Let's just get rid of the Jones Act once and for all

Get rid of this 100 year old law already

There is no disagreement that the Jones Act raises the prices of goods shipped between ports in this country. Furthermore, the ostensible reason to keep it going, as an artificial monopoly, to "protect" domestic shipping and shipbuilding has instead accomplished what All monopolies do. Creating a sclerotic and inefficient Industry that does a disservice to this country. There's no reason other than the Jones Act why the best ships in the world are built in South Korea and Norway. We can't compete because we DON'T compete. 

Imagine the sorry state of the internet today if we still labored under the AT&T monopoly. Want high speed internet to your home? If the Judge Green decision hadn't happened, we'd be faced with spending $2000 per month for slow T1 circuits that could not support old school television, let alone high definition Netflix or Vudu.  I have contended, with proof, for decades that one of the greatest things to happen to this country and our overall economy was the dismemberment of that colossus. It needed to go, and so does the Jones Act, for similar reasons. Let those shipping companies get a healthy dose of reality and learn to Compete for business instead of having it handed to them on a silver platter. 

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^ agreed.  Monopolies generally end up distorting markets in a bad way, much in the same way that subsidies distort markets in a bad way.  Both breed laziness, corruption, inefficiencies and financial rot.

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41 minutes ago, Ward Smith said:

Get rid of this 100 year old law already

There is no disagreement that the Jones Act raises the prices of goods shipped between ports in this country. Furthermore, the ostensible reason to keep it going, as an artificial monopoly, to "protect" domestic shipping and shipbuilding has instead accomplished what All monopolies do. Creating a sclerotic and inefficient Industry that does a disservice to this country. There's no reason other than the Jones Act why the best ships in the world are built in South Korea and Norway. We can't compete because we DON'T compete. 

Imagine the sorry state of the internet today if we still labored under the AT&T monopoly. Want high speed internet to your home? If the Judge Green decision hadn't happened, we'd be faced with spending $2000 per month for slow T1 circuits that could not support old school television, let alone high definition Netflix or Vudu.  I have contended, with proof, for decades that one of the greatest things to happen to this country and our overall economy was the dismemberment of that colossus. It needed to go, and so does the Jones Act, for similar reasons. Let those shipping companies get a healthy dose of reality and learn to Compete for business instead of having it handed to them on a silver platter. 

I'm not sure the purpose was to protect a monopoly.  The purpose was to make sure that we had sufficient vessels should we ever be involved in a military confrontation and have the need to call upon the fleet.  

I would argue that this resulting monoply has stifled this industry, yet offers some security (or rather, a feeling of security).  I'm neither passionately for or against it.  

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53 minutes ago, Rodent said:

I'm not sure the purpose was to protect a monopoly.  The purpose was to make sure that we had sufficient vessels should we ever be involved in a military confrontation and have the need to call upon the fleet.  

I would argue that this resulting monoply has stifled this industry, yet offers some security (or rather, a feeling of security).  I'm neither passionately for or against it.  

I'll agree the "purpose" wasn't to create a monopoly, but the end result was to do just that. Or more correctly, a market distorting oligopoly made up of the remaining shipyards who profit (immensely) from this distortion.  The idea that we can't mobilize a "fleet" in some future confrontation is ludicrous. As was learned in previous Wars, possession is 9/10the of the law. Ships were routinely commandeered for being oh the wrong place at the wrong time. Other than khat crazed Somalis, no one is really stupid enough to do that to the world's sole remaining super power, but we could well get away with the reverse, especially if those ships were bought and paid for by US companies. Meanwhile, an astonishingly large number of "American" ships fly Liberian colors because of more ridiculous regulations outside the scope of this post. 

Ask yourself if you had billions to spend on drillships and gathering systems, would you Really want them built in Newport News? You know, the same ship yards who've done such an excellent job with the latest US aircraft carrier, that can't launch planes? 

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Just curious, are similar monopolies in place in other countries around the world?

As an aside, one of the most complicated systems to build and operate on an aircraft carrier is the catapault system. I would assume that the new generations of catapaults are even more complex.

These systems aren't required on civilian shipping, neither are nuclear reactors. Need to compare apples to apples.

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3 hours ago, Tom Kirkman said:

^ agreed.  Monopolies generally end up distorting markets in a bad way, much in the same way that subsidies distort markets in a bad way.  Both breed laziness, corruption, inefficiencies and financial rot.

Wow, Tom, something we agree on?  What is the world coming to?

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Some of the most advanced ships in the world are built in the USA. But typically for the USN. We aren't cost competitive for generic ships, but we certainly have the capabilities. 

There's a wonderful casting house in Tacoma that can do a casting the size of house, and it's because of the ship building industry. Fascinating place to visit for those that love old school manufacturing, PhD metallurgist working in a state-of-the-art-lab, in buildings that still have machines that are pre-WW2. The USA WW2 industrial machine is one of the great achievements in history.

