It’s time to repeal the Jones Act(discoursemagazine.com)
discoursemagazine.com
It’s time to repeal the Jones Act
https://www.discoursemagazine.com/economics/2022/10/18/its-time-to-repeal-the-jones-act/
334 comments
Except, as far as I'm aware, the Jones Act hasn't prevented the collapse of the merchant marine fleet--in other words, it's failed to do its primary goal, and it has some pretty heft costs for everyone who doesn't live in mainland US.
There's still shipbuilders up and down both US coasts. They don't build that many ships, but they'd almost certainly disappear if foreign vessels were an option.
If having any local shipbuilding capability is better than none, the act works enough.
IMHO, I'd drop Puerto Rico and other island territories from the act. Maybe Hawaii and Alaska too. The inducement to build and operate US based cargo ships for those markets clearly isn't sufficient, and it hurts the economy of the territories for little benefit. But keep it for the mainland --- I think effectively reserving US ports for foreign trade reduces import/export costs which helps the US interface with the global market.
If having any local shipbuilding capability is better than none, the act works enough.
IMHO, I'd drop Puerto Rico and other island territories from the act. Maybe Hawaii and Alaska too. The inducement to build and operate US based cargo ships for those markets clearly isn't sufficient, and it hurts the economy of the territories for little benefit. But keep it for the mainland --- I think effectively reserving US ports for foreign trade reduces import/export costs which helps the US interface with the global market.
>the act works enough
Does it though, or is this a false sense of security? Regardless of the Jones Act the Navy is paying to modernize shipyards [0]. Meanwhile the small shipping industry propped up by the Jones Act seems to severely outdated, they were using steamships well past when the rest of the world stopped using them and manage to get away with more corruption due to lack of competition [1]. Maybe just drop the act, and have the Navy responsible for shipyards directly & ongoing, or something rather than hope a bunch of old fashioned, inefficient shipyards will be sufficient when we need them most?
https://www.gao.gov/products/gao-22-105993
https://www.freightwaves.com/news/freightwaves-classicsfalle...
Does it though, or is this a false sense of security? Regardless of the Jones Act the Navy is paying to modernize shipyards [0]. Meanwhile the small shipping industry propped up by the Jones Act seems to severely outdated, they were using steamships well past when the rest of the world stopped using them and manage to get away with more corruption due to lack of competition [1]. Maybe just drop the act, and have the Navy responsible for shipyards directly & ongoing, or something rather than hope a bunch of old fashioned, inefficient shipyards will be sufficient when we need them most?
https://www.gao.gov/products/gao-22-105993
https://www.freightwaves.com/news/freightwaves-classicsfalle...
US doesn't build non-military ships in any sizeable quantities, to maintain any of those anymore.
Jone's Act doesn't protect any shipbuilding facility, beyond the existing government contracts forwarded to them.
Jone's Act doesn't protect any shipbuilding facility, beyond the existing government contracts forwarded to them.
Which then keeps at least BASIC knowledge of shipbuilding available in this country, should we suddenly require grow in that industry (which is crucial). You are either misleading the purpose of this act or are willfully ignorant.
Correct: this is also why we ban importation of foreign food, so they Americans can keep at least BASIC knowledge of agriculture. Similarly, we require that air transportation in US is only done on US made planes, so that US keeps at least basic knowledge of building planes. Without these measures, those industries would be gone.
There are only 4 US shipbuilders still capable of building large ocean-going commercial ships, and they pretty much exclusively subsist off government contracts. The US used to be the world's leading builder of commercial ships by a wide margin, now it barely produces any.
https://www.freightwaves.com/news/freightwaves-classics-amer....
https://www.freightwaves.com/news/freightwaves-classics-amer....
Man, sounds like we DEFINITELY need to protect that market then doesn't it? It's like having a professional army, you don't have enough soldiers to fight a world war, but you have enough knowledge base to train people up SHOULD a world war happen. Would you argue we should either disband the Army or institute a draft to increase it's size because it can't fight a world war and other nations have a larger army? What a non-serious argument is being made here all in the name of $$$. You understand that a nation exists to fulfill a certain social contract, right? You can't keep just chipping away that contract in the name of 'paying foreign country level wages' and expect a functioning country. That 'social' element WILL turn against this behavior at some point.
It sounds like the current system utterly failed to protect the market. The Jones act encourages US shipping to be done over land, meaning there are fewer orders for ships and less (at this point zero) work for US shipyards. Mandating that US ships be US made only works if there are still US ships. We should instead be reinstating the subsidies that used to be in place to keep American shipbuilders competitive with other countries who subsidize their shipbuilding industries for exactly the same strategic considerations. Keeping in place the same policies that destroyed American shipbuilding is very bad for our future as a naval power.
So why not just push for subsidies since that is the entirety of the argument you just made? Does China have it's own version of the Jones Act? Since China is the 'model of success' as the largest ship builder, do they allow foreign ships and foreign crews?
I very clearly also argued that the Jones act's repeal also helps. Why would you invest in something while at the same time actively harming it? America's shipbuilding industry is a husk of its former self and every effort must be made to revitalize it. Subsidies alone would be a half measure.
China does not have its own version of the Jones act, it's a uniquely American problem. Most countries aren't stupid enough to kill their internal industry.
China does not have its own version of the Jones act, it's a uniquely American problem. Most countries aren't stupid enough to kill their internal industry.
If we’re going to endure a cost to keep local ship building capacity id rather the government just directly subsidize the construction of ships via credits to purchasers ala evs, or just direct purchases and finding a use for the ships. Limiting the market to try and force the choice ruins the efficiency of the market and doesn’t guarantee a local minimum amount of capacity
US shipbuilders get orders mainly from military. Civilian orders is almost zero. The facility and technology for military vs civilian ships are vast, that a shipyard focusing on one cannot efficiently work on the other.
I don’t think that it’s a problem. If a facility is designed for civilian products, and can only work on government contracts inefficiently, that sounds like… all government contracts in recent memory. It is well known that US government overpays on everything anyway.
But is there a better way to subsidize shipbuilding capacity? I agree with your suggestion for focusing the Jones Act on the continental US, at a minimum that would reduce the disproportionate burden that states and territories outside the continental US face.
I'm sure there is. But when the headline is repeal the act, not replace it, it's important to note that it has some of its intended effect, even if it's not very much.
Something that actually resulted in productive shipyards would be much better than what we have that results in shipyards that don't produce much, which is still likely better than no shipyards outside of those producing naval vessels and domestic ferries (although, those would probably be imported too, if that were legal; technically that's prohibited under a different act)
Something that actually resulted in productive shipyards would be much better than what we have that results in shipyards that don't produce much, which is still likely better than no shipyards outside of those producing naval vessels and domestic ferries (although, those would probably be imported too, if that were legal; technically that's prohibited under a different act)
There is a clearer way to subsidize than to require the purchases. One is to literally directly subsidize the industry. Another is cheaply lend or even grant money to the customers buying the product but only when buying domestically made units.
It also strikes me that the percentages mentioned in the article are very high. 75% US crew? 75% US owned? 100% US built? Revising the statute to operators needing 55% of their domestic fleet being US built, and requiring 55% US ownership, and a 55% US crew should be more than sufficient. Give tax incentives for newer, more efficient craft both to the manufacturer and the buyer.
The US uses a lot of military power for non-combat purposes. We move supplies for natural and humanitarian disasters. We have water purification ships, hospital ships, and generator ships. We transport weapons systems as cargo, and even those ships themselves could be mostly protected by a surrounding fleet. If we could get a design made that's fitting for heavy movers suitable for both military and civilian use the US government's purchases could bolster domestic shippers' orders.
One even more unusual option since it's a national security concern is the US government could buy large numbers of newer, more efficient craft and lease them on affordable terms (or lease to own even) to cargo companies.
It also strikes me that the percentages mentioned in the article are very high. 75% US crew? 75% US owned? 100% US built? Revising the statute to operators needing 55% of their domestic fleet being US built, and requiring 55% US ownership, and a 55% US crew should be more than sufficient. Give tax incentives for newer, more efficient craft both to the manufacturer and the buyer.
The US uses a lot of military power for non-combat purposes. We move supplies for natural and humanitarian disasters. We have water purification ships, hospital ships, and generator ships. We transport weapons systems as cargo, and even those ships themselves could be mostly protected by a surrounding fleet. If we could get a design made that's fitting for heavy movers suitable for both military and civilian use the US government's purchases could bolster domestic shippers' orders.
One even more unusual option since it's a national security concern is the US government could buy large numbers of newer, more efficient craft and lease them on affordable terms (or lease to own even) to cargo companies.
> Except, as far as I'm aware, the Jones Act hasn't prevented the collapse of the merchant marine fleet--in other words, it's failed to do its primary goal, and it has some pretty heft costs for everyone who doesn't live in mainland US.
Then instead of repeal it, fix it. I wonder if the flaw is that it didn't account for the changes in American sea traffic as foreign imports have undoubtedly increased by orders of magnitude since it was passed 100 years ago.
Then instead of repeal it, fix it. I wonder if the flaw is that it didn't account for the changes in American sea traffic as foreign imports have undoubtedly increased by orders of magnitude since it was passed 100 years ago.
Can you describe the "fix"? US shippers would rather pay for trucking, rail, pipelines, or air freight rather than pay through the nose for US-built marine vessels.
This is a consequence of math. The economics just don't make sense. I'm not sure what you can do to "fix it".
This is a consequence of math. The economics just don't make sense. I'm not sure what you can do to "fix it".
Seems like this is a case where the "soft touch" approach—set rules and let the market create the outcome you wanted—isn't working, so maybe a more direct approach would be a better idea for the purpose of ensuring a healthy merchant marine fleet, if that's still something we want to do.
Why does US "need" a 100% internally built, owned and operated merchant marine fleet?
Most of US is accessible via freight rail or road freight transport. Ships transport almost exclusively foreign made products, today.
That's the primary reason why the merchant fleet is wasting away - there's no demand for marine transportation between US ports, other than required by Jones Act.
I have 0 interest in building something that has little to no use in a free market.
Most of US is accessible via freight rail or road freight transport. Ships transport almost exclusively foreign made products, today.
That's the primary reason why the merchant fleet is wasting away - there's no demand for marine transportation between US ports, other than required by Jones Act.
I have 0 interest in building something that has little to no use in a free market.
> Ships transport almost exclusively foreign made products, today.
You understand that this is because the Jones Act makes shipping domestically prohibitively expensive. Which is precisely why ground shippers are insistent that the Jones Act remain on the books.
> I have 0 interest in building something that has little to no use in a free market.
If you see a free market there, you haven't read the article.
You understand that this is because the Jones Act makes shipping domestically prohibitively expensive. Which is precisely why ground shippers are insistent that the Jones Act remain on the books.
> I have 0 interest in building something that has little to no use in a free market.
If you see a free market there, you haven't read the article.
> If you see a free market there
That's not what I wrote.
That's not what I wrote.
Shipbuilding capacity, especially, is extremely important for being able to project power globally in the most extreme situations. So if that's something we're still interested in doing, it's a very good idea to prevent that capacity from falling under some level.
The problem is, the Jones Act has harmed our shipbuilding capacity as well. According to the artcle our ship building capacity is 1% of China's and US built ships cost 6-8 times as much. That's not helpful.
> The problem is, the Jones Act has harmed our shipbuilding capacity as well. According to the artcle our ship building capacity is 1% of China's and US built ships cost 6-8 times as much. That's not helpful.
So better have ship building capacity at 0% of China's and it be impossible to buy US built ships at any cost?
So better have ship building capacity at 0% of China's and it be impossible to buy US built ships at any cost?
That, or make it easier to start up domestic shipbuilders.
In a vacuum, the Jones Act should be encouraging the construction of new shipyards and/or freight rail infrastructure. That neither seems to have happened suggests that other barriers exist, and those barriers need addressed, Jones Act or no.
In a vacuum, the Jones Act should be encouraging the construction of new shipyards and/or freight rail infrastructure. That neither seems to have happened suggests that other barriers exist, and those barriers need addressed, Jones Act or no.
U.S. built things costing 6-8 times as much as Chinese built things is not specific to shipbuilding.
Sure, my point is that there's not no good reason to want to protect US ship-building capacity, not that the Jones Act doesn't suck, which AFAIK it does.
That would be done via planned navy ship replacement. Not by Jone's Act and similar.
Let alone - merchant ships are needed to trade and interact with allies in these extreme situations. And last I checked Maersk is a Danish company, and Danmark is a close ally.
Let alone - merchant ships are needed to trade and interact with allies in these extreme situations. And last I checked Maersk is a Danish company, and Danmark is a close ally.
You can't guarantee allies' shipbuilding capacity will remain intact in war, or that they won't redirect their shipping or ship-building capacity for other purposes, and without shipping the US cannot meaningfully act globally. Things are relatively stable now and most major US allies seem to be in pretty secure positions (a tad less so right now, sure, but in general, for some decades) but I don't think the smart money's on us getting through this century without at least one big war, possibly not even caused by or involving any of the powers that seem most-likely to kick something off now, so there's no guarantee the major action would be confined to or even primarily in, say, the Pacific theater, meaning that it'd be a good idea to be prepared for any of our allies to be taken off the table early in a conflict (or even for their being on the other side of it).
I agree that the Jones Act sucks, but I do think there's some valid reason behind trying to do what it tried to do.
I agree that the Jones Act sucks, but I do think there's some valid reason behind trying to do what it tried to do.
If you don't have overseas allies, then you don't need a large merchant fleet at all.
As it stands - merchant fleet of US allied nations is strong enough for US to not need one at all.
As it stands - merchant fleet of US allied nations is strong enough for US to not need one at all.
National defense. In peace time a merchant marine fleet may have poor economics but is immensely valuable to have during wartime. You can’t just snap your fingers when that happens and magically get all of the boats and crew and logistics in place so instead we the people have to pay to maintain it.
Let's pretend that there's a global conflict and US is both against "United Asia" and "European Empire" - what would be a need for such a fleet?
If we're talking about US/European allies vs China - then European allies have the ships and capacity to build more.
You have to give a concrete example where US would need to have a merchant fleet, where allies aren't willing to provide.
If we're talking about US/European allies vs China - then European allies have the ships and capacity to build more.
You have to give a concrete example where US would need to have a merchant fleet, where allies aren't willing to provide.
A more likely scenario is that we'd be supporting allies in those theaters, not fighting united continent-blocs. Either way, you can't fight across an ocean without lots and lots of cargo ships.
> If we're talking about US/European allies vs China - then European allies have the ships and capacity to build more.
Not necessarily enough capacity if you're losing tens of ships a month, and there's no guarantee those would remain intact, or that we'd even be on the same side. It's easy to assume stable, decent-enough, friendly governments will continue to be that way indefinitely, but they may not (for other actors, it's very much worth worrying whether the US will remain so, for instance)
> You have to give a concrete example where US would need to have a merchant fleet, where allies aren't willing to provide.
We literally have a real world example, which is far more valuable than made-up scenarios, that was arguably won primarily by US industrial capacity and the ships to direct that output to the right places, and it's still (barely, admittedly) within living memory. Among the most famous machines of that war is a class of merchant ship, for very good reason.
Unless we suppose that modern great-powers wars will be over so fast that shipping wouldn't have time to play a major role, or we think that anti-shipping weapons would be so effective and have such wide reach that no amount of shipping & protection could keep a meaningful proportion of a shipping fleet afloat for any useful length of time even if we started with a significant upper-hand overall—and I sure wouldn't want to bet on either of those things—it seems like that'd still be highly relevant in any major conflict in, at least, the near- to mid-term future.
> If we're talking about US/European allies vs China - then European allies have the ships and capacity to build more.
Not necessarily enough capacity if you're losing tens of ships a month, and there's no guarantee those would remain intact, or that we'd even be on the same side. It's easy to assume stable, decent-enough, friendly governments will continue to be that way indefinitely, but they may not (for other actors, it's very much worth worrying whether the US will remain so, for instance)
> You have to give a concrete example where US would need to have a merchant fleet, where allies aren't willing to provide.
We literally have a real world example, which is far more valuable than made-up scenarios, that was arguably won primarily by US industrial capacity and the ships to direct that output to the right places, and it's still (barely, admittedly) within living memory. Among the most famous machines of that war is a class of merchant ship, for very good reason.
Unless we suppose that modern great-powers wars will be over so fast that shipping wouldn't have time to play a major role, or we think that anti-shipping weapons would be so effective and have such wide reach that no amount of shipping & protection could keep a meaningful proportion of a shipping fleet afloat for any useful length of time even if we started with a significant upper-hand overall—and I sure wouldn't want to bet on either of those things—it seems like that'd still be highly relevant in any major conflict in, at least, the near- to mid-term future.
> We literally have a real world example
I'm not a mind reader - what is it?
I'm not a mind reader - what is it?
If the US is fighting with (or just in!) Asia and Europe, they still want to trade with Australia, Africa, and South America. And, they likely need to get a lot of materiel to the theater.
In the last World War, the US built a ton of cargo ships (about 6,000) to replace ships that were sunk and to increase shipment capacity in general. Allies weren't able to build ships fast enough. I'd imagine that capacity will be needed in the next world war, too. Having existing shipyards helps get production ramping sooner.
Certainly, ware has changed a lot in 80 years, but all out war is still going to need a lot of shipping, and cargo ships carrying war materiel are going to be fair game for sinking, and need to be replaced (as well as escorted). Industrial capacity and availability of fuel will continue to be necessary but not sufficient for success on the battlefield.
In the last World War, the US built a ton of cargo ships (about 6,000) to replace ships that were sunk and to increase shipment capacity in general. Allies weren't able to build ships fast enough. I'd imagine that capacity will be needed in the next world war, too. Having existing shipyards helps get production ramping sooner.
Certainly, ware has changed a lot in 80 years, but all out war is still going to need a lot of shipping, and cargo ships carrying war materiel are going to be fair game for sinking, and need to be replaced (as well as escorted). Industrial capacity and availability of fuel will continue to be necessary but not sufficient for success on the battlefield.
It's harder to bully/manage foreign shipyards than it is domestic ones. Even better if they're on the eastern seaboard within easy drive of D.C.
Central and South America exist too and in your scenario South America would be the only way to get certain resources.
If the US needs naval capacity, it just leases it from foreign providers [0].
[0] https://sgp.fas.org/crs/weapons/RS22454.pdf
[0] https://sgp.fas.org/crs/weapons/RS22454.pdf
Then you’ll get steamrolled when you need to expand or build a merchant navy on short notice against the adversary which builds all your existing merchant fleet cough China cough, not that they don’t ALREADY have us by the balls in a million other ways.
China doesn't dominate shipbuilding in the same way it dominates most industries. Japan and South Korea have active shipbuilders building immense container ships (Ever Given was built in Japan), and Europe dominates the cruise ship industry.
It's still a national security issue that there's little domestic shipbuilding. In the event of a major war, it would be useful to have domestic shipbuilders available to press into service making warships, beyond the peacetime warship builders.
It's still a national security issue that there's little domestic shipbuilding. In the event of a major war, it would be useful to have domestic shipbuilders available to press into service making warships, beyond the peacetime warship builders.
Quite true! Geographically, keep in mind it would be trivial to blockade South Korea from China, and South Korea has been invaded by a Chinese Puppet state in the somewhat recent past (North Korea), with which they are still technically at war.
It’s no ship yard in Seattle.
