptive list of the problems. What hasn't changed is the immersive nature of the game, as the players come face-to-face with new concepts and have to develop strategies to not only understand problems, but find ways to fix them.

I learned about the game through a blog post and was immediately taken by the concept. I sent John e-mail and he was kind enough to respond. In a few exchanges, I addressed issues I saw might be pertinent to expanding the game so that other teachers could host it. As much as I wanted to jump in and help John and the World Peace Game organization, I couldn't stretch enough to do it. Didn't matter, as John and his organization expanded workshops and the Game to reach a much broader audience.

The book (did I mention I was thanked in it? Okay.) is a wonderful read, packed with experiences that good teachers thrill about, those that have students reaching far beyond their expectations to explore their greatest potential. I defy any teacher who thinks they are goof to read about the World Peace Game and not come away prouder of their profession and inspired to do more.

One thing John learned early in the Game--and that he still has to challenge himself with--is to sit still and let the students do. The urge to jump in and "correct" them is ever-present, and the Game's overwhelming success--and it is an overwhelming success--is due to this "the students learn through their efforts" process. The current education system is a top-down, fully-imposed, authoritarian, command-center, conformist, shut-up-don't-ask, memorize-and-vomit sausage factory (My words, not anybody else's) while the World Peace Game is a "Here, experience this directly" journey.

There are only two things I regret not being able to participate in as a kid: parkour/free running (although We did do "run away through obstacles to avoid getting beaten up" a lot) and this Game. I love strategic games, the more complex the better, and I can only imagine what it would be like to face the challenges John places before his students. Workshops and Games are held often, for students and teachers, but time and travel constraints can limit participation.

Now the game is more accessible, as the online version allows players to join in from around the world, even using cell phones. The format is adapted to asynchronous play, and though I'm sure that the challenges are as riveting, in many ways the direct and personal sharing involved in classroom or workshop play adds a rich dimension to the entire experience.

You can see the results yourself in the film about the Game, a companion piece to the book (where My name appe--Oh, you know that already...).  If you have kids, want to have kids or were ever a kid, I urge you to see the film, read the book, watch the video...and support similar projects.

Our children's education is far too important to leave in the hands of government. We need to do more to support dedicated teachers, visionary principals, community resources and Our own talents in order to make education less destructive. (Yes, I said "destructive." It is.) John Hunter has his way of improving education, but he'd be the first to say that his way is certainly not the only way. Whether it is through a game, dance, journals, music, lab experiments, robots, painting, making films, building castles or making costumes, kids will learn better when they are (a) engaged in activity and (b) allowed to explore their solutions and their mistakes.

And no, not everything has to be a game. But it helps if the lessons are merged with a sense of excitement that can be treated as fun. And kids can tackle more than you think, as John has shown over and over again in his Game.

All of the world's major problems solved, and everyone making progress together. Sounds utopian? Most great ideas do, and through the World Peace Game, fourth graders are getting a chance to experience that maybe, just maybe, Utopia is not as impossible as adults believe.

The Jenius Has Spoken.

25 December 2013

Solving Puerto Rico 007: Laura Gorbea and James O'Malley


The James Bond vidcast presents two of my favorite people, the husband-and-wife team of Laura Gorbea and James O'Malley. Both are talented, well-educated, entrepreneurial souls that also happen to be the parents of four lovely children. In this video, they discuss their idea about fostering Fine Arts education in Our schools. And as you shall see, they don't just talk about ideas: listen and you will discover what their wonderful oldest daughter did.

To get to know Laura and James a little, click here or just click below:

And with this family-oriented theme, I want to wish all of you the very Merriest of Christmases.

The Jenius Has Interviewed.

18 December 2013

Solving Puerto Rico 006: Gabriel Pagán

Here's the thing about ideas: the best ones are often the most startling.

On that note, welcome Gabriel Pagán. His idea is simple to express and once you get past the "Huh?" factor, it makes a ton of sense: spread Our government agencies around the Island.

