This past week, the Jones Act became the poster child for everything that is wrong with government regulation — an outdated law hampering Puerto Rico’s ability to get the critical supplies it needs following a disastrous hurricane.
Thankfully, President Trump responded to the storm by waiving this archaic regulation temporarily, but in order to assist Puerto Rico in a timely recover, this rule needs to be more than paused — it must be repealed.
As Josh Siegel of the Washington Examiner explained, the Jones Act is a 1920s-era law that:
…prohibits tankers from hauling oil between U.S. ports unless those vessels are American-made, flagged and manned by a crew that is 75 percent U.S. citizens…Because of the high cost of using vessels that qualify under the Jones Act, critics say coastal shipping has declined, even though infrastructure experts contend it could be more efficient than delivery by trucks or rail.
A separate article for the Washington Examiner added that the Jones Act:
…is perniciously protectionist, deliberately creating an artificial scarcity of domestic shipping by boat, and thus driving up costs. In short, anyone shipping anything from a U.S. port to a U.S. port must use a U.S. ship. This drives up the costs of everyday life for residents of Hawaii, Alaska, Puerto Rico, and other U.S. possessions mostly accessible by sea.
The Jones Act makes it more expensive for people from such places to buy American products, or to sell their goods to the rest of the U.S. As Washington Examiner contributor Mark Perry noted, this law makes it roughly three times as expensive to ship oil from the Gulf states to New England (about $6 per barrel) as it is to ship the same amount of oil to Europe (about $2).
The special interests that defend the Jones Act say it helps keep Americans (a very small number of them) employed in the shipping industry. In fact, it just marshalls xenophobia and economic ignorance to make shipping much more expensive for those who live in hard-to-reach states and possessions.
As stated above, the Jones Act is a persistent burden on Puerto Rico, quite literally financially strangling these Americans by forcing them to shell out more money for energy.
Puerto Ricans continually suffer higher prices at the pump on any given day because politicians, nearly a century ago, decided to “protect American jobs” by legislating a ridiculous handout to U.S. shipbuilders and sailors.
With Puerto Rico’s economy decimated from the storm, waiving the Jones Act is simply not enough. The Jones Act must be repealed to lower energy prices and aid Puerto Rico in its recovery.
Lastly, this is not the first time the Jones Act has been waived — President Bush also halted the Jones Act in the aftermath of Hurricane Katrina.
Forgive me for stating the obvious, but if a federal regulation needs to be repeatedly waived after catastrophes so that it doesn’t impede critical recovery efforts, maybe that regulation is stupid.
As today’s Investor’s Business Daily observed, so far President Trump has both talked the talk and walked the walk on deregulating our economy. Let’s hope the Jones Act is next on his chopping block.