The numbers behind the Jones Act - Splash247

Professional Mariner Forum
61

Once again you are ignoring the human factor. The perception that it will occur is strong with shipowners and mariners, and perception drives them to circle the wagons.

Want to change that? Have the members of the Cato Institute swear with one hand on a copy of “Atlas Shrugged” ( signed by Ayn Rand) that they have no intention of agitating for the cabotage provision of the Jones Act to be repealed if the act is altered, and will fight against anyone who tries to do so. Then you’ll find the maritime world more willing to listen. They too want to modernize the law.

Will the CI swear to this? or is…

…just sophistry? (That means “bullshit” in ancient Greek :grinning:)

62

Yes, and the 85 U.S.-flagged ships that operate internationally are all foreign-built.

63

I actually appreciate that’s he’s willing to come here to a known hostile environment and engage. Otherwise we’re just in an echo chamber.

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64

Matson has 5 US built container/con-ro ships operating internationally, but your point is taken.

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65

Well aware of the perception. I just find it baseless.

Regarding Cato, I can only speak for myself. If US-built was repealed and a waiver system instituted so Americans could use foreign flags if no US vessel was available or didn’t exist (e.g. for transporting LNG), I’d probably move on and spend more time attacking other dumb laws like the U.S. sugar program. Free traders live in a target-rich environment.

As for the maritime industry, that’s great to hear about interest in modernizing the law. But I’m skeptical. In my experience, there is zero receptivity to change of any kind—certainly not by those that lobby on the industry’s behalf in DC. And it makes sense. Shipyards don’t want to get rid of US-built and neither do the vessel operators who a) paid top dollar for those ships and would see their book value plummet and b) view US-built as a barrier to market entry against competitors. Maritime labor should hate the requirement, but from what I can tell they either don’t care or are simply too scared of clashing with the shipbuilders and operators. So we keep the same policies in place and keep getting the same poor results.

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I’m fairly certain all the 150+ vessels on the list he’s drawing from (which of course does not come close to representing the totality of US vessels carrying freight or other cargo who would be affected by repeal) are certificated for international service, including the US built ones, not just 85 who don’t hold COASTWISE endorsements. EVERGREEN STATE, EMPIRE STATE, etc…. He just grabbed the MARAD list looked at the total for non Jones Act eligible and assumed.

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Oh here’s Colin pulling out the old fave—get the US mariners to see the build requirement as a barrier to their jobs and getting more of them. Same old same old. Next move is more of that magically thinking, that somehow if the build requirement were removed benevolent owners would buy more manned modern ships for them to sail on! Of course the Cato Institute and its free traders want to get rid of the US mariners too: https://www.cato.org/cato-online-forum/why-jones-acts-us-citizenship-quota-should-be-repealed

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68

If you want to believe that vessel costs have zero bearing on either the number of ships or the fleet’s age profile, knock yourself out. I find that to be absolutely crazy, but you do you. But I will point out this from a 2006 study on short sea shipping in the US (or lack thereof): Four Corridor Case Studies of Short-Sea Shipping Services - Google Drive

“Ocean carriers perceived that the high capital cost of U.S.-built ships was the single largest
obstacle to successful implementation of domestic coastal short-sea shipping services.”

As for having the ability to hire non-US employees, that’s just preaching what we practice. We hire non-U.S. citizens at Cato. Plenty of U.S. companies do. Having access to foreign talent is a good thing that makes our economy stronger.

69

The Cato Institute and the Kochs have interesting ideas about what’s best for the USA. Back in 1980 the late David Koch ran for vice president and laid out the family ideals. Since then they’ve smoothed out the message, gotten smarter but the goals are the same and they are gaining ground!
From David Koch’s Platform 1980.

“We favor the abolition of Medicare and Medicaid programs.”
“We oppose any compulsory insurance or tax-supported plan to provide health services, including those which finance abortion services.”
“We also favor the deregulation of the medical insurance industry.”
“We favor the repeal of the fraudulent, virtually bankrupt, and increasingly oppressive Social Security system. Pending that repeal, participation in Social Security should be made voluntary.”
“We propose the abolition of the governmental Postal Service. The present system, in addition to being inefficient, encourages governmental surveillance of private correspondence. Pending abolition, we call for an end to the monopoly system and for allowing free competition in all aspects of postal service.”

“We oppose all personal and corporate income taxation, including capital gains taxes.”

“We support the eventual repeal of all taxation.”

“As an interim measure, all criminal and civil sanctions against tax evasion should be terminated immediately.”

“We support repeal of all law which impede the ability of any person to find employment, such as minimum wage laws.”

“We advocate the complete separation of education and State. Government schools lead to the indoctrination of children and interfere with the free choice of individuals. Government ownership, operation, regulation, and subsidy of schools and colleges should be ended.”

“We condemn compulsory education laws … and we call for the immediate repeal of such laws.”

“We support the repeal of all taxes on the income or property of private schools, whether profit or non-profit.”

“We support the abolition of the Environmental Protection Agency.”

“We support abolition of the Department of Energy.”
“We call for the dissolution of all government agencies concerned with transportation, including the Department of Transportation.”
“We demand the return of America’s railroad system to private ownership. We call for the privatization of the public roads and national highway system.”

