As some of you on RedState know, I am a Puerto Rican: yeah, one of the crazy ones with the 3' x 4' flag in his house and a smaller one in his car. My irrational love of all things Puerto Rico matches up quite nicely with the most stubborn Southerner's love of state, and I would recommend Puerto Rico to anyone wanting to live or vacation there without hesitation. That is why my heart yearns for me to write an uncritical and positive homily on the virtues of PR statehood. Realizing that following your heart only works in Disney movies and radio friendly three minute long pop songs, however, I have this to say: don't do it. It's unfortunate, but at present, adding PR to the list of states would be ill-advised for both PR and the US.
That there is a large cultural barrier is indisputable: though it is highly patriotic, the territory is very different in character from the American heartland. While its cultural independence from the other states coupled with national and local patriotism would have made it an ideal member in 1787, it is less ideal in present-day America, where the federal government is far less concerned about its jurisprudence. A Puerto Rican Congressperson won't be circumspect in his push or larger government: it's almost expected in PR.
Chronic unemployment is a staple of Puerto Rican politics, and has been since time immemorial. This is largely the result of federal policies which had enormous disparate impact and New Deal holdover legislation, as well as some unfortunate natural disasters. In 1938, for instance, 2/3rds of all textile factories closed when the federal government established a minimum wage of 25 cents (!), because worker productivity wasn't high enough to justify that price. Operation Bootstrap and other Keynesian programs have been popular among pols looking to increase their stature, and have all failed. Unemployment is currently at ~15%, and is expected to hit 17% shortly. This has made PR susceptible to populists and demagogues promising them a Square Deal which they have yet to deliver.
The exemption from federal taxes has made PR a good place for businesses who want access to US markets to invest. The low wages demanded by PR's inhabitants have also made it a good place for (relatively) cheap labor. Both of these factors have made it a pharmaceutical and manufacturing center. State pols have taken advantage of this by jacking up territory taxes to an unconscionable level to pay for the incestuous relationship between the public unions and craven politicians (more on that). If they were required to pay federal taxes, the entire structure of PR's economy and government would change radically. With a rosy economic forecast, this would be difficult to handle well. Under the current economic forecast, it would be a disaster to throw the PR economy so out of whack, and the guy left holding the bag would be Uncle Sam.
Though there are virtually no private unions in the territory (minimum wage has made it impossible to get a job in PR!), public unions are unusually large, powerful, and entrenched. This, as well as PR's own version of machine politics, have made politicians in the territory subservient to their demands. Unfortunately, this has led to the California-like decline of the island: recently, Puerto Rico's credit was downgraded by Moody's Investor Services, with the possibility of further downgrades in the future. It also currently boasts the highest debt per capita of any of the territories or states, including California.
Its current Republican governor, Luis Fortuno, is pretty much our Chris Christie: his budget cuts have led to the elimination of 17,000 jobs, which is unfortunate for those who are jobless, but necessary for fixing the territory's fiscal mess, which dwarfs California's. He has put forth his 2010-11 budget here;. Scroll down to page 5 and you can see the problem: "social development" makes up for over half of PR's expenditures, even after Fortuno's cuts. Most of what is charitably called "social development" is the operating cost for the fiefdoms established by the public sector unions, and they are quite protective of their holdings! This, in turn, funds the politicians who are elected to do their bidding, and these politicians then continue this positive feedback loop by voting for a larger share of government funds to go to these unions. While I wish Gov Fortuno the best in solving his government's fiscal crisis, only time will tell if his cuts are lasting, and if they inspire more fortitude on the part of citizens and legislators.
There are certainly aspects of PR that are admirable: if made a state, it would be the most anti-abortion state in the Union. The people of PR are wonderful, and their democratic institutions are well-developed and generally free from political violence. However, its fiscal problems, unemployment level, and distinctness from the American body politic make it difficult for me to recommend statehood. Puerto Ricans have consistently and wisely voted to keep the status quo in referendum concerning this very subject. America, wait a couple of decades before allowing a territory with less fiscal discipline than CA have a say in where your money gets spent: PR is just fine without the state coin, and the current arrangement works better at present than statehood.