Patterico's Pontifications

3/20/2014

Planet Money on Rent-Seeking, Part 2: The Jones Act

Filed under: General — Patterico @ 7:31 am

This is Part 2 of a three-part series about rent-seeking, a phenemonon in which rich businessmen maintain their wealth by legally bribing politicians to pass absurdly inefficient laws protecting their industries. The series relies on the NPR show Planet Money, a sometimes quietly subversive show which undermines the bases for liberal tinkering with the economy by showing how such interference creates inefficiencies.

Part 1 of the series dealt with state-created monopolies for car dealerships, a situation that has contributed to the ouster from New Jersey of the popular Tesla car. New Jersey was the perp in Part 1 — but today, in Part 2, New Jersey is the victim, as we discuss The Jones Act.

Here’s the story told in the episode. The state of New Jersey ran out of rock salt to melt ice and snow — which was a problem, because they were in the middle of a giant winter storm. But all was well: Maine had a mountain of rock salt. Even better, there was a giant ship in Maine that could easily transport 40,000 tons of rock salt in a single trip. Best of all, the ship was already on its way to Newark.

Problem solved, right?

Wrong. You see, using that particular ship was illegal.

Was the ship not seaworthy? Had the captain neglected to file necessary paperwork? Had the company that owned the ship failed to pay taxes?

No, none of that was the problem. The problem was: the ship was not made in America and did not fly an American flag. And under a law passed decades ago called the Jones Act (aka the Merchant Marine Act of 1920), any ship that carries material from one U.S. port to another must be made in America, staffed by an American crew, and must fly an American flag.

The law was passed, as laws like this often are, to protect American businessmen who couldn’t hack it in the marketplace. We wanted to keep a strong marine industry, so we hurt the consumer by passing protections for business. Thing is, it didn’t work out so well. The U.S. doesn’t build that many ships any more. (We barely build anything anymore.)

So it’s not like an equally capacious American-built ship was standing by to haul the rock salt to Newark.

No, instead everyone waited for a little barge to come to the dock. It was filled with rock salt to melt the New Jersey snow and ice. The barge then took off with its load of salt — leaving a mountain of it sitting on the dock. Because, you see, the 40,000 tons could not begin to fit on the small barge. So the barge took some salt down to Newark, dropped it off, went back to Maine, got another “fraction” of the mountain of salt, and went back to Jersey.

The reporter does not say how many trips were required to transport the whole load, but it’s clear it would be at least three.

Well. Serves New Jersey right for banning the direct sales of Tesla.

This rock salt example is just one of many examples of inefficiencies and expense created by the Jones Act. If you miss your cruise ship in a U.S. port, you’ll have to pay a giant fee to catch it in another port. A cattle rancher in Hawaii seeking to avoid the extra expense of using American-made ships has gotten his cows to the U.S. mainland in two ways. Formerly, he shipped them to Canada so they could travel over the border to the U.S. Now, he sends the cows by plane when they are younger and weigh less.

Absurd, right? You bet. Economists hate the law. Yet the chances of repeal appear to be zero.

You see, politicians don’t pay attention to what works. They pay attention to the almighty dollar.

Coming in Part 3: government-sponsored cartels in raisins, and the Stalinist-sounding “Raisin Administrative Committee.”

81 Responses to “Planet Money on Rent-Seeking, Part 2: The Jones Act”

  1. Ding.

    Patterico (9c670f)

  2. Isn’t government wonderful? Our politicians and legislators, federal, state & local,never miss an opportunity to place a legal monkey wrench in the economy while claiming to care about everybody.

    Michael M. Keohane (51f54d)

  3. The United States Merchant Marine is vital to our national interest. We might as well outsource production of antibiotics, oh wait http://dailycaller.com/2014/02/17/report-americans-completely-reliant-on-china-for-antibiotics/

    nk (dbc370)

  4. So. We don’t build ships anymore. Why don’t we subsidize steel mills and shipyards instead of wind farms and Teslas?

    nk (dbc370)

  5. You’re killing me, Patterico. A thousand independent car dealerships do not constitute a monopoly. Don’t state ” with state-created monopolies for car dealerships” because the state created no such thing. The state, in this case, made sure the manufacturers could not form monopolies by preserving the independent dealership/franchise system.

