Patterico's Pontifications

9/28/2017

The Jones Act Should Be Repealed

Filed under: General — Patterico @ 10:00 am

President Trump’s waiver of the Jones Act for Puerto Rico puts a spotlight on an absurd law. It should not be necessary for presidents to issue ad hoc waivers on occasions when there are natural disasters. Instead, the Jones Act should be repealed outright.

I have written about the Jones Act before. The NPR program Planet Money, which is often quite good even though it is on NPR, told the following story about the Jones Act. From my 2014 post:

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.

Apparently President Obama did not “waive” the Jones Act then. Does a president have authority to do so? The New York Times says yes, in certain specified situations.

A waiver can be granted only if it is in the interest of national defense and only if there are enough United States vessels available to meet national defense needs. Shipping costs or humanitarian needs cannot be considered, officials say.

Previous waivers were granted during Irma and Harvey, and before that during Sandy, according to The Times.

Regardless of the legality of any one particular waiver, the Jones Act is just silly and deserves to be repealed in its entirety. As I explained in 2014, the inefficiencies happen all the time — not just during natural disasters:

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.

Government interventionism is, as a rule, a bad thing for the economy and for society. Unintended consequences invariably result from well-intentioned policies. Allowing the free market to work is the best solution — whether you’re talking about health care, shipping, food, electronics, or anything else.

People in Congress either don’t know this or don’t care. But the consequences are very real.

[Cross-posted at RedState and The Jury Talks Back.]

81 Responses to “The Jones Act Should Be Repealed”

  1. poop-lick paul and sleazy mitch gonna get on this right after they cut off the federal subsidies for NPR and PBS

    happyfeet (28a91b)

  2. So you weren’t paying attention during the campaign when Trump was endlessly yammering about making America great again by adopting 18th-century mercantilist policies regarding trade? Look, it’s simple – which is worth more, a million dollar boatload of T-shirts or a 2 million dollar boatload of T-shirts? You double the cost of stuff and it’s magically twice as valuable! Geez, did you skip second-grade math class or something?

    Jerryskids (3308c1)

  3. The Act is protectionist as is Trump. Puerto Rico is not his priority.

    https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920

    Ben burn (101c24)

  4. You can’t make America Great Again without breaking eggs.

    Ben burn (101c24)

  5. So it seems the Jones act is in keeping with earlier practices

    narciso (d1f714)

  6. Honore’s gonna get the happyfeet treatment in 3..2..1..

    urbanleftbehind (5eecdb)

  7. generals don’t have any credibility anymore, especially US ones

    they squandered it

    happyfeet (28a91b)

  8. Spot on, urban. What are the odds?

    Ben burn (101c24)

  9. At this point it appears there is the usual TV/media hyperventilating for cameras by Democrats about a non-existent Jones Act problem. I expect Maxine Waters to call for Trumps impeachment based on the failure to waive the Johns Act because resist we much. Schumer will call for the Affordable Cargo Act which Nazi Pelosi will demand be passed before we see what’s in it and the SPLC will declare Crowley Trucking a Hate Group. Idiots will accuse Trump of adopting 18th-century mercantilist policies regarding trade like he had personally passed the Jones Act rather than protectionist Democrats in Congress and signed by Woody Wilson.

    And the beat goes on.

    Rev.Hoagie® (6bbda7)

  10. If Trump was educated (history or anything, really) he would identify with Kubla Khan without cohorts gleaming in gold.

    Ben burn (101c24)

  11. It reminds me of when Schumer and Michael Savage were unlikeliest of allies against the Dubai Ports deal and Limbaugh cautioned that they were doing the bidding of the unions.

    urbanleftbehind (5eecdb)

  12. Well somebody has to do something for these Hispanics, Hoagie!

    Ben burn (101c24)

  13. You might need to air drop some oxen … what are the elephants from the Ringling Bros. Circus doing in their forced retirement?

    urbanleftbehind (5eecdb)

  14. The logistics of ground strategy should have been done in advance of the storm narco. You’re right that it’s about Trumps apathy and incompetence though.

    Ben burn (101c24)

  15. failmericans prefer their disasters to be non-disastrous Mr. narciso

    they’re quite insistent upon this actually

    happyfeet (28a91b)

  16. This Puerto Rico thing is a red herring, I think. Were there foreign ships in American ports just hanging around with nothing better to do than to load up some relief supplies and take them to Puerto Rico? Because that’s what the Jones Act prevents. Would they have done it faster and/or cheaper than American ships, is the second question.

    For the larger picture, our coastal shipping cannot be put into the hands of foreign ship owners, ships, and crews. Not prudent. Not a good idea. It’s not merely a question of protecting the income of American shipping interests — it is a question of national security.

    If there is a shortage of American-made ships, waivers can be granted to flag foreign-made ships on a ship-by-ship basis. Likewise, if there is a shortage of American crews, foreign crews can be hired as is done with temporary foreign workers in other occupations.

    nk (dbc370)

  17. If there is a shortage of American-made ships, waivers can be granted to flag foreign-made ships on a ship-by-ship basis. Likewise, if there is a shortage of American crews, foreign crews can be hired as is done with temporary foreign workers in other occupations.

    I meant, we could change the law that much.

    nk (dbc370)

  18. Or you could get waivers for illegals as Trump did at Mira Lago.

    Ben burn (101c24)

  19. For the larger picture, our coastal shipping cannot be put into the hands of foreign ship owners, ships, and crews. Not prudent. Not a good idea. It’s not merely a question of protecting the income of American shipping interests — it is a question of national security.

    With Caracas closer than Miami (learned that from a 1983 National Geographic article about P.R.), it simply cant be glossed over, whether its the regime seeking a territory and material for itself and its “Axis of” buddies, or desperate anti-Maduros commandeering supplies earmarked for Puerto Ricans.

    urbanleftbehind (5eecdb)

  20. CaratS is already near in Puerto Rico’s condition

    https://faustasblog.com/2017/09/argentina-inflation-down-markets-up/

    narciso (d1f714)

  21. @22. It’s a distribution issue; they need drivers and trucks to move the goods. Some savvy firms that converts containers into temporary housing might be in order as well. A solar power grid as well… the golf courses, five star hotels and casinos will come much later after president Real Estate Developer visits next week. There are deals to be made! And there’s an art to it!

    DCSCA (797bc0)

  22. 25

    I’m just saying NAFTA! for the hell of it.
    =========
    “Raising taxes on families that make $50,000 in order to lighten the tax load for families that make $5 million?
    Yet that’s precisely what the White House is planning.”

    Kingdom of Lies.

    Ben burn (101c24)

  23. @26. Remember, it’s an island, you know. And trucks can’t just drive to it. Our President said so. What insight!

    DCSCA (797bc0)

  24. 27. He has to explain it to his base, no?

    He dumbs it down well.

    Ben burn (101c24)

  25. @28. Yes. LOL After watching one of his ‘base’ in Texas burn his $450 Steelers jacket in protest, it’s easy to see why, too.

    DCSCA (797bc0)

  26. It’s been said that the inability to use certain ships is not the bottleneck right now in Puerto Rico.

    The phones are down, and many roads have obstructions and that’s slowing distribution. .

    It has also been said the Jones Act raises transportation costs. In some places theer was also looting. In one of the Virgin Islands a\one of the limited number of functioninmg cell towers had its generator stolen.

    Sammy Finkelman (02a146)

  27. Well, when said guy gets a double hit of Trumptax and Harvey Special Levies, he’ll wish he still had the jacket to pawn on EBay.

    urbanleftbehind (5eecdb)

  28. The Jones Act protects more American truckers than it ever protected American ships and sailors. If CO2 were actually harmful, Maersk would be hauling containers from LA to San Francisco to Portland to Seattle every day rather than the diesel trucks clogging I5. The same situation applies on the East and Gulf coast. It’s just another one of the costs of American ignorance.

    Rick Ballard (c15cdb)

  29. “Flag$ of convenience.”

    DCSCA (797bc0)

  30. Like other old and crusty protectionist policies, the Jones Act was an unholy compromise between labor and management — in particular, domestic management of American-flagged shipping and ship-building interests. The protectionism highlighted by this post is half the equation.

    The other half is the system of “maintenance and cure” for Jones Act seamen, which operates in somewhat the same fashion as worker’s compensation insurance in other industries (replacing the common law, at which the seaman’s contributory negligence was an absolute bar to any legal recovery for his injuries sustained in the course and scope of employment). Maritime unions will fight to the death to preserve the current system, and their fellow unions will join them for the most part, along with all the congress-critters who those unions support (meaning essentially every politician with a (D) after their office title).

    That also explains why there has been bipartisan resistance to every serious Congressional attempt to repeal it, akin to the kind of entrenched special-interest resistance we’ll see to all attempts to change the federal tax code.

    Trump was right to agree to the waivers for Harvey and Irma, and awkwardly flat-footed in delaying the waiver for Puerto Rico. But he’s now done so (or so I heard driving back from lunch just now), and that will, as a practical matter, be the end of discussion of the Jones Act except among free-marketeers (like our host and me).