South Korea targeted the ship building market. I remembering visiting sites in 1982. It wasn't a free market thing. KSA is now trying to get into the giant shipbuilding business (another misplaced Vision 2030 thing). I swear they smoke legalized dope to think up some of the things they think. Build the yard in a time when yards are being shut down, and who would work in it? Years to learn the craft and lack the steel industry, which they also want to build. Watching Nippon steel try and explain things was such a hoot. But an LOI was signed anyway. 

These sort of industries are almost always government protected. Does anyone believe Boeing is truly a commercial entity? or Airbus. Some of the components making them up are. Competition requires quite a few options for the buyers and the sellers. By their nature these become semi-government industries.

I do think the Jones Act has long ago run it's course, left over vestige of WW2 ideas. The modern carrier fleet is so sinkable, and 90% of it's resource is to defend itself. 

Isn't the Jones Act also for protecting US Merchant seaman to ensure we still have a few instead of all foreign flagged vessels with mostly very low cost sailors?

Technological disruptions can create competition despite the efforts of government and large companies to stifle and turf protect. Killing Ma Bell set a lot of great researchers onto the market. The semiconductor tool industry as we know it today can largely tie back to Ma Bell. Even a pure commercial entity, like Zerox, what they invented in labs, but didn't have the sense to see opportunities, those that left, that is so much of Silicon Valley. 

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We had a brief discussion about Jones Act under another topic.

One of the things the Gov. can start with is to amend the Jones Act, to include that a certain percentage of ships can be built in foreign shipyards meeting and adhering to US compliance and safety requirements, this will start making the coastal trade more competitive. They can also require a more robust and or enhanced vetting of foreign owned vessels and their crew and perhaps include a provision that calls for a certain percentage of the crew on a foreign owned vessel conducting commerce and transporting goods between US ports would be US crew. When a vessel berths at a US port, they can do a crew switch. Ofcourse the vessels on which this would be done, would require that the US crew be previously trained and experienced on these designated vessels.

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11 hours ago, Tom Kirkman said:

^ agreed.  Monopolies generally end up distorting markets in a bad way, much in the same way that subsidies distort markets in a bad way.  Both breed laziness, corruption, inefficiencies and financial rot.

You would think so, but that is conclusory.  The results you describe are outliers.  

What monopolies and oligopolistic and oligopsonic markets do is, in industrial goods, create a shelter for a domestic industry.  In agricultural goods, they create a shelter for existing market participants.  However, they also tend to increase farm land prices and that becomes a barrier to entry of new producers.   So these market mechanisms are a mixed bag.  In the case of US shipping, they have been a complete disaster, but again, that is an outlier. 

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12 hours ago, Tom Kirkman said:

^ agreed.  Monopolies generally end up distorting markets in a bad way, much in the same way that subsidies distort markets in a bad way.  Both breed laziness, corruption, inefficiencies and financial rot.

You would think so, but that is conclusory.  The results you describe are outliers.  

What monopolies and oligopolistic and oligopsonic markets do is, in industrial goods, create a shelter for a domestic industry.  In agricultural goods, they create a shelter for existing market participants.  However, they also tend to increase farm land prices and that becomes a barrier to entry of new producers.   So these market mechanisms are a mixed bag.  In the case of US shipping, they have been a complete disaster, but again, that is an outlier. 

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The long text on the above got obliterated by a glitch bump in the software, I will come back to this and attempt to reconstruct what I wrote.  

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(edited)

There goes good paying Jobs for American Sailors. Maybe just make a Amendment to the Jones Act allowing foreign built ships to operate in the USA with American sailors. I believe that the airline industry allows something like that. Shipping has take ideas from the airline industry... maybe we can take that idea. Would be sad to lose an entire industry for us. Another big reason for the Jones Act besides having good paying jobs is the National Security issue. If a major war does happen are we going to ask foreigners to ship our tonnage? A lot of people don’t understand how world trade works in general.... average joe has never even thought of ships. Doesn’t seem like USA has many friends anymore. I wouldn’t rely on some other country to ship our tonnage in an emergency when they would just rather watch us bleed. Besides I saw earlier about other countries having “monopolies”... its more like cabotage laws. And yes many countries have them!

Edited by bluewater15
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16 hours ago, Douglas Buckland said:

Just curious, are similar monopolies in place in other countries around the world?

As an aside, one of the most complicated systems to build and operate on an aircraft carrier is the catapault system. I would assume that the new generations of catapaults are even more complex.

These systems aren't required on civilian shipping, neither are nuclear reactors. Need to compare apples to apples.

Take away the aircraft carrier launch system and you no longer have an aircraft carrier. The Gerald Ford is finding this out Can't launch and can't land. Already the most expensive floating target in the navy, I expect the shipyards will glean another billion or so to clean up the mess they made. 

