Going Broke With The Jones' — Episode 018

Going Broke With The Jones' — Episode 018 Podcast Notes and Outline. Jones Act Intro Pre-recorded by Jeff as a MonologueHave You Ever Split a Cab or an Uber with a friend? If the Jones Act applied to Uber drivers, this would be illegal Reasons we economists suck — the dismal science What the heck is cabotage?  Market Distortions The Devil Lives at the Margins — “Concentrated Benefits” & “Diffuse Costs” Merchant Marine Act of 1920 — The Jones Act100 years ago Introduced by Wesley Jones — the senior senator from Washington State Hmmmm … and they build ships where? (hint: Washinton State!) The Jones Act in a NutshellAll Ships Used for Cabotage US Built US Owned US Flagged US Commanded US Staffed Other Related Issues Insurance Seaman Rights Port Inspections Etc. Often confused with the Passenger Service Act of 1886 — Discuss the difference Even NPR confused the issue in their podcast. Jeff Introduces Guest Colin Grabow (GRAY-Bō) Colin Grabow of the CATO Institute — Policy Analyst, Herbert A. Stiefel Center for Trade Policy Studies. He has a BA in international affairs from James Madison University and an MA in international trade and investment policy from George Washington University. He specializes in things like subsidizing sugar production and The Jones Act. Welcome to the JeffEffect. What did the Jones Act Attempt to Do? Foster Shipbuilding in the US (Protectionism) To Maintain Domestic Fleet and Shipbuilding Capacity (National Security) Maintain an experienced Merchant Marine Workforce (Protectionism & National Security) Did it Succeed …. No, It Did Not — Jeff and Colin Discuss There are currently less than 100 Jones Act Qualifying ships. Commerce between states is negatively impacted. How The Jones Act Got on My Radar Thinking about opportunity for the local Economy — Why Apple Can’t Build Phones in Puerto Rico Why Are US-built Ships So Darned Expensive? The irony of Asia-Pacific Shipbuilding — Being destroyed in war required that it be rebuilt from scratch. Japanese industrial base was devastated during WWII. The Korean conflict occurred immediately after WWII. Both areas were reindustrialized after the conflicts. This appears to have facilitated the construction and recapitalization of shipbuilding in these two regions. Protectionism Breeds Complacency Every Time It’s Tried. There is not a single LNG Tanker, Heavy Project Ship, Heavy Cargo Ship, or Cruise Ship built in the US — Zero Qualify for The Jones Act. If ZERO qualify, what are we protecting? Anecdotes Flying Cows of Hawaii Road Salt in New Jersey LNG Triangle Trade — Russia/Massachusetts/Pakistan Oil in Houston Can’t Get to Maryland Other Ideas and Anecdotes from Colin Complacency Revisited Transport companies that were not covered by the Jones Act have become competitive on the world stage. US Airplane Manufacturers Boeing Gulfstream/General Dynamics Textron (Textron Aviation/Cessna) US Locomotive Manufacturers GE Transportation/Wabtec Brookville Equipment Corp. Electro-Motive/Caterpillar US Semi-Truck and Trailer Manufacturers Peterbuilt International/Navistar Kenworth/PACCAR Nixing The Jones Act Seems Like Something Everyone Could Support Environmentalist Should Like it — more energy-efficient. Consumers Should Like it — lower prices. Domestic producers of commodities and manufactured goods should like it lower transport costs more competitive domestically. Economic development of Places Like Puerto Rico Should Like It — Activate local workforce. National Security … two sides of the coin. So, who doesn’t support it and why? Could We Further the Goals of The Jones Act other Ways? Tax Incentives to Modernize Domestic Shipbuilding? Expansion of the Naval Reserves? Tax Incentives for Domestic Ownership? Liberalization of Flagged Ship Laws? Other Mitigating and Replacement Ideas from Colin Links and Additional...