It’s no ship yard in Seattle.
You can't count on industry in any state that's going to be a direct war participant and on or, these days, even kinda-close to, the front lines, anyway. Look at Ukraine, and they're arguably winning. That's how fucked-up your production capacity gets when you're more-or-less successfully repelling an invasion, let alone when you're plainly losing. The other day they had, what, 30% of their energy infrastructure damaged, by their own government's admission? And the only reason it hadn't happened sooner seems to be that Russia just hadn't decided to do it yet (not to overstate Russia's advantage—part of why they hadn't done it yet was probably that they have limited ability to restock their own weapons, so preferred to hold such weapons in reserve for a time). Plus all the bombed or captured factories, difficulty and danger getting inputs and workers to any surviving factories, et c.
> Japan and South Korea have active shipbuilders building immense container ships (Ever Given was built in Japan), and Europe dominates the cruise ship industry.
Cruise missiles have entered the chat
Besides, it's very nice in these scenarios to build your ships the same place that's sending cargo, so you don't have to risk an empty or low-priority cargo trip the wrong direction before you can load up with the good stuff.
Plus, governments change. The US could well end up on a different side of a conflict from some current allies, or those allies might remain neutral and so avoid behaving too-favorably to the US.
Cruise missiles have entered the chat
Besides, it's very nice in these scenarios to build your ships the same place that's sending cargo, so you don't have to risk an empty or low-priority cargo trip the wrong direction before you can load up with the good stuff.
Plus, governments change. The US could well end up on a different side of a conflict from some current allies, or those allies might remain neutral and so avoid behaving too-favorably to the US.
Actually, I think most of the US merchant fleet was built by South Korea, not China.
> I have 0 interest in building something that has little to no use in a free market.
Nation states have goals that the free market doesn’t value like stability or risk mitigation. Keeping an industry that can become critical around in a reduced capacity so that you don’t need to bootstrap from scratch is to governments like purchasing insurance on a car is for an individual who relies on one for their income.
Nation states have goals that the free market doesn’t value like stability or risk mitigation. Keeping an industry that can become critical around in a reduced capacity so that you don’t need to bootstrap from scratch is to governments like purchasing insurance on a car is for an individual who relies on one for their income.
The free market absolutely does value stability and risk mitigation because they have direct implications for the cost of financing which directly tacks onto the cost of any given capital investment.
They value it in the same way that I nebulously value the environment but still buy things wrapped in single use plastics. The free market has shown that they currently value efficiency over stability which has led to the rise of JIT logistics and manufacturers being unable to produce goods after a hiccup of a few months on their supply chain.
There is no equivalent section of the free market that is looking on multi decade long horizons for risk mitigation in the same way that governments do.[1]There are industries that care about risk mitigation on 30-50 year schedules for individual pieces of heavy industrial capital but there aren’t any that will actively run or subsidize factories building parts for a market they don’t participate in for decades on the off chance they might need to spin that up ASAP.
[1]generalizing here. I’m sure you can find a handful of companies who do this but unless they represent double digit percentages of the entire economy I’m not going to be convinced that it’s a sign of the free market valuing stability
There is no equivalent section of the free market that is looking on multi decade long horizons for risk mitigation in the same way that governments do.[1]There are industries that care about risk mitigation on 30-50 year schedules for individual pieces of heavy industrial capital but there aren’t any that will actively run or subsidize factories building parts for a market they don’t participate in for decades on the off chance they might need to spin that up ASAP.
[1]generalizing here. I’m sure you can find a handful of companies who do this but unless they represent double digit percentages of the entire economy I’m not going to be convinced that it’s a sign of the free market valuing stability
The thesis is that there would be, if we allowed foreign ships and to operate in the US.
Water transport is much, much cheaper where there is not a burden, and is generally also more fuel-efficient per ton-mile. It should be possible for a wide variety of goods; the Mississippi alone is the largest river system in the ~~world~~. EDIT: North America, not the world
Water transport is much, much cheaper where there is not a burden, and is generally also more fuel-efficient per ton-mile. It should be possible for a wide variety of goods; the Mississippi alone is the largest river system in the ~~world~~. EDIT: North America, not the world
> the Mississippi alone is the largest river system in the world.
Mississippi is only the largest in the world after the Nile, Amazon, & Yangtze.
Mississippi is only the largest in the world after the Nile, Amazon, & Yangtze.
argh, not had the coffee yet. largest in North America.
It's also good that the Mississippi is so navigable, pretty much all the way north-south through the country up to Minneapolis. The Nile is only really navigable to Aswan High Dam, the Yangtze and Amazon fare better on this metric.
It's also good that the Mississippi is so navigable, pretty much all the way north-south through the country up to Minneapolis. The Nile is only really navigable to Aswan High Dam, the Yangtze and Amazon fare better on this metric.
Plus a ton of the Missouri is navigable. IIRC if you were to judge the Missouri the official continuation of the Mississippi, where they meet in St. Louis, the resulting river would be even longer than the Mississippi as currently judged (though, also IIRC, its total flow where it meets the Mississippi is the smaller of the two by a decent margin, so that'd be hard to justify)
The Mississippi River Watershed includes the Missouri and Ohio Rivers, and 59% of all US rivers, draining parts or all of 32 states.[1] It is really an astoundingly massive river system, which is why it is the fourth largest in the world.
[1] https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i9QxpflmIAz...
[1] https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i9QxpflmIAz...
The US merchant marine fleet has declined (in terms of ship numbers) from 16.7% of the global fleet in 1960 (3000 ships) to 0.4% in 2019 (180 ships).
> it's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country
This is a pretty squishy claim, but there's a mountain of work in economics showing that the Jones Act punishes Puerto Rico, Hawaii, and Guam.
> lowering costs by offshoring labor had hollowed out the middle class in America
Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US.
The Jones Act has actually been shown to have made US ship building and ports less competitive by shielding them from competition. US ships and ports are basically 3rd rate at this point.
This is a pretty squishy claim, but there's a mountain of work in economics showing that the Jones Act punishes Puerto Rico, Hawaii, and Guam.
> lowering costs by offshoring labor had hollowed out the middle class in America
Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US.
The Jones Act has actually been shown to have made US ship building and ports less competitive by shielding them from competition. US ships and ports are basically 3rd rate at this point.
> Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US.
I don't buy it - US manufacturing simply wasn't competitive with overseas prices. If it was just automation, it would still be here - only automated. It's not.
I don't buy it - US manufacturing simply wasn't competitive with overseas prices. If it was just automation, it would still be here - only automated. It's not.
On a dollar-of-stuff-produced basis, US manufacturing has continued to grow and remains only a fraction behind China:
https://www.brookings.edu/research/global-manufacturing-scor...
It’s the jobs that went away, not the manufacturing sector or the dollars.
https://www.brookings.edu/research/global-manufacturing-scor...
It’s the jobs that went away, not the manufacturing sector or the dollars.
From the article:
"Manufacturing is enjoying a resurgence in the United States. After years of falling output and a diminishing percentage of the labor force, the last few years have seen renewed growth."
Resurgence implies it was not great for a long time. To add - now that automation makes us competitive with cheap overseas labor, it makes sense to invest. It didn't make sense to ivnst in 1975 - hence, the rust belt.
Resurgence implies it was not great for a long time. To add - now that automation makes us competitive with cheap overseas labor, it makes sense to invest. It didn't make sense to ivnst in 1975 - hence, the rust belt.
These numbers are more in my favor than yours. It's rapidly shrinking in terms of GDP. Sure, the world economy is growing, thus the rising tide lifts all boats - but compared to competitors, the US is doing quite poorly and losing global share quite rapidly.
If your automation argument was true, this would not have happened - output would have increased exponentially and we wouldn't have lost share. Automation is making it more economical now - but that's a recent development, after the decimation of the American middle class.
If your automation argument was true, this would not have happened - output would have increased exponentially and we wouldn't have lost share. Automation is making it more economical now - but that's a recent development, after the decimation of the American middle class.
American manufacturing is very much “still here”, not unlike, say, American agriculture, despite also being crowded out of GDP by other growing sectors. So I’m not sure which claim we’re arguing about.
Still waiting for you to explain global share. Still waiting for you to realize your time scales are 30 years off.
I'll always be waiting. Best of luck!
I'll always be waiting. Best of luck!
You moved the goalpost here, buddy.
American manufacturing grew in the last 20 years.(and probably before that)
Automation didn't produce the increase in jobs, to match population growth... But a claim that US manufacturing shrunk is false. No one in this thread made a claim, including you, that this is about "global scale". You just threw in this argument to avoid accepting the fact that you're wrong.
American manufacturing grew in the last 20 years.(and probably before that)
Automation didn't produce the increase in jobs, to match population growth... But a claim that US manufacturing shrunk is false. No one in this thread made a claim, including you, that this is about "global scale". You just threw in this argument to avoid accepting the fact that you're wrong.
"If it was just automation, it would still be here - only automated. It's not."
It is though. The U.S. steel industry which everyone thinks is dead, for example, is producing at about 70% of its all-time peak. It's just doing it with 15% or less of the peak workforce. And the current numbers represent about 5% of world steel production - which is consistent with our population, just not with the fact that we once produced the majority of the world's steel.
https://blog.boydmetals.com/the-past-present-and-future-of-t...
It is though. The U.S. steel industry which everyone thinks is dead, for example, is producing at about 70% of its all-time peak. It's just doing it with 15% or less of the peak workforce. And the current numbers represent about 5% of world steel production - which is consistent with our population, just not with the fact that we once produced the majority of the world's steel.
https://blog.boydmetals.com/the-past-present-and-future-of-t...
Bold claims, bold citations?
The "mountains of work" "proving" that the JA is a negative suffer from a free-market neo-liberal bias.
The "mountains of work" "proving" that the JA is a negative suffer from a free-market neo-liberal bias.
This is also why the free market trumpeteers are wrong.
Companies charge the most they can, any lowering of internal costs will only change the external costs under 1 circumstance. When lowering the external cost will increase volume enough to make up for the lower cost.
Tech has changed the game so it's much easier for a winner to take most. The free market idea has always assumed local competition, that's no longer the case. When Apple and Google can collaborate on how much to charge for a phone it becomes more difficult to associate lower costs of production with lower cost to consumers.
Companies charge the most they can, any lowering of internal costs will only change the external costs under 1 circumstance. When lowering the external cost will increase volume enough to make up for the lower cost.
Tech has changed the game so it's much easier for a winner to take most. The free market idea has always assumed local competition, that's no longer the case. When Apple and Google can collaborate on how much to charge for a phone it becomes more difficult to associate lower costs of production with lower cost to consumers.
There is another reason why companies lower cost, and it's because of competition. We have seen company after company in all sorts of sectors lose revenues because of competition, so your theory that they only lower costs to increase volume doesn't hold water.
Please read my post again, lowering of internal costs does not lower external costs unless doing so increases profit due to volume changes.
You're arguing that a company with competition may choose to lower its price whether or not internal costs have lowered (or not). That's a different question entirely.
You're arguing that a company with competition may choose to lower its price whether or not internal costs have lowered (or not). That's a different question entirely.
If lower internal costs are achieved there is more flexibility to competitively price your product, i.e. reduce prices.
The classic example is televisions. They no longer cost $3000 because of competition and internal cost reduction.
The classic example is televisions. They no longer cost $3000 because of competition and internal cost reduction.
This is taken into account with the volume change point.
internal cost sets the lowest bar possible without a profit, it does not set what the price will be in the face of competition because companies charge as much as they can to maximize profit. That maximization either comes in the form of per-unit profit or volume profit.
internal cost sets the lowest bar possible without a profit, it does not set what the price will be in the face of competition because companies charge as much as they can to maximize profit. That maximization either comes in the form of per-unit profit or volume profit.
Right. Companies are compelled to competitively price their product. They still seek profit, but are not at will to price whatever they want. I'm not sure then how you arrive at the conclusion that "the free market trumpeteers are wrong."
I don't think anyone disagrees that companies must price their product competitively and that they seek profit, those are uncontroversial facts.
I don't think anyone disagrees that companies must price their product competitively and that they seek profit, those are uncontroversial facts.
I'm going to repeat myself here.
read the post again.
It's there, that you cannot see it is neither a damnation of the point, nor a refutation of it. If you cannot find a way to respond to the actual point being made there is no discussion to be had here.
read the post again.
It's there, that you cannot see it is neither a damnation of the point, nor a refutation of it. If you cannot find a way to respond to the actual point being made there is no discussion to be had here.
Your entire premise is that "free market trumpeters" are wrong because we don't have a free market.
And as absurd as that sounds, you are right. I've heard more times than I can count from Libertarian ideologues that we could totally avoid these problems by just leaving the market alone.
So many people in the US stubbornly believe that a totally unregulated market would be a totally competitive one.
Back over here in reality, we see corporations taking every opportunity they have to be anti-competitive, and no amount of deregulation would change their motives.
The liberation we need is not for the market itself (as a whole), but for any new marketers who wish to compete against the giant incumbents that regulate them out of business. And the only option I'm aware of with enough leverage to intervene is government.
And as absurd as that sounds, you are right. I've heard more times than I can count from Libertarian ideologues that we could totally avoid these problems by just leaving the market alone.
So many people in the US stubbornly believe that a totally unregulated market would be a totally competitive one.
Back over here in reality, we see corporations taking every opportunity they have to be anti-competitive, and no amount of deregulation would change their motives.
The liberation we need is not for the market itself (as a whole), but for any new marketers who wish to compete against the giant incumbents that regulate them out of business. And the only option I'm aware of with enough leverage to intervene is government.
I suggest re-reading the article.
It has almost nothing to do with "lowering costs"; the fact that it costs 8x more to build a ship in the US is one of many pieces of evidence supporting the argument that the Jones Act has failed to protect the US shipbuilding industry.
It has almost nothing to do with "lowering costs"; the fact that it costs 8x more to build a ship in the US is one of many pieces of evidence supporting the argument that the Jones Act has failed to protect the US shipbuilding industry.
It's not about simply "making things cheaper". It's that the costs imposed by the Jones Act are so imbalanced that they lead to effects like this:
>Significant opportunity costs also can be observed in the loss of revenues experienced when, for example, a hog farmer in North Carolina purchases corn feed from Canada instead of from a farmer in Iowa because exorbitant delivery costs make the latter’s price uncompetitive.
Clearly, this is not effectively protecting American business from foreign competition. Even if that is considered a reasonable goal, it should actually, you know, be met.
>Any earnest proposal to repeal the Jones act should address how the [military] goals of the act can be met in other ways. [brackets mine]
The Jones Act was passed in 1920. At that time, US military spending was a tiny fraction of what it is today, and the idea that the Navy would borrow commercial ships instead of simply using its own was a lot more sensible. Today, the US Navy is by far the largest in the world, focuses primarily on blue-water power projection rather than defense of the homeland, and naval battles are primarily fought by aircraft, which was unimaginable in 1920.
If the Jones Act continues to bring military benefits, the onus, in my opinion, rests on its supporters to show what they are, because modern naval warfare looks almost nothing like it did in 1920.
>Significant opportunity costs also can be observed in the loss of revenues experienced when, for example, a hog farmer in North Carolina purchases corn feed from Canada instead of from a farmer in Iowa because exorbitant delivery costs make the latter’s price uncompetitive.
Clearly, this is not effectively protecting American business from foreign competition. Even if that is considered a reasonable goal, it should actually, you know, be met.
>Any earnest proposal to repeal the Jones act should address how the [military] goals of the act can be met in other ways. [brackets mine]
The Jones Act was passed in 1920. At that time, US military spending was a tiny fraction of what it is today, and the idea that the Navy would borrow commercial ships instead of simply using its own was a lot more sensible. Today, the US Navy is by far the largest in the world, focuses primarily on blue-water power projection rather than defense of the homeland, and naval battles are primarily fought by aircraft, which was unimaginable in 1920.
If the Jones Act continues to bring military benefits, the onus, in my opinion, rests on its supporters to show what they are, because modern naval warfare looks almost nothing like it did in 1920.
Just to respond to a few of your more landlubberly comments:
Naval battles are fought by aircraft carried on ships.
Modern naval warfare is still about global power projected by ships. That hasn't changed since 1920. Global power projection has always been the focus of the US Navy since its inception.
North Carolina and Iowa are far from each other separated by mountains. Until the advent of giant cargo airships, it will always be cheaper to move bulk goods by sea.
Naval battles are fought by aircraft carried on ships.
Modern naval warfare is still about global power projected by ships. That hasn't changed since 1920. Global power projection has always been the focus of the US Navy since its inception.
North Carolina and Iowa are far from each other separated by mountains. Until the advent of giant cargo airships, it will always be cheaper to move bulk goods by sea.
>Naval battles are fought by aircraft carried on ships.
In other words, there's a whole new cost and technology center. Modern naval warfare was unimaginable in 1920. The fact that "there is a boat involved" is not sufficient justification.
>Global power projection has always been the focus of the US Navy since its inception.
The US Navy was founded in 1794. So no.
>North Carolina and Iowa are far from each other separated by mountains.
Iowa is on the Mississippi, the Chicago Portage exists, the Erie canal exists, etc. I was quoting the author who had studied the issue: you should give your opponents more credit than that.
In other words, there's a whole new cost and technology center. Modern naval warfare was unimaginable in 1920. The fact that "there is a boat involved" is not sufficient justification.
>Global power projection has always been the focus of the US Navy since its inception.
The US Navy was founded in 1794. So no.
>North Carolina and Iowa are far from each other separated by mountains.
Iowa is on the Mississippi, the Chicago Portage exists, the Erie canal exists, etc. I was quoting the author who had studied the issue: you should give your opponents more credit than that.
Origins of the US Navy as a blue-water force:
https://en.wikipedia.org/wiki/First_Barbary_War
https://en.wikipedia.org/wiki/Naval_Act_of_1794
https://en.wikipedia.org/wiki/Quasi-War
A Mahanian would argue that sea power endures regardless of the technological limitations of the contemporary weapon delivery mechanism, i.e. shell, aircraft, torpedo, or missile. The USS Langley (first US aircraft carrier) dates to 1921 and Billy Mitchel sank the SMS Ostfriesland in the same year, the first sinking of a major warship by aircraft. Of course, submarines had already came close to starving Britain in WWI. These are all the elements of "modern naval warfare."
https://en.wikipedia.org/wiki/First_Barbary_War
https://en.wikipedia.org/wiki/Naval_Act_of_1794
https://en.wikipedia.org/wiki/Quasi-War
A Mahanian would argue that sea power endures regardless of the technological limitations of the contemporary weapon delivery mechanism, i.e. shell, aircraft, torpedo, or missile. The USS Langley (first US aircraft carrier) dates to 1921 and Billy Mitchel sank the SMS Ostfriesland in the same year, the first sinking of a major warship by aircraft. Of course, submarines had already came close to starving Britain in WWI. These are all the elements of "modern naval warfare."
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country.
After untangling the double-negative, this is equivalent to saying: "It's basically been proven at this point that simply lowering cost necessarily leads to better outcomes for the country."
Is this in fact what you meant? The rest of your comment suggests you may believe the opposite.
After untangling the double-negative, this is equivalent to saying: "It's basically been proven at this point that simply lowering cost necessarily leads to better outcomes for the country."
Is this in fact what you meant? The rest of your comment suggests you may believe the opposite.
There is no double negative; "does not" is the only negative in the statement. "Disproven" is not a grammatical negative.
> Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall.
What? You're basically arguing for trickle-down economics here. No - subsidizing small special interest groups is not in our collective best interest.
Making shipping cheaper absolutely leads to better outcomes. And if you are worried about offshoring labor, the Jones Act makes it specifically more expensive to ship domestically than internationally.
What? You're basically arguing for trickle-down economics here. No - subsidizing small special interest groups is not in our collective best interest.
Making shipping cheaper absolutely leads to better outcomes. And if you are worried about offshoring labor, the Jones Act makes it specifically more expensive to ship domestically than internationally.
I'm not arguing trickle-down economics. The concept I'm talking about is called the "money multiplier" [0].
Think about it like this: You go to the store and buy some bread for $1. GDP has increased by $1. Now the store owner saves 20% of the store's income and spends the other 80%. So after your purchase, the store owner goes to the bakery supply store and buys $0.80 of flour. Now GDP has increased by $1.80 from your initial $1 purchase. Trickle-down economics is more about how income is distributed in a society.
[0]: https://en.wikipedia.org/wiki/Money_multiplier
Think about it like this: You go to the store and buy some bread for $1. GDP has increased by $1. Now the store owner saves 20% of the store's income and spends the other 80%. So after your purchase, the store owner goes to the bakery supply store and buys $0.80 of flour. Now GDP has increased by $1.80 from your initial $1 purchase. Trickle-down economics is more about how income is distributed in a society.
[0]: https://en.wikipedia.org/wiki/Money_multiplier
You're thinking of a "fiscal multiplier" - which is only applicable when you are distributing from a central source like a government or a bank. https://en.wikipedia.org/wiki/Fiscal_multiplier
Otherwise this is a common Broken Window fallacy - your example forgets that that dollar you spent would have been spent elsewhere. So all of those multipliers would have happened regardless of who gets the dollar (a key problem with Trickle-Down economics).
If you have to pay $5 more per loaf because of the Jones Act, we don't generate greater than $5 of economic activity because I will be buying less bread and you will be selling less of it. So there will be somewhere between $1 and $5 in economic deadweight loss.
Otherwise this is a common Broken Window fallacy - your example forgets that that dollar you spent would have been spent elsewhere. So all of those multipliers would have happened regardless of who gets the dollar (a key problem with Trickle-Down economics).
If you have to pay $5 more per loaf because of the Jones Act, we don't generate greater than $5 of economic activity because I will be buying less bread and you will be selling less of it. So there will be somewhere between $1 and $5 in economic deadweight loss.
Yes, I linked to the wrong Wikipedia page. Thanks. But no, it's not an instance of the broken window fallacy.
Let's say the store owner buys the bread directly from China, and by doing so can offer bread at 20% less than before.
So, I pay $0.80 for bread. The store owner saves 20%, which is $0.16. And let's say pay $0.40 for the bread from the Chinese supplier, leaving the baker with $0.24 to spend. I also have an additional $0.20 to spend. If I spend it, the merchant I spent it with saves 20% and spends the other $0.16, then the total GDP contribution is 0.80 + 0.20 + 0.24 + 0.16 = 1.4. I spent $1, but only only received a multiplier of 1.4 instead of 1.8 in the original case. This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total. This, of course, assumes there is a trade deficit with the overseas country.
Let's say the store owner buys the bread directly from China, and by doing so can offer bread at 20% less than before.
So, I pay $0.80 for bread. The store owner saves 20%, which is $0.16. And let's say pay $0.40 for the bread from the Chinese supplier, leaving the baker with $0.24 to spend. I also have an additional $0.20 to spend. If I spend it, the merchant I spent it with saves 20% and spends the other $0.16, then the total GDP contribution is 0.80 + 0.20 + 0.24 + 0.16 = 1.4. I spent $1, but only only received a multiplier of 1.4 instead of 1.8 in the original case. This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total. This, of course, assumes there is a trade deficit with the overseas country.
So... firstly I think you are confused about the nature of the Jones Act. It only affects the domestic shipping industry. There is no overseas country to deal with. And to the extent that the Jones Act creates deadweight loss, it only penalizes the deal with the local baker.
>This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total.
Even given the above, I have no idea why you would assume this to be true. If someone in a foreign country is paid in US Dollars, the most likely thing to do with it is buy US goods or assets. (In the case of China, that is most likely US securities, but it's still not lost to the US economy).
Again, the multiplier effect is only applicable when dealing with an external input to a system. Otherwise, you are arguing that simply raising prices creates economic growth which is clearly not true.
>This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total.
Even given the above, I have no idea why you would assume this to be true. If someone in a foreign country is paid in US Dollars, the most likely thing to do with it is buy US goods or assets. (In the case of China, that is most likely US securities, but it's still not lost to the US economy).
Again, the multiplier effect is only applicable when dealing with an external input to a system. Otherwise, you are arguing that simply raising prices creates economic growth which is clearly not true.
> Again, the multiplier effect is only applicable when dealing with an external input to a system. Otherwise, you are arguing that simply raising prices creates economic growth which is clearly not true.
No, that's not what I'm arguing. I'm arguing that the multiplier of a single dollar is based on the percentage of that dollar that stays in the local economy.
> Even given the above, I have no idea why you would assume this to be true. If someone in a foreign country is paid in US Dollars, the most likely thing to do with it is buy US goods or assets. (In the case of China, that is most likely US securities, but it's still not lost to the US economy).
Yes, that's why I mentioned that my argument is predicated on there being a trade deficit. The U.S. runs a massive trade deficit, so clearly not all the dollars end up back in the U.S. economy. Buying treasuries isn't really relevant because each dollar the government takes in in exchange for a treasury needs to be paid back out.
No, that's not what I'm arguing. I'm arguing that the multiplier of a single dollar is based on the percentage of that dollar that stays in the local economy.
> Even given the above, I have no idea why you would assume this to be true. If someone in a foreign country is paid in US Dollars, the most likely thing to do with it is buy US goods or assets. (In the case of China, that is most likely US securities, but it's still not lost to the US economy).
Yes, that's why I mentioned that my argument is predicated on there being a trade deficit. The U.S. runs a massive trade deficit, so clearly not all the dollars end up back in the U.S. economy. Buying treasuries isn't really relevant because each dollar the government takes in in exchange for a treasury needs to be paid back out.
>There is no overseas country to deal with.
There would be if you ended the act and all local shipping manufacturers shutdown so the country had to buy all their ships from Norway.
There would be if you ended the act and all local shipping manufacturers shutdown so the country had to buy all their ships from Norway.
More likely South Korea, where most of Europe's ships already come from.
What if you could buy the bread for $0.12 and spend the rest of your dollar on other things? Your quality of life and standard of living has massively improved. You send paper overseas and get actual goods in return, and you still have $0.88 to spend on other things.
I use $0.12 because as the article points out, local shipyards cost 8x as much as foreign shipyards.
I use $0.12 because as the article points out, local shipyards cost 8x as much as foreign shipyards.
[deleted]
not an example of the money multiplier
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country.
Huh? When did this happen?
Neoliberal orthodoxy still reigns supreme.
> So if you take dollars and send them elsewhere, [...]
The US can print as many dollars as they need. In fact, when dollars go overseas, a inflation targeting central bank will automatically print more.
Huh? When did this happen?
Neoliberal orthodoxy still reigns supreme.
> So if you take dollars and send them elsewhere, [...]
The US can print as many dollars as they need. In fact, when dollars go overseas, a inflation targeting central bank will automatically print more.
A disproven orthodoxy can still reign supreme. Take the Catholic Church post-enlightenment to the mid 20th-century for example. Just because an orthodoxy fails and falters doesn't mean that it will fade away. There isn't an equivalent of atheism for economics - there are no "aneoliberals" or "aeconomicists".
Anyone who declared themselves "aeconomicist" would be ridiculed. That reaction should give anyone pause though. Ridicule is a powerful reality-maintenance mechanism. Economics is an extremely powerful reality-creating assemblage. Attempts beyond descriptive are met with intense skepticism and cynicism. Even here, in purported a bastion of competing ideas, normative economics are routinely lambasted.
The most common reality-maintenance mechanism is the reflexive "come up with a better idea then" response. It serves as a means of shutting down all discourse which ends up being antithetical and ultimately hypocritical to the mingling of ideas and curious questioning we claim to adhere to. The end result is implicit support for the status quo. Even if that isn't what is typically intended, it is functionally equivalent.
Anyone who declared themselves "aeconomicist" would be ridiculed. That reaction should give anyone pause though. Ridicule is a powerful reality-maintenance mechanism. Economics is an extremely powerful reality-creating assemblage. Attempts beyond descriptive are met with intense skepticism and cynicism. Even here, in purported a bastion of competing ideas, normative economics are routinely lambasted.
The most common reality-maintenance mechanism is the reflexive "come up with a better idea then" response. It serves as a means of shutting down all discourse which ends up being antithetical and ultimately hypocritical to the mingling of ideas and curious questioning we claim to adhere to. The end result is implicit support for the status quo. Even if that isn't what is typically intended, it is functionally equivalent.
> Attempts beyond descriptive are met with intense skepticism and cynicism. Even here, in purported a bastion of competing ideas, normative economics are routinely lambasted.
Which universe do you live in?
Normal people call for statism all the time.
For example pointing out that Germany manages to do just fine without a government snail mail provider, and that the US ain't so different and perhaps could do without, too, gets ridiculed.
Which universe do you live in?
Normal people call for statism all the time.
For example pointing out that Germany manages to do just fine without a government snail mail provider, and that the US ain't so different and perhaps could do without, too, gets ridiculed.
All my friends who think neoliberalism = "placing one's head in one's ass" call themselves "socialists". You are correct that they're ridiculed, though.
This is actually a really good example of re-enforcing the normalcy of ridicule in that it licenses others to do the same to the same groups of people. It's precisely this reality-enforcing mechanism that I'm attempting to point out. It's endlessly both funny and sad that even giving folks the ability to recognize it doesn't actually change anything.
TrickardRixx's reply is kind of perfect in that regard.
Exactly. I can imagine the response to having such a statement pointed out - "Well, it's true, though!" Which of course is a welcomed retort; we're talking about the social construction of reality[1] after all. Indeed, it is this very process of weaving truths by way of social interactions that is being examined.
1. Berger, P. L., & Luckmann, T. (1991). The social construction of reality. Penguin Books.
1. Berger, P. L., & Luckmann, T. (1991). The social construction of reality. Penguin Books.
Historically the US has favored protectionism over subsidies, but my understanding is that subsidies are almost always a more economically optimal way of ensuring that strategically-important domestic industries are able to survive.
Eternally subsidizing massive shipbuilding infrastructure as an insurance policy against WW3 seems beyond silly in my view. And remember, it has to be massive shipbuilding infrastructure or you're not doing any good. Having one or two shipyards that aren't very good at shipbuilding does zero if you need to suddenly build a lot of ships locally for "national security" which seems to be the argument of the pro-jones act commenters.
Then the "free market" zealots would just be crying about subsidies instead of tariffs and regulatory barriers. There's really no winning this battle.
I love how the only reply to this is to mash the down arrow. Never change, HN, never change.
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liberal orthodoxy until the mid 2010s, by which point it was clear that lowering costs by offshoring labor had hollowed out the middle class in America. Money has a multiplyer effect. Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall.
Literal gibberish.
What you are describing is a fiscal multiplier which is the change in national income via government spending, or a money multiplier from a central bank.
What actually happens in the scenario described is deadweight loss. Consumers spend more to obtain less goods. See figure 1.
https://corporatefinanceinstitute.com/resources/knowledge/ec...
Literal gibberish.
What you are describing is a fiscal multiplier which is the change in national income via government spending, or a money multiplier from a central bank.
What actually happens in the scenario described is deadweight loss. Consumers spend more to obtain less goods. See figure 1.
https://corporatefinanceinstitute.com/resources/knowledge/ec...
>What actually happens is deadweight loss. People buy less goods, suppliers make less money.
Literal gibberish.
Let's not imply things in a vacuum that don't have second-order effects. Where does this magical margin come from? Oh look, it's wages for that same worker who would be buying these goods!
Literal gibberish.
Let's not imply things in a vacuum that don't have second-order effects. Where does this magical margin come from? Oh look, it's wages for that same worker who would be buying these goods!
The Jones Act hasn’t even done that though. So what’s the point?
Obviously there are winners and losers, but overall, the benefits to society favor repealing the Jones Act.
No, they don't actually.
Neo-liberalism that literally pulled half of the planet out of permanent poverty?
>goals of the act can be met in other ways
American merchant fleet is all but gone by now. Yet you're suggesting that we keep this act, pretending that doing the same thing would yield a radically opposite result?
PS: PATRIOT Act has a few goals, that have nothing to do with a lot of the content.
>goals of the act can be met in other ways
American merchant fleet is all but gone by now. Yet you're suggesting that we keep this act, pretending that doing the same thing would yield a radically opposite result?
PS: PATRIOT Act has a few goals, that have nothing to do with a lot of the content.
> Neo-liberalism that literally pulled half of the planet out of permanent poverty?
My original quote said "better outcomes for the country." Yes, a lot of people were pulled out of poverty, but their gains came and the expense of middle-class Americans.
Maybe you're a globalist and you think this is a good outcome. I just hope you never have a nation state-level problem, e.g. unfair competition in the market place. The help you receive from the Chinese government, despite all of their gains, is likely to be quite minimal if you're not a Chinese citizen.
My original quote said "better outcomes for the country." Yes, a lot of people were pulled out of poverty, but their gains came and the expense of middle-class Americans.
Maybe you're a globalist and you think this is a good outcome. I just hope you never have a nation state-level problem, e.g. unfair competition in the market place. The help you receive from the Chinese government, despite all of their gains, is likely to be quite minimal if you're not a Chinese citizen.
> you're a globalist
If I were a nationalist and tech world was, I would probably be working in a low paid job. Because I'm not from "the default country"... and there are plenty of annoyed IT specialists in US that would kick me out(and blame me for driving down salaries), to "spite their face".
Being anything other than a globalist on a tech forum - is schizophrenic. Meritocracy is by nature globalist.
If I were a nationalist and tech world was, I would probably be working in a low paid job. Because I'm not from "the default country"... and there are plenty of annoyed IT specialists in US that would kick me out(and blame me for driving down salaries), to "spite their face".
Being anything other than a globalist on a tech forum - is schizophrenic. Meritocracy is by nature globalist.
Right out of poverty and into a new kind of servitude, maybe. OP really should've used "capitalism" entirely but I suppose that would go down even worse.
China pulled half of the planet out of permanent poverty, no neo-liberalism there (no freedom either, so no love lost on them from my side).
> Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways.
Spend money directly on the thing you are trying to support rather than trying to bank shot private money into it by restrictions.
Spend money directly on the thing you are trying to support rather than trying to bank shot private money into it by restrictions.
[deleted]
At what point was it alluded that the Jones Act was to make things cheaper? This is the first I hear of this. (I am actually asking, not rhetorical.)
this is what googling and reading economics on wikipedia gets
What "hollowed out middle class" in America are things like "The Jones Act".
The major problem in America is not foreign competition. The barrier to industry is not opening up relations with China.
The major problem in America, and has been since at least the 1970s is a managerial crisis. It is a crisis imposed on the working class by incompetent monolithic bureaucracies in government and in corporate culture.
The problem is exactly the sort of problems imposed on the public by things like the "Jones Act". It is that incompetent buffoons attempt to impose rules on the country to accomplish one thing, which fails utterly, and then has a whole host of undesirable side effects that are aggressively ignored and/or downplayed by apologists like yourself.
It is this managerial crisis that saw the rise of massive conglomerates in the 60s and 70s that ate up industry all over the midwest, liquidated them, and leveraged the assets to purchase more small and medium business. This was considered marvels of efficiency then... which in actually has turned out to be a series of accountancy scams and pyramid schemes that all hinged on exploiting incompentely design regulation.
It is the protectionism and subsidies and cronyism in this country that has destroyed it's competitiveness.
It has never been, and probably never will be, the willingness of the American worker to compete with foreign labor.
Advocating for more protectionism and cronyism and regulatory capture is going to make the problem worse, not better.
IF you need proof of this look no further to what the Federal government has done to the semiconductor industry in the past year.
The major problem in America is not foreign competition. The barrier to industry is not opening up relations with China.
The major problem in America, and has been since at least the 1970s is a managerial crisis. It is a crisis imposed on the working class by incompetent monolithic bureaucracies in government and in corporate culture.
The problem is exactly the sort of problems imposed on the public by things like the "Jones Act". It is that incompetent buffoons attempt to impose rules on the country to accomplish one thing, which fails utterly, and then has a whole host of undesirable side effects that are aggressively ignored and/or downplayed by apologists like yourself.
It is this managerial crisis that saw the rise of massive conglomerates in the 60s and 70s that ate up industry all over the midwest, liquidated them, and leveraged the assets to purchase more small and medium business. This was considered marvels of efficiency then... which in actually has turned out to be a series of accountancy scams and pyramid schemes that all hinged on exploiting incompentely design regulation.
It is the protectionism and subsidies and cronyism in this country that has destroyed it's competitiveness.
It has never been, and probably never will be, the willingness of the American worker to compete with foreign labor.
Advocating for more protectionism and cronyism and regulatory capture is going to make the problem worse, not better.
IF you need proof of this look no further to what the Federal government has done to the semiconductor industry in the past year.
> ...incompetent buffoons attempt to impose rules on the country to accomplish one thing, which fails utterly"
This is NOT what the Jones Act is.
The Jones Act is a very successful attempt by certain special interests to make money by instituting a law sending tons of money their way.
If we believe this model, one way to repeal the Jones Act is to somehow pay off those interests.
This is NOT what the Jones Act is.
The Jones Act is a very successful attempt by certain special interests to make money by instituting a law sending tons of money their way.
If we believe this model, one way to repeal the Jones Act is to somehow pay off those interests.
I don't disagree that private equity has, historically, not been great at adding value. Sometimes they're good at cutting waste such as private jets and fat management perks. They're finance people, not product people, and that shows up in what they do to companies. More leverage than innovation.
But it's wrong to ignore the impact of competition from very low wage countries. China truly has hollowed out a lot of industrial operations, especially those that ship easily and are not super high tech.
(One might object and say that we don't care about industries that are not bleeding edge. It's true, degreed engineers don't have to care. Tell that to someone without a college degree.)
I'm here to tell you that it is extremely difficult to compete against low-cost country labor if you're doing basic to mid-level industrial manufacturing, because I'm a partner in a company that does that. I spend a lot of time thinking about how to avoid making things they make, because I pay people a reasonable wage, I have to pay their health benefits, I have to pay skilled machinists and engineers, and all of it is 6-20x the hourly costs of their equivalents overseas.
Some just say, well, automate all of it! And anyone who has experience in manufacturing knows that's not a great answer. "Lights-out manufacturing" is a bullshit myth propagated by people who know nothing about manufacturing except watching a couple YouTube videos. Because the labor that can be automated is already fairly limited. It's already mostly automated! It's the mechanics, machinists, tool and die makers, electricians, mechatronics specialists, production managers, procurement, quality managers, mechanical engineers who are most of your cost. Team leads whose jobs are mostly to monitor the machines and tweak the dials. They're good jobs and they pay quite well. A lot more than their equivalents in China. It's not the automatable direct labor that gets you - it's the skilled overhead labor costs inherent to manufacturing.