 

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5 hours ago, bluewater15 said:

There goes good paying Jobs for American Sailors. Maybe just make a Amendment to the Jones Act allowing foreign built ships to operate in the USA with American sailors. I believe that the airline industry allows something like that. Shipping has take ideas from the airline industry... maybe we can take that idea. Would be sad to lose an entire industry for us. Another big reason for the Jones Act besides having good paying jobs is the National Security issue. If a major war does happen are we going to ask foreigners to ship our tonnage? A lot of people don’t understand how world trade works in general.... average joe has never even thought of ships. Doesn’t seem like USA has many friends anymore. I wouldn’t rely on some other country to ship our tonnage in an emergency when they would just rather watch us bleed. Besides I saw earlier about other countries having “monopolies”... its more like cabotage laws. And yes many countries have them!

You should look up cabotage, I don't think it means what you think it does. 

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(edited)

On 4/25/2019 at 6:40 PM, Ward Smith said:

There is no disagreement that the Jones Act raises the prices of goods shipped between ports in this country. Furthermore, the ostensible reason to keep it going, as an artificial monopoly, to "protect" domestic shipping and shipbuilding

I disagree. Truth be known the ostensible reason big oil wants to end the Jones Act is for taxes. 

Int'l Oil Companies pay very little US taxes. They play accounting games using transfer pricing to wholely owned subsidiaries in zero tax countries.

So for example EXXON TRADING Company domociled in Cayman Islands and flags ship in Cayman Islands buys LNG, Oil. Ethane, LPG, etc from EXXON USA in Texas for cost.  EXXON USA breaks even, so no income US Income taxes.  EXXON TRADING sells to buyer in Philadelphia at nice profit and pays no taxes in zero tax Cayman.  

The big oil companies used to sell product at a loss gaining even more tax shelter.  US Congress had to pass a law that stopped selling at a loss. 

Edited by Falcon

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The idea of using magnetic induction to launch planes is pretty cool. It will get dialed in.

Steam catapults were considered crazy at first. Soviets never could master them. 

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9 hours ago, Ward Smith said:

Take away the aircraft carrier launch system and you no longer have an aircraft carrier. The Gerald Ford is finding this out Can't launch and can't land. Already the most expensive floating target in the navy, I expect the shipyards will glean another billion or so to clean up the mess they made. 

 

The Gerald Ford is the first carrier to be equipped with the new electromagnetic catapault system, as opposed to the the 'old' steam catapault. This is why you have sea trials.

Take away a failed O-ring and you do not have a Space Shuttle. Take away a anti-stall software glitch and you do not have a 737 Max 8.

isn't any vessel, in any Navy, a floating target to someone? If carriers are such a naval liability, why are other countries rushing to build them?

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14 hours ago, Douglas Buckland said:

.

isn't any vessel, in any Navy, a floating target to someone? If carriers are such a naval liability, why are other countries rushing to build them?

" why are other countries rushing to build them? "

Air Power arm for a Tactical Nuclear Missle Launch system ??

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14 hours ago, Douglas Buckland said:

The Gerald Ford is the first carrier to be equipped with the new electromagnetic catapault system, as opposed to the the 'old' steam catapault. This is why you have sea trials.

Take away a failed O-ring and you do not have a Space Shuttle. Take away a anti-stall software glitch and you do not have a 737 Max 8.

isn't any vessel, in any Navy, a floating target to someone? If carriers are such a naval liability, why are other countries rushing to build them?

I'm all for rail guns, they're used in all the best sci-fi movies. Generals and admirals love all the latest gizmos. But Trump was right, getting it all to work properly, day in day out, not so easy. It's one thing to launch a dumb round at hypersonic speed it's another to launch a multi-million dollar plane with one or more multi-million dollar pilots aboard. 

Why do other countries want them? Carriers project power, anywhere in the world. As teddy bear Roosevelt said, "Walk softly and carry a big stick", this while parading a fleet around the world. A carrier can reach much further than a battleship as Midway taught us all. But don't forget how many were sunk in that battle. 

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11 hours ago, Ward Smith said:

I'm all for rail guns, they're used in all the best sci-fi movies. Generals and admirals love all the latest gizmos. But Trump was right, getting it all to work properly, day in day out, not so easy. It's one thing to launch a dumb round at hypersonic speed it's another to launch a multi-million dollar plane with one or more multi-million dollar pilots aboard. 

Why do other countries want them? Carriers project power, anywhere in the world. As teddy bear Roosevelt said, "Walk softly and carry a big stick", this while parading a fleet around the world. A carrier can reach much further than a battleship as Midway taught us all. But don't forget how many were sunk in that battle. 

I think the most valuable ships are submarines. They can hide and they carry devastation anywhere in the world. I am sorry, but I do think of surface ships as sitting ducks. Please tell me how wrong I am. I know they are needed for many tasks, but I fear for the sailors and for how much we spend on them. We have jet bombers all over the world. Do we need to build floating bases where we really need them? Artificial Islands like the Chinese are doing? 

 

 

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