Simple, right? At least in concept, for execution will take some effort. But once you get into the idea, you'll see it has more pros than cons. And no, I won't make a joke about "cons" and government workers. It's your turn.

You can explore this idea with Us by clicking here, or just aim your mouse at the video link below:

You will note that I don't appear at all, except as a disembodied voice. Cheer if you must. A technical glitch kept the camera on Gabriel the whole time, or maybe he rigged the system because he needed the attention.

I doubt that, though. A little.

Either way, take a look at decentralizing Our government and if you notice a trend in these videos, it isn't an accident: many of Our solutions have a common thread.


The Jenius Has Interviewed.

12 December 2013

Someone Shut The PoopyHead Up

Detroit declared bankruptcy. The largest municipal default in U.S. of part of A. history. Want to guess who might be next?

Uh-huh. Although in Our case, We can't "go bankrupt": We "default." Which still leaves Us holding a smelly diaper of diarrhea-drenched debt.

Speaking of which, Head Beggar Pedro "PoopyHead" Pierluisi had this to fart about the situation: “Some people might say, ‘This is their problem.’ But Puerto Rico is part of the United States, you own this problem."

Well, yeah, they own pretty much everything We have, what with Us being a colony and all that jazz. But here's the trouble with your statement, PoopyHead Beggar: you sound childish and stupid.

Pedro "PoopyHead Beggar" Pierluisi
I know, I know: you can't get sweet wine from a lump of filthy clay. But your job, PoopyHead Beggar, such as it laughingly is, consists of one single, undeniable, unimpeachable and uniquely central goal: Don't make Us look bad. 

Mission unaccomplished. Pat yourself on the ass, you ass.

Capable, responsible and mature human beings, also known as "adults," don't go whining and blaming others for situations they are involved in. 

Intelligent people who think clearly about their situation, don't spout shit that makes the people that most likely to help think twice about doing so or disgusts them enough to make them walk away.

Is the $70 billion clusterfuck We are in Our fault? Damn right it is, based on your fellow shitbags in blue and turdsacks in red, going back to 1968. We elected the vermin and let them run the country into the ground, so yeah, it's Our fault.

Is the U.S. of part of A. involved in Our problem? Hell yeah: they hold most of Our debt. But does that mean that they have to help Us, to bail Our sorry asses out? Not really. As I pointed out before, the Puerto Rico Constitution forbids the government from declaring bankruptcy and is obligated to repay external creditors (i.e., investors in Our bonds) firsteven at the expense of the people it is supposed to serve.

You know PoopyHead Beggar, you should read Our Constitution sometime. It's in Spanish, too, so you won't strain what feeble linguistic skills you have. Then again, you might.

Here We are: up Shit Creek and some PoopyHead Beggar takes a dump in the paddle-makers' faces. Who would you rather help: the whiner or the guy who rolls up his sleeves, exhibits a can-do attitude and gets to work?

Yeah, the U.S. of part of A. too. Too bad We specialize in whiners.

The Jenius Has Spoken.

11 December 2013

Solving Puerto Rico 005: Ramphis Castro

The best thing about talking with smart people is that you come away with an enhanced perspective on the issues discussed. That's the case with Ramphis Castro, an energetic explorer of ideas who takes action. As you'll see in the vidcast, I give him the idea of "the 5--", uh, actually, Ramphis gives Me the idea of identifying "the 5%," the folks who know what's up and are either doing or are willing to do what's needed to make Puerto Rico better.

Yeah, I want credit for every great idea out there.

Here's the link or just click on the bearded man below:

 You'll be hearing more about "The 5%" (now capitalized, which was MY idea) in future Jenius posts.

The Jenius Has Interviewed.

05 December 2013

Choking Our Information Stirrer-Straw

Look what I just found: an executive order that seeks to centralize all--ALL--digital information sources and services of Our hideous shitfest of a government under one shitpile, the Office of Management and Budget.


