The Jones Act hurts US shipping and consumers: Kill it
After the recent hurricane, Puerto Ricans were in desperate need of fuel.
Fortunately, an oil tanker was just offshore.
Unfortunately, the US government banned it from coming ashore!
Because of a stupid law with a stupid name: the Jones Act.
The Jones Act prohibits the shipping of anything between US ports in vessels that are not US-built and -crewed.
This increases the cost of goods (the average Hawaiian family pays $1,800 more a year) and sometimes, as happened in Puerto Rico, worsens the crisis.
Yet America’s shipping lobby claims the law is a good thing.
“The Jones Act ensures reliable, dedicated service,” says Jennifer Carpenter of the American Maritime Partnership in my new video. His group lobbies for shipowners and labor unions.
“Your rules really hurt people!”
I push back disgustedly, accusing him of unnecessary manipulation, “You pay politicians; they ban your competition.
She smiles and says, “The Jones Act is a time-tested American security law, so we’re not at the mercy of foreign powers.”
This is bullshit. This act has nothing to do with US security.
Foreign ships deliver goods to America from foreign powers all the time.
This includes aircraft from China and Russia. Dozens of foreign ships are currently in US ports.
It just is inside Foreign shipping to the US is prohibited.
Only US aircraft and crew are permitted to carry cargo from Los Angeles to Hawaii, or from Miami to Puerto Rico.
The Jones Act is just another special deal that an industry has forced out of Congress.
Banning foreign vessels did not bode well for the US shipbuilding industry either. By outlawing competition, they became fat and lazy.
There were once more than 450 American shipyards.
Now there are only 150. The number of US-crewed aircraft has also decreased.
“Because of your monopoly,” I say to Carpenter, “American shipyards keep closing. They have no competition, so they don’t improve.
“Competition within our industry and with other modes of transportation is fierce!” She replies.
“It’s dog eat dog.”
“No, it isn’t!” I answer.
“The best dogs are banned.”
She spins quickly.
“The US government does not subsidize US shipyards the way many of our strategic competitors and allies do.”
This is true, and pathetic.
Subsidies are destructive. It is a good thing that America gives less subsidy than other countries.
Still, Cato Institute trade-policy expert Scott Lincicombe points out that U.S. aircraft cost far more than the subsidy difference, “making four to five times more than Japanese or Korean aircraft,” mostly “protected from competition for decades.” Reasons to stay,” just don’t need to innovate.”
No American shipyard today builds a single ship that can carry natural gas. This is a big problem for New England if we have a cold winter.
Eversource president Joseph Nolan worried that there would not be enough gas for the winter because he “couldn’t get Jones Act relief.”
No wonder New Hampshire Gov. Chris Sunu called the act “a 100-year-old union-driven policy.”
Carpenter lobbies against Jones Act exemptions.
“You don’t pay politicians to give pardons,” I told him.
“Stop!” she screams.
“Let’s open it up. Obviously, discounts should be safe, legal and rare. What we often see is someone trying to make a quick buck. There is no need for national-defense; There is no shortage of product. It’s, ‘Hey, I can save some money.’
But save money good For consumers!
That’s good for everyone but America’s shipping monopoly.
Of course, most industries don’t want competition!
American car manufacturers did not want to compete with Honda and Toyota.
But they got better Because They had to compete.
“Just as foreign competition has improved American automobiles, foreign competition will do the same for American-made aircraft,” Lincicome says.
We would all be better off if America’s shipping industry had to compete like every other business.
The Jones Act must die.