Protectionism

How a Dumb Protectionist Law from 1920 Still Screws People from New Jersey to Hawaii

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NPR has a story about how The Jones Act, a 1920 law designed to protect the U.S. shipping industry from foreign competition, has made it difficult for New Jersey to get large shipments of road salt this winter. The Garden State could have brought 40,000 tons of salt down from Maine on a single ship, saving time and money during one of the toughest winters in memory, but instead has to ferry a barge capable of handling shipments of under 10,000 tons back and forth, adding costs and delays.

[New Jersey officials] bought the salt but ran into problems getting it to New Jersey — despite the fact that there was an enormous, empty cargo ship, sitting at the Searsport port, headed down to Newark.

"I mean, it was just like serendipity," says Joe Dee, chief of staff with the New Jersey Department of Transportation. "Here's this ship that's big enough to take 40,000 tons of salt, on its way to Newark anyway. This is perfect."

But standing between that pile of salt and the port of Newark was an ancient law. Stemming back to the 1600s, reaffirmed in its modern form in 1920, it's called, the Jones Act. Under the Jones Act, if you want to bring something from one U.S. port to another, you have to use an American-built ship, flying an American flag, with a mostly American crew.

Read more here.

The argument in favor of The Jones Act—a weak one, to be sure—is that ship-building and sailoring more generally is related to defending the country. We've got to keep a strong ship-building industry on our shores, say defenders, so we can conscript it in time of war. Seriously.

It's not just folks in frigid New Jersey who are suffering because of a dumb old law. The NPR story touches on how The Jones Act screws over Hawaii especially. Thanks to this form of protectionism, residents of America's furtherst-flung state routinely pay 15 percent to 20 percent more for goods that come from the mainland.

Last May, Reason TV talked to Hawaiian legislators about "How Protectionism Hurts Hawaii: Why It's Time to Repeal the Jones Act." Check it out now:

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  1. NPR covered this as well. It was Planet Money so they had pretty much the same takeaway, though a little less snarky about the law is for national war readiness defense of blithering stupidity.

    1. NPR covered this as well.

      You may wan to take some time to read the first three letters of this post.

      1. This is why there are no female libertarians.

        1. Is waffles a chick? Well hell, I’m sorry little lady. I’ll start treating you differently based on your gender right away because we all know women can’t handle some good-natured ribbing without bursting randomly into tears.

          1. A dude would have simply blasted you for falling victim to Joez law.

            1. Now that’s a law we need to repeal.

              1. We tried, but it simply was pushed away from us.

      2. “Hug”?????

        1. Watch his hands!

      3. You caught me. However, my comment-first, then read style is what keeps me employed. I don’t know how John does it.

  2. It’s also the reason why it’s hard to find a cruise that goes from an American port to another American port. The major cruise companies are foreign owned, so for example, an Alaskan cruise must either start or end in Vancouver. I think there are some special cases, but it’s just another unintended consequence of a stupid law.

    1. You know, it seems like a (summer) cruise that had ports of call something like Boston, NYC, Baltimore/DC would actually be fairly popular as it’d give the option for people not from the East Coast to pretty cheaply hit quite a few of the larger cities/historical places to visit on the East Coast.

      1. They have them , but they start in Halifax or somewhere in New Brunswick.

        1. Having to go to Canada would certainly take away from the effect.

    2. Yup, Alaskan cruises will always stop in Vancouver or Victoria. This is why cruise ships serving the Hawaiian Islands are notoriously bad: no foreign port to call on between american ports means no competition.

  3. Heard some of that on the morning drive.

  4. Inst this the same law that made the deep water horizon clean up worse as BP wanted to bring in ships from it’s and Shells north sea oil fields but couldn’t due to there UK/Dutch flagging and crew?

      1. Laws in times of disasters are totally without exception while in times of political trouble they are a bit more fungible it seems.

  5. The Jones Act isn’t really what you think it is. I’m no expert in this, but have had some exposure. Isn’t this is the same Act that prohibits foreign flagged AIRCRAFT from transporting passengers from American port to American port? Air cargo as well?

    1. Yes, because its definition of cabotage includes both ships and aircraft. That is equally stupid.

  6. Under the Jones Act, if you want to bring something from one U.S. port to another, you have to use an American-built ship, flying an American flag, with a mostly American crew.

    Strictly for legitimate safety reasons.

    1. Actually, strictly and explicitly for protectionist reasons.

  7. How a Dumb Protectionist Law from 1920 Still Screws People from New Jersey to Hawaii

    Hey, pal! This great country of ours was built on dumb laws!

  8. The Navy thing may have made more sense when naval ships were more like regular ships with guns, but what the fuck is the modern US Navy going to need with some old cargo ship?

    1. Move supplies.

      The whole reason they built metric craploads of “Liberty Ships” was to move cargo.

    2. Target practice?
      Cargo transport?
      FYTW?

  9. Is there a movement to repeal this asinine law?

    And is there some other law that says in times of emergency or you name it particular strife, overrides the Jones Act? I mean instead of repealing laws, don’t they usually just write a workaround, making it even more impossible to navigate the stupid bureaucracies?

    1. Repeal…a… law? I don’t follow. Do you mean commit treason?

    2. Yes. McCain has repeatedly sponsored a bill to repeal the Jones Act.

      1. McCain has repeatedly sponsored a bill to repeal the Jones Act.

        Broken clock… blind squirrel… etc.