    Then you throw in “a situation that has contributed to the ouster from New Jersey of the popular Tesla car.” Tesla does not have to be “ousted”, it just needs to establish INDEPENDANT dealers like everyone else does. You know, equality under the law. Why should Tesla be exempt? And just so you know, the Tesla is hardly “popular” unless you’re some left wing movie star with money to burn.

    Now as far as the Jones Act is concerned, I have no personal experience with it but by your explanation it sounds stupid as hell. But that does not makeevery law stupid.

    Hoagie (511e55)

  6. nk, there’s no reason for the tax payer to subsidize anything. If you want to subsidize a company, buy their stock but don’t force your neighbor to buy their stock.

    Hoagie (511e55)

  7. The Jones Act is stupid only if Beijing taxis not being allowed to operate in Los Angeles is stupid.

    nk (dbc370)

  8. The Jones Act, while designed to protect US shipbuilding, merchant marine and their unions, has had the exact opposite effect. It has destroyed all three. Most other nations allow foreign made ships in their domestic fleets which has resulted in shipbuilding centers where standardized ships are produced in mass numbers at a third what it would cost in the US. Japan became the world leader in tankers, now South Korea holds that honor.

    We allow foreign built aircraft in our airline fleets, why not ships? The Jones Act forced the sale of two refineries in the Philadelphia area because the owners needed lower cost US oil rather than the Nigerian crude being shipped in foreign flag carriers using foreign ships. That was legal because it didn’t travel from a US port to another US port. But shipping from Galveston to Philadelphia falls under the Jones Act. And there were no US built ships to do it and it would take three years to build them.

    Waivers to the Jones Act were not forthcoming. But they are granted to allow foreign aid shipping in leased foreign built, US union manned ships.

    The refineries were eventually sold, but only with massive financial support from Philadelphia (taxpayers money). Unions are the main stumbling block to a rational solution.

    Corky Boyd (c95a33)

  9. Uh-uh. Americans are not each others’ neighbors, we are each others’ family members. If your brother runs bakery, buy your bread from him. Especially bread, which is a necessity.

    nk (dbc370)

  10. And virtually all the cruise ships which ply the trade from US ports are made in Finland or Spain, flagged in the Bahamas or Liberia, crewed by multi-national staffs. Most make a port stop at a foreign port, even if just for a few hours. to get around the no American to American port rule.

    Loren (1e34f2)

  11. I am not well versed at debate but would this comment by nk “7.The Jones Act is stupid only if Beijing taxis not being allowed to operate in Los Angeles is stupid.” be considered a “straw man”? I only ask cause it seems the Jones Act deals with domestic and international maritime law and taxis are regulated locally. I mean, Philly taxis aren’t allowed to operate in Los Angeles either , so what? What’s that got to do with this conversation?

    Hoagie (511e55)

  12. Yeah, the taxi example is kind of weak. Los Angeles could survive without taxis, should China stop providing them. The United States could not survive without coastal shipping. The Jones Act is intended to preserve American coastal shipping. It is a good thing.

    nk (dbc370)

  13. For the cattle ranchers in Hawaii, maybe they should check with Malcolm Reynolds on Serenity.

    Brent Glines (a3af2a)

  14. Do one on sugar.

    jakee308 (e940d5)

  15. The Jones Act is intended to preserve American coastal shipping. It is a good thing.

    Comment by nk (dbc370) — 3/20/2014 @ 9:29 am

    Sure according to the unions and the shippers that benefit by it.

    It is not a good thing if it strangles interstate trade. It doesn’t even help the Seaman’s Union and it sure as hell has not kept the market for American ships from going belly up.

    Yet somehow you think it’s a good thing.

    Care to expound on that theme? I don’t think you can really because although it was a good thing then, it’s not now and hasn’t been for about 30 years. but it hasn’t mattered as much before but American flag cargo vessels are at an all time low because of union rules, coast guard rules, taxes and a bunch of other rules that all raise the price of operating an American flag ship.

    that’s why you don’t see many around. That’s why you see ships with flags from countries WITH NO COAST LINE. That’s how operators got away from having to pay the high price of operating an American Flagged ship. Which is why they don’t want to reverse the laws as it would show how stupid it was and the prices would drop on a great many things that are very expensive for Americans right now.

    jakee308 (e940d5)

  16. “The Jones Act is intended to preserve American coastal shipping. It is a good thing.’