    Beldar (fa637a)

  31. I’m still trying to figure out why there’s an Interstate freeway on Oahu.

    Pinandpuller (16b0b5)

  32. If Trump was educated (history or anything, really) he would identify with Kubla Khan without cohorts gleaming in gold.
    Ben burn (101c24) — 9/28/2017 @ 10:42 am

    You identify as a 20# string strung on an 160# Mongol bow.

    Pinandpuller (16b0b5)

  33. Well somebody has to do something for these Hispanics, Hoagie!
    Ben burn (101c24) — 9/28/2017 @ 10:45 am

    Rule, Hispania!

    Pinandpuller (16b0b5)

  34. You want to go to San Juan?

    I know a boat you can get on!

    Isn’t that from The Sound of Music?

    Speaking of I totally saw an OG Aryan swastika on an Indian dude’s door but it had four dots on the inside corners so what’s up with that? If it looks like you carved it in your forehead in a mirror its the good kind, right?

    Pinandpuller (16b0b5)

  35. Stop hanging out on Nolensville Road, Pin.

    urbanleftbehind (5eecdb)

  36. @25 DCSCA

    There’s a guy down the road from me building a puppy mill out of conexes. He has them lined up in two rows. Some Mennonites built roofs over top with open bays. He’s sheathing them in OSB right now. Window AC units in all of them. He has a big fifth wheel RV but he could be living in one for all I know. Hope the creek don’t flood right there though.

    Pinandpuller (16b0b5)

  37. I’m still trying to figure out why there’s an Interstate freeway on Oahu.

    Pinandpuller (16b0b5) — 9/28/2017 @ 1:32 pm

    I know that’s one of those head scratch moments, but you eventually realize given the history of the interstate system that it makes sense. When the interstates were first conceptualized under Eisenhower, he was using the German autobahns- the ones Hitler built- as inspiration. It isn’t widely realized that part of the design was the ability to transport large amounts of military goods and men quickly. Used as a landing strip or to drive a tank as necessary. That’s why you see a short interstate on Oahu. If it weren’t for that German influence, we would likely still be using the Lincoln Highway and Route 66 today.

    Bill H (383c5d)

  38. Rauner to sign bill expanding public funding for abortion

    could he be a bigger goddamn loser survey says no

    happyfeet (28a91b)

  39. Had HRC won, Rauner (or mg’s bete noir Charlie Baker) would be the model R candidate for 2020.

    urbanleftbehind (5eecdb)

  40. “Bruce Rauner is a failed governor who lied to the people of Illinois,” said state Rep. David McSweeney (R-Barrington Hills) after learning Rauner would sign the abortion bill. “On April 14th, he announced that he would veto HB 40. Rauner looked the other way on the 32 percent increase in the income tax rate, made Illinois a sanctuary state, and is primarily responsible for Illinois’ $16 billion backlog of unpaid bills.”

    happyfeet (28a91b)

  41. @39 ulb

    Heh, I used to work in Sud Nashville. Some folks call it Hispanioc. It was right near where they load up said conexes for back and forth to Jacksonville and whatnot. Huge railyard. Maybe Elon Musk’s next project should be a chunnel.

    Pinandpuller (16b0b5)

  42. @30 Sammy

    I’ve often heard it said that stealing a generator sometimes warms a man twice.

    Pinandpuller (16b0b5)

  43. Bill H (383c5d) — 9/28/2017 @ 2:03 pm

    I’m sure most people see it facetiously like me. I’m sure it’s more a function of a line in the Federal budget and HI’s piece of the pie.

    Pinandpuller (16b0b5)

  44. @42 happyfeet

    I have always thought that there should be a way to bring passionate abortion lovers together with girls who want to kill their babies.

    Instead of Uber, how about Hoover?

    Pinandpuller (16b0b5)

  45. as long as they don’t use my monies i think abortion is a top-notch leisure activity knock yourself up and knock yourself out

    but we have pension tsunami crashing down on our heads

    and toxic toni taxwinkle’s beverage tax-rape of working families

    and corruptions and madigans and this moron ballerina jack-off what keeps putting bike lanes downtown

    happyfeet (28a91b)

  46. http://www.newser.com/story/249315/cruise-line-cancels-trip-to-bring-aid-to-puerto-rico.html

    Once Aid Gets to Puerto Rico, There’s Another Big Problem

    Supplies are piling up at ports because of logistical logjams

    …………….

    Logjam: Bloomberg reports that “mountains” of relief aid in the form of emergency meals and other supplies are piling up on Puerto Rico’s ports because of the logistical nightmare of getting it distributed. USA Today says “thousands” of shipping containers are in such limbo, thanks to “red tape, lack of drivers and a widespread telecommunications blackout.”

    Water: Puerto Rico has 3.4 million residents, and nearly half of them still lack potable water one week after Maria blew through, reports NBC News. The situation is turning into “hell,” says one local doctor.

    ….

    Attention, Florida: An analysis at the Washington Post floats a hypothetical that could have big political consequences. If thousands of Puerto Ricans move permanently to the state as a result of the hurricane, that could be enough to tilt the “swingiest of swing states” into solid Democratic territory. Generally speaking, Puerto Rico votes Democratic.

    Airport: Flights out of the main airport in San Juan are few and far between because the hurricane largely wiped out radar and navigational systems, reports the New York Times. In fact, security checks must be done by hand because TSA equipment isn’t working, reports CNN.

    Also, priority is being given to flights related to relief.

    Sammy Finkelman (02a146)

  47. I

    ’m sure most people see it facetiously like me. I’m sure it’s more a function of a line in the Federal budget and HI’s piece of the pie.

    Pinandpuller (16b0b5) — 9/28/2017 @ 2:20 pm

    Yah, I figured you were being a bit of a smartass. My mistake was trying to give a tiny bit of education while recognizing your facetiousness. Sigh. I’ll do my best not to do that again.

    Bill H (383c5d)

  48. Ben burn, at 18: while the logistics of ground supply should have been thought about before the storm, this is an area where I think we should cut the adminsitration some slack. The aftermath of this storm was far, far worse than anticipated, and I don’t think it’s reasonable to hold the administration accountable for not having forseen it.

    That said … Congress is going to have to act. The provincial government was bankrupt before the storm, and the *total annual budget of the provincial government* is less than the expected cost of the *infrastructure repairs alone*. Plus, the economy of the island is basically wiped out, so there is no meaningful local tax base and won’t be for years.

    “Catastrophic”, in this case, isn’t an exaggeration, it’s just the simple truth.

    aphrael (3f0569)

  49. Hillary says:

    I think this was one of the most consequential elections that we have faced in a long time.

    As I said during the election, I thought this was the least consequential presidential election of my lifetime.
    Dukakis v Bush 41? Pretty big difference.
    Clinton V Bush? Pretty big difference.
    Bush v Gore? HUGE difference.
    Bush v Kerry? Fundamental difference in the direction of our foreign policy and domestic agenda.
    Mccain v Obama? OK… not a huge difference.
    Romney v Obama? CEO vs Community organizer different.

    But Trump actually championed Hillary as Secstate and president. It remains to be seen if we really get a massive immigration reform, but so far it’s looking like amnesty and Obamacare. Is Hillary fundamentally different on foreign policy? Maybe if Trump tweets us into WWIII, but so far I don’t think it’s a big difference.

    Only really important difference is the courts. But what was Hillary on about? What was she going to do with this presidency that made it so consequential? Maybe if she had campaigned on this consequence she wouldn’t be mad at her voters for not caring that much.

    Dustin (ba94b2)

  50. @ pin (#38): Close. West Side Story. Or were you making a joke about how hard it would be to get from Puerto Rico to the Swiss-Austrian Alps by boat?

    Beldar (fa637a)

  51. For many years it applied to cruise ships in Hawaii. A cruise ship under a foreign flag could not travel from one port in Hawaii to another port in Hawaii, nor could a cruise ship travel directly from LA to Honolulu. They had to make a detour to a foreign port. LA cruise ships would go to Mexico, and ships cruising around Hawaii would make a two day trip to the Republic of Kiribati, south of the Hawaiian Islands, and then come back again to a different island port.

    shipwreckedcrew (56b591)

  52. Anyway, smoke on your pipe and put that in!

    Beldar (fa637a)

  53. @56 Beldar

    Little column A. Little column B. I always heard my dad quote it but I didn’t know if it was 100% verbatim.

    Pinandpuller (86c996)

  54. Except trump punished Syria’s nerve gas attack, has taken steps against the Castro regime, has gotten the Chinese to leverage their authority with n korea

    narciso (d1f714)

  55. And I wanted to bring up a serious question of why a real swastika has four dots on the inside corners, so I figured nazi musicals would be like a pontoon bridge.

    And if someone brings up Indians I can ask dot, swastika or Subway?