So, this business does quite well against its domestic competition. But what can I do when the Chinese competition reliably comes over and offers a product for half the cost? Mostly the answer is to avoid making that stuff, and specialize in smaller, higher margin niches. Which works, and is an answer for the business. But it means much less production happening domestically, because the niche stuff is usually a fraction of the volume. And that has lots of knock-on effects throughout the economy.
Go to Germany and talk to people in their industrial sector, like I have. You hear the same story. Factories shutting down because of low cost labor country competition. Magazines catering to Americans talk about how Germany has beaten this, but you'll find the reality when you talk with people in depressed German towns that have had yet another factory move away. This isn't only an American story.
But sure. Let's just blame the accountants and their "pyramid schemes." There's our villain. Investigation complete!
But it's wrong to ignore the impact of competition from very low wage countries. China truly has hollowed out a lot of industrial operations, especially those that ship easily and are not super high tech.
(One might object and say that we don't care about industries that are not bleeding edge. It's true, degreed engineers don't have to care. Tell that to someone without a college degree.)
I'm here to tell you that it is extremely difficult to compete against low-cost country labor if you're doing basic to mid-level industrial manufacturing, because I'm a partner in a company that does that. I spend a lot of time thinking about how to avoid making things they make, because I pay people a reasonable wage, I have to pay their health benefits, I have to pay skilled machinists and engineers, and all of it is 6-20x the hourly costs of their equivalents overseas.
Some just say, well, automate all of it! And anyone who has experience in manufacturing knows that's not a great answer. "Lights-out manufacturing" is a bullshit myth propagated by people who know nothing about manufacturing except watching a couple YouTube videos. Because the labor that can be automated is already fairly limited. It's already mostly automated! It's the mechanics, machinists, tool and die makers, electricians, mechatronics specialists, production managers, procurement, quality managers, mechanical engineers who are most of your cost. Team leads whose jobs are mostly to monitor the machines and tweak the dials. They're good jobs and they pay quite well. A lot more than their equivalents in China. It's not the automatable direct labor that gets you - it's the skilled overhead labor costs inherent to manufacturing.
So, this business does quite well against its domestic competition. But what can I do when the Chinese competition reliably comes over and offers a product for half the cost? Mostly the answer is to avoid making that stuff, and specialize in smaller, higher margin niches. Which works, and is an answer for the business. But it means much less production happening domestically, because the niche stuff is usually a fraction of the volume. And that has lots of knock-on effects throughout the economy.
Go to Germany and talk to people in their industrial sector, like I have. You hear the same story. Factories shutting down because of low cost labor country competition. Magazines catering to Americans talk about how Germany has beaten this, but you'll find the reality when you talk with people in depressed German towns that have had yet another factory move away. This isn't only an American story.
But sure. Let's just blame the accountants and their "pyramid schemes." There's our villain. Investigation complete!
I'm curious about a tangent topic, if you don't mind. What are your thoughts (or have you thought much about) the feasibility of modern industrial manufacturing workspaces/processes designed with the goal of being easy to shutdown & restart?
Edit to clarify what I mean by this: It seems that a significant danger to small or upstart manufacturers is that once they become big enough to achieve stability, their product is likely worthwhile for amazon to copy. At which point amazon will contract a large scale factory and leverage efficiency of scale to outcompete on price.
The only ways to avoid losing out to the bigger fish seem to be "Scale Harder" and "Diversify". I am wondering if there are any good ideas about (essentially) diversifying without scaling for physical manufacturing.
Edit to clarify what I mean by this: It seems that a significant danger to small or upstart manufacturers is that once they become big enough to achieve stability, their product is likely worthwhile for amazon to copy. At which point amazon will contract a large scale factory and leverage efficiency of scale to outcompete on price.
The only ways to avoid losing out to the bigger fish seem to be "Scale Harder" and "Diversify". I am wondering if there are any good ideas about (essentially) diversifying without scaling for physical manufacturing.
You said a lot of words there, but I'm having a real trouble understanding just what you think it is that this "managerial crisis" actually involves.
not the OP, but there is a whole lot of failure to build infrastructure (housing, roads, public transit) quickly, cheaply, and/or in adequate quantity that results from governance issues (and not say a concrete shortage).
In this case the "managerial class" would repeal the Jones Act and marvel at the resulting efficiency?
This is just opinion spewing.
That said, the comment you are replying to didn't provide any sources, but if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion that outsourcing had a real negative effect on large swaths of Americans.
Also, as a counterpoint, lots of other countries that have had a more robust middle class in the past 2 decades have stricter regulations than the US does.
That said, the comment you are replying to didn't provide any sources, but if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion that outsourcing had a real negative effect on large swaths of Americans.
Also, as a counterpoint, lots of other countries that have had a more robust middle class in the past 2 decades have stricter regulations than the US does.
If entity A can create something(labor/product) cheaper (more efficiently) than entity B, then B can purchase that something for cheaper than what it would cost B to do/produce it. Now B has extra resources to devote to what B is efficient at creating and A purchases products that B is efficient at producing at less than what it would cost A. The net result is each entity has spent less time and resources for goods and services, and can use the savings (capital) to devote to future endeavors.
This basic idea scales up to the country level provided all the rules and regulations do not interfere. The problem with the shrinking status of the lower classes in the USA is not division of labor throughout the world. The imbalance of worldwide division of labor is primarily a symptom of disastrous monetary policy by the Federal Reserve bank and Congress and ill conceived regulations.
This basic idea scales up to the country level provided all the rules and regulations do not interfere. The problem with the shrinking status of the lower classes in the USA is not division of labor throughout the world. The imbalance of worldwide division of labor is primarily a symptom of disastrous monetary policy by the Federal Reserve bank and Congress and ill conceived regulations.
unfortunate that you're getting downvoted for explaining comparative advantage; none of these "we could face unfair competition from other countries" comments seem to understand this basic concept
To be fair, I did tarnish the simple explanation with an opinion on why the lower classes are worse off. I knew the risk I was taking when I added that.
> if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion
If your topic is broad enough, you can abuse napkin math any way you want to reach any sort of conclusion.
Virtually all instances of protectionism has caused the industry being protected to stagnate. We saw this with automobiles, and we're seeing this with Boeing. If Intel weren't facing competition from TSMC and Samsung, they would happily milk their 14mm process for who knows how long.
The only time when protectionism is a unequivocally a good thing is with services with no obvious societal benefit. I don't think China loses out from not having Instagram or Facebook. Even if their domestic alternatives are worse, they aren't missing out on much. Likewise, I don't think we'd lose out much if everyone was forced to use Youtube Shorts instead of TikTok.
If your topic is broad enough, you can abuse napkin math any way you want to reach any sort of conclusion.
Virtually all instances of protectionism has caused the industry being protected to stagnate. We saw this with automobiles, and we're seeing this with Boeing. If Intel weren't facing competition from TSMC and Samsung, they would happily milk their 14mm process for who knows how long.
The only time when protectionism is a unequivocally a good thing is with services with no obvious societal benefit. I don't think China loses out from not having Instagram or Facebook. Even if their domestic alternatives are worse, they aren't missing out on much. Likewise, I don't think we'd lose out much if everyone was forced to use Youtube Shorts instead of TikTok.
The major issue with the Jones act is that it prevents domestic transport of goods on water unless it is a built/flagged US ship. This accounts for a tiny fraction of transport within the US (3%):
https://data.bts.gov/stories/s/Moving-Goods-in-the-United-St...
Getting rid of this single part of the Jones Act would help a lot, and I don't see it hurting, as it accounts for such a tiny fraction of our transport today.
https://data.bts.gov/stories/s/Moving-Goods-in-the-United-St...
Getting rid of this single part of the Jones Act would help a lot, and I don't see it hurting, as it accounts for such a tiny fraction of our transport today.
I am passionate about this issue because I think the US is failing to leverage an extremely valuable asset that could help bring manufacturing back to the states, reduce highway traffic and cut co2 emissions.
I believe the biggest infrastructure change the US could do is invest in a comprehensive inland terminal network. Europe is doing this. They have been working on strengthening hundreds of inland terminals. Check out this example linked below on google of terminal in Basel, Switizerland - literally in the middle of the continent[1]! Below is also a proposed project in Cincinnati, Ohio that never gained traction because of the issues with the Jones Act[2]. Imagine if every city along the Mississippi river network had a terminal like this.
I want to stress that the real use of an inland terminal network like this isn't only for delivering finished goods from outside the US to the interior of the country. The real value is to further integrate manufacturing transportation networks between US states, Canada and Mexico. I think this opportunity will fail to be realized because of our dysfunctional politics in Washington and too many powerful lobbies.
[1] https://www.google.com/maps/place/Swissterminal+AG+COBI/@47....
[2] https://www.soapboxmedia.com/devnews/0605queensgateterminals...
I believe the biggest infrastructure change the US could do is invest in a comprehensive inland terminal network. Europe is doing this. They have been working on strengthening hundreds of inland terminals. Check out this example linked below on google of terminal in Basel, Switizerland - literally in the middle of the continent[1]! Below is also a proposed project in Cincinnati, Ohio that never gained traction because of the issues with the Jones Act[2]. Imagine if every city along the Mississippi river network had a terminal like this.
I want to stress that the real use of an inland terminal network like this isn't only for delivering finished goods from outside the US to the interior of the country. The real value is to further integrate manufacturing transportation networks between US states, Canada and Mexico. I think this opportunity will fail to be realized because of our dysfunctional politics in Washington and too many powerful lobbies.
[1] https://www.google.com/maps/place/Swissterminal+AG+COBI/@47....
[2] https://www.soapboxmedia.com/devnews/0605queensgateterminals...
There's a big difference - US actually has a highly efficient rail freight network.
Ah. Depends on what you mean by "highly efficient". From both memory and a quick Google on "2022 u.s. railroad problems", there are plenty of major problems with the U.S. freight RR system. Especially if you try to assume that it has (or can easily add) a bunch of spare capacity.
(Short version - each of the major U.S. freight RR's is more-or-less a monopoly in the part of the U.S. which it serves. If management relentlessly optimizes for profitability, and doesn't much care about customer service, shipping delays, sustainable staffing levels, etc... Well, I'm sure RR management has enjoyed some fat profit-sharing bonus checks.)
(Short version - each of the major U.S. freight RR's is more-or-less a monopoly in the part of the U.S. which it serves. If management relentlessly optimizes for profitability, and doesn't much care about customer service, shipping delays, sustainable staffing levels, etc... Well, I'm sure RR management has enjoyed some fat profit-sharing bonus checks.)
Except those "monopolies" ship freight at drastically lower prices than their European counterparts.
US rail has it's problems but freight rail is not one of them.
US rail has it's problems but freight rail is not one of them.
4/5th of EU rail traffic is passenger trains which changes a great deal about how each system operates. The EU actually has more track miles per person than the US and vastly more electrified lines, they even pay less for rail infrastructure projects etc, but freight traffic very much plays second fiddle.
The US on the other hand allows for much heavier and slower freight trains. It’s very good at moving heavy stable bulk loads like coal and corn long distances, but less so about moving perishable goods. US freight trips to Mexico can take as long as 45-60 days but those trips are really cheap per ton/mile.
The US on the other hand allows for much heavier and slower freight trains. It’s very good at moving heavy stable bulk loads like coal and corn long distances, but less so about moving perishable goods. US freight trips to Mexico can take as long as 45-60 days but those trips are really cheap per ton/mile.
The US’s rail network isn’t that different than the EU’s.
The average freight rail trip in the EU are much shorter which makes rail less competitive relative to trucks. That has nothing to do with the rail network and is instead a function of EU’s economy.
The difference in utilization largely comes down to geography and politics. America’s flyover states and high population coasts just fit rail really well.
The average freight rail trip in the EU are much shorter which makes rail less competitive relative to trucks. That has nothing to do with the rail network and is instead a function of EU’s economy.
The difference in utilization largely comes down to geography and politics. America’s flyover states and high population coasts just fit rail really well.
> The average freight rail trip in the EU are much shorter which makes rail less competitive relative to trucks.
Which makes rail freight in US much more different, doesn't it? We cannot discount competitiveness when comparing rail networks in economics context.
The fact that US rail freight is so much more efficient makes any argument for internal water based transport much less sound.
Which makes rail freight in US much more different, doesn't it? We cannot discount competitiveness when comparing rail networks in economics context.
The fact that US rail freight is so much more efficient makes any argument for internal water based transport much less sound.
> Which makes rail freight in US much more different, doesn't it?
It makes US rail less efficient vs EU rail, but more competitive compared to US trucking.
It makes US rail less efficient vs EU rail, but more competitive compared to US trucking.
Sure, maybe that explains why Europe has made more progress with their inland transportation network. But what I said is still true. Transporting freight via river systems is cheaper and greener than using road and rail. The gap will widen as energy and transportation costs continue to increase.
The United States has the largest internal waterways system in the world, and we basically only use it for bulk goods.
The United States has the largest internal waterways system in the world, and we basically only use it for bulk goods.
> Transporting freight via river systems is cheaper and greener than using road and rail.
True - so long as the navigable waterways reach the points which you need to ship from & to. And the cargo isn't particularly time-sensitive. And exceptional droughts do not lower the rivers so far that "navigable" is only on paper, and not on the no-longer-there water. That last issue is getting to be a major problem this year.
Edit: Also recall that in the northern parts of the U.S., even the largest navigable waterways may close down for a few months every winter, due to ice / winter storms / etc.
True - so long as the navigable waterways reach the points which you need to ship from & to. And the cargo isn't particularly time-sensitive. And exceptional droughts do not lower the rivers so far that "navigable" is only on paper, and not on the no-longer-there water. That last issue is getting to be a major problem this year.
Edit: Also recall that in the northern parts of the U.S., even the largest navigable waterways may close down for a few months every winter, due to ice / winter storms / etc.
I disagree that rail in US is much more polluting, than internal waterway transport.
In Europe - yes, but not US.
In Europe - yes, but not US.
I don’t understand: why would rail pollution be worse in Europe, which has electrification initiatives for even freight rail, than in the US, where the rail duopolies and monopolies use old diesel locomotives and never invest in meaningful system upgrades?
Fair, but still diesel.
Diesel electric engines are actually VERY efficient.
Even the "old diesel" locomotives are still easily 40% efficient.
Even the "old diesel" locomotives are still easily 40% efficient.
Ok, sure. But wouldn’t a large natural gas electric turbine be even more efficient?
The thing about electric motors is the energy source is abstracted. So even if you’re generating electricity with gas, it’s usually much more efficient than a small localized engine.
So I think my point stands, if EU is electrifying its networks, I don’t understand how the US could possibly be more efficient.
The thing about electric motors is the energy source is abstracted. So even if you’re generating electricity with gas, it’s usually much more efficient than a small localized engine.
So I think my point stands, if EU is electrifying its networks, I don’t understand how the US could possibly be more efficient.
If you have a major spill on a river, to what area is the impact contained, versus if you have a major spill on land?
The largest waterway in the system also lacks water at the moment.
As does Europe?
Europe's rail freight is not very efficient actually.
Isn't it?
The thing is both you and the GP seem to be handwaving it. Efficient in what sense? Is freight rail in Europe slower, more expensive, dirtier, and if so how much? Or do they just measure/account for externalities differently? It doesn't require an essay to put assertions about efficiency in context.
The thing is both you and the GP seem to be handwaving it. Efficient in what sense? Is freight rail in Europe slower, more expensive, dirtier, and if so how much? Or do they just measure/account for externalities differently? It doesn't require an essay to put assertions about efficiency in context.
> Imagine if every city along the Mississippi river network had a terminal like this.
Alas, just this week the news [1] is that the Mississippi river's water-level has fallen low enough that existing docks and routes are having problems.
So while it's an interesting vision, there are some risks with respect to reliable rainfall and water-usage.
[1]: https://www.wsj.com/articles/mississippi-river-approaching-r...
Alas, just this week the news [1] is that the Mississippi river's water-level has fallen low enough that existing docks and routes are having problems.
So while it's an interesting vision, there are some risks with respect to reliable rainfall and water-usage.
[1]: https://www.wsj.com/articles/mississippi-river-approaching-r...
What does this look like in practice? Extending the port of Stockton to Fresno?
I think a better example would be the following. Let's take the perspective of cargo intended for a Honda plant in Ohio. This is a fictional illustration. The below voyage is impossible right now because of the Jones act.
1. River barge within the Mexican interior picks up a shipment intended for the Honda plant in Ohio.
2. Shipment is transferred to a larger vessel in Coatzacoalcos, Mexico for voyage to Houston Texas.
3. Vessel travels along the coast, which makes for a perfect transport waterway because of its shallow and calm waters.
4. Vessel stops in Houston. picks up and drops off containers at various terminals.
5. Vessel enters the Mississippi river system and continues to drop off and pick up goods throughout its voyage.
6. Our original cargo we care about, is offloaded in Cincinnati at the Queen City Ohio River Terminal and transferred to the rail network, ultimately for delivery at the Honda manufacturing plant outside of Columbus Ohio.
1. River barge within the Mexican interior picks up a shipment intended for the Honda plant in Ohio.
2. Shipment is transferred to a larger vessel in Coatzacoalcos, Mexico for voyage to Houston Texas.
3. Vessel travels along the coast, which makes for a perfect transport waterway because of its shallow and calm waters.
4. Vessel stops in Houston. picks up and drops off containers at various terminals.
5. Vessel enters the Mississippi river system and continues to drop off and pick up goods throughout its voyage.
6. Our original cargo we care about, is offloaded in Cincinnati at the Queen City Ohio River Terminal and transferred to the rail network, ultimately for delivery at the Honda manufacturing plant outside of Columbus Ohio.
Isn't that journey possible if you just use an American flagged ship with a crew of Americans starting at Coatzacoalcos, Mexico? In the original article you linked [2] I didn't see any mention of how using Americans would be cost prohibitive.
Which IIUC is to try to offload some of the costs of keeping a ship building industry onto private industry [1].
[1]: https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920#Na... [2]: https://www.soapboxmedia.com/devnews/0605queensgateterminals...
Which IIUC is to try to offload some of the costs of keeping a ship building industry onto private industry [1].
[1]: https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920#Na... [2]: https://www.soapboxmedia.com/devnews/0605queensgateterminals...
American crews are way more expensive than foreign crews, and even then there just aren't many Americans who want to go into sailing - it's a tough and sometimes dangerous job with a terrible work-life balance. It's a good way to escape third world poverty, but most Americans have better prospects.
And here is the real motivation. They want to replace trucking with external non-American salaried workers. No thanks. What a garbage position to take.
Yeah that is the problem I keep running into when justifying removal of the jones act. I am anti-jones act on a theoretical basis as part of a holistic plan to deregulate the industry and labor.
But it seems especially fucked up to keep US minimum wage / protections in place while simultaneously not requiring the same thing for foreign flagged corporations performing the same service in a domestic capacity. As you say it's basically saying "if the trucker is American, follow us labor laws. IF the trucker is foreign, race to the bottom." Except instead of trucker it's domestic ship crew flying under a different flag. In practice it's just as bad as protectionism except -- it's protectionism for foreign labor and indeed works against the goals of even the Cato institute. It's the ocean going equivalent of allowing that foreign owned gas station on American soil to go by a completely different set of labor laws than an American owned gas station on American soil. And I say that as someone who really hates the principle of the Jones Act on ideological grounds.
