Weekly Review – October 1, 2020

Published on October 1, 2020 / Leer en español

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Dear Readers:

On September 20, 2017, Hurricane Maria hit Puerto Rico with a force not seen in these latitudes in almost a century. Damages were estimated at $90 billion, without taking into account the cost of broken social and economic ties, as well as approximately 3,000 deaths—the exact number of fatalities has not been determined, and it probably never will be. In the three years since, the public debate has focused on the slow flow of federal funding for the recovery efforts and the contempt, not to say outright racism, with which the Trump administration has treated Puerto Rico. In today’s WR, we provide a brief overview of what a fair reconstruction should look like and the current status of federal funding for said purpose.

In addition, given we have less than five weeks to go before the general election, we provide a primer on the mechanics of the Electoral College in the United States. Many political scientists are worried that President Trump may try to discredit the legitimacy of the general election and manipulate the creaky two-hundred year old plus machinery of the Electoral College to stay in power. You may be surprised at what we found.

Sergio M. Marxuach, Editor-in-Chief

Insights + Analysis from CNE

Part III – Lessons for Puerto Rico’s Reconstruction

This week we want, first, to take a step away from the war of federal funding figures and review lessons of the path towards a fair reconstruction. Second, we present a brief summary of how much reconstruction funding has been appropriated, obligated, and spent. Finally, we present a set of questions we believe should be answered as the reconstruction process moves forward.


Reviewing Lessons

By Deepak Lamba Nieves, Ph.D. , Research Director

Shortly after Hurricane María slammed Puerto Rico, at CNE we began to study post-disaster reconstruction programs and processes in different parts of the world to identify some general lessons that would guide us on the long and tortuous road to a just recovery. After three long years, during which very little has been achieved and we have had to face new catastrophes, it is worth reviewing some of those lessons that emanate from academic literature (Kates et. Al. 2006; Olshansky, 2006; Olshansky, et. al. 2008) mainly from the experience of New Orleans after Hurricane Katrina:

  • The reconstruction will be a long, costly, and contentious process.
  • Funding is what drives reconstruction, and experience shows that more funding will always be needed.
  • Recovery is not a final state, but a process that evolves over time and achieves the most success when local organizations can respond quickly and freely to the specificities of their contexts.
  • Lower-income groups and small businesses and, which are often less resilient, need to be prioritized. Because recovery is uneven, higher-income households and businesses usually receive the most attention and can bounce back quicker.
  • Recovery efforts should move rapidly to maintain existing social and economic networks, but time should be allotted for sound post-disaster planning.
  • Catastrophes provide opportunities to upgrade existing planning systems and reconfigure collaborative links between federal, state, local, and community institutions.
  • Government is but one of the players in post-recovery efforts. New organizations emerge and reliable NGOs are often the most efficient and effective respondents.


Reconstruction Funding Update

By Rosanna Torres – Director, Washington D.C. Office, and Sergio M. Marxuach, Policy Director

As shown in the chart below, according to the Leadership Group of the FEMA Recovery Support Function, as of July 31, 2020, approximately $45.9 billion had been allocated mostly to HUD ($20.2 billion) and FEMA ($17.6 billion) to address the damages caused by Hurricane Irma and Maria. Of the total allocated amount, $25.5 billion had been obligated mostly by FEMA ($17.6 billion), and a total of $16.8 billion had been actually spent, again mostly by FEMA ($13.9 billion). It is important to note that these amounts do not include emergency nutritional assistance funds and well as supplementary Medicaid funding.

Source: FEMA Recovery Support Function – Leadership Group as of 7/31/20

The table above also does not include the most recent allocation from FEMA. On September 18, 2020, Governor Vazquez held a press conference to announce a multi-billion-dollar allocation from FEMA under Section 428 of the Stafford Act for the Commonwealth. The funding for this program stems from the Disaster Relief Fund. Therefore, although the funding stream is not entirely new, the announcement this week does specifically allocate funding to Puerto Rico’s Electric Power Authority and the Puerto Rico Department of Education, which will be considered “new” funding for the Commonwealth’s sub-recipients. The announcement provides $9.4 billion for PREPA’s permanent work projects and another $2.29 billion for Puerto Rico’s Department of Education to repair and rebuild public schools.


Questions for the Candidates

Below we present some questions we think should be addressed by the candidates running for governor of Puerto Rico. The reconstruction process will take at least a decade, probably more. We at CNE believe it is important for the press to ask and the candidates to answer questions about how they envision the reconstruction process evolving during the next four years.

  • How can the reconstruction process be made more inclusive? What affirmative actions is the government of Puerto Rico willing to take to increase inclusivity?
  • Why is Puerto Rico being subject to higher scrutiny that other jurisdictions undergoing a reconstruction process after a natural disaster? Is the office of the federal coordinator at the White House necessary? How about the monitor for Puerto Rico at HUD?
  • How can the influence of pernicious organizations that come “bearing the white man’s burden” be limited in Puerto Rico? How can we increase the effective participation of local NGOs and nonprofits in the reconstruction process?
  • Why are contracts being awarded mostly to out of town firms with little or no local connections? What mechanisms are available to increase training and knowledge transfers to the local workforce?
  • What mechanisms are necessary to improve cooperation and coordination among and between all the relevant stakeholders?

US Elections Analysis: When does the election end?

By Sergio M. Marxuach, Policy Director

With less than five weeks to the general election in the United States, the partisan temperature is rising as politicians and their lawyers plot their electoral strategies. Remember, in the US the contest for the presidency is really, in essence, fifty-one different elections (including DC), governed by approximately 10,500 electoral authorities, each enforcing a different set of rules. Indeed, the fight over those rules has already begun, as lawyers for both parties have filed approximately 200 lawsuits in at least 28 states, according to Jeffrey Toobin’s reporting for The New Yorker.

To complicate matters, there is a pandemic still going on and many states have changed the rules to make voting by mail easier, so as to avoid long lines on Election Day. These changes have prompted a backlash from President Trump, who has argued, without presenting any evidence, that the increase in mail-in voting will lead to widespread fraud. This is hogwash.

Data Snapshot

Housing Damage Caused by Hurricane Maria

Source: CNE analysis using FEMA data and Puerto Rico Planning Board shapefiles

This “heatmap” shows total household damages after hurricane María. Darker spots indicate a greater concentration of highly damaged homes.

On Our Radar...

An Eviction Moratorium is Necessary but Not Sufficient – “An eviction moratorium during the COVID-19 pandemic is critical for the economic security of renters—but it is only half the solution. Without rental assistance, “mom and pop” landlords will experience a significant income shock due to the loss of rental income under the moratorium”…write Kristen Broady, Wendy Edelberg, and Emily Moss in a blog for the Brookings Institution.

The Road to Recovery – Professors Rob Olshansky and Laurie Johnson discuss “the impacts of the current public health crisis on disaster preparedness and community planning, and what will it take to build a more equitable and resilient future” in this piece published by the Lincoln Institute of Land Policy.

Economic Impact of Stabilization Policies in the U.S. – Economist Raj Chetty and his team at Opportunity Insights have just published a paper about the economic impacts of COVID-19. Some of their findings are that “(1) state-ordered re-openings of economies have small impacts on spending and employment; (2) stimulus payments to low-income households increased consumer spending sharply, but little of this increased spending flowed to businesses most affected by the COVID-19 shock, dampening its impacts on employment; (3) Paycheck Protection Program loans increased employment at small businesses by only 3%, implying a cost of $290,000 per job saved.” According to their analysis, “these results suggest that traditional macroeconomic tools – stimulating aggregate demand or providing liquidity to businesses – have diminished capacity to restore employment when consumer spending is constrained by health concerns. During a pandemic, it may be more fruitful to mitigate economic hardship through social insurance.”