Now I'm not going to sit here on what was supposed to be My week off and tell you that Our digital information system is A+. Or C+. Or even D+. It's more like a D--, but it is making progress. Here are some highlights, in just 7 months:

* Oracle contract reduction cost from $33 million to $16 million.

* Mobile phone compatibility (finally) for government webpages.

* The discovery and elimination of over 64,000 viruses infecting government computers, most of them originating in Russia and China.

* A centralized portal for government tech projects, to avoid waste through repetition or needless redundancy.

* Coordination of agency groups for enhanced inter-agency communication and collaboration.

* Database contract cost reductions, the first ever.

* A Tech Summit, the first such high-profile event in Puerto Rico.

* The implementation of transparency and open source software as the official policy of the government.

In the words of a Mythbuster, "There's your problem!" This power ploy by the OMB--OGP in Spanish, as in Over-Grown Pus-heads--is pretty transparent, seeking as it does to quash not only the notion of "open government data," but also that of "open source software." The order issued would consolidate all purchasing power and purchasing-related decisions into the hands of the OMB, leaving the tech experts as before, "advisors" with the power of watching their best efforts be derailed.

I can practically smell the crabbed hands of Micropore and Bore-acle in this mess.

Now I'm not a techie. Can't program an 8-track to record a video for My Nokia. But I do understand one thing: change hurts. But change is needed, and in Our tech environment, it is absolutely necessary. The change coming out of the technology director's office is a breath of fresh air for two very basic, very cogent reasons:

1) True techies are finally in charge of tech development and policies, and...

2) The established providers are being shown up for what they are: money-grubbing, bribing apes.

Okay, not convinced? Then look at it from another direction, in step-by-step fashion:

Step 1: The current (faux)governor, Alejandro García, "The Ova," made transparency and open source a commitment of his (faux)administration.

Step 2: The OMB Director, one Carlos "¿Quéseyo?" Rivas, decides to unilaterally erase that policy, effective December 15th, 2013.

Carlos ¿Quéseyo? Rivas
Now, analyze:

* Did The Ova decide the policy's time was ova, uh, I mean, over? If so, he is now several parsecs further from considering the potential of maybe having a spinal cord than he was before.

* Has ¿Quéseyo? decided that The Ova is too soft to stop him? In so much hot water that he'll crack before taking action? That The Ova is fried from too many problems and nowhere near enough solutions? Or is it that ¿Quéseyo? thinks The Ova is ultimately a chicken?

* Yes, I enjoyed writing all that.

You see, this 3-page document is not just another dosage of stiff toilet paper, this is a battle for the type of government We will have. On one side sits a group of tech experts who want to implement best practices and truly place Puerto Rico at the forefront of tech innovation. On the other side, you have whores. Nothing more, nothing less.

I know what side I'm on, and there's only side to be on. The days when whores run rampant on Our dollars should have ended long ago. Transparency is a sure way of starting to run them off.

So Let's make sure they stay on the run.

The Jenius Has Spoken.

27 November 2013

Solving Puerto Rico 004: Marcos Polanco

Continuing The Jenius's vidcast series, Solving Puerto Rico, We come to Marcos Polanco. Not only is Marcos a serial entrepreneur, he also worked for the government agency called Puerto Rico Industrial Corporation, better known as TRASH, er, I meant PRIDCO.

Marcos is closely involved with Our start-up community and was a major force behind the successful TEDx San Juan Conference. We cover a series of topics in almost rapid-fire fashion, and leave many more for future chats. Check it out here, or simply click below.

I'm very sure that, time permitting, Marcos will be back on the vidcast. There's too many ideas We could discuss to leave unexplored.

The Jenius Has Interviewed.

22 November 2013

We Were Screwed, Then The Rapists Showed Up

Ronald Reagan, second banana to a chimp for most of his life, once said, "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.'"

Screw that. They're still true, but they've been replaced by "You're bankrupt and Wall Street will help fix that."