Personally I would just completely deregulate US shipping, eliminate maritime labor laws and protections, and then kill the jones act. Everybody gets to go on equal footing. But with the system we live in, without overhauling it significantly, the Jones Act does make sense on some level.
But it seems especially fucked up to keep US minimum wage / protections in place while simultaneously not requiring the same thing for foreign flagged corporations performing the same service in a domestic capacity. As you say it's basically saying "if the trucker is American, follow us labor laws. IF the trucker is foreign, race to the bottom." Except instead of trucker it's domestic ship crew flying under a different flag. In practice it's just as bad as protectionism except -- it's protectionism for foreign labor and indeed works against the goals of even the Cato institute. It's the ocean going equivalent of allowing that foreign owned gas station on American soil to go by a completely different set of labor laws than an American owned gas station on American soil. And I say that as someone who really hates the principle of the Jones Act on ideological grounds.
Personally I would just completely deregulate US shipping, eliminate maritime labor laws and protections, and then kill the jones act. Everybody gets to go on equal footing. But with the system we live in, without overhauling it significantly, the Jones Act does make sense on some level.
When people actually don't want to do a job - the answer isn't necessarily to close down the whole industry.
Right now carpenters are in very short supply. An hourly rate of a carpenter in Hudson Valley is higher than Senior Engineer at Meta.... and there's less carpenters...
Right now carpenters are in very short supply. An hourly rate of a carpenter in Hudson Valley is higher than Senior Engineer at Meta.... and there's less carpenters...
[deleted]
In California? Many badge terminals along Pacific coast. But it means much more for Eastern and Southeastern US where waterways are plentiful.
I’m from Puerto Rico and people there have been fighting for this since I can remember.
This disproportionately hurts the poorest people there the most. Groceries are already exorbitantly expensive, doubly so because of this misguided act.
Never mind the fact that Puerto Rico is in the middle of recovering from a Cat1 hurricane that nearly took the island out for a month (power outages still ongoing). While the island should have been prepared for that, it was still in the middle of recovering from Maria (a cat 5 hurricane in 2017).
How much slower has relief been because of the jones act? How much longer can we keep subjecting people to colonialism?
This disproportionately hurts the poorest people there the most. Groceries are already exorbitantly expensive, doubly so because of this misguided act.
Never mind the fact that Puerto Rico is in the middle of recovering from a Cat1 hurricane that nearly took the island out for a month (power outages still ongoing). While the island should have been prepared for that, it was still in the middle of recovering from Maria (a cat 5 hurricane in 2017).
How much slower has relief been because of the jones act? How much longer can we keep subjecting people to colonialism?
I live in Puerto Rico. I'm curious about the actual mechanics of how the Jones Act affects PR. For context, I'm against the Jones Act regardless of the exact effects it may or may not have---but I'm still curious about the mechanics.
For instance, I used to believe we couldn't get produce from the DR without it first going through a US port (typically Jacksonville).
But in reality, the Jones Act doesn't prevent ships from bringing DR produce directly to PR, even foreign ships.
I'd like to get a specific example of something economically useful that the Jones Act forbids.
For instance, you couldn't have a trade route by a DR ship that goes San Juan -> Ponce -> DR, if you want to be able to pick up goods in San Juan and drop them in Ponce. But is that really useful, anyway?
Perhaps allowing non-US ships to brings goods between Florida and PR would be the biggest gain of dropping the Jones Act? Because shipping would be much cheaper. Like the case in the article where it's cheaper to bring fuel to the Northeast from Africa than from Texas.
For instance, I used to believe we couldn't get produce from the DR without it first going through a US port (typically Jacksonville).
But in reality, the Jones Act doesn't prevent ships from bringing DR produce directly to PR, even foreign ships.
I'd like to get a specific example of something economically useful that the Jones Act forbids.
For instance, you couldn't have a trade route by a DR ship that goes San Juan -> Ponce -> DR, if you want to be able to pick up goods in San Juan and drop them in Ponce. But is that really useful, anyway?
Perhaps allowing non-US ships to brings goods between Florida and PR would be the biggest gain of dropping the Jones Act? Because shipping would be much cheaper. Like the case in the article where it's cheaper to bring fuel to the Northeast from Africa than from Texas.
I think the issue is that a non-Jones ship going from DR to PR could then not continue on to another US port, which means that PR would have to have enough demand to unload the entire ship there or at another foreign port.
The issue really comes into play with the fact that a non-Jones ship couldn't stop at a US port on the way to another US port, and that really hurts smaller outlying ports that are between a foreign nation and mainland US.
The issue really comes into play with the fact that a non-Jones ship couldn't stop at a US port on the way to another US port, and that really hurts smaller outlying ports that are between a foreign nation and mainland US.
It's a bit of a further tangent, but my understanding is that this has a particular weird impact on cruise ship destinations and related tourism cash/investments. Because cruise ships aren't exempt from the Jones Act either and are often foreign flagged (many cruise ship companies are nominally headquartered in the Bahamas and fly Bahamanian flags on their ships), they also have to make sure that they alternate ports in the way that meets the Jones Act. They can't go from Florida or New Orleans straight to Puerto Rico without stopping somewhere else first (and with US sanctions still "weird" with Cuba the obvious stop isn't generally possible either) or travel directly between Puerto Rico and the USVI without a stop somewhere in between (such as DR).
This seems silly for a number of reasons. I know a bit too much about it because a cruise charter group I go on cruises with has wished for certain itineraries to make logistics easier (PR has better concert logistics than most other islands, for instance, if you are trying to set up a single day concert in a park), but there are too few available PR routes for the sake of variety precisely because some of those routes that might be desirable are basically illegal under the Jones Act. It's not a showstopper in this group's case, but it is silly.
This seems silly for a number of reasons. I know a bit too much about it because a cruise charter group I go on cruises with has wished for certain itineraries to make logistics easier (PR has better concert logistics than most other islands, for instance, if you are trying to set up a single day concert in a park), but there are too few available PR routes for the sake of variety precisely because some of those routes that might be desirable are basically illegal under the Jones Act. It's not a showstopper in this group's case, but it is silly.
A non-US ship can go to PR and then another US port. From the article:
"The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above."
"The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above."
Thanks for the clarification. I was running off of memory from a Peter Schiff podcast where he talked about the Jones Act.
That is still an issue though. Those ships need to try and maximize on board cargo at every port. They have wasted dollars if they don't. There is zero reason for this law to exist except to prohibit free trade and stomp out domestic competition.
That is still an issue though. Those ships need to try and maximize on board cargo at every port. They have wasted dollars if they don't. There is zero reason for this law to exist except to prohibit free trade and stomp out domestic competition.
It's pretty simple. PR isn't a major market, that means that delivering goods from US to PR isn't valuable enough to have economies of scale to kick in.
Add to that that most freight in The Lower 48 is ground(rail and road) - there's little demand for all American merchant fleet.
Low demand for services = low demand for new ships = older inefficient ships = high maintenance costs = lower profit or high prices = small markets get screwed (PR, Guam, Hawaii, etc)
Add to that that most freight in The Lower 48 is ground(rail and road) - there's little demand for all American merchant fleet.
Low demand for services = low demand for new ships = older inefficient ships = high maintenance costs = lower profit or high prices = small markets get screwed (PR, Guam, Hawaii, etc)
Shipping Florida or Texas to PR would be where you see a benefit to PR. Currently, shipping an American-made good (car made in SC, maybe) to PR requires using the US merchant fleet, which is more expensive.
Or uanavailable, because the ship rusted away...
The arguments I've seen are:
a) you would get more competition / lower prices on trade routes from the US to PR. b) foreign flagged vessels could stop in PR on their way to the US, drop off PR goods, and load PR manufactured goods.
It's hard to argue that those possibilities wouldn't have _some_ impact on CoL... but they wouldn't change the bigger reality that PR is an island that doesn't have any natural resources, imports 85% of its food, and is a second class entity within the country it belongs to.
a) you would get more competition / lower prices on trade routes from the US to PR. b) foreign flagged vessels could stop in PR on their way to the US, drop off PR goods, and load PR manufactured goods.
It's hard to argue that those possibilities wouldn't have _some_ impact on CoL... but they wouldn't change the bigger reality that PR is an island that doesn't have any natural resources, imports 85% of its food, and is a second class entity within the country it belongs to.
People say PR is a second class entity, but I think almost any US state would be far better off with Puerto Rico's deal.
PR gets to harvest its own taxes, whereas the other states are tax fiefdoms for the Federal bureaucracy. This is truly a superpower for Puerto Rico.
In return, PR doesn't get to vote for president, or have senators or congressmen. But I can tell you, all those are worthless. My state's representatives (when I lived in a state) served the Federal bureaucracy in practice, not the people of the state. They are cronies for their political parties.
I personally believe that PR's mediocre economic situation is because their own elites steal all the money they get (like the $80 billion or whatever they defaulted on), and because the vast majority of Puerto Ricans have already gone to the States, creating a massive brain drain. I do not believe it's because of the Jones Act or some other form of colonialism.
PR gets to harvest its own taxes, whereas the other states are tax fiefdoms for the Federal bureaucracy. This is truly a superpower for Puerto Rico.
In return, PR doesn't get to vote for president, or have senators or congressmen. But I can tell you, all those are worthless. My state's representatives (when I lived in a state) served the Federal bureaucracy in practice, not the people of the state. They are cronies for their political parties.
I personally believe that PR's mediocre economic situation is because their own elites steal all the money they get (like the $80 billion or whatever they defaulted on), and because the vast majority of Puerto Ricans have already gone to the States, creating a massive brain drain. I do not believe it's because of the Jones Act or some other form of colonialism.
>I'd like to get a specific example of something economically useful that the Jones Act forbids.
The Jones Act obliges some pretty absurd contortions and workarounds to construct offshore wind, of which many many gigawatts are planned to be built in the future off the coasts of the US. This directly increases risk, cost, complexity, and uncertainty compared to offshore wind development in other countries.
The highly specialized vessels which are capable to do this work are in very limited supply globally, and exceedingly few are (or will be) US-flagged and JA compliant. These are the heavy crane vessels, jack up vessels, precision rock placement vessels, cable lay vessels, etc of which practically nothing suitable exists in the US-flagged fleet. Some US vessels are being built (Dominion’s turbine installation jack-up or GLDD’s fall pipe vessel), however, these are absolutely insufficient on their own, and vastly more expensive (and uncompetitive elsewhere) compared to the rest of the global fleet.
The Jones Act obliges some pretty absurd contortions and workarounds to construct offshore wind, of which many many gigawatts are planned to be built in the future off the coasts of the US. This directly increases risk, cost, complexity, and uncertainty compared to offshore wind development in other countries.
The highly specialized vessels which are capable to do this work are in very limited supply globally, and exceedingly few are (or will be) US-flagged and JA compliant. These are the heavy crane vessels, jack up vessels, precision rock placement vessels, cable lay vessels, etc of which practically nothing suitable exists in the US-flagged fleet. Some US vessels are being built (Dominion’s turbine installation jack-up or GLDD’s fall pipe vessel), however, these are absolutely insufficient on their own, and vastly more expensive (and uncompetitive elsewhere) compared to the rest of the global fleet.
The Jones act restricts trips between US ports to US ships. So transport between San Juan and Jacksonville needs to be a US ship. It doesn't technically restrict ships between DR or another other foreign port and PR. But the Jones act prevents a ship going from DR to Jacksonville from stopping in San Juan along the way. San Juan isn't a large enough market, so it doesn't make financial sense to make a trip only there, or to stop in San Juan then another foreign port, then Jacksonville.
According to the article, a foreign ship can stop at multiple US ports, as long as it only offloads. A ship can go from DR to Jacksonville and stop in San Juan on the way.
Formally exempting overseas territories like Puerto Rico seems to me a reasonable compromise.
But why do it at all? There's no evidence that the Jones Act has worked. The US ship building industry lags far behind places like South Korea that churn out bigger, better, and cheaper ships on a faster basis. South Korean ship builders aren't poorly paid either, they just have to compete on a global market.
> But why do it at all? There's no evidence that the Jones Act has worked.
But there are more options than that, like strengthening the Jones Act to make it work better. It's a false choice to present the options as a binary repeal or keep.
But there are more options than that, like strengthening the Jones Act to make it work better. It's a false choice to present the options as a binary repeal or keep.
How could you make it work better by strengthening it? There are decades of work in economics point to how shitty the Jones Act is. It punishes island territories and makes US ship building less competitive.
> How could you make it work better by strengthening it? There are decades of work in economics point to how shitty the Jones Act is.
So? Those people who did that "work" have certain priorities, but those priorities aren't the only ones.
One annoying thing about economists (or at least many of the ones that spend their time pontificating to the public like this) and economics-minded people, is that they're almost always fixated on a small number of oversimplified metrics that they think should be overoptimism to the exclusion of all else.
So? Those people who did that "work" have certain priorities, but those priorities aren't the only ones.
One annoying thing about economists (or at least many of the ones that spend their time pontificating to the public like this) and economics-minded people, is that they're almost always fixated on a small number of oversimplified metrics that they think should be overoptimism to the exclusion of all else.
I'm all for repealing it, but politics is frequently about compromises. Start with the most obvious need, prove the world doesn't explode when you do.
I see your point, but a half measure is likely to stick around just as long as the Jones Act.
If congress wants to phase it out and give some no interest loans to ship builders to modernize, then I guess I'm fine with that.
If congress wants to phase it out and give some no interest loans to ship builders to modernize, then I guess I'm fine with that.
> Formally exempting overseas territories like Puerto Rico seems to me a reasonable compromise.
If you're going to exempt Hawaii, Puerto Rico, Guam, etc. then why not just repeal it entirely? At that point it doesn't really do anything.
If you're going to exempt Hawaii, Puerto Rico, Guam, etc. then why not just repeal it entirely? At that point it doesn't really do anything.
Hawaii isn't a territory and represents significant Jones act related commerce. While I'm not pro jones act it's worth noting Hawaii/Alaska have congressional participation in the democratic process so you can say it's kind of 'their fault' because they're held to the 'social contract' of the majority vote, to whatever weight that validates following laws.
Territories do not have congressional representation and thus cannot be faulted for failures of democratic federal decision making. I think even from the pro-jones act perspective there's a compelling argument to exempt territories.
Territories do not have congressional representation and thus cannot be faulted for failures of democratic federal decision making. I think even from the pro-jones act perspective there's a compelling argument to exempt territories.
>How much longer can we keep subjecting people to colonialism?
Puerto Ricans call themselves subjects of colonialism yet continually reject both statehood and complete independence. It seems like Puerto Ricans want the worst of both worlds.
Puerto Ricans call themselves subjects of colonialism yet continually reject both statehood and complete independence. It seems like Puerto Ricans want the worst of both worlds.
Puerto Rico currently benefits from massive federal grants and subsidies, while having a power structure/leadership that doesn’t have to report/be accountable to the US gov’t in certain ways, and doesn’t have the same taxation. For instance, most Puerto Rico residents don’t need to pay federal income taxes.
It leads to some interesting incentives for folks there, especially in gov’t, if they know how to poke certain populist buttons.
The voting demographics also favor one party over the other, if one cares to look, and if admitted as a state may cause swings and imbalances in the current two-party detente. This is similar to Washington D.C.
The current balance has a lot of defacto non-obvious benefits for politicians that their constituents might not appreciate if they fully knew about them.
It leads to some interesting incentives for folks there, especially in gov’t, if they know how to poke certain populist buttons.
The voting demographics also favor one party over the other, if one cares to look, and if admitted as a state may cause swings and imbalances in the current two-party detente. This is similar to Washington D.C.
The current balance has a lot of defacto non-obvious benefits for politicians that their constituents might not appreciate if they fully knew about them.
> For instance, most Puerto Rico residents don’t need to pay federal income taxes.
Most US households in general haven't paid federal income tax in the past couple of years. In a good year it's close to 50-50.
Most US households in general haven't paid federal income tax in the past couple of years. In a good year it's close to 50-50.
There is a difference between ‘required to do the math, but gets money back/doesn’t owe anything’ and ‘completely exempt’. Puerto Rico is exempt except for certain classes of payments (mainly ‘money directly from the feds’ and ‘money that is intentionally going straight back to the mainland’.
There is a whole ecosystem of companies in the island for instance which use this for tax arbitrage, providing services for mainland folks at lower rates because of it, which they couldn’t do if they had the same tax rates.
The economy there is… unusual, partially because of it’s current semi-favored situation. If it had to play in an even playing field from the mainland US, it isn’t clear what it would look like, but it would probably shift to even more of a resort/retirement place (like Hawaii), which is not to the locals benefit in many cases.
At least if they want jobs that aren’t just hospitality type jobs, which aren’t for everyone.
There is a whole ecosystem of companies in the island for instance which use this for tax arbitrage, providing services for mainland folks at lower rates because of it, which they couldn’t do if they had the same tax rates.
The economy there is… unusual, partially because of it’s current semi-favored situation. If it had to play in an even playing field from the mainland US, it isn’t clear what it would look like, but it would probably shift to even more of a resort/retirement place (like Hawaii), which is not to the locals benefit in many cases.
At least if they want jobs that aren’t just hospitality type jobs, which aren’t for everyone.
Multiple referendums in the last decade where Puerto Ricans voted for statehood:
https://en.wikipedia.org/wiki/2020_Puerto_Rican_status_refer...
US government's rejecting Puerto Rico's statehood
https://en.wikipedia.org/wiki/2020_Puerto_Rican_status_refer...
US government's rejecting Puerto Rico's statehood
a third of the votes in the 2012 were blank in protest. Can not say that that vote proved anything at all. The 2020 vote seems definitive enough though, although it was quite close.
Even as a protest vote an intentional abstention still supports the majority. (At least according to Robert's Rules. Which I know isn't directly applicable to referendums such as this but is still a useful interpretative lens.)
Well the abstainers were explicitly against being a state so I don’t think it makes sense to just put them with the majority.
The abstainers weren't being explicit about that in the vote itself. They left an implicit vote so it could be (and was!) interpreted however one liked.
That said, most of my awareness is Wikipedia and second-hand account, but I heard most of the abstainers weren't protesting "against statehood" but against the meaningless nature of the vote itself because it was non-binding to anyone, its results weren't going to be used to do anything (and indeed did not ultimately matter other than a couple of wishy-washy President Obama words but no actions).
I'm probably wrong on that interpretation, too, but the two votes after the 2012 vote seem to align with that: there is a desire for statehood over alternatives, but that there also seems to a feeling of neglect that they can vote all they want and Congress itself has yet to certify the votes or to make the necessary movements towards an actual, binding vote.
That said, most of my awareness is Wikipedia and second-hand account, but I heard most of the abstainers weren't protesting "against statehood" but against the meaningless nature of the vote itself because it was non-binding to anyone, its results weren't going to be used to do anything (and indeed did not ultimately matter other than a couple of wishy-washy President Obama words but no actions).
I'm probably wrong on that interpretation, too, but the two votes after the 2012 vote seem to align with that: there is a desire for statehood over alternatives, but that there also seems to a feeling of neglect that they can vote all they want and Congress itself has yet to certify the votes or to make the necessary movements towards an actual, binding vote.
Yeah; the democrats said this would be a priority under Biden (giving them two free senate seats!), but haven't moved on it.
I suspect Manchin and pals want to make sure we continue to be ruled by a minority of the voters.
