- With deference to What’s Going on With Shipping[1], the Jones Act isn’t really the problem. The entire incentive structure and industry crumbled well after it was enacted. [1] https://youtu.be/qWKz3psejb0?si=5QJd5HQ3W1IrSJ7F
- This is literally the meme of "worst guy you know made a great point" playing out in real time.
- What do you mean? Can you elaborate?
- Amazing, never thought it would happen.
Ridiculous to have laws that unfairly protect dead industries. Dockworkers next please so we can have automated container unloading.
- Absolutely wonderful news for Hawaii.
- if it works, will they keep it suspend even after?
- That's the goal. The Jones Act guarantees a lot of American jobs and those workers are expensive. This allows US port-to-port shipping at much lower prices.
Good for the bottom line, bad for the worker.
- Jones act also guarantee lack of competition between shipyards. When companies MUST buy from you, there is no pressure to improve and you can set prices as you like.
Now US shipbuilding has been shielded from competition for so long, that any kind of permanent repeal of Jones act will mean instant bankruptcy of US ship builders. Similar to what happened in Eastern Europe after 1989. That shock of not being shielded by iron curtain from competition has caused implosion of whole industries.
- US shipbuilding basically doesn't exist as it is. Jones Act was the only thing (other than Navy contracts) keeping it on pathetic life support. The only possible (poor) case you could make is that it kept enough facilities and workers barely functional enough so you could mothball excess production and surge it if needed. I would eat my hat if we could surge production to anything meaningful today even if it meant survival of the nation.
Not that it did a great job, so I don't think it's going to be a huge loss on the shipbuilding front either way. The defense budget will simply pick up the subsidization slack, or we're be even more unable to field a Navy in the future. Likely both.
What will be interesting is how folks think they are going to be able to keep a merchant marine floating on the water? Are a bunch of US shipping companies going to start up, buy boats from Asia, and start employing American crews with American flagged vessels? Doubtful.
But again - Jones Act didn't really keep those goals going either way. I just hope it's replaced with something other than thoughts and prayers. There is absolutely a strong case to be made that shipping prices can justifiably be higher and paid for by the American consumer so that we can have a robust and independent merchant marine fleet only the US can control. I don't know how we get there, but I do know without it there is no such thing as sovereignty.
- Ehh, doesn't this just merely rock the boat for a few years before the same uncompetitive pattern equilibriates in the expanded market? Makes no sense to me why say the subset of the earths economy within the iron curtain is say a constrained market lacking competition, but the subset of the universe's economy that takes place on the finite confines of planet earth isn't.
- Not really, China has 232 times the shipbuilding capacity of US. See: https://www.americanmanufacturing.org/blog/chinas-shipbuildi...
The problem with Iron curtain has been that you were not allowed to import stuff from the West unless you were specifically permitted to (i.e. military purposes). The ideology of Eastern block was to employ everyone, that caused low automation demand which caused high prices for goods. Furthermore lack of quality processes caused that products were expensive and also garbage. So after iron curtain fell you can buy cheap garbage from the east or expensive quality goods from the west.
That compounded with USSR imploding (losing market) and management of communist companies not being able to innovate because there was no demand for it and you got industries falling apart like Hindenburg.
Jones act has created exactly same trap. US shipbuilders are not being forced into innovation nor automation (so they can reduce labor costs) because they don't need to. And now with China eclipsing them 200 times, Jones act can't be repelled
- Why are chinese shipbuilders incentivized to compete with eachother while US shipbuilders are not incentivized to compete with eachother? The answer is probably due to cartel behavior on the part of the american shipbuilders, which tends to happen in any industry that has coalesced into few enough players to get into a conference call. If the chinese are still innovating I would say it is because they are merely early in the inevitable march capitalism takes from smallholder to largeholder based industry. I would expect after several decades of mergers and acquisitions that the chinese shipbuilding industry begins to behave a lot like the American shipbuilding industry today, if they haven't already begun to do so.
- > Good for the bottom line, bad for the worker
Bad for most workers. Good for a cabal. The Jones Act directly lead to the failure of American shipbuilding.
- Say what?
Jones Act didn't kill American Shipbuilding, cost of American worker did.
However, whole reason for Jones Act is attempt to protect the American Merchant Marine. If you can't move things via water in wartime, you don't have an empire.
- It destroys far more American jobs in favor of a special interest group.
- God's work. Page literally jumped away from me with an ad/paywall.
36 points by geox 2 hours ago | 17 comments