So combine the two, the federal government shoving Wall Street at a problem, and you have the current "Huzzah!" moment Puerto Rico is going through.

 "But, Jenius," some of you will say, "it's just the feds coming in to set things straight. Who said anything about Wall Street?"

I did, I do and there's no hiding it. The federal government is trying to head off the financial collapse of Puerto Rico and who knows more about financial collapses than the banksters of the Street?

Look, We are bankrupt. Our debt and debt service are beyond Our current and estimated future capacity to repay. Anyone who argues the contrary is an idiot or ignorant of the facts. Puerto Rico's bond rating has not been properly classified as "junk" because there's too many billions of dollars of Our debt running around in too many pension funds and investment pools.

Yes, Puerto Rico, through bankster-like mismanagement and greed, has become "too big to fail." Woo.

And hoo.

The feds may have ordered the "rescue mission," but the banksters are going to do the actual """work""", and if history is any sort of teacher--and it is--We're about to get raped. Oh, not immediately, of course not, that would be counterproductive. No, the rape will be delayed, to a time well after the money-grubbing forced "pawing foreplay" has properly run its course. Then, when the banksters and their cronies, both federal and local, have had their fill of easy pickings, then We'll experience the full effect. Think of it as going roofied, by command.

But by then, the feds and the banksters and most of the local vermin will have moved on, to another target.

It's not called a "SWAT team" for nothing.

And yes, "rape" is a harsh and horrible word. But Puerto Rico is about to be forced, compelled and obligated to perform solely to please someone else's idea of "satisfaction." We will ultimately get nothing out of the "rescue the Island's financial status" process except a loss of self, an image tainted by contempt and lasting pain. That is economic rape.

We can demand transparency in the process. We won't get it.

We can demand a greater say in the process. We won't get it.

We can demand more control over Our economy. We won't get it.

We can demand to be left alone to solve it Ourselves. Nobody will believe Us.

We won't get any of the above because We haven't got the guts, brains or will to demand any of it. And even if We did, We'd get nothing.

What We'll get, is shafted. Economically stripped and plundered like a Roman vestal by rampaging Visigoths wearing $2,000 suits and the moral IQ of a lead bullet.

They'll get what they want. We'll just get older. And more screwed.

The Jenius Has Spoken.

20 November 2013

Solving Puerto Rico 003: Raúl Colón

Serial entrepreneur and young father Raúl Colón has a varied background. On top of that, he is a passionate advocate of and for Puerto Rico. Our Solving Puerto Rico vidcast crept over the 30-minute mark because Raúl unleashes ideas a mile a minute and I saw no need to stem such a favorable tide.

You can see the the interview here, or click below.

For Raúl, a social change is needed, a building of trust between individuals and organizations, so that We come together rather than dedicate Ourselves to wretched in-fighting. It's about time We realized that We don't live in a zero-sum world, but We are responsible for the zero-sum society We live in.

[In strict order, Raúl's was vidcast 004, but I want to bookend Marcos Polanco and Ramphis Castro over the next two weeks. Continuity-obsessed fans can watch them in chronological order, to avoid any severe and debilitating stress My decision may cause them.]


As a follow-up to Solving Puerto Rico 001, with Luis Herrero, his idea was to change the incentives in the education system to provide a greater level of support to school principals. It is beyond discussion that the educational system We have is a failure. And yet as a system, it sustains itself, so whatever incentives the system has must be working. That the system's goals are not what We want them to be is the issue, so I start by asking: who benefits from the current (fetid) educational system's incentives?

At a general level, the Department of (Mis)Education's personnel structure is about a 51/49 ratio, with the higher number being administrators or some such crap. (I'm taking the high road here, obviously.) That looks pretty bad, when one considers that an educational system should have more educators than a mere "less than half."

But a closer look reveals that in terms of personnel compensation, the ratio in percentages is closer to 66/34, in other words, the pay scale for crap exceeds that of teachers/ (Again, I'm on the high road here.) Even a third grade (math teacher) student can see that 51/49 does not equal 66/34.

Drilling a little deeper, with what little statistics the department provides (data from 2009 and not online as far as I could find), you'll see that on the administrative side, almost 23% of the total payroll goes to "consultants." A simple calculation (66 X .227) will show that almost 15% of the department's total payroll goes to outsiders, folks who neither teach in a classroom or directly support those who do.

"So what?" you say. "Teachers can't work alone." Granted, but when the average teacher salary barely cracks $21,000 on average, you'll note that the average consultant salary averages $79,000.

Uh-oh. Crap be expensive.

So Let's just look at that angle. The system knows it gets many millions of dollars, from both local (it is the largest single departmental budget in PR) and federal funding. Instead of focusing the department on education, the system looks inward to create boondoggles for political cronies. The incentives are not geared to "education," but "profiteering," on the form of increased bureaucracy (more people doing crap) and sweetheart deals, which include consulting and "services." Have you ever wondered why the local department of education doesn't keep accurate statistics? Now you know why.

You want proof? Our educational system was pretty much under federal government control for several years because from 1992-2008, it was a morass of corruption and fraud. It isn't much better now, but at least We no longer have the feds probing every orifice.

When education spirals downward year after year, and corruption and fraud rise over the same period, it is obvious what the incentives of the system support. So Luis Herrero's idea of changing the incentives of the system to foster stronger community schools is a great idea. It aligns the system's goals with its primary mission, whereas before the goal was "lip service to education" and the mission was "grab as much as you can before they catch on."

The educational system works as a partnership platform for back-scratching-cum-profiteering, acronym F.E.L.O.N.S. Seems appropriate that the acronym begins with the exact letter grade the system has earned for over two generations of ill-served students, parents and teachers.

The Jenius Has Spoken.

18 November 2013

Low-Wage Corporate Welfare Must Die

Wal-mart. Taco Bell. McDonald's. KFC. Marshalls. Pizza Hut.

You know these places. You know what the offer. But did you know they are amongst the lowest-paying companies in the U.S of part of A?

According to a 24/7WallStreet.com article, these companies, along with Sears, Macy's, Target, Starbucks, Kroger, Olive Garden and Red Lobster are in the group of the 10 lowest-paying cheapskates.

But unless We work there, what do We care? "Bring on the low prices," We say!

To the employees of these companies, whose average wage is under $10 an hour and most are limited to part-time work to avoid getting benefits, the reality is very different. There's a reason the government tracks a category called "working poor."

Did you know there's a company that made $17 billion in annual profit, paid virtually no taxes in almost every state, has over 1.4 million employees and is by far the company with the most employees receiving food stamps and welfare support? In fact, in some states, their employees are the single-largest group of welfare recipients? Did you know that company is Wal-mart?

Now you do.

And what do you care, right? You don't work at Wal-mart. Bring on everyday low prices!

Okay, but who pays that welfare support to Wal-mart employees? It isn't Wal-mart, who protects its profits with canny accounting. It's Us. Our taxes subsidize Wal-mart underpaying its employees. In effect, We pay for these employees, as We do for those who work in McDonald's, Sears, Pizza Hut and the rest.

You might say that people have to work and at least these folks have a job. Wrong point. Look at the other end: $17 billion in annual profit. How much of that is needed to raise wages to a level that gets Us--you and I and Our taxes--off the hook, so We stop providing welfare to employees and the companies that underpay them? Did you make $17 billion in annual profit last year? So why should your money underwrite the company that made that much and expects to make more this year?

The argument for establishing a "living wage" minimum, which can range (according to whose numbers you believe) from $11 to $25 an hour, is based on the idea that when people earn enough money to sustain themselves, they need less welfare. They can thus consume more and as We have all learned from Saturday morning TV ads, consumption makes the world go round.

