Our wa­ter­ways pol­icy is crony cap­i­tal­ism dis­guised as pa­tri­o­tism

The Tribune (SLO) - - Opinion - BY GE­ORGE F. WILL

The pres­i­dent has re­ceived from one of his em­ploy­ees, Com­merce Sec­re­tary Wil­bur Ross, a re­port that prob­a­bly tells Ross’ em­ployer what he wants to hear: that im­ports of cars – “The Audis are com­ing! The Audis are com­ing!” – threaten “na­tional se­cu­rity.” This re­port is re­quired by our lack­adaisi­cal Congress so it can pre­tend to be in­volved in set­ting trade pol­icy. Af­ter the pres­i­dent’s yes-man says “Yes” to the na­tional se­cu­rity threat, the pres­i­dent can uni­lat­er­ally raise taxes (i.e., tar­iffs which are paid by Amer­i­cans) to slow the flow of cars to Amer­i­cans who want them.

Us­ing na­tional se­cu­rity as an ex­cuse for eco­nomic fool­ish­ness, in the ser­vice of cu­pid­ity, is noth­ing new. What is novel nowa­days is a leg­is­la­tor stand­ing athwart fool­ish­ness, yelling “Stop!” Al­though it is im­pos­si­ble to imag­ine Sen. Mike Lee yelling.

The Utah Repub­li­can, he of the white shirts, blue suits, sub­dued ties and mea­sured words softly spo­ken in stately ca­dences, lacks the de­meanor of a brawler spoil­ing for a fight. He has, how­ever, just picked one con­cern­ing a small sliver of some­thing vast – crony cap­i­tal­ism dis­guised as pa­tri­o­tism.

The Mer­chant Ma­rine Act of 1920, aka the Jones Act, was passed af­ter one war and sup­pos­edly in an­tic­i­pa­tion of oth­ers. Its pur­ported pur­pose was to en­cour­age the devel­op­ment of a mer­chant ma­rine suf­fi­cient for war or other “na­tional emer­gency.” Ninety-nine years later, the na­tion is in a “na­tional emer­gency” (pres­i­den­tial dis­ap­point­ment re­gard­ing his wall); emer­gen­cies and na­tional se­cu­rity crises mul­ti­ply as the ease of declar­ing them in­creases. Never mind. The Jones Act has failed to achieve its stated aims while in­flict­ing sub­stan­tial unan­tic­i­pated costs, en­rich­ing a few busi­nesses and unions, and pleas­ing the 16 con­gres­sional com­mit­tees and six fed­eral agen­cies that have over­sight ju­ris­dic­tion un­der the act.

Lee’s Open Amer­ica’s Wa­ters Act of 2019 would re­peal the Jones Act’s re­quire­ments that cargo trans­ported by wa­ter be­tween U.S. ports must travel in ships that are U.S.-built, U.S.owned, U.S. reg­is­tered and U.S.-crewed. Colin Grabow, Inu Manak and Daniel Iken­son of Wash­ing­ton’s Cato In­sti­tute demon­strate that largely be­cause of the Jones Act, the fol­low­ing has hap­pened:

One of the na­tion’s ge­o­graphic ad­van­tages – tens of thou­sands of miles of coast­line and in­land wa­ter­ways – has been min­i­mized by mak­ing it off-lim­its to for­eign com­pe­ti­tion in trans­porta­tion. This in­creases trans­porta­tion costs, which rip­ple through the pro­duc­tion process as a sig­nif­i­cant por­tion of the costs of goods. Be­cause of the Jones Act’s costly man­dates, less cargo is shipped by wa­ter, mer­chant mariners have fewer jobs and more cargo is car­ried by truck, rail and air, which are more en­vi­ron­men­tally dam­ag­ing than wa­ter trans­porta­tion. Two of Amer­ica’s most con­gested high­ways, I-95 and I-5, are along the At­lantic and Pa­cific coasts, re­spec­tively. Yet the amount of cargo shipped by wa­ter along the coasts and on the Great Lakes is about half the vol­ume of 1960. Since then, rail­road freight vol­ume has in­creased about 50 per­cent, and vol­ume by in­ter­city trucks – re­spon­si­ble for 75 per­cent of fed­eral high­way main­te­nance costs – has in­creased more than 200 per­cent.

A hog farmer in North Carolina pur­chases corn feed from Canada rather than Iowa be­cause de­liv­ery costs make the Iowa corn un­com­pet­i­tive. Al­though the United States is the world’s sec­ond largest pro­ducer of rock salt, Mary­land and Vir­ginia buy theirs for win­ter use from Chile be­cause of Jones Act ship­ping costs.

The Jones Act il­lus­trates how pro­tec­tion­ism cre­ates de­pen­dent in­dus­tries that then squan­der re­sources (in­ge­nu­ity, money) on ma­nip­u­lat­ing the gov­ern­ment.

Spurious “na­tional se­cu­rity” con­cerns tend to de­scend into slap­stick (“The Audis are com­ing!”) as with this hy­po­thet­i­cal hor­ri­ble imag­ined by a U.S ship­ping ex­ec­u­tive de­fend­ing the Jones Act: “I wouldn’t want North Korea mov­ing barges and tug­boats up and down the Mis­sis­sippi River. If you don’t have this law, that could oc­cur.” Huck’s raft crowded off the river by Kim Jong Un’s ves­sels? Make your blood boil? Or your ribs ache from laugh­ter?

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