    Now I assume you’re just being sarcastic, nk. So apparently the Jones Act has harmed shipbuilding, unions and coastal shipping but it has been stated it can’t be repealed. Perhaps that’s the real problem here. Laws are put on the books and stay there forever whether good or bad, whether they do what they were supposed or in this case have the opposite effect.

    We really need to find a way to purge archaic laws.

    Hoagie (511e55)

  17. Don’t forget the sugar lobby – which is why so many soft drinks contain high fructose corn syrup or artificial sweeteners.

    The corn syrup lobby (Archer Daniels Midland?) wants that changed to “corn sugar.”

    Sammy Finkelman (798a49)

  18. “…A thousand independent car dealerships do not constitute a monopoly…”

    Yet, organizations such as the New Jersey Automobile Dealers’ Association(sic) act to institute and strengthen monopoly enabling legislation in Trenton.
    So, though there are many individuals, each not constituting a monopoly; as a community they act as a monopoly, preventing new competitors from entering that market.

    askeptic (2bb434)

  19. “So, though there are many individuals, each not constituting a monopoly; as a community they act as a monopoly, preventing new competitors from entering that market.”

    askeptic – I’m not sure the point is limiting new competitors entering the market. Tesla would have been fine if the had opened a dealership or linked up to sell through a dealer the way you see so many exotic brands. The point is the dealers don’t want competition through other channels if I understand correctly.

    daleyrocks (bf33e9)

  20. One of the groups fighting rent-seeking on the local level is the Institute for Justice, which has a particular specialty in breaking local government restrictions on trade. Worth a look, or a donation.

    http://ij.org

    Kevin M (dbcba4)

  21. Comment by daleyrocks (bf33e9) — 3/20/2014 @ 10:31 am

    They just want to ensure that a new player pays the same tuition that they did, which is a way to limit competition.

    askeptic (2bb434)

  22. We should not be dependent on foreigners for coastal shipping. Emphasis on dependent. That is my entire argument.

    nk (dbc370)

  23. “The law was passed, as laws like this often are, to protect American businessmen who couldn’t hack it in the marketplace.”

    As a couple of commenters have hinted, the Jones Act was intended to protect American unions.

    Remember when the well blowout was going on in the Gulf? There was a foreign ship with lots of containment boom equipment that was not allowed to participate because of the Jones Act.

    The Act has pretty much ended US flag shipping except local stuff.

    MikeK (cd7278)

  24. I don’t think unions were all that powerful in 1920. Strikers were still being machine-gunned by the police years later. Here is the preface of the Jones Ac:

    “46 USC § 50101 – Objectives and policy (a) Objectives.— It is necessary for the national defense and the development of the domestic and foreign commerce of the United States that the United States have a merchant marine— (1) sufficient to carry the waterborne domestic commerce and a substantial part of the waterborne export and import foreign commerce of the United States and to provide shipping service essential for maintaining the flow of the waterborne domestic and foreign commerce at all times; (2) capable of serving as a naval and military auxiliary in time of war or national emergency; (3) owned and operated as vessels of the United States by citizens of the United States; (4) composed of the best-equipped, safest, and most suitable types of vessels constructed in the United States and manned with a trained and efficient citizen personnel; and (5) supplemented by efficient facilities for building and repairing vessels. (b) Policy.— It is the policy of the United States to encourage and aid the development and maintenance of a merchant marine satisfying the objectives described in subsection (a).”

    nk (dbc370)

  25. Strikers machine-gunned in 1927. http://en.wikipedia.org/wiki/Columbine_Mine_massacre

    nk (dbc370)

  26. “They just want to ensure that a new player pays the same tuition that they did, which is a way to limit competition.”

    askeptic – Agreed. Competition comes in through the front door, not the back door.

    daleyrocks (bf33e9)

  27. nk – Fannie Mae and Freddie Mac originally had noble objectives as well, just sayin’.

    daleyrocks (bf33e9)