I suspect Manchin and pals want to make sure we continue to be ruled by a minority of the voters.
Manchin is in the Democratic caucus. Even if you think he generally votes R, he gives the Democrats a majority for rules issues and committees, making him far more D friendly than any R.
PR voted for statehood THREE TIMES already... THREE!!! (2012, 2017, 2020)
https://en.wikipedia.org/wiki/Puerto_Rico_political_status_p...
https://en.wikipedia.org/wiki/Puerto_Rico_political_status_p...
Turns out different people want different things.
Repealing the Jones Act would be great for the US economy. It is an artificial constraint on internal trade, and trade is the single most useful tool for prosperity.
It does not achieve its goal. Its goal is to ensure internal trade is not foreign dependent. However, what really happens is domestic trade is replaced by international trade!
A great example is liquid natural gas in Massachusetts. Massachusetts cannot buy LNG from sellers in the US because there are no Jones Act compliant ships that carry LNG.
So we buy from Trinidad instead. Literally billions of dollars flowing out of the country because of this regulation.
It does not achieve its goal. Its goal is to ensure internal trade is not foreign dependent. However, what really happens is domestic trade is replaced by international trade!
A great example is liquid natural gas in Massachusetts. Massachusetts cannot buy LNG from sellers in the US because there are no Jones Act compliant ships that carry LNG.
So we buy from Trinidad instead. Literally billions of dollars flowing out of the country because of this regulation.
A recent post from the Cato Institute shows that their push to repeal the Jones Act seems to have touched a nerve inside the U.S. Maritime Administration (MARAD).
"Almost at the end of the 41‐ page document is what appears to be a set of recommendations related to a March 2020 meeting of the Marine Transportation System National Advisory Committee (MTSNAC)’s International Shipping Subcommittee. Among them: “Charge all past and present members of the Cato and Mercatus Institutes with treason.”
https://www.cato.org/blog/charge-all-past-present-members-ca...
"Almost at the end of the 41‐ page document is what appears to be a set of recommendations related to a March 2020 meeting of the Marine Transportation System National Advisory Committee (MTSNAC)’s International Shipping Subcommittee. Among them: “Charge all past and present members of the Cato and Mercatus Institutes with treason.”
https://www.cato.org/blog/charge-all-past-present-members-ca...
Slight nitpick, but I think it’s worth pointing out that MARAD, a federal agency, is a distinct entity from MTSNAC, a collection of industry folks who made the treason comment.
According to this article, New England is risking winter blackouts due to strong LNG demand in Europe and the Jones Act making delivery of domestic supplies nearly impossible: https://www.wsj.com/articles/new-england-risks-winter-blacko...
There's a much easier long-term solution to this problem: electric heating, powered by electricity from Hydro-Québec. Unfortunately, the LNG industry has lobbied hard to block transmission lines, but it would make a huge difference should the lines eventually be built.
I think it's a fair criticism of the jones act that it hasn't delivered on its goals of keeping a vibrant commercial shipbuilding and shipping industry in the US for the purpose of supporting our military in case of war. Is seven active shipyards sufficient if we need to mobilize a war effort? Do ships matter as much to logistics in modern warfare? Is our domestic production capable of building trans-oceanic capable ships when international shipping is not protected?
Similarly, the costs of the act are not evenly distributed, with Puerto Rico and Hawaii particularly burdened by higher shipping costs.
Similarly, the costs of the act are not evenly distributed, with Puerto Rico and Hawaii particularly burdened by higher shipping costs.
The Jones Act in combination with the Passenger Vessel Services Act (1889) also forces foreign-flagged cruise ships (which is basically all of them) to stop at a foreign port even if they loop back to the same starting US port or all passengers will be charged a fee of several hundred dollars.
A Seattle to Alaska to Seattle cruise will need to stop in Canada, even for an hour, just to avoid the extra fees. Starting at one US port and ending at another requires a stop at a "distant" foreign port which makes it difficult from cruise lines to offer routes like Los Angeles to Hawaii.
https://thepointsguy.com/guide/what-is-the-jones-act-for-cru...
A Seattle to Alaska to Seattle cruise will need to stop in Canada, even for an hour, just to avoid the extra fees. Starting at one US port and ending at another requires a stop at a "distant" foreign port which makes it difficult from cruise lines to offer routes like Los Angeles to Hawaii.
https://thepointsguy.com/guide/what-is-the-jones-act-for-cru...
Maybe they should even put the passengers on a rail to nowhere! https://www.maritime-executive.com/article/judge-rules-that-...
The obvious and easy solution is to be US flagged.
But then they couldn't get away with abusing their workers and paying them peanuts: https://www.businessinsider.com/why-cruise-ship-workers-take...
Obvious, yes, but not necessarily easy. It would also have to be US manufactured, US crewed, and majority US owned.
I'm ambivalent about cruise ship manufacturing location, since it is a niche and luxury activity. Having read the conditions working on those ships though, the US ownership and crewing doesn't bother me.
If the purpose of the Act is to ensure US independence in maritime shipping, why should cruise lines be affected? Even supporters of the Act could probably justify an exemption. I'm talking out of my butt, though.
If the purpose of the Act is to ensure US independence in maritime shipping, why should cruise lines be affected? Even supporters of the Act could probably justify an exemption. I'm talking out of my butt, though.
Cruise ships are affected by the Passenger Vessel Services Act of 1886, not the Jones Act. Similar to the Jones Act, it seeks to protect the US passenger vessel industry.
Also the Foreign Dredge Act [1]…
[1]https://en.m.wikipedia.org/wiki/Foreign_Dredge_Act_of_1906
[1]https://en.m.wikipedia.org/wiki/Foreign_Dredge_Act_of_1906
I had to read in a ways to find out what the Jones Act is. It says that maritime cargo traffic in internal US waterways has to be carried by US-flagged vessels. Repealing it means e.g. that Panama-flagged vessels could carry the cargo instead. The article starts out saying that the importance of repealing it has been propounded by the Cato Institute and by Lawrence H. Summers. So that says what the Act is, and who wants to repeal it. I figured at that point that my curiosity was satisfied.
It's not just where the ship is registered. The ship literally has to be constructed in a US shipyard by US shipbuilders and operated by US crews, and everything has to be owned by US citizens.
It’s much more restrictive than that, which is why there are basically no carriers that meet its requirements. It’s just not financially feasible. From Wikipedia:
It requires that all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States and that fly the U.S. flag, are owned by U.S. citizens, and are crewed by U.S. citizens and U.S. permanent residents.
It requires that all goods transported by water between U.S. ports be carried on ships that have been constructed in the United States and that fly the U.S. flag, are owned by U.S. citizens, and are crewed by U.S. citizens and U.S. permanent residents.
Thanks.
I'd like to know exactly what foreign maritime traffic the Cato Institute and Lawrence H. Summers think can successfully navigate internal US waterways.[1] Freeing stuck ships can cost upwards of $1B, not to mention the ecological threat of discharged ballast, inviting wholesale invasion of snakehead and worse.
[1] https://www.nytimes.com/2022/04/17/business/chesapeake-cargo...
I'd like to know exactly what foreign maritime traffic the Cato Institute and Lawrence H. Summers think can successfully navigate internal US waterways.[1] Freeing stuck ships can cost upwards of $1B, not to mention the ecological threat of discharged ballast, inviting wholesale invasion of snakehead and worse.
[1] https://www.nytimes.com/2022/04/17/business/chesapeake-cargo...
AFAIK, internal waterways does not literally mean inside the US. Internal means routes between US ports. A foreign vessel could still sail between two deep water ports for example, if the act were repealed.
Does the nomenclature exclude water routes within the US, and only refer to coastal port to port routes? If not, you have constructed a straw man.
Fair enough I guess? From the comment it sounded like it was arguing that repealing the jones act would only make sense if foreign ships could navigate internal waters ways. It was more aimed at clearing up misunderstanding
than creating a strawman.
I'm not sure how you could have interpreted it that way. My argument is that those that recommended repealing the Jones Act had not considered detrimental consequences. Notwithstanding, repealing the Jones Act would still permit foreign ships to navigate internal waterways. Just because it would also permit port to port navigation does not eliminate the possibility of supertankers running aground in major waterways.
Its impact is vastly greater than trade along inland waterways. It regulates “coastwise transport” which, under various interpretations, means from one port in the US to another to even a single rock placed on the seabed by a ship.
With respect to ballast water, any vessel discharging cargo or entering US ports has to abide by USCG and other regulations about treatment etc, regardless of whether or not it’s a JA-compliant vessel or not
With respect to ballast water, any vessel discharging cargo or entering US ports has to abide by USCG and other regulations about treatment etc, regardless of whether or not it’s a JA-compliant vessel or not
> any vessel discharging cargo or entering US ports has to abide by USCG and other regulations about treatment etc, regardless of whether or not it’s a JA-compliant vessel or not
Trusting in compliance does not remotely eliminate the grave risk of contamination, and enforcement only occurs after the damage is done. Anyone that has any affection for domestic marine species will see this as begging for ecological catastrophe.
Trusting in compliance does not remotely eliminate the grave risk of contamination, and enforcement only occurs after the damage is done. Anyone that has any affection for domestic marine species will see this as begging for ecological catastrophe.
That’s why there are inspections, permits, and audits.
But this is entirely orthogonal to the jones act because there are foreign vessels calling at US ports like literally all the time. They just don’t pick up cargo in one US port and take it to another US port.
But this is entirely orthogonal to the jones act because there are foreign vessels calling at US ports like literally all the time. They just don’t pick up cargo in one US port and take it to another US port.
> That’s why there are inspections, permits, and audits.
These may discourage noncompliance, but they can not prevent it.
> But this is entirely orthogonal to the jones act because there are foreign vessels calling at US ports like literally all the time. They just don’t pick up cargo in one US port and take it to another US port.
As attractive as allowing foreign vessels to transport cargo from one domestic port to another, repealing the Jones Act will also permit foreign vessels to access inland ports such as St. Louis, Cincinnati, Pittsburgh, Kansas City, and Memphis. It would not take much for foreign vessels to accidentally, by negligence, or noncompliance introduce invasive species that would decimate populations of walleye, sauger, largemouth bass, smallmouth bass, channel catfish, northern pike, bluegill and crappies that live in the Mississippi watershed. As omnipotent as they seem, inspections, permits, and audits would never be able to prevent that from occurring, yet the Jones Act clearly has, as these native populations still exist, and introduction of invasive species through ballast discharge of foreign vessels in these fragile ecosystems has been prevented.
These may discourage noncompliance, but they can not prevent it.
> But this is entirely orthogonal to the jones act because there are foreign vessels calling at US ports like literally all the time. They just don’t pick up cargo in one US port and take it to another US port.
As attractive as allowing foreign vessels to transport cargo from one domestic port to another, repealing the Jones Act will also permit foreign vessels to access inland ports such as St. Louis, Cincinnati, Pittsburgh, Kansas City, and Memphis. It would not take much for foreign vessels to accidentally, by negligence, or noncompliance introduce invasive species that would decimate populations of walleye, sauger, largemouth bass, smallmouth bass, channel catfish, northern pike, bluegill and crappies that live in the Mississippi watershed. As omnipotent as they seem, inspections, permits, and audits would never be able to prevent that from occurring, yet the Jones Act clearly has, as these native populations still exist, and introduction of invasive species through ballast discharge of foreign vessels in these fragile ecosystems has been prevented.
Other U.S. laws regulate both safety and environmental issues, but you seem to be assuming that foreign vessels are more likely to break them than the Jones Act.
As far as I can tell, though, the Jones Act doesn't regulate country of manufacture or require exclusive U.S. operation; it only requires U.S. flagging and crews. A foreign-flagged vessel is not really more or less likely than a domestic-flagged one to have been constructed in the U.S., or to have been transported here from elsewhere, or to operate elsewhere.
It's entirely possible (if French law permits) to have a U.S. flagged ship built in France that does river cruises on the Seine but occasionally sails (or realistically gets transported) back to the Mississippi, bringing with it whatever is stuck to its hull. On the other hand it's theoretically possible without the law to have a French-flagged and crewed ship that is built in the U.S. and never operates anywhere but the Mississippi, which seems to still satisfy your requirements. The Jones Act is an employment and profit law, not a health, safety, or environmental one.
As far as I can tell, though, the Jones Act doesn't regulate country of manufacture or require exclusive U.S. operation; it only requires U.S. flagging and crews. A foreign-flagged vessel is not really more or less likely than a domestic-flagged one to have been constructed in the U.S., or to have been transported here from elsewhere, or to operate elsewhere.
It's entirely possible (if French law permits) to have a U.S. flagged ship built in France that does river cruises on the Seine but occasionally sails (or realistically gets transported) back to the Mississippi, bringing with it whatever is stuck to its hull. On the other hand it's theoretically possible without the law to have a French-flagged and crewed ship that is built in the U.S. and never operates anywhere but the Mississippi, which seems to still satisfy your requirements. The Jones Act is an employment and profit law, not a health, safety, or environmental one.
> The Jones Act is an employment and profit law, not a health, safety, or environmental one.
And yet this does not guarantee repealing the Jones Act will not introduce environmental issues, and I'm not sure why we'd have such strong sympathy for limited profit opportunities of foreign operators and vessels restricted by the Jones Act.
And yet this does not guarantee repealing the Jones Act will not introduce environmental issues, and I'm not sure why we'd have such strong sympathy for limited profit opportunities of foreign operators and vessels restricted by the Jones Act.
The Jones Act is a problem and a blessing. It ensures a US maritime industry, albeit tiny. Still, due to lack of competition, it has left the US maritime industry so far behind the world standard that the minute it is removed, the entire sector will go bankrupt from international competition.
The Decline of the U.S. Merchant Marine | What's Going on With Shipping?
https://www.youtube.com/watch?v=kJn0bCWx_9g
The Decline of the U.S. Merchant Marine | What's Going on With Shipping?
https://www.youtube.com/watch?v=kJn0bCWx_9g
Eh, all international shipping will collapse the moment the US Navy stops being the oceanic police for everyone for free.
How come? What is this disaster mindset? Even Ukraine and Russia agreed on how to open grain corridors from Odesa.
https://en.wikipedia.org/wiki/Black_Sea_Grain_Initiative
https://en.wikipedia.org/wiki/Black_Sea_Grain_Initiative
Because the US Navy patrols the waters and keeps piracy down. The areas it doesn't patrol are infested with pirates. It costs quite a bit to do this, and if the US Navy steps back other countries will have to step up.
Can you point to research showing this? Except outside Somalia 10-15 years ago when the international community stepped in.
Piracy is mostly handled by local governments and is hugely dependent on their strength and international cooperation.
https://www.imo.org/en/OurWork/Security/Pages/Piracy-Reports...
Piracy is mostly handled by local governments and is hugely dependent on their strength and international cooperation.
https://www.imo.org/en/OurWork/Security/Pages/Piracy-Reports...
The argument is put forward by Zeihan et al https://gcaptain.com/end-of-the-world-is-just-beginning-book...
We'll see - perhaps super transports will keep sailing even if the US Navy pulls back.
We'll see - perhaps super transports will keep sailing even if the US Navy pulls back.
It's not just piracy, it also is a matter of keeping other nation states from preventing interference. Zeihan also says that piracy will be state sponsored.
This seems entirely unrelated to the conversation at hand, and a strawman because no claim is made that such an event is about to occur.
I'm no fan of the Jones Act, I think it should be repealed in its entirety. However, there is a political reality that several special interests are united in keeping the law on the books.
I think a better solution would be to amend the Jones Act to remove the American built requirement. I'm fine with American flagged and crewed ships if we want to ensure that we have available merchant marines. (which we don't have now) However, there is no such thing as an "American built" ship anymore. The ships we "build" in the USA have had their design and critical components outsourced. The only thing we do is assembly, and that is the easiest part of shipbuilding to ramp up in a war.
You can sell this plan to the defense department by stating that you will actually have ships and crew members if you need them. Right now almost the entire fleet of Jones Act ships is reaching their end of life and there is a point which we will reach soon where they will go extinct.
I think a better solution would be to amend the Jones Act to remove the American built requirement. I'm fine with American flagged and crewed ships if we want to ensure that we have available merchant marines. (which we don't have now) However, there is no such thing as an "American built" ship anymore. The ships we "build" in the USA have had their design and critical components outsourced. The only thing we do is assembly, and that is the easiest part of shipbuilding to ramp up in a war.
You can sell this plan to the defense department by stating that you will actually have ships and crew members if you need them. Right now almost the entire fleet of Jones Act ships is reaching their end of life and there is a point which we will reach soon where they will go extinct.
Repealing this will be difficult, because you have a small focused organization supporting it, and you have a large, diffuse, and distractible public.
And those maritime guys are hardcore union guys, which will make Democratic support a given.
The only reason it has a chance to pass now is because the repeal may reduce costs for millions of consumers. If it's hurting home heating oil customers in New England then the NE delegation may get behind it. That'll put them against every state that's contiguous to water (including inland waterways). I'd put the chance of it passing at 15% unless something exciting happens.
And those maritime guys are hardcore union guys, which will make Democratic support a given.
The only reason it has a chance to pass now is because the repeal may reduce costs for millions of consumers. If it's hurting home heating oil customers in New England then the NE delegation may get behind it. That'll put them against every state that's contiguous to water (including inland waterways). I'd put the chance of it passing at 15% unless something exciting happens.
There have been significant issues building offshore wind farms because the speciality ships used to construct these behemoths are not built by US shipyards. There have been some discussions of sailing these vessels all the from from Europe and operating them out of ports in Canada to get around the Jones Act, but the inefficiencies are obvious.
Perhaps democrats could be persuaded into abolishing this rule on the basis of furthering green energy efforts.
Perhaps democrats could be persuaded into abolishing this rule on the basis of furthering green energy efforts.
For context, it looks like there are only 32 wind turbine installation vessels in the world as of early 2021, and the first Jones Act-compliant wind turbine installation vessel is currently being built: https://www.theverge.com/22296979/us-offshore-ships-wind-boo...
Instead of taking on national security + environmental pollution risks and further empowering foreign industry by repealing the Jones Act, we should invest in U.S. shipyards and continue to investigate assembling wind turbines at port and bringing out to sea mostly intact: https://crew.udel.edu/industrializing-offshore-wind-power-ge...
Instead of taking on national security + environmental pollution risks and further empowering foreign industry by repealing the Jones Act, we should invest in U.S. shipyards and continue to investigate assembling wind turbines at port and bringing out to sea mostly intact: https://crew.udel.edu/industrializing-offshore-wind-power-ge...
>There have been some discussions of sailing these vessels all the from from Europe and operating them out of ports in Canada to get around the Jones Act
Not mere discussions. This has already happened (Dominion Coastal Virginia demo project) and will continue to happen.
JA support is really bipartisan…some dems are fully on board with continuation and even further strengthening of the Jones Act.
Not mere discussions. This has already happened (Dominion Coastal Virginia demo project) and will continue to happen.
JA support is really bipartisan…some dems are fully on board with continuation and even further strengthening of the Jones Act.
It seems to me that the Jones Act is a tariff on the activity of shipping itself. Unless one wants to argue the globalist stance that all tariffs should be abolished, the Jones Act should be examined with a careful eye to what it prevents, not only what costs it incurs. I.e. if the Jones Act was repealed, would all shipping suddenly be done by foreign actors, who, by virtue of being cheaper, would have a virtual monopoly on (and insight into, and control over) all shipping within the US? Maybe this might not actually be bad, but such consequences should be considered.