    Pinandpuller (86c996)

  56. Mr. narciso it looks like they gave this their dead-level best

    very difficult material

    i’ll see it no matter what I hear just out of respect for the effort i think

    happyfeet (28a91b)

  57. My comment went into the wrong thread! Hahahaha.

    Dustin (ba94b2)

  58. @ aphrael, who wrote (#54):

    That said … Congress is going to have to act. The provincial government was bankrupt before the storm, and the *total annual budget of the provincial government* is less than the expected cost of the *infrastructure repairs alone*. Plus, the economy of the island is basically wiped out, so there is no meaningful local tax base and won’t be for years.

    “Catastrophic”, in this case, isn’t an exaggeration, it’s just the simple truth.

    True, and at least a large down-payment toward that will happen relatively promptly and on a bipartisan basis, I expect. The bipartisanship might break down for later tranches and projects; we’ll see.

    New Orleans, though, isn’t the same city it was pre-Katrina now. In some ways it’s better, others maybe not, but it’s definitely a lot smaller now. A lot of the post-Katrina exodus became relatively permanent, relatively quickly, and mostly by choice. Houston in particular absorbed, mostly to good effect all around, a huge number of Katrina refugees, as did some other places on a smaller scale. So I expect there will be some down-sizing as a result of this catastrophe, and the infrastructure that does get rebuilt will likely reflect that — and, perhaps, through its type and pace, either drive or moderate some of the exodus. My impression is that post-Katrina New Orleans is now even more tightly wedded to tourism, and that may likewise be true in Puerto Rico.

    Beldar (fa637a)

  59. Did you know that there’s also a Smith Act?

    nk (dbc370)

  60. There was also an Alias Smith and Jones Act, but it was canceled in early 1973.

    Colonel Haiku (2601c0)

  61. Its by the guy who did exnachina, so it will be an interesting exercise.

    narciso (d1f714)

  62. mostly i’m just hoping for more closure than i got from the book

    this has the potential to go solaris in the worst george clooney way possible

    but my sense is they understood that going in

    happyfeet (28a91b)

  63. “The aftermath of this storm was far, far worse than anticipated..”

    You’re forgetting the 1st hurricane which had plenty of advance notice. It’s a challenge, for sure but the response was muted by more important NFL matters.

    Ben burn (101c24)

  64. Ah yes stanislaw lam let out a primal scream in the ether, they were threatening to cast him in the steinhauer mil weaver books

    narciso (d1f714)

  65. The first storm had significant impacts, but they were sold a bill of goods like Greece, or more properly crete

    narciso (d1f714)

  66. 35-Pinandpuller
    My sister says its a free parking lot.
    So, she moved to the big island.

    mg (31009b)

  67. I could see repealing the Jones Act as far as ship construction is concerned, but I would be reluctant to repeal it entirely. Coastal shipping is a domestic activity; I don’t want it being carried on by a foreign business under foreign rules. If it is licit that foreign ships, with foreign crew, operating under foreign rules, can carry freight from one oceanic port to another, will it be licit for freight to be transported in the same way between oceanic ports and inland ports? If so, then why not between inland ports? Why not ferry boats?

    A foreign-flag ship is an exclave of that country. It’s one thing to outsource, say, a call center to India. The activity actually moves there. It would be another to leave the activity in the same location, but replace that location with a piece of India.

    Rich Rostrom (d2c6fd)

  68. @53 Bill H

    No harm, no foul sir.

    Pinandpuller (3f025d)

  69. You’re forgetting the 1st hurricane which had plenty of advance notice.
    Ben burn (101c24) — 9/28/2017 @ 5:43 pm

    14 years by my count.

    Pinandpuller (3f025d)

  70. I’m not forgetting anything. As far as I know.

    Steve57 (0b1dac)

  71. it’s the height of unseriousness for a slapdash and farcical little country like failmerica to plead “national security” in the name of the Jones Act when it has absolutely zero ability to prevent terrorists from strolling across the border with unlimited quantities of cheez whiz and ebola

    to say nothing of its sick penchant for infesting smelly trannies all up in its once-respectable military

    happyfeet (28a91b)

  72. Our merchant marine is considered an auxiliary component of our naval forces. An un-mobilized reserve in peacetime which can be called up in wartime. Is there any nation whose merchant marine is not? Russia’s? China’s? Iran’s? North Korea’s? Cuba’s? Venezuela’s? Do you want them picking up your sriracha at Galveston and bringing it up the Mississippi to Chicago?

    nk (dbc370)

  73. Was there some argument over the Jones Act when the BP well busted loose in the Gulf? Strikes me that there were reports of foreign ships which could have helped but were not allowed. Can’t find anything on it.

    Richard Aubrey (0d7df4)

Leave a Reply

Comment moderation is enabled. Your comment may take some time to appear.


Powered by WordPress.

Page loaded in: 0.3329 secs.