  28. I would remind nk that most legislation has lofty titles that are only accurate when one looks at “and for other purposes”.

    askeptic (2bb434)

  29. It could just be conflicting national vs. ethnic pride. ;) http://en.wikipedia.org/wiki/List_of_merchant_marine_capacity_by_country

    nk (dbc370)

  30. The Jones Act is just another of those left-over artifacts from the surge of Progressivism during the early-20th Century – like the 16th & 17th Amendments.

    askeptic (2bb434)

  31. Hmm. I was browsing Wikipedia. The Seaman’s Act of 1915 did abolish flogging and shanghaing. And things just went downhill from there.

    nk (dbc370)

  32. Rather than say that either the Jones act or the State laws about car dealerships are bad (or good), I would put it to you that what is wrong is that Government does not change as quickly as the market. Solutions that may (may, mind) have been a rational decision when passed are quickly overtaken by events.

    This is, of course, exactly why command and control economies always fail so spectacularly; they simply cannot react as quickly as they need to, even if they are getting honest feedback (which is a whole other rant).

    The honest Lefties assert that what they want is a let’s-consult-everybody approach to setting prices and wages and allocating resources. The dishonest Lefties (and scads of swine of other political stripes) make damn sure that they honest ones never realize that the open market is just such a system.

    C. S. P. Schofield (e8b801)

  33. “Government does not change as quickly as the market…”, which is exactly why it should stay out of the market, as the Founders intended.

    askeptic (2bb434)

  34. Comment by C. S. P. Schofield (e8b801) — 3/20/2014 @ 12:22 pm

    …. I would put it to you that what is wrong is that Government does not change as quickly as the market. Solutions that may (may, mind) have been a rational decision when passed are quickly overtaken by events.

    Even slowly. Government does not eaily correct its mistakes, or change things that are not good now.

    Things that come to mind are:

    1) Laws prohibiting the purchase of hypodermic needles. Which stayed in effecvt many years after the AIDS epidemic was killing drug addicts – and that they should get sick and die wass not anyone’s intention, although it did play a large role in the reduction of crime in the 1990s – that’s my theory.

    2) FDA drug aproval and regulation laws, which postpone medical advanaces for years, and now may be eliminating antibiotics – because new ones are needed due to drug resistance – and creating shortages of old generic medications (partially also because of price controls)

    3) School curriculum and teacher training.

    Sammy Finkelman (798a49)

  35. “, a phenemonon in which rich businessmen maintain their wealth by legally bribing politicians to pass absurdly inefficient laws protecting their industries”

    covered — and covered well — in Goldberg’s Liberal Fascism

    jb (030df7)

  36. @ jb #35

    But, as I said in the comments on the previous post on this topic, that is how government has ALWAYS worked. That society is even considering this to be wrong is revolutionary and (in historical terms) new.

    C. S. P. Schofield (e8b801)

  37. The Jones Act is just another of those left-over artifacts from the surge of Progressivism during the early-20th Century

    It’s much older than that. Old enough to have a name of it own: cabotage. It’s actually one of the very few forms of economic protectionism that Adam Smith endorsed in The Wealth of Nations. But in the form known then nobody cared where the ship was made, just what flag it was flying. The purpose of the restriction was to allow the country to maintain a merchant marine larger than was economically efficient; it was explicitly a subsidy to the domestic shipping industry at the expense of consumers of domestic products.

    The reason it made sense for the UK to want such a large merchant marine was because in wartime all those ships could be commandeered by the navy, and their crews could be impressed (fancy word for drafted). Essentially, the UK was outsourcing the maintenance of its wartime fleet to the private sector, maintaining a skeleton fleet in peace time, and letting private people run the rest of it mostly at its own expense, but supplemented by what amounted to a tax on shipped goods. Similarly, its naval reserve had what amounted to subsidised private sector jobs in peace time, rather than being paid entirely at the public expense.

    This is, of course, about as far from the effect of our Jones Act as can be imagined. And yet that is its origin.