“We specifically oppose laws requiring an individual to buy or use so-called “self-protection” equipment such as safety belts, air bags, or crash helmets.”
“We advocate the abolition of the Federal Aviation Administration.”
“We advocate the abolition of the Food and Drug Administration.”
“We support an end to all subsidies for child-bearing built into our present laws, including all welfare plans and the provision of tax-supported services for children.”
“We oppose all government welfare, relief projects, and ‘aid to the poor’ programs. All these government programs are privacy-invading, paternalistic, demeaning, and inefficient. The proper source of help for such persons is the voluntary efforts of private groups and individuals.”
“We call for the privatization of the inland waterways, and of the distribution system that brings water to industry, agriculture and households.”
“We call for the repeal of the Occupational Safety and Health Act.”
“We call for the abolition of the Consumer Product Safety Commission.”
“We support the repeal of all state usury laws.”

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70

I see there obviously isn’t enough work at the CI these days that Colin has taken to trolling the gCaptain forum.

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71

So let’s talk directly about oil/coal/gas company subsidies. If there are any companies that don’t need subsidies, it’s them. And yet here is a list of direct subsides they receive, calculated as of 2019. My source is listed at the end.

A direct question: Does CATO believe these subsidies, and any other subsidies received by U.S. oil/coal/gas companies directly or indirectly, should be eliminated?

Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active)…eliminating tax breaks for intangible drilling costs would generate $1.59 billion in revenue in 2017, or $13 billion in the next ten years.

Percentage Depletion (26 U.S. Code § 613. Active)…eliminating percentage depletion for coal, oil and natural gas would generate $12.9 billion in the next ten years.

Credit for Clean Coal Investment Internal Revenue Code § 48A (Active) and 48B (Inactive). … Eliminating credits for investment in these projects would save $1 billion between 2017 and 2026.

https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs

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72

A direct question: Does CATO believe these subsidies, and any other subsidies received by U.S. oil/coal/gas companies directly or indirectly, should be eliminated?

Let me first be clear that Cato doesn’t take institutional positions and that its employees have their own views. As for subsidies, I consider myself anti-subsidy although I can perhaps be convinced in certain circumstances. For example, I don’t have a big problem with the Maritime Security Program as I view it as payment for services rendered by making ships available in case of war/crisis (although I do think it could be made more efficient).

With regard to the three items you listed, I’m inclined to oppose the clean coal credit as to me it smacks of government picking winners and losers and favoring a particular approach to environmental problems (I favor taxing polluting activities and letting markets identify the optimal remedies). As for the other two, I have no idea. I’m not familiar enough with the industry to know if these are sensible deductions or dumb giveaways (always a strong possibility with tax deductions). Would probably need a better understanding of both tax law and the energy industry to have a strong opinion.

Apologies if this seems like a dodge, but I just don’t know enough to really comment with any strong conviction.

73

Are you sure you want to call tax deductions subsidies? Because those who live in glass houses shouldn’t throw stones.

There are numerous tax credits and deductions available to maritime companies but I haven’t heard them referred to as subsidies.

PPP loan forgiveness is publicly available.

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74

Before we repeal the Jones Act, we first need to amend the immigration laws to allow work visas for “Think Tanks” and the “News Media” to hire much cheaper foreign researchers and writers from India that are much better at math.

This would supposedly save American consumers a few pennies!

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75

Bearing in mind that the Jones Act was never about efficiency, but of national interest and national security, this is an observation, not a question or a rebuttal:

   Getting the Ad hominem out of the way, the Cato Institute is a bastion of the Old money Republicans- the ones being pushed out of federal office by their own party and also the ones thankfully called to the carpet by the Creator.  The Cato Institute has no future in a populist Republican Party. They are the think tank for the Benevolent Guild of Buggy Whip Artificers.  As such their influence is happily declining among former supporters. The Cato Institute is deeply incestuous and self-interested.

Given their current bad odor among conservatives, of which I am, myself, I’m wondering what separates the Cato Institute from Mother Jones?
theyreboththesamepicture.jpeg
Had this been a serious article, it would have followed the money in more depth, focusing more on the inland US where the Act itself has a significant impact as a trade protection act… but to be fair, ADM, who can sometimes be mistaken for the Monopoly board game’s mascot, wouldn’t want those numbers posted or an impact analysis drawn up for inland marine transport. Let’s also not forget railroad interests, who also get soggy and hard to light when the Jones Act comes up, and this is hardly news. Any sort of claims to a mandate from American business to revisit the Jones Act is sketchy at best. What’s that saying about knowing someone by the quality of their enemies?
Finally, the Cato folks have always had an issue with tunnel vision, circling back to unaddressed questions as to workforce training and national defense (the MSC 2021 Turbo Activation called), maintaining shipbuilding skills (omitting that 2nd and 3rd-tier yards exist and are damn busy too) and, again, glossing over our massive and growing inland fleet.
And really, the tone deafness is risable. The good folks at the Cato Institute might want to leave the tennis club at their summer home in Newport to see if the American public likes the smell of cancelling Christmas for a half million families or so and importing foreigners to do them nationwide. Moving jobs offshore is a bit easier when it’s quiet.

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76

They’re is more to the Jones Act than the build requirement and American mariner requirement. As was mentioned earlier on the thread, many in the industry want to modernize the Jones Act but are afraid of allowing ANY changes because of people like you that want to simply repeal the whole thing.

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