That 'globalist' stance is eminently sensible.
Tariffs should be unilaterally abolished: no need to wait for the other guys to stop hitting their head against a wall, you can stop today. Ie no need to wait for free trade agreements. Just declare unilateral free trade.
Tariffs should be unilaterally abolished: no need to wait for the other guys to stop hitting their head against a wall, you can stop today. Ie no need to wait for free trade agreements. Just declare unilateral free trade.
If that was done, all workplace safety and employment security laws would stop being useful and become mostly only a financial drain on all domestic businesses, as foreign countries without such laws and restrictions could offer cheaper goods and services by exploiting and endangering their employees. Also all child labor laws. Most domestic businesses would, by force of price competition, be made to buy from, and outsource their jobs to, wherever it was cheapest. Since this outcome might still technically protect domestic workers and children, but would leave them destitute and out of work in a destroyed economy, it is reasonable to argue that this outcome should be avoided.
Children are not, in fact, productive workers.
Foreign product tariffs prevent nothing of what you just listed. Complete baseless boogeyman argument
What I wrote was the standard argument as I understand it. Unlike your reply, which contains no argument at all.
I repeat myself: Foreign product tariffs prevent nothing of what you just listed
You can also argue that shooting yourself in the foot will prevent child labor in sneaker industry... but mainly because you'd stop buying sneakers.
You can also argue that shooting yourself in the foot will prevent child labor in sneaker industry... but mainly because you'd stop buying sneakers.
Again, as I understand it, the standard argument is that product tariffs prevent, say, child labor, since cheap foreign products, produced as cheaply as possible with unsafe child labor, can still not be profitably sold domestically since the tariff makes domestic products comparable in price. This makes foreign child labor less common, since it is not economical to produce products abroad for the domestic market. This seems like a reasonable argument to me.
I also repeat myself: this theoretically also preserves the domestic economy, which would otherwise be outcompeted by cheap foreign companies.
I also repeat myself: this theoretically also preserves the domestic economy, which would otherwise be outcompeted by cheap foreign companies.
US had tariffs on foreign made sneakers, when the Nike scandal hit.
EU has tariffs on foreign made clothes - yet multiple examples of child labor were discovered in multiple clothes retailer supply chains.
This argument has been proven to be false - empirically.
EU has tariffs on foreign made clothes - yet multiple examples of child labor were discovered in multiple clothes retailer supply chains.
This argument has been proven to be false - empirically.
>EU has tariffs on foreign made clothes - yet multiple examples of child labor were discovered in multiple clothes retailer supply chains.
Maybe the tariffs aren't high enough!
Or perhaps a government of the people and not of profit would outright ban merchants such as Nike and others that source slave labor.
Maybe the tariffs aren't high enough!
Or perhaps a government of the people and not of profit would outright ban merchants such as Nike and others that source slave labor.
If it was still economical to produce foreign products for the domestic market, then the tariff were not high enough to prevent it. The mere existence of tariffs which proved too low does not disprove the entire concept.
Fees for non-US ships might be a compromise that helps the opposing side get more comfortable with a repeal
Taxation (or fees) are in general less bad than outright bans.
I wanted a bit of education outside this, so Wikipedia tells me the Jones act declares that cargo between US ports must be on US-flag, US-created, largely US-crew, US-owned ships. The Lexington Institute, a center-right thinktank focused on domestic security policy, has claimed(June 2016) it strengthens border security and reduces terrorism.
I guess my question is: how much is a stronger border security and terrorism reduction worth, economically?
I guess my question is: how much is a stronger border security and terrorism reduction worth, economically?
It’s not just those issues. The original Impetus for the jones act was to keep a strong merchant marine for war time, so we subsidise the us merchant fleet so that if we had need during war they would exist.
I find this difficult because my outlook for those kinds of conflicts indicates it’s not necessary to have such a fleet, but if you need it, it’s too late to decide. Those ships are a multi year build.
I would think some flexibility and also some accounting of exactly how many us merchant boats we’d need should inform changes to the Jones act.
I find this difficult because my outlook for those kinds of conflicts indicates it’s not necessary to have such a fleet, but if you need it, it’s too late to decide. Those ships are a multi year build.
I would think some flexibility and also some accounting of exactly how many us merchant boats we’d need should inform changes to the Jones act.
That original "impetus" also changed dramatically due to technology shifts in the very next war after the Jones Act was enacted: naval combat shifted in World War II dramatically towards the favor of aircraft carriers and submarines. A merchant marine fleet doesn't need submarines (they don't have much cargo room, do they?) and maybe there's some crazy way that an aircraft carrier deck could double as a modern shipping container deck, but why go to all that expense?
The last war that merchant marines truly mattered to war was World War I and "iconic" moments like the merchant fleet at Dunkirk.
The last war that merchant marines truly mattered to war was World War I and "iconic" moments like the merchant fleet at Dunkirk.
> so that if we had need during war they would exist.
How would we use a US merchant fleet during war? Maybe I just don't understand how that fleet would be useful in a war. Does the US merchant fleet really have military grade vessels and military grade weapons systems?
How would we use a US merchant fleet during war? Maybe I just don't understand how that fleet would be useful in a war. Does the US merchant fleet really have military grade vessels and military grade weapons systems?
A straight forward fix would be a gradual repeal. Start with foreign territories and Hawaii allowing for non-US vessels. Then in the US allow for 10% of all traffic to be serviced by an international company, and keep increasing that until some X% that allows for a US maritime industry and international competition.
Although I do think that elements of the Jones Act make sense to repeal (the shipbuilding aspects are an example of something that has really bad outcomes on the whole), I think there are also aspects that ought to be retained and enhanced.
It is true that foreign owned vessels can't move goods between US ports. These vessels sail under flags of convenience and are crewed by poorly treated Filipino sailors earning a pittance. Do we really want to move _more_ shipping to them?
It seems appropriate to me that cargo between US ports should be effectively regulated. I would hate for the outcome of a repeal to be yet more abusive labor practices.
It is true that foreign owned vessels can't move goods between US ports. These vessels sail under flags of convenience and are crewed by poorly treated Filipino sailors earning a pittance. Do we really want to move _more_ shipping to them?
It seems appropriate to me that cargo between US ports should be effectively regulated. I would hate for the outcome of a repeal to be yet more abusive labor practices.
Pointlessly protectionist law. What's worse - it hurts primarily other americans... like most protectionist laws.
It's protectionist - yes. Pointless... there's good reason for it when it was written.
The domain is cabotage ( https://en.wikipedia.org/wiki/Cabotage ). Note that many countries have cabotage laws of one sort or another.
The domain is cabotage ( https://en.wikipedia.org/wiki/Cabotage ). Note that many countries have cabotage laws of one sort or another.
It's pointless, because it failed miserably to do anything.
It failed to account for the fact that most of internal US freight transport is ground or air.
It lived in some ideal world where Florida to New York is cheaper to deliver via freight ship, than a rail line.
At the time of drafting it was already based in an imaginary world.
It failed to account for the fact that most of internal US freight transport is ground or air.
It lived in some ideal world where Florida to New York is cheaper to deliver via freight ship, than a rail line.
At the time of drafting it was already based in an imaginary world.
Other laws cover air and land transport.
Try taking a Ryanair or Air China flight from New York to San Francisco. Try getting CP Rail to deliver from Florida to New York or Bison Transport to deliver from Minneapolis to Houston.
The Jones Act covers foreign carriers between US maritime ports.
There are indeed problems with it and the amount of investment that the US, as a nation, has invested and retained in building and staffing ships that could be complaint with the Jones Act. It goes both ways - and the problem is not solely with the law.
Try taking a Ryanair or Air China flight from New York to San Francisco. Try getting CP Rail to deliver from Florida to New York or Bison Transport to deliver from Minneapolis to Houston.
The Jones Act covers foreign carriers between US maritime ports.
There are indeed problems with it and the amount of investment that the US, as a nation, has invested and retained in building and staffing ships that could be complaint with the Jones Act. It goes both ways - and the problem is not solely with the law.
General laws, requiring that business conducted in US is conducted with residency laws taken into account is not the same as everything listed in Jone's Act.
This is simply outsourcing. We know what happens when you outsource. You cannot simply export an industry and then expect to have more money flowing in the nations economy at the end of the day, will the company be richer? sure, but the individuals who actually make that currency flow will be less. This is what happens in a lot of states that are fighting just so there's an amazon or any industry inside of it. To implement this in a national scale is extremely dangerous. Completely decimating the economic import/export balance of any nation.
The Jones Act limits intra-state transit of goods. Trade efficiencies create new economically viable business opportunities, which in this context are definitionally domestic. Outsourcing the ships used for intra-state transit would unlock new domestic opportunities which ultimately grow the domestic economy.
There are also acute more significant benefits. Transportation of natural gas by sea would allow better utilization of domestic gas production, as opposed to what currently happens, where states not connected by pipeline have to import gas internationally.
There are also acute more significant benefits. Transportation of natural gas by sea would allow better utilization of domestic gas production, as opposed to what currently happens, where states not connected by pipeline have to import gas internationally.
As one (very wise) commenter here on HN once said, you have to prefix “We would like you to believe that…” to the title of publications like this.
“We would like you to believe that it’s time to repeal the Jones act.”
“We would like you to believe that it’s time to repeal the Jones act.”
Hard pass.
This is no different to any other neoliberal effort to move more profits to the capital-owning class by offshoring more jobs under the mirage of reducing costs to consumers by paying people in the third-world peanuts.
The US (and the EU) are able to use their significant market power to benefit consumers and workers by imposing regulation on those who want access to their markets. Access to the US financial system is one way the US can impose its will (for better or for ill) on foreign financial institutions, as one notable example.
This article makes no mention of "flags of convenience" and that really gives the game away at the agenda of the neoliberal thinktanks that produced it.
Maritive law is complicated. A big factor is what flag a ship flies under. Often commercial shiping will fly under a flag of a country that has next to no worker protections so countries like Liberia and even Mongolia (yes, land-locked Mongolia) ostensibly operate large commercial shipping fleets. To further escape any liability form, say, spilling millions of barrels of oil this will be further complicated by a corporation registerd in a different country operating the ship flying a flag of yet another country.
The US is a huge destination for commercial shipping. The US thus has a ton of power to require certain standards of the ships that want to visit its ports and the conditions the crews operate under. Under no circumstances should we give this up for the false promise of neoliberal cost-cutting.
This is no different to any other neoliberal effort to move more profits to the capital-owning class by offshoring more jobs under the mirage of reducing costs to consumers by paying people in the third-world peanuts.
The US (and the EU) are able to use their significant market power to benefit consumers and workers by imposing regulation on those who want access to their markets. Access to the US financial system is one way the US can impose its will (for better or for ill) on foreign financial institutions, as one notable example.
This article makes no mention of "flags of convenience" and that really gives the game away at the agenda of the neoliberal thinktanks that produced it.
Maritive law is complicated. A big factor is what flag a ship flies under. Often commercial shiping will fly under a flag of a country that has next to no worker protections so countries like Liberia and even Mongolia (yes, land-locked Mongolia) ostensibly operate large commercial shipping fleets. To further escape any liability form, say, spilling millions of barrels of oil this will be further complicated by a corporation registerd in a different country operating the ship flying a flag of yet another country.
The US is a huge destination for commercial shipping. The US thus has a ton of power to require certain standards of the ships that want to visit its ports and the conditions the crews operate under. Under no circumstances should we give this up for the false promise of neoliberal cost-cutting.
How about you actually read the damn article and the law, before writing this?
The Cato Institute is a conservative think tank.
Repealing Jones would effectively kill a huge amount of the US maritime industry and related jobs. Literally offshoring those jobs to foreign ships and wage slave crews. Just like we offshored union manufacturing jobs to China in the 80s and 90s.
We can discuss ways to make it more efficient but keeping jobs onshore has very real benefits. It's the core of our middle class.
Repealing Jones would effectively kill a huge amount of the US maritime industry and related jobs. Literally offshoring those jobs to foreign ships and wage slave crews. Just like we offshored union manufacturing jobs to China in the 80s and 90s.
We can discuss ways to make it more efficient but keeping jobs onshore has very real benefits. It's the core of our middle class.
I think the operational description of the Cato Institute is that of 'neoliberal ideologue', not necessarily 'conservative' or 'liberal' (not that those two latter terms have much meaning anymore, there more like keys to rather mutable dictionary entrys whose meaning fluctuates with the daily political intrigues).
Neoliberal is a bit easier to define, it's basically the notion that international pools of capital should be liberated from the restrictions imposed by the persistence of nation-states.
Neoliberal is a bit easier to define, it's basically the notion that international pools of capital should be liberated from the restrictions imposed by the persistence of nation-states.
The Jones act has already made sure that the US maritime industry is tiny.
Considering that CATO has been blamed to be liberal, conservative and everything under the sun - they've had a very consistent view on many issues, that opponents come up with labels to try to smear them.
I lost about $700 due to the Jones Act.
What happened was that my friend had booked a cruise for us, that sailed out of Orlando. But I couldn't join them in Orlando. "No worries," I thought, "I'll just meet up with the ship at the very next stop" -- which I did, I took an uber there. We had done the same with MSC cruises in the Mediterranean -- missing the ship in Rome and taking a train up to meet it in Civitavecchia.
Well, as I got on the ship, they said I owe $700 or so. I was really wondering why! Turns out that unless the ship drops off the passenger at the exact same US port as they picked them up, it is considered that the ship is "transporting cargo" and therefore has to pay taxes.
I asked whether I could be dropped off at the port I got on: no.
I asked whether I could get off in the Bahamas and fly back: no. (Well, yes but I'd still owe the money).
So, I had to pay. The ship otherwise risked getting fined for not paying its tax.
What happened was that my friend had booked a cruise for us, that sailed out of Orlando. But I couldn't join them in Orlando. "No worries," I thought, "I'll just meet up with the ship at the very next stop" -- which I did, I took an uber there. We had done the same with MSC cruises in the Mediterranean -- missing the ship in Rome and taking a train up to meet it in Civitavecchia.
Well, as I got on the ship, they said I owe $700 or so. I was really wondering why! Turns out that unless the ship drops off the passenger at the exact same US port as they picked them up, it is considered that the ship is "transporting cargo" and therefore has to pay taxes.
I asked whether I could be dropped off at the port I got on: no.
I asked whether I could get off in the Bahamas and fly back: no. (Well, yes but I'd still owe the money).
So, I had to pay. The ship otherwise risked getting fined for not paying its tax.
Zvi is tackling Jones Act repeal: https://thezvi.substack.com/p/announcing-balsa-research.
One interesting point he makes is that it can be cheaper to simply buy out the special interests; in this case, can we support the shipbuilder unions and manufacturing capacity by committing to increase direct navy contracts in some way?
The general argument being that the special interests capture some value X, and the diffuse costs borne by society are Y, and Y >> X. So if we just pay ~X from some other pot, we still come out ahead as a society. Put differently, is there a more targeted way of achieving the original goals of the Jones Act, without distorting the markets and raising costs as much? It seems likely.
One interesting point he makes is that it can be cheaper to simply buy out the special interests; in this case, can we support the shipbuilder unions and manufacturing capacity by committing to increase direct navy contracts in some way?
The general argument being that the special interests capture some value X, and the diffuse costs borne by society are Y, and Y >> X. So if we just pay ~X from some other pot, we still come out ahead as a society. Put differently, is there a more targeted way of achieving the original goals of the Jones Act, without distorting the markets and raising costs as much? It seems likely.
Some things are more important than price efficiency.
I'm 100% with you. We have to keep the money flowing away from taxpayers and towards corporate interests.
That's inevitable. What is preventable, however, is having taxpayer money flow out of the country to foreign corporate interests. As an American, I'd rather get screwed by an American company than one from, well, a whole host of other countries.
I agree. We need more American (TM) companies with no competition. In every industry, there should be a Comcast sitting on top collecting rents.
Really? That's a grossly uncharitable interpretation of what I said. How abominable of you, Socrates.
What if the the Americans screw you for 8x the cost (number the article uses), and you get a smaller inferior ship in return? Why not go with the foreign product at that point?
Money that flows out of the country is essentially free.
The Fed targets inflation. They'll just print more money, if the foreigners want to sit on it.
The Fed targets inflation. They'll just print more money, if the foreigners want to sit on it.
We'd want to know - to as detailed of an extent as possible - the scale of the trade in question.
How much economic efficiency are we giving up, and for what exactly?
How much economic efficiency are we giving up, and for what exactly?
The USA has a prime example of what would happen if they removed the patriot act, that is shipbuilding industry in Canada. The industry need doesn't sustain itself at those costs and Canada's cost for labour are much lower than the US's.
We are trying to reboot the industry here and I am not kidding when I say it will take 2-4 decades so I can only imagine what the US will lose if they give up the Jones act.
We are trying to reboot the industry here and I am not kidding when I say it will take 2-4 decades so I can only imagine what the US will lose if they give up the Jones act.
The US already lost the vast majority of its shipbuilding industry. Jeffboat was one of the few US manufacturers the Jones Act tried to protect and Jeffboat went bankrupt and shut down for good in 2018. (Jeffboat was an historic shipbuilder going back to the golden years of the steamship.)
If you're sympathic to these types of ideas you might find these entertaining
https://www.youtube.com/watch?v=5hwuRkJMo_4&list=PLBuns9Evn1...
Sometimes I am and sometimes I'm not but I still find them entertaining
https://www.youtube.com/watch?v=5hwuRkJMo_4&list=PLBuns9Evn1...
Sometimes I am and sometimes I'm not but I still find them entertaining
I'm not sure we even have to think about it. Whenever the sophistry is mostly name dropping "deep state" authorities whom all agree its a great idea, its certain to screw over everyone not at the top of the pyramid. Its like that every time, and this is not likely to be an exception.
[deleted]
I pointed asked Yolo on a call why won't we repeal this. Gave him my contact information. Never. Never! heard back on this. It's idiotic that we require this process.
Haven't we collectively learned the lesson, globalization makes for an extremely vulnerable world.
It's an entire infrastructure and skill base which is being maintained.
When the need arises the government can cause growth. They can't cause knowledge. There are skilled workers and organizers that make shipbuilding happen, likewise a skilled workforce of engineers, navigators and shiphandlers that know how to operate vessels. These things take years or decades to master.
Articles like this are just more globalist rhetoric pitched in with some neocon export-your-slavery.
The Jones Act rant is tired.
It's an entire infrastructure and skill base which is being maintained.
When the need arises the government can cause growth. They can't cause knowledge. There are skilled workers and organizers that make shipbuilding happen, likewise a skilled workforce of engineers, navigators and shiphandlers that know how to operate vessels. These things take years or decades to master.
Articles like this are just more globalist rhetoric pitched in with some neocon export-your-slavery.
The Jones Act rant is tired.
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I definitely support the notion of allowing "shipping from foreign ports to multiple American ports in sequence." (Shipping from China to Port A, Port B, and Port C in sequence, while allowing off-boarding only of cargo in ports A and B.)
Allowing foreign-flag carriers to ship general cargo among American ports is not something I have a strong opinion on (but I generally am not inclined to permit it).
Allowing foreign-flag carriers to ship general cargo among American ports is not something I have a strong opinion on (but I generally am not inclined to permit it).