    Milhouse (50cb78)

  38. you can use rock salt to make homemade ice creams all you really need is a 1-quart ziploc bad and then a 1-gallon ziploc bag and a few key ingredients

    I’m a try this for to make lemon basil ice creams if my basil takes

    happyfeet (8ce051)

  39. “Yet, organizations such as the New Jersey Automobile Dealers’ Association(sic) act to institute and strengthen monopoly enabling legislation in Trenton.”

    Common askeptic, that broad indictment could be made for any lobbying group and you know it. “Institute and strengthen monopoly enabling legislation”?, Really?

    “So, though there are many individuals, each not constituting a monopoly; as a community they act as a monopoly, preventing new competitors from entering that market.” Sorry but they in no way PREVENT any new competitors from entering that market. Just ain’t so. Name one dealer “prevented” from entering the car market in New Jersey. Just one.

    This is like saying the BAR Ass’n or the AMA are trying to form monopoly. Yes, they are fighting for their established members but that’s their job.

    Then you and daleyrocks echo each other: “26.“They just want to ensure that a new player pays the same tuition that they did, which is a way to limit competition.”

    askeptic – Agreed. Competition comes in through the front door, not the back door.

    Comment by daleyrocks

    Paying the same tuition as you say is NOT a way to limit competition, it is a way to ensure equal treatment under law. Would you play a $1000 a hand poker game with an opponent who didn’t have to ante? And although daleyrocks glib front door/back door comparison of competition was cute it is irrelevant. There is no legal, ethical or moral back door. But there is equal application of the law which means if GM, Ford, Toyota et al must have dealers by law, so must Tesla. Period.

    Hoagie (511e55)

  40. Salt and basil taste great together.

    highpockets (ad576c)

  41. Paying the s”ame tuition as you say is NOT a way to limit competition, it is a way to ensure equal treatment under law. Would you play a $1000 a hand poker game with an opponent who didn’t have to ante? And although daleyrocks glib front door/back door comparison of competition was cute it is irrelevant.”

    Hoagie – To me you are making a distinction without a difference. See my earlier comment regarding different channels which relates to what you call my glib front door/back door comment. At the time the law was enacted, dealers and lawmakers probably never envisioned internet or phone sales of cars. Now that is possible, but illegal under the law. Manufacturers underselling dealers and selling direct to customers (backdoor) would also have been illegal.

    Not hard when you think it through.

    daleyrocks (bf33e9)

  42. Just so you understand me daleyrocks, askeptic and nk, I am not saying I agree nor disagree with the New Jersey laws about dealers. I’m saying two things:
    1. I understand why the laws were made in order to protect the smaller dealers from the deep pocketed manufactures. And
    2. If the law is legal and equally applied Tesla should not get a pass where other manufacturers have not.

    Perhaps today with more sophisticated franchise and tort laws and more contractual protections these laws are no longer needed. But as long as they’re on the books they should apply to all the players equally and that includes Tesla.

    Hoagie (511e55)

  43. This is like saying the BAR Ass’n or the AMA are trying to form monopoly. Yes, they are fighting for their established members but that’s their job.

    Yes, actually, that is exactly what they are doing. Or rather, they’re not trying to form a monopoly, they’ve already done so. And yes, it’s their job. How’s that relevant?

    Milhouse (50cb78)

  44. What a pleasure it is to read this thread. Lively discussions with lively agreements and disagreements. I have little to offer, but wish to contribute what I can.

    “Paying the same tuition as you say is NOT a way to limit competition” (emphasis mine).

    I believe the word should be “participation”. What is it that is so special about Auto manufacturers that preclude them from participating alongside those that are already selling auto? Is there a similar prohibition on General foods, Dell (I know, Taiwan), or Apple?

    I think this deal is part of a coming paradigm shift in commerce. That’s all I got.

    felipe (6100bc)

  45. I’m no hippie, I don’t bleed for Tesla or for its three New Jersey customers. New Jersey’s policy, if it mirrors the policy of the other 56 states, likely has been upheld against a restraint of interstate commerce challenge under the Sherman Antitrust Act. (I’m inclined to think that New Jersey could legally ban electric cars and/or lithium ion batteries altogether, actually.) It’s a fun discussion on the interplay of markets, public policy, political muscle, and unintended consequences in an evolving marketplace.

    nk (dbc370)

  46. What the hell does ” a distinction without a difference” mean? Anything which is distinct is by definition different or it wouldn’t be distinct. And just because something is different does not mean it is in any way, shape or form distinct. A Ford and Chevy are different, but a Bugatti is distinct. They’re all cars but only the one can be considered distinct.

    Hoagie (511e55)

  47. 46.What the hell does ” a distinction without a difference” mean?

    I am sure Sammy will fill you (and the rest of us)in.

    felipe (6100bc)

  48. Damn you, Milhouse. Damn you to hell! You guys have me arguing against the very free markets I’ve lived and loved all my life. Damn you all!

    ( You do realize that is meant in good humor.)

    Hoagie (511e55)

  49. You’re killing me, Patterico. A thousand independent car dealerships do not constitute a monopoly. Don’t state ” with state-created monopolies for car dealerships” because the state created no such thing. The state, in this case, made sure the manufacturers could not form monopolies by preserving the independent dealership/franchise system.

    Hoagie,

    My online dictionary defines “monopoly” as “the exclusive possession or control of the supply or trade in a commodity or service.”

    Isn’t that what auto dealers have, by state law, all across the country?

    Answer me this: let’s say I feel like starting a Ford dealership in California. Can you tell me how successful I am likely to be? Let’s say I approach Ford and tell them: “I would like to start a dealership in California city x and sell your cars.” Correct me if I wrong, but from what I learned in the Planet Money episode, Ford’s reaction is going to be: “Sorry, that territory is already covered, and we are prohibited by law from setting up a competing dealership.” And that will be true for any value of x I could give.

    Isn’t that what’s going on — and isn’t that a monopoly?

    But maybe I am misunderstanding the mechanics of it all. Educate me.

    Patterico (9c670f)

  50. Was there ever a time when you could buy a car directly from the factory in Detroit, or is it an urban myth? Maybe it was for employees only?

    nk (dbc370)

  51. LOL, Hoagie!

    felipe (6100bc)

  52. But there is equal application of the law which means if GM, Ford, Toyota et al must have dealers by law, so must Tesla. Period.

    I don’t get this. At all. If this model does not work for GM, why should it be banned for someone else?

    JD (534747)

  53. Plus I think nk is a damn hippie. And Patterico is a trouble maker. You guys are so good at stuff like this I feel like a nine year old who just went ten rounds with Ali. That’s okay, Hoagie can take a lickin’ and keep on tickin’.

    Hoagie (511e55)

  54. Before you can compete, you have to be able to participate.
    So, any artificial restriction upon participation is a restriction upon competition.

    “Can’t we all just get along?”

    askeptic (2bb434)

  55. 50.Was there ever a time when you could buy a car directly from the factory in Detroit, or is it an urban myth?

    I bet there was a time. I had an elderly brother Knight (Knights of Columbus) tell me how he walked to the Ford factory and purchased a new car for (I forget how much) cheap, and then drove away. But maube he was pulling my leg.

    felipe (6100bc)

  56. Even employees (who were able to buy at a very deep discount) had to take delivery through a dealer.

    askeptic (2bb434)

  57. “50.Was there ever a time when you could buy a car directly from the factory in Detroit, or is it an urban myth? Maybe it was for employees only?”

    nk, I recall “special orders” from Detroit but frankly since dealers order each car for their inventory it wasn’t that “special”. I also do recall that employees could order direct from Detroit on the provision they picked up the car FOB Detroit in person.

    Hoagie (511e55)

  58. “54.Before you can compete, you have to be able to participate.
    So, any artificial restriction upon participation is a restriction upon competition.”

    By that definition askeptic, any educational requirement, testing, licensing, and many other qualifications for certain jobs/businesses could be considered a restriction on competition. Which I guess they are. So the question is: are ALL restrictions bad restrictions?

    Now I’m gonna get coffee and watch Vikings. It will let my over taxed pea brain to relax after you guys used it as a punching bag. I’d like to get back to Patterico #49 tomorrow.

    Hoagie (511e55)

  59. Hogie, I think you are avoiding the words “any artificial” in askeptics statement and inserting ” educational requirement, testing, licensing, and many other qualifications” in its place. Do you really think the two statements are equivalent?

    felipe (6100bc)

  60. “Just so you understand me daleyrocks, askeptic and nk, I am not saying I agree nor disagree with the New Jersey laws about dealers. I’m saying two things:
    1. I understand why the laws were made in order to protect the smaller dealers from the deep pocketed manufactures. And
    2. If the law is legal and equally applied Tesla should not get a pass where other manufacturers have not.”

    Hoagie – Then you should have no disagreement with any of my comments, so I don’t understand your dickish tone. We are in complete agreement.

    daleyrocks (bf33e9)

  61. Absurd, right? You bet. Economists hate the law. Yet the chances of repeal appear to be zero.

    A nationwide version of a dumb law that has the law of unintended consequences (or does just the opposite of what makes sense or what it’s supposed to do) and was promoted by business interests — reportedly involving leisure and retail industries — is Daylight Saving Time. Even though the best studies show that tinkering with the clock early each year not only doesn’t save energy but that it actually causes usage to rise, and that the time change also undermines human health (ie, reduced sleep, earlier awakenings and an ensuing greater amount of stress and increased likelihood of heart attacks), and that — ta-da! — pushing the clock forward actually apparently doesn’t even help reduce the phenomenon of the “couch potato” (ie, more sunshine in the evening not necessarily causing more people to pursue healthy sport activities, etc), DST was extended a few years ago.

    We is stupid.

    Mark (cc48f8)

  62. Let’s listen to Johnny Cash tell us about his lunchbox Cadillac. The fun part is when he tries to register it with DMV. http://www.youtube.com/watch?v=sIuo0KIqD_E

    nk (dbc370)

  63. 62. I’m just a humble flyover hayseed but I liked the movie.

    gary gulrud (e2cef3)

  64. Dailyrocks, I’m not necessarily in disagreement with your comments and am sorry for the dickish (?) tone. I just think that the state law making sure that manufacturers must retail through dealers does not set up a monopoly but rather stops the formulation of one by manufacturers. If you argued that dealers collude to fix prices (which I know them to be too greedy to do since they’ll always try to undercut each other for the sale) then you are arguing they are setting up a cartel. But that is not a monopoly because there are too many players. And the mere fact on any given day you can visit ten dealers and get ten different prices proves there is no cartel either.

    Hoagie (511e55)

  65. I just think that the state law making sure that manufacturers must retail through dealers does not set up a monopoly but rather stops the formulation of one by manufacturers.

    This seems to be a false choice, or rather, arguing against a position that doesn’t exist in the real world. Is there any evidence that manufacturers have even tried this, or desire to?

    JD (534747)

  66. It is illegal, this act of selling raisins. Il-LEGAL

    I would think a lot of people here would demand that before the law can be repealed, it must be enforced, and especially we must know that whatever the law is revised to, will be enforced – or no action.

    Sammy Finkelman (798a49)

  67. My Altima cost me $20,000 out the door in 2006. Nissan may have gotten $8,000 (Hoagie?) out of the deal. I would have taken the Greyhound down to Smyrna if Nissan could sell it to me at the factory gate for that much.

    nk (dbc370)

  68. Nissan: Which car do you want, Mr. nk?
    Me: Altima.
    Nissan: Color, accessories, the 2.5 or the 3.5 …?
    Me: Whichever is rolling off the assembly line when the cab drops me off that your gate. I’ll bring cash.

    nk (dbc370)

  69. *off at*

    nk (dbc370)

  70. And why shouldn’t they be able to do that? Is it imperative that government decide how a manufacturer chooses to market their products?

    JD (534747)

  71. It all goes back to Henry Ford (for the sake of argument) giving local salesmen territories exclusive even of Ford as an incentive to sell his Model A; the local salesmen uniting to have their private contract provisions with Ford enshrined into public law. Hoagie mentioned an $11 million investment for a car dealer these days. They have a tiger by the tail from their point of view. They cannot afford to let go of the exclusive franchise system.

    Would things have been different for the American automotive industry if you could pick up a car from the factory at Detroit or Pontiac without paying the dealer’s 100% markup? Enough to have kept foreign cars out? Or to have forced foreign car companies to build factories in the United States with American workers? Like the Jones Act intended to do with shipping?

    nk (dbc370)

  72. “I just think that the state law making sure that manufacturers must retail through dealers does not set up a monopoly but rather stops the formulation of one by manufacturers.”

