On August 8 and 9, 2023, wildfires destroyed the Hawaiian town of Lahaina, leaving many of its 13,000 residents homeless, another 106 dead, and 1300 still missing. Other areas on Maui, Hawaii’s second-largest island, and Hawaii’s Big Island were also affected. The devastation is awful with 2,207 homes destroyed and an estimated $5.5 billion in damage.
But as bad as the devastation is from these tragic acts of nature, you best believe the government is actively making it worse. Anytime a natural disaster hits an island there are additional logistical challenges to the response, but when it comes to US islands, there’s also a terrible, union-backed policy called the Jones Act getting in the way.
On August 10th, President Biden issued a disaster declaration, which authorizes federal aid for communities in harm’s way. But he has yet to issue a waiver for the Jones Act, which ultimately could spell life and death for those still waiting on relief efforts.
Food, generators, cots, meals, and even temporary housing are needed in such cases, and since Hawaii is an island they all must come by either plane or boat. But due to the Jones Act, those supplies and resources cannot take the most direct line of access to the people struggling.
As Ivis Garcia points out at The Conversation, “Hawaii is closer to California than Japan but thousands of miles away from both places. Because of U.S. laws, all government-paid assistance needs to originate in the United States. The same is largely true as well for private aid because of the Jones Act, a 1920 law that requires goods shipped between U.S. ports to be transported by vessels that belong to Americans and are primarily U.S.-operated.”
(The government has the power to issue a waiver of the Jones Act during disasters, Biden just hasn’t done so yet).
The Jones Act was passed in 1920 and it limits how cargo is transported by sea. It dictates that any cargo being shipped between US ports must be carried by US ships with American crews. It’s considered one of the oldest and worst cases of protectionism on the books. It was always a union-driven agenda item, which tracks, because unions are only able to secure higher wages for their members by making the costs of goods and services more expensive for everyone else.
America’s shipping industry (and its lobbyists) claim that the law is needed to protect their industry and guard national security. But as is usually the case when lobbyists claim health and safety concerns for their self-serving regulations, that’s bogus. Tons of foreign ships deliver cargo to US ports, and we rely heavily on other nations for many goods. Additionally, our own shipping industry has only gotten progressively worse since the law was passed.
50 years ago, America built around 18 ships a year. Last year? We built just one. Our fleet once boasted 250 ships, now there are 90. And we used to have over 400 American shipyards, today, there are about 150. Not only that, but it is 4-5 times more expensive to build a ship in the United States versus places like Japan or South Korea, according to the Cato Institute’s Scott Lincicome. That’s because the industry has no competition, and has stagnated—leading to less innovation, fewer options, and higher costs.
When you restrict access to supply, the costs for the demand always increase. It’s economics 101 and therefore no politician or lobbyist can claim ignorance of the true intent of this law. The Jones Act is in place to create and enshrine a government backed monopoly and it forces Americans to pay for it through higher prices.
It’s funny, you never seem to hear politicians like Amy Klobuchar or Josh Hawley—who spend a great deal of time trying to expand antitrust powers against “monopolies” in the tech sector—complain about this issue. The difference? This is an example of an actual monopoly that’s truly harming consumers, whereas the companies they constantly target are not. Which proves my ongoing point that antitrust is about control, not about competition.
Even in times of peace, the Jones Act costs the average Hawaii family about $1800 a year. It’s a major reason why the costs of goods are so much higher in US territories like Puerto Rico too. And it’s not even a secret, which is why everytime there’s a disaster, people immediately ask for a waiver.
Good public policies don’t need a waiver though. If it’s a bad idea during an emergency, it’s a bad idea, always. Americans shouldn’t have to wait for natural disasters to get relief from the disastrous union-backed regulations like the Jones Act.