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By Ben Domenech Posted in 2008 | Barack Obama | Hillary Clinton | Puerto Rico — Comments (2) / Email this page » / Leave a comment »

Over at Human Events this morning, you'll find my latest column on the importance of Puerto Rico in the 2008 cycle.

There's a point that I make later in the piece which might be worth considering here - namely, that neither Barack Obama or Hillary Clinton offer a cure for what ills Puerto Rico. Regardless of what you think of the statehood-independence issue, this is a situation where there's no question that there's a need for pro-free market, anti-corruption, pro-trade leadership.

Here's the relevant portion of the article:

In terms of the issues that matter, just as on the mainland, the economy will be of great significance for Puerto Rican voters. The old maxim was that “when the mainland sneezes, we get a cold.” But now, Puerto Ricans are facing their first true island-born recession in a generation: tourism is underperforming, citizens are experiencing huge costs from the island’s government-owned utilities, and federal tax incentives have been very limited since the 936 phaseout in the 1990s. The recent passage of a 7% Sales Tax only hurt the Puerto Rican economy more, as the burden of a heavy income tax and the stacked sales taxes pushed more people into the thriving underground economy. To top it off, the Puerto Rican government is still running a $500 million deficit, without lowering income tax rates for anyone or any significant spending cuts.

Many of the problems the island faces are systemic in nature, and involve more fundamental changes than either Democratic candidate is likely to endorse. The Puerto Rican government accounts for nearly 1/3rd of all jobs -- a gargantuan number for any economy. There are no short-term fixes for such things, and if any group of citizens needed leadership from a get-things-done business-minded technocrat who understands the power of the free market as an agent for change, Puerto Rico does. They are unlikely to find such perspective in the 2008 versions of Clinton or Obama, who respond to most economic questions by playing class warfare instead of advocating real solutions.

With a population of more than 4 million, Puerto Rico has a larger number of American citizens than Oregon, Iowa, or Oklahoma - and they are facing problems that call out for fiscally conservative solutions. They may end up playing a very important role in the Democratic Primary, but it is Republicans who should be paying greater attention to the island and its challenges.

Simply put, it's an opportunity - like Louisiana - to put our ideas to the test.