    Hoagie – Thank you for the comment. It is clear that you did not understand what askeptic and I were saying. askeptic likened the dealership law in N.J. to making sure everybody paid the same tuition before being allowed to sell cars. I likened it to making every one come in through the front door. Different words, no distinction in meaning.

    As Patterico pointed out, the manufacturers have the ability to control who sells their product in given territories. Dealers have an interest in making sure their territory does not become saturated with competing dealerships from the same manufacturer or illegal backdoor sales from unauthorized outlets.

    I did not address the issue of monopolies. In the area in which I live there are competing dealerships for all but the most exotic brands within a 20 mile drive. That’s not the case in many areas of the country and it is not uncommon for franchise agreements to specify a territorial exclusivity zone.

    daleyrocks (bf33e9)

  73. “A distinction without a difference” is a normal idiom in my lexicon.

    What it means is this: while it’s true that X and Y differ in the way you describe, the difference is unimportant. More specifically, it is not relevant to whatever context surrounds the discussion of differences.

    If we’re arguing about whether carrots, like parsnips, are vegetables, and you respond that carrots are orange, that’s a distinction without a difference: it distinguishes parsnips and carrots, but not in a way that is relevant to the discussion.

    aphrael (5cffd4)

  74. Comment by nk (dbc370) — 3/21/2014 @ 9:08 am

    I would have taken the Greyhound down to Smyrna if Nissan could sell it to me at the factory gate for that much.

    How would you get it to Chicago?

    Ferry across the Black Sea, or drive through Greece, Bulgaria and Rumania to Ukraine, Russia,
    drive 7.500 mile to the ferry across the Bering Strait to Wales, Alaska, then to Canada’s Yukon Territory, British Columbia, Alberta, Saskatchewan, Manitoba, Minnesota, Wisconsin and down to Chicago.

    Sammy Finkelman (798a49)

  75. “A distinction without a difference” is a normal idiom in my lexicon.

    aphrael – I think it’s a pretty common idiom, which was why I was surprised to see somebody take issue with it.

    daleyrocks (bf33e9)

  76. US-41, all the way.

    nk (dbc370)

  77. When I was selling cars (BMC-Lotus-BMW) in the 60′s, the average dealer margin was 16-18% of MSRP (Sticker), not counting advertising co-pays, and the Dealer’s “Factory Holdback” (2-3%), which the Dealer (not the Dealership) received at the end of the year from the factory if he was a good boy.

    askeptic (2bb434)

  78. The Jones Act is certainly protectionist. But it also insures that services provided in the United States are provided by Americans working to American standards.

    It’s one thing to accept foreign goods into our marketplace. It’s another to accept foreign services provided here, by foreign labor brought here. If the Jones Act was repealed in toto, U.S. coastal shipping would be provided by foreign-flag ships with foreign crews working for Third-World wages. And coastal shipping connects to riverine shipping, and to shipping on the Great Lakes.

    There would be a whole class of foreigners effectively living and working in the U.S. with no rights or residency. (They’d live on the ships.)

    Breaking the stranglehold of the maritime unions would be better.

    Rich Rostrom (a46dd6)

  79. Sammy Finkelman (798a49) — 3/21/2014 @ 1:24 pm

    “How would you get it to Chicago?

    Ferry across the Black Sea, or drive through Greece, Bulgaria and Rumania to Ukraine, Russia,
    drive 7.500 mile to the ferry across the Bering Strait….”

    Your remarkable grasp of geography would be even more impressive if you knew there was a Smyrna in Tennessee, Sammy.

    Amiable Dorsai (627e4b)

  80. By that definition askeptic, any educational requirement, testing, licensing, and many other qualifications for certain jobs/businesses could be considered a restriction on competition. Which I guess they are. So the question is: are ALL restrictions bad restrictions?

    Pretty much.

    I’m still hoping you’ll answer my #49, Hoagie.

    Patterico (9c670f)

  81. it’s ok with me if dirt poor foreign people live on boats hither and yither

    I prioritize my concerns to where I’m not likely to ever get to that one

    happyfeet (8ce051)


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