That is already how it works. Transpacific eastbound ships typically call at LA/Long Beach, Oakland, and Seattle before returning to Asia. They just can't pick up cargo at any of those stops and then drop it off at another US port (they can and do pick it up and take it to Asia)
Then why is Puerto Rico complaining that the Jones Act is causing high prices in Puerto Rico for foreign-sourced goods? Are those complaints just invalid / based on a completely wrong premise?
Because if they 'import' things like food or an amazon package from the mainland they can only use Jones Act vessels which drives the costs up crazy.
I think the generous claim would be that given that Puerto Rico has a manufacturing dominated economy, if foreign flagged vessels could pick up goods there and take them on to the USA, they would be more likely to build routes that included them. Eg you could go through the Panama Canal, stop in PR to drop off goods from Asia and pick up goods from PR, and then continue on to Savannah/Charleston/Newark.
I'm personally skeptical of that.
I'm personally skeptical of that.
Pass on this "analysis". I'd rather speak with actual merchant mariners with 4+ decades experience in the industry and reams of data of actual merchant marine businesses and a bunch of other stakeholders like shipbuilders, DoD, municipality water utilities techs who have to deal with the industry on the coal face, ecologists, marine biologists, etc. to find out where the real skeletons lie in a scrap-vs-support discussion of the Jones Act.
This kind of pablum that passes for "analysis" thrives upon readers not bringing externalities into the picture. When you lossy compress these types of decisions into a unidimensional pricing metric, the blowback from overlooked information always comes back to bite you in the ass after the ones who can monetize the externalities have long since absconded with the money and saddled the rest of us in taxes with the clean up bill.
I'm completely open to scrapping the Jones Act and in fact my personal inclination is to scrap it. Once I find where the externality debt the authors were so desperate to hide is buried, and priced that into the full evaluation, like any balanced business decision should be made. After seeing up close first-hand the disaster that is Chinese food biosecurity, I'm not at all impressed with these capitalism über alles boosters who are not putting forth a proposal in good faith, instead just putting in a negotiating ploy.
We see this all the time in our profession where someone blithely ignores technical debt of all kinds to meet a metric, grab their bonuses, and jet out the door before the business realizes they've been conned.
This kind of pablum that passes for "analysis" thrives upon readers not bringing externalities into the picture. When you lossy compress these types of decisions into a unidimensional pricing metric, the blowback from overlooked information always comes back to bite you in the ass after the ones who can monetize the externalities have long since absconded with the money and saddled the rest of us in taxes with the clean up bill.
I'm completely open to scrapping the Jones Act and in fact my personal inclination is to scrap it. Once I find where the externality debt the authors were so desperate to hide is buried, and priced that into the full evaluation, like any balanced business decision should be made. After seeing up close first-hand the disaster that is Chinese food biosecurity, I'm not at all impressed with these capitalism über alles boosters who are not putting forth a proposal in good faith, instead just putting in a negotiating ploy.
We see this all the time in our profession where someone blithely ignores technical debt of all kinds to meet a metric, grab their bonuses, and jet out the door before the business realizes they've been conned.
Since cato is a PR firm for corporate interests, and nothing more than that, it has no incentive as an organization to support anything that genuinely provides for public wellbeing. Some other think tank will do that work.
It stands to reason, then, that Cato is lying in some essential way. Since they are arguing that the Jones act is agaisnt the public interest. The most obvious such way that this might be true is that requiring an american workforce requires large retailers and logistics companies to pay more to their employees. This obviously serves American interests by preventing, in aggregate, the very wealthy to avoid redistributing their wealth as much by expatriating it. Additionally, repealing the Jones act is an attempt to increase unemployment which drives wages down in aggregate.
Sure, in a well built system of government, protectionism is usually a bad thing, but right now it is serving to stanch the flow of money to the capitalist class, whom Cato universally represents.
It stands to reason, then, that Cato is lying in some essential way. Since they are arguing that the Jones act is agaisnt the public interest. The most obvious such way that this might be true is that requiring an american workforce requires large retailers and logistics companies to pay more to their employees. This obviously serves American interests by preventing, in aggregate, the very wealthy to avoid redistributing their wealth as much by expatriating it. Additionally, repealing the Jones act is an attempt to increase unemployment which drives wages down in aggregate.
Sure, in a well built system of government, protectionism is usually a bad thing, but right now it is serving to stanch the flow of money to the capitalist class, whom Cato universally represents.
This would be a win for capital over labor. Make your own conclusions.
This would be a win for the millions of laborers that don't work in maritime shipping over the capital owners of the (~100 odd) jones act ships.
It would be a win for hundreds of millions of Americans who buy products that are shipped between ports. It would be a huge win for Americans in Hawaii, Puerto Rico, and other US islands.
It would be a loss for people employed building these vessels and it would be a loss for the companies that profit on building them. This is not a huge number of people.
As other people have mentioned, the issue is that the Jones Act has very clear advantages for the people who benefit from it, and it generally imposes very diffused costs on the people it hurts, even though the costs are very real. This is the issue with all tariffs.
It would be a loss for people employed building these vessels and it would be a loss for the companies that profit on building them. This is not a huge number of people.
As other people have mentioned, the issue is that the Jones Act has very clear advantages for the people who benefit from it, and it generally imposes very diffused costs on the people it hurts, even though the costs are very real. This is the issue with all tariffs.
Disagree. It would be a win for labor over capital.
It would be a win for both labour and capital.
A win of diffuse interests over concentrated interests.
A win of diffuse interests over concentrated interests.
Just update the Jones Act so that the only vessels allowed to dock at US ports are US vessels or vessels coming from the flagged country. So if a ship from China wants to dock, it better be a US or China vessel.
The Jones act mostly puts limits on shipping within the US.
Do you want to add even more restrictions?
Do you want to add even more restrictions?
There exists almost no US-other country shipping that is US flagged. The problem is that these foreign flagged vessels can pay slave wages to what are sometimes literal slaves, and we take advantage of it.
So yes, restricting the vessels that can use US ports even more will help US-flagged shipping.
So yes, restricting the vessels that can use US ports even more will help US-flagged shipping.
Restricting people's employment opportunities doesn't make them better off.
It would eliminate the specific concern that a ship can't stop by PR on its way to another port.
It would make those restrictions more consistent between mainland and island US ports
It would make those restrictions more consistent between mainland and island US ports
A ship that docks at any US port can't stop by any other US port on its way.
Doesn't matter whether any of the ports involved are in Puerto Rico or otherwise.
So it's already very consistent (if stupid..), ain't it?
Doesn't matter whether any of the ports involved are in Puerto Rico or otherwise.
So it's already very consistent (if stupid..), ain't it?
> Before I do, let me say that I am forever grateful for the tremendous work that scholars at the Cato Institute have done—and continue to do—to expose the Jones Act’s many flaws. ... A special mention goes also to Scott Lincicome who, more than anyone, has made fighting the Jones Act hip on Twitter.
> Other scholars have worked on this effort, of course. For instance, in 2018 the Mercatus Center published a piece by Thomas Grennes called “An Economic Analysis of the Jones Act” urging the reform of a law that “imposed large losses on American consumers.” My Mercatus colleagues Alden Abbott and Andrew Mercado also recently published a policy brief that delineates the negative economic effects of the Jones Act
This looks like typical free market libertarian dogma, so color me unconvinced. Especially since the reasoning seems all about consumer prices, which libertarians seem to often forget are not the only policy priority.
> The Jones Act is a 102-year-old federal measure that aims to promote and maintain the American merchant marine fleet for commercial and defense purposes. To achieve this goal, it restricts the waterborne transportation of cargo within the U.S. to vessels that are U.S.-flagged, U.S.-built, at least 75% U.S.-crewed and at least 75% U.S.-owned. The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above.
Personally, I think it's probably time to strengthen the Jones Act. It seems written for a time where a larger fraction of American sea trade consisted of domestically-produced goods. Now that we've unwisely outsourced much of our manufacturing ability, so maybe it should be modified to also mandate a certain percentage of all cargo, foreign and domestic be transported by US-flagged, US-built, US-crewed, US-owned ships. That should increase US sea transport capacity, and the greater volume should help drive down the costs of US-build ships.
> Other scholars have worked on this effort, of course. For instance, in 2018 the Mercatus Center published a piece by Thomas Grennes called “An Economic Analysis of the Jones Act” urging the reform of a law that “imposed large losses on American consumers.” My Mercatus colleagues Alden Abbott and Andrew Mercado also recently published a policy brief that delineates the negative economic effects of the Jones Act
This looks like typical free market libertarian dogma, so color me unconvinced. Especially since the reasoning seems all about consumer prices, which libertarians seem to often forget are not the only policy priority.
> The Jones Act is a 102-year-old federal measure that aims to promote and maintain the American merchant marine fleet for commercial and defense purposes. To achieve this goal, it restricts the waterborne transportation of cargo within the U.S. to vessels that are U.S.-flagged, U.S.-built, at least 75% U.S.-crewed and at least 75% U.S.-owned. The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above.
Personally, I think it's probably time to strengthen the Jones Act. It seems written for a time where a larger fraction of American sea trade consisted of domestically-produced goods. Now that we've unwisely outsourced much of our manufacturing ability, so maybe it should be modified to also mandate a certain percentage of all cargo, foreign and domestic be transported by US-flagged, US-built, US-crewed, US-owned ships. That should increase US sea transport capacity, and the greater volume should help drive down the costs of US-build ships.
"...the real concentration story exists in monopolized markets around the country where the Jones Act has eliminated competition and shielded local firms from international market forces... This conclusion is shared across ideological lines."
Shielding local markets from the race-to-the-bottom of international market forces sounds like a good thing. But does this prove that neoliberalism is the main creed of both political parties?
The Jones Act insures strong regulations for crew, safety, and environment on ships entering at least some US ports, and helps to maintain a strong merchant marine which is critical for our thallasocracy and projecting global sea power.
Shielding local markets from the race-to-the-bottom of international market forces sounds like a good thing. But does this prove that neoliberalism is the main creed of both political parties?
The Jones Act insures strong regulations for crew, safety, and environment on ships entering at least some US ports, and helps to maintain a strong merchant marine which is critical for our thallasocracy and projecting global sea power.
Stopped reading as soon as they quoted Lawrence Summers.
So when will Cato just go full-on globalist neoliberal and demand that weapons production should not be a national concern? Maybe we can contract out production of F-35 engines to China, and close that plant in Vermont that Congressperson Bernie Sanders lobbied so hard for? Or maybe ULA's production facility in Alabama, a gift to Congressperson Richard Shelby, could be moved to Honduras to take advantage of the cheap labor costs?
Yes, higher domestic labor costs mean less profits to distribute to the entities that finance the Cato Institute. Regardless, regional realities mean that shortening supply line for critical necessities is a wise move in an increasingly unstable world (that instability being due to well-known factors like resource starvation, climate destabilization, population pressure, etc.).
This doesn't mean that well-regulated global trade isn't a benefit to all partners, it just means that trade in things like luxury items (whose loss from local economies doesn't cause critical failures) is quite different from trade in fundamental necessities (whose loss does).
As far as the Jones Act, here's a good counterargument to Cato:
https://www.defensenews.com/opinion/commentary/2020/06/05/wh...
To imagine life without this law, consider the risks we would face if foreign-owned companies were allowed to conduct our domestic trade during this pandemic. Foreign companies would be able to influence the flow of domestic goods and resources that are keeping our economy afloat. Thousands of now-secure American jobs throughout our shipbuilding and maritime workforces would be threatened, and foreign governments could gain even more undue leverage over our economy.
Yes, higher domestic labor costs mean less profits to distribute to the entities that finance the Cato Institute. Regardless, regional realities mean that shortening supply line for critical necessities is a wise move in an increasingly unstable world (that instability being due to well-known factors like resource starvation, climate destabilization, population pressure, etc.).
This doesn't mean that well-regulated global trade isn't a benefit to all partners, it just means that trade in things like luxury items (whose loss from local economies doesn't cause critical failures) is quite different from trade in fundamental necessities (whose loss does).
As far as the Jones Act, here's a good counterargument to Cato:
https://www.defensenews.com/opinion/commentary/2020/06/05/wh...
To imagine life without this law, consider the risks we would face if foreign-owned companies were allowed to conduct our domestic trade during this pandemic. Foreign companies would be able to influence the flow of domestic goods and resources that are keeping our economy afloat. Thousands of now-secure American jobs throughout our shipbuilding and maritime workforces would be threatened, and foreign governments could gain even more undue leverage over our economy.
Most other economies don't have the equivalent of the Jones Act. Did they have a worse experience in the pandemic?
Repealing the Jones Act in particular is really about outsourcing the construction of ship-building to places like China and India to get the cheapest labor rates and maximize profits. The well-known scarcity of medical supplies during the pandemic is part of the broader trend of neoliberal globalization.
> "Among ocean-going commercial ships, worldwide 2,873 are under construction and China is building 1,291 of them while the U.S. is building only 8 (as tracked by the shipbroker BRS Group). The other leaders are Japan with 697 and South Korea with 475, both also heavily-subsidized, although less than China’s mega-billions. Other nations subsidize the building of commercial ships, including India and France. But the U.S. discontinued its shipbuilding subsidies decades ago."
https://townhall.com/columnists/ernestistook/2020/04/23/chin...
Note the above article has a kind of 'fear China' theme, but the reality is that the US oligarchs in the shipping industry would be the immediate primary beneficiary, in terms of profit margins and overall labor/material costs. Of course, if the US economy and state goes belly up, they'll run off to hidey holes in New Zealand, Singapore, Switzerland or similar.
> "Among ocean-going commercial ships, worldwide 2,873 are under construction and China is building 1,291 of them while the U.S. is building only 8 (as tracked by the shipbroker BRS Group). The other leaders are Japan with 697 and South Korea with 475, both also heavily-subsidized, although less than China’s mega-billions. Other nations subsidize the building of commercial ships, including India and France. But the U.S. discontinued its shipbuilding subsidies decades ago."
https://townhall.com/columnists/ernestistook/2020/04/23/chin...
Note the above article has a kind of 'fear China' theme, but the reality is that the US oligarchs in the shipping industry would be the immediate primary beneficiary, in terms of profit margins and overall labor/material costs. Of course, if the US economy and state goes belly up, they'll run off to hidey holes in New Zealand, Singapore, Switzerland or similar.
> The well-known scarcity of medical supplies during the pandemic is part of the broader trend of neoliberal globalization.
I'd put the blame on price controls and other regulation.
Remember that for example, early on American authorities went out of their way to ban covid tests.
I'd put the blame on price controls and other regulation.
Remember that for example, early on American authorities went out of their way to ban covid tests.
I think you should be banned from using any equipment not entirely made in USA, by US citizens and by a company owned by a US citizen. You know - be the nat-con that you're expressing here
I think the fundamental point here is that neoliberal trade policy is supported by both 'libs' and 'cons', and also that the lib-con distinction is mostly just political posturing over issues whose outcomes have relatively little fundamental economic impacts. An analogy for an American lib vs. con political contest might be the members of a homeowners association getting to vote over what color curtains are allowed.
Take NAFTA as a case example - even though noted 'con' Trump campaigned in the Rust Belt on opposition to NAFTA and TPP, with the latter heavily supported by 'lib' Obama, once in office NAFTA was merely renamed the USMCA, and the Rust Belt is as far away from a manufacturing renaissance as it was a decade ago, and the TPP is now being flogged by the 'cons' at the National Review, so.
Take NAFTA as a case example - even though noted 'con' Trump campaigned in the Rust Belt on opposition to NAFTA and TPP, with the latter heavily supported by 'lib' Obama, once in office NAFTA was merely renamed the USMCA, and the Rust Belt is as far away from a manufacturing renaissance as it was a decade ago, and the TPP is now being flogged by the 'cons' at the National Review, so.
Yes, it's heartwarming to see that for all its faults, the political establishment is more pragmatic and rational than voters.
You can see that in the UK as well, where the idea of renationalising the railways always does well in polls, but none of the major political parties has ever made any serious moves in that direction.
You can see that in the UK as well, where the idea of renationalising the railways always does well in polls, but none of the major political parties has ever made any serious moves in that direction.
Typical Cato drama. Since when do they care about consumers?
The amortized cost of a $100M US cargo ship vs a $30M ship from India or whatever is peanuts.
The United States is the worlds pre-eminent maritime power. You need ships and the industry to support ships to maintain that. We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters. The treason statement is dramatic, but there’s a legitimate point there… we enjoy the benefits of owning the water, and weakening that dominance to satisfy some phoney baloney principles will hurt the interests of the United States.
The amortized cost of a $100M US cargo ship vs a $30M ship from India or whatever is peanuts.
The United States is the worlds pre-eminent maritime power. You need ships and the industry to support ships to maintain that. We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters. The treason statement is dramatic, but there’s a legitimate point there… we enjoy the benefits of owning the water, and weakening that dominance to satisfy some phoney baloney principles will hurt the interests of the United States.
>We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters.
What are you talking about? There's tons of those already, they just can't go between 2 US ports directly.
What are you talking about? There's tons of those already, they just can't go between 2 US ports directly.
>Since when do they care about consumers?
Since forever. Since when Donny slapped a 35% tariff on S.Korean major home appliances all prices in US jumped 35%, without change in quality - CATO institute called it and it definitely hit consumers.
>We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters.
Jone's Act doesn't prevent that...
Since forever. Since when Donny slapped a 35% tariff on S.Korean major home appliances all prices in US jumped 35%, without change in quality - CATO institute called it and it definitely hit consumers.
>We also don’t want ships operated with the oversight of nations like Liberia in our coastal waters.
Jone's Act doesn't prevent that...
Note also that that the act requires that the ships be flagged in the US and staffed by 75% US workers. This means they're subject to US minimum wage laws, and there's a smaller labor pool to draw from, so there are additional costs that raise the price of each voyage, not just a higher upfront capital cost.
Additionally, since there are far fewer firms that can compete for these routes, I would expect that the margins on Jones act compliant shippers is much higher than the industry norm.
Additionally, since there are far fewer firms that can compete for these routes, I would expect that the margins on Jones act compliant shippers is much higher than the industry norm.
As an aside - the complete list of all Jones act ships can be found at https://www.maritime.dot.gov/sites/marad.dot.gov/files/2021-...
Using that information, it would be possible to find out where all of them are right now.
There's only 96 ships... 57 of them are tankers... and note that this also has implications for natural gas in New England this winter ( https://www.wsj.com/articles/new-england-risks-winter-blacko... ) because they typically get some LNG from international sources and that is going to be tighter this winter... so you need to get it from Texas instead, but the pipelines ( https://costcontrolassociates.com/blog/natural-gas-problems-... ) are at or near capacity and so you need to ship instead... but that gets into Jones act again.
Using that information, it would be possible to find out where all of them are right now.
There's only 96 ships... 57 of them are tankers... and note that this also has implications for natural gas in New England this winter ( https://www.wsj.com/articles/new-england-risks-winter-blacko... ) because they typically get some LNG from international sources and that is going to be tighter this winter... so you need to get it from Texas instead, but the pipelines ( https://costcontrolassociates.com/blog/natural-gas-problems-... ) are at or near capacity and so you need to ship instead... but that gets into Jones act again.
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Also, as the article itself states:
> [The Jones act] aims to promote and maintain the American merchant marine fleet for commercial and defense purposes.
The act has nothing to do with making things cheaper. Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways.