Weil on Finance: Rescuing Puerto Rico

Links to morning reading.

We meet again, View fans. Here are your morning links.

The federal government's backdoor bailout of Puerto Rico.

Martin Sullivan of Tax Analysts writes: "Here's a little secret that the powers that be inside and outside government don't want you to know: The Obama administration has already provided a multibillion-dollar bailout to Puerto Rico. Nobody in the major media outlets has noticed because the issue is highly technical. But let me try to give you a plain English explanation." And he gives one. The gist is that Puerto Rico enacted an excise tax on U.S. multinationals that is of questionable constitutionality. The companies don't mind because they get a credit for the tax. And the Treasury Department isn't intervening. Sullivan concludes: "A lot of powerful interests like the current situation. They include the government and both major political parties in Puerto Rico, the Obama administration, investors in Puerto Rico's municipal bonds, and U.S. multinationals that can credit the tax. The only ones on the short end of the stick are U.S. taxpayers, who are footing the bill that they would probably be unwilling to pay if they were ever asked."

Iceland let its insolvent banks fail because it couldn't afford to save them, and now it's doing pretty well.

Unemployment is at about 4 percent these days, and a 2 percent rate seems achievable. The country's 38-year-old prime minister, Sigmundur Gunnlaugsson, says his goal is "to rebuild the Icelandic welfare state." Give him credit for openness: How many politicians anywhere say things like that anymore? Well-done piece by Bloomberg News reporter Omar Valdimarsson in Reykjavik.

The Justice Department's revolving door never stops.

Mike Koehler, who writes about Foreign Corrupt Practices Act cases at his blog FCPA Professor, isn't so pleased that the recently departed head of the Justice Department's FCPA unit has joined the law firm Morrison & Foerster as a partner where he will head -- what else? -- the firm's global anti-corruption practice. Koehler writes: "I have long suggested a prohibition on DOJ (or SEC) FCPA enforcement attorneys with supervisory and discretionary authority from providing FCPA defense or compliance services for five years upon leaving government service. Indeed, the legitimacy and credibility of the DOJ and SEC's entire FCPA enforcement programs hinge on this policy proposal being adopted."

Davos is irrelevant , and that is a good thing.

So says Reuters finance blogger Felix Salmon. I could have told him that before he flew off to the World Economic Forum in Switzerland and saved him the trip. But he got a good column out of his junket, so it wasn't a waste: "Davos 2014, then, was all very fun and busy for the people who made it up the alp. But there was no reason whatsoever for anybody outside Davos to care what was going on. And that's exactly how it should be."

No flying cats were injured during the making of this blog post.

From the U.K.'s Guardian newspaper: "A striking new element has been added to the inventory of atrocious weather indicators. Along with the customary floods, uprooted trees, toppling power lines and flying roof tiles, cats were lifted off their feet by the blast of gale-force wind that ripped across counties from Kent to the Midlands." Shirley Blay of Surrey said: "We've got four feral cats in the yard and they were being lifted off the ground -- about 6 feet off the ground -- they just went round like a big paper bag." Her cats were unhurt.

(Jonathan Weil is a Bloomberg View columnist.Follow him on Twitter.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.