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Notes -
I would love to see a Twitter-style poll with the following options:
A) Keep Jones Act, don't implement Trump tariffs
B) Keep Jones Act, implement Trump tariffs
C) Repeal Jones Act, don't implement Trump tariffs
D) Repeal Jones Act, implement Trump tariffs
I'd love to see not only percentages, but some mental models from the people in different categories. This in inspired by seeing both Zvi's latest on the Jones Act and MR linking one estimate related to possible Trump tariffs.
Zvi doesn't sum it up super nicely, but estimates I see of the value of repealing the Jones Act are \approx 3% reduction in cost of goods (just due to the flagging effect) and a claim that a plausible OOM estimate is \approx 3% GDP increase (I lost the thread the other day on how to put approximately signs in without strikeout). The randomly-linked twitter post estimates price increases due to tariffs mostly around 2-3%, with some specific sectors rising up to 13%.
I suspect that most people just don't mentally look at economic estimates and compare them to each other, but I don't know what else goes on in their heads. If they're trying to justify one or the other position, how do they go about it? Is it at all plausible if we apply their justification to the other question?
Finally, heresthetics. Could an 'omnibus' option (D) bill be pushed, saying, "That old, bad, just banning stuff style protectionism clearly failed; we shot ourselves in the foot and didn't even manage to actually protect an industry in the process. Instead, tariffs will be the way; at the very least, taxes are slightly more pleasing to the economist than specific bans, as they still allow price signals to work somewhat and inspire new solutions, while at least collecting some revenue for a debt-strapped gov't"? Obviously, people would horrifically oppose it, but what would they say when they oppose it? What would the reasoning be? How would that reasoning come across to the people who would respond with a different choice from the list?
I'm going to take a very controversial stance and support keeping the Jones Act. If the goal is to develop US shipbuilding for security reasons, there needs to be an actual shipbuilding industry. US shipbuilding is currently so horrendously inefficient that it will be instantly vaporized by Korea, Japan and... China most of all. US shipbuilding is not 50% less competitive, they're 500% less competitive. Instant loss. And if you nuke your shipbuilding sector who is going to build warships? Why would you want to make your warships within the Chinese missile death zone? Real great powers know how to make their own ships.
It makes zero sense to do all this onshoring and neo-mercantilism in microchips, strategic materials and leave out shipbuilding. There are all kinds of things you could do to introduce efficiencies and market discipline without razing the industry to the ground. Shock therapy is not the answer, there needs to be careful, judicious reform. Import technology and best practices from allies, reform regulations, bring in technical experts, break up cartels or cozy price fixers. Nationalize - China State Shipbuilding is the biggest shipbuilder in the world and is profitable too.
How is it that the US can build rockets, jet fighters and cars but ships are beyond them... because they protected their own market? The Chinese protect their own auto industry - lo and behold they produce huge numbers of cheap cars. The Koreans protected their auto industry for decades and turned it into a competitive export industry. The EU protects its agriculture and isn't a famine-stricken wasteland. Americans aren't some alien race that has an inherent -500% to Shipbuilding, there must be other problems than protection.
This doesn't really seem like a good argument for keeping the Jones Act. If we're not good enough at making ships, why not just throw in the towel? You wouldn't pooh-pooh the nation of Haiti for importing computer chips instead of trying to make their own, it'd be foolish to expect them to just magically have the physical and human capital needed to do so.
Haiti is a small shithole country that, last I checked, was controlled by a cannibal who barbecued people. They're so incompetent and disorganized that the Presidential Palace still hasn't been repaired after an earthquake struck in 2010.
The US is a huge, highly developed country with aspirations to world hegemony. They produce plenty of advanced technology. Why can't they find the physical or human capital to build ships efficiently? How hard can it be?
https://en.wikipedia.org/wiki/List_of_countries_by_ship_exports
The Italians can do it. The Germans can do it. The Finns can do it! White people spent about 500 years clobbering the rest of the world because we had better ships, the US relies on its navy for relevance in world affairs. This planet is 75% water. Shipbuilding is not something that can be sacrificed.
My point is that you can't simply will your way towards robust institutions and the necessary human capital through saying "Be Tough" on the subject. Either you have an actual plan to achieve the thing you want directly, or you admit it's beyond you for lack of time or resources and turn to alternatives. We have allies who presumably do know a thing or two about how to build ships and maintain the industries needed to build those ships, and if needed, we can just rely on them. Hell, why not let the Europeans build us some warships and we can count that towards their contributions towards NATO, assuming that's still a hot subject?
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