        1. Don’t worry. It’s purely for political gain. He would never do anything principled.

          1. Phew, that’s a relief. I thought I’d woken up in Bizarro world!

            1. He wants to built a seaport in Arizona.

              1. Let me guess … he confused Grand Canyon with Grand Caymans and thinks a seaport up the Colorado River is a good government investment.

            2. Y’all will struggle to find anything to disagree with in his statement about repealing the Jones Act. McCain is in generally quite good on trade (and on opposing ag subsidies, though, yeah, Arizona isn’t a big beneficiary of them so that’s easy for him to do.)

              1. Basically, since AZ doesn’t have any water ports, McCain won’t have to deal with extra goddamned foreigners if the Jones Act is repealed. But if he was Senator from LA, he’d be supporting the Jones Act because Mexicans.

  10. instead has to ferry a barge capable of handling shipments of under 10,000 tons back and forth, adding costs and delays.

    How hard would it be for Al Gore to get on the phone with a few of his cronies and have them get rid of these retarded cabotage laws by pointing out the resulting workaround puts 10 times as much carbon dioxide in the atmosphere, contributing to global warming and thus causing this incredibly cold and snowy winter?

    1. But it employs 10 times as much union labor so it’s a wash.

      1. Actually I think union jerbz trump CO2. Especially since CO2 doesn’t pay union dues which are then fed into various pol’s campaign coffers.

        Besides, s.p. was falling victim to the assumption that Al Gore actually cares about global warming as something other than an excuse to enrich himself and his cronies.

        1. Actually I think union jerbz trump CO2

          If this were strictly true, then Keystone XL would already be approved.

  11. Alright Nick, that alt-text made up for the AM Links enough that I’m actually going to subscribe.

    1. That was a freakin’ WIN for the alt-text. I may have to do the same.

      1. That’s not a “really small” bathing suit, unless it’s still the 1950’s.

        1. D&D and chicks in bikinis?

          What’s up with the shameless pandering today? Why not every other day?

  12. New Jersey officials bought the salt but ran into problems getting it to New Jersey.

    Sounds like poor planning to me. I too live in a state with a seaport, a state which borders N.J., has many times their population and which has had a far snowier winter than they, and yet we have had no shortage of road salt this winter. Although, in fairness, I do understand N.J.’s lack of time in preparing for a law which has been on the books since 1920.

    1. I too live in a state with a seaport, a state which borders N.J., has many times their population and which has had a far snowier winter than they, and yet we have had no shortage of road salt this winter.

      Are you being paid by the word?

      1. Probably.

        In New York, King Cuomo kept declaring states of emergency every storm to steal salt from the upstate communities who’d planned for winter and have the DoT crews forced to drive down and clear Long Island, which had too few plows and too little salt.

        1. So, business as usual in the capital of too big to fail?

    2. You know one of the beauties of liberty is that it’s flexible. In other words, you can adapt to changing circumstances quickly. You seem to have a fetish for “planning”, which shows how inefficiently you think.

      1. Liberty is great if you don’t have to deal with the negative consequences. Otherwise it’s totally unfair.

      2. “you can adapt to changing circumstances quickly”

        Which is what every state with snowfall did this winter. Every state except, inexplicably, New Jersey. Because government.

        1. So, on the one hand, you’re claiming these states planned well. On the other, you’re claiming they were adaptable to change ‘quickly’.

          Derp. Pick an argument and stick with it.

      3. “You seem to have a fetish for “planning.”

        Nah, I merely pointed out that among all the states that had snow this winter, only New Jersey screwed the pooch. You, on the other hand, seem to have a fetish for arguing with strangers on the internet. In that spirit, I’ll give you the last word, as I know you crave it.

  13. Listen all y’all it’s cabotage!

    http://en.wikipedia.org/wiki/Cabotage

  14. After reflection, I am willing for the people of Hawaii to pay an extra 15% to support the US shipping industry and merchant marine.

    Paint me blue and call me a democrat!

    1. I have a Workaround!

      Give one of the uninhavited rocks back to the Kingdom of Hawai’i, and treat it’s waters as a foreign port for the purposes of the law. The ships don’t have to unload there, just check in.

      1. So what are the rules on that? Seems that hitting a Mexican port out of S California or BC from the NW ports could pay off for a shipper. Or instead of an US bound ship stopping off at Hawaii, why not a Mexican or Canadian bound one?

  15. All that salt wasn’t just for the roads, but for the citizens of New Jersey to take every time one of their politicians opens their mouth.

  16. Way to pick a crappy bikini pic. Here, use this one instead.

    1. Sorry, Nick’s pic had breasts.

      1. Exactly.

  17. Randian found something to bitch about. Yay.

    1. Even when I’m on your side you attack me. Coooool story bro

  18. NJ runs out of salt every fucking winter. The DOT and the municipalities salt the shit out of the roads for minor storms in late November and early December needlessly, we’re talking 3-4 applications of salt for 1-2 inches of snow. It’s so bad that you can’t see the lines on the roads. Then by the time we get hammered in January and February the salt sheds are at less than 50% of capacity.

    1. The purpose of oversalting is so the roads will deteriorate faster which creates more union jobs.

  19. use this one

    I’ll be in my bunk little grass shack.

    1. I don’t get it.

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