The companies listed above are vehemently opposed to a "living wage." Wal-mart and many of these companies are also vehemently opposed to unions, who can organize to negotiate one. Cynically, the opposition is because these companies will then have to get off the welfare teat and actually work for a living. The specific driving force is that the shareholders want profits and profits are harder to come by when the monies have to be paid to the employees, rather than letting the state and federal governments pay out.

But are profits really that hard to come by when paying a living wage? Costco has routinely kicked Wal-mart's Sam's Club ass year after year, generating more sales per square foot and far more sales per employee. Costco workers average just under $17.00 per hour in base pay, nearly all work full-time and thus enjoy benefits such as medical plans and retirement funds. Costco is not as large as Sam's Club, but it generates roughly the same level of profit per store, and that makes them just as attractive to shareholders.

McDonald's has a dominant position in one market, where the stores have above-average sales and wages are equivalent to about $15.50 per hour. There's even plans to open more stores, despite having to pay over twice Our national minimum wage. Where is this magical place of Happy Happy Joy Joy Meals? 


Stick that in your low-wage pouch and smoke it.

The largest segment of workers in Puerto Rico are in the "Services" category. Just drive around and you'll see why, with many of the cheapskate companies listed above joined by Walgreens, Pep Boys, Burger King, Auto Zone, Wendy's and Office Max along with local retail chains like Pitusa, Econo, Selectos and Me Salvé. All have the same marginal-wage structure, trying to cap employee hours at 35 per week and letting the welfare system fill the gaps.

A friend of Mine, who has an MBA, lost her job when the multinational she worked for closed with barely 15 day's notice. She went to verify her unemployment benefits and to see if she could get a job through the government agency's resources. She was only offered jobs at Burger King. The pitch? "Take the job and we'll get you food stamps to help out."

She's living in Boston now.

Where Burger King and McDonald's and Wal-mart and Starbucks employees also qualify for food stamps.

You see the problem, right? "Blame it on the system," right?

But aren't We "the system"?  Damn right We are. So it's either fix it, destroy it or stay out of it altogether. 

We can do all three, and We should. Solutions are out there, but like with ideas, it's making them happen, the execution, that makes the difference.

Let's explore that, shall We?

The Jenius Has Spoken.

P.S. -- From today's Cleveland Plain Dealer website: A Wal-mart in Canton. Ohio is holding a Thanksgiving food drive "for their associates in need." Associates, what Wal-mart calls its employees, are in need? Of food? What the hell is Wal-mart paying them? Peanut shells? And how the hell does a company with a $17 billion annual profit have the totally unmitigated gall of asking its customers to directly help feed its employees? Is this the new image of America? 


[Update: 20 Nov 2013: You vote more with your dollars than you do with your, uh, vote. Here's the explanation and how powerful it is, via Free From Broke.]

[Update: 21 Nov 2013: How Wal-mart Could Pay Workers a Decent Wage Without Raising Prices. From Mother Jones. The skinny? Take the money the company uses to buy back its stock, to enrich the Walton family, and put it into wages instead. And you thought I was just spewing gall about the $17 billion profit, of which $7.6 billion goes to buying back stock...

And from Bloomberg.com, How McDonald's and Wal-mart Became Welfare Queens. A few words, to sully the palate: "Wal-mart’s 'associates' are paid so little, according to Grayson, that they receive $1,000 on average in public assistance." That's over $1.4 billion a year that taxpayers shell out for "everyday low prices." Shit.

Speaking of which, from the good people that run the other welfare queen bitch: "McDonald's Tells Employees To Consider Returning Holiday Gifts To Get Out Of Debt."

Merry Christmas, everybody!]

[Update: 22 Nov 2013: Counterpoint, also from Bloomberg: Why Wal-mart Will Never Pay Like Costco. A quote: "Costco really is a store where affluent, high-socioeconomic status households occasionally buy huge quantities of goods on the cheap: That’s Costco's business strategy (which is why its stores are pretty much found in affluent near-in suburbs). Wal-Mart, however, is mostly a store where low-income people do their everyday shopping." The article makes, and supports, its valid points.]