No Jones Act Cost to Puerto Rico? I Have My Doubts

In anew op-ed I take issue Rep. Duncan Hunter (R-CA) for his unstinting support of maritime special interests and the Jones Act at the expense of average Americans. Particularly egregious is Hunter ’s promotion of a recent report funded by a special interest group, the American Maritime Partnership, whichmakes the incredible claim that the Jones Act imposes no cost to consumers in Puerto Rico. Indeed, Hunter actuallypresided over a gathering of the House Subcommittee on Maritime Transportation meant to highlight its dubious findings.While Hunter ’s support for the AMP and the unseemly nexus between legislators and maritime special interests is the op-ed’s focus, the shortcomings of the AMP-funded report are worth exploring in greater detail.From simply a theoretical perspective, the notion that the Jones Act would leave consumers in Puerto Rico unscathed is highly implausible. The Jones Act, which among other provisions prohibits foreign-flagged ships from transporting cargo between domestic ports and Puerto Rico, is a protectionist law. Keeping out competition is the entire point. It violates our understanding of economics to believe this is consequence-free for either costs or prices. Further note that competition among Jones Act carriers that provide service to Puerto Rico is sufficiently restrained that several of them werefound guilty of price fixing.Even if we were to believe that a perfectly competitive market exists in Puerto Rico despite the Jones Act ’s rest...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs