How Protectionism Hurts Hawaii: Why It's Time to Repeal the Jones Act

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How Protectionism Hurts Hawaii: Why It's Time to Repeal the Jones Act

"What would an enemy want to do to the people of Hawaii during war time?" asks Ken Schoolland, professor of economics at Hawaii Pacific University and scholar at the Grassroot Institute. "They would want to cut us off from international shipping. Well, this is what the law does to us all the time."

Reason TV sat down with Schoolland to talk about the Jones Act, federal legislation that restricts foreign-flagged ships from engaging in commerce in domestic shipping lanes. Schoolland argues that this protectionist measure is crippling the Hawaiian economy and results in Hawaii's imports being among the most expensive in the world.

Attorney John Carroll petitioned to overturn the Jones Act, but the petition was dismissed by the court with prejudice. Carroll says he intends to mount a vigorous appeal.

About 4 minutes.

Produced by Zach Weissmueller. Shot by Sharif Matar, Paul Detrick and Weissmueller.

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Comments

[CAB]

I'm confused.

If the essence of the Jones act is that "all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents", what exactly stops Hawaii from receiving goods directly from China, India, or whomever?

[sarcasmic]

Because the next stop on such a journey is likely a US port. What's the ship to do? Unload the crew in Hawaii and pick them up on the way back?

[UnCivilServant]

The intent (but not effect) was that the ship going to india or china would be a US vessel as well, so no changeover would be required. But the US isn't a good flag to ship under, so most cargo vessels don't fly US flags. The loophole would be - stop on the mexican coast and take advantage of NAFTA to ship into the US. All stops in Hawaii were to and from foreign countries.

[UnCivilServant]

*Or Vancouver.

[CAB]

Ahhh.. Didn't consider that. Thank you.

So theoretically, could a Chinese merchant ship stop in Hawaii, unload a portion of their goods and move on to a brief stopover in Tijuana before unloading the rest of their goods in San Diego and still be in compliance with the Jones Act?

[UnCivilServant]

I would argue that it could.

[CAB]

What an unsurprisingly stupid law...

[sarcasmic]

Most of them are.

[yonemoto]

would probably go to LA, for volume's sake.

[Isaac Bartram]

Actually, they might as well unload all the goods in a Mexican port and take advantage of transhipment rules to load them on rail or trucks for transfer to the US. That way they get to avoid paying US longshoreman wages.

If there's a significant amount of stuff being unloaded in HI then the extra labor cost is probably less than the cost of reshipping the stuff from the mainland.

[yonemoto]

"what exactly stops Hawaii from receiving goods directly from China, India, or whomever?"

Volume. There's only just north of a million people on Hawaii.

[pitbull07]

up to I looked at the bank draft that said $5552, I be certain that my mom in-law truley making money parttime at there labtop.. there brothers friend has been doing this 4 only about 17 months and just now paid for the morgage on there mini mansion and got a great Volkswagen Golf GTI. read more at wow65.com
(Go to site and open "Home" for details)

[John Thacker]

NB: Jones Act repeal is one of those issues where Sen. McCain is very good, but like reducing ag subsidies, not the sort of thing that really stirs the blood of people.

[Chris Mallory]

Even better, it is time to give Hawaii it's freedom.

[Brandybuck]

Yeah! Let's make it a state so it can elect it's own governor and legislature! 9th, 10th, and 14th amendments apply!

[cavalier973]

Along with the other 49 states.

[yonemoto]

I think you mean the other 56 states

[cavalier973]

Ah, yes. I forgot we were living in Obamatopia now.

[yonemoto]

I think he's a little confused about what ocean Hawaii is in.

[playa manhattan]

The wikipedia entry about the Jones act appears to have been written by the Longshoreman's union...

[Jayburd]

It's heavily favored by the various mariner's unions. If we were to go to war without a viable merchant fleet we would be at a severe disadvantage. Thus lies the problem. Is it possible to send our merchant jobs overseas and still be safe?

[kupekyrenes]

what Elaine replied I'm blown away that a student able to earn $5519 in a few weeks on the internet. have you read this web link.. http://www.ask22.com

[SouthernSeaDog(Y-tarian)]

The Jones act is mean't to keep a few good ships operational in order to transport goods during war or other national emergency. I agree that the U.S. should make taxes and regulations fairer so that a Jones act is not needed (Like the Brits), but for the time being the Jones Act leaves a few good ships/mariners operational .

[don quixote]

The Jones Act also stops foreign-flagged cruise ships from carrying US citizens between US ports unless if there is a foreign port in the mix. Except for the one and only US-flagged cruise ship, it forces all other Hawaiian cruises to either start/end in Vancouver or Ensenada ...or stop in Fanning Island.

Or in the case of Alaskan cruises, start/end in Vancouver rather than Seattle... or stop at Prince Rupert, Canada for an "operational stop" -- the people don't get off, they just satisfy the Jones Act.

So the $38 billion cruise industry does all sorts of unproductive things to avoid the Jones Act... and what is protected? One US flagged vessel, NCL's Pride of America sailing between the Hawaiian islands.

[grey]

I looked up the quote ("Protectionism in all of its forms, does to your people in peacetime what your enemy would to do you in wartime."- Henry George?); I thought maybe I'd find myself another Bastiat.

Not so much, between more of his quotes and his wiki page he seems like he would have informed the likes of Karl Marx.

"The man who gives me employment, which I must have or suffer, that man is my master, let me call him what I will." - Henry George

"Progressive societies outgrow institutions as children outgrow clothes." - Henry George

"Capital is a result of labor, and is used by labor to assist it in further production. Labor is the active and initial force, and labor is therefore the employer of capital." - Henry George

This doesn't sound like the same guy that was quoted in the video, which quote I can't find attributed to him. Different Henry George, what am I missing?

[atlashrug]

Unfortunately this is nothing new: http://en.wikipedia.org/wiki/Navigation_Acts

[jimmy jean]

shipping lanes. Schoolland argues that this protectionist vendreceintures.com measure is crippling the Hawaiian economy and results in Hawaii's imports being among the most expensive in the world.

[crystallann]

upto I looked at the bank draft for $9472, I didnt believe that my brothers friend was like they say actually bringing home money part time from there labtop.. there neighbour had bean doing this for less than twenty three months and just repayed the morgage on there apartment and bourt a top of the range Mazda. go to, http://www.up444.c?m

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[EstherBartz]

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[Waterfall67b]

I've got it. Anchor a buoy somewhere between Hawaii and Long Beach and declare it to be the country of Palekaiko.