WEBVTT - The Great Jones Act Debate 0:00:02.720 --> 0:00:16.439 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.520 --> 0:00:21.400 Hello and welcome to another episode of the All Thoughts Podcast. 0:00:21.520 --> 0:00:22.959 I'm Tracy Alloway. 0:00:22.600 --> 0:00:23.720 And I'm Jill Wisenthal. 0:00:23.920 --> 0:00:25.919 Joe, this is the big one. We are about to 0:00:26.040 --> 0:00:29.560 ruin our most long running joke all for this. 0:00:30.840 --> 0:00:33.120 What is our next most running joke? Anyway? Yes, we 0:00:33.159 --> 0:00:34.040 are ruining a lot. 0:00:34.120 --> 0:00:37.400 So we've joked for years and years and years about 0:00:37.400 --> 0:00:39.600 how we should do an episode on the Jones Act 0:00:39.800 --> 0:00:43.080 because it's come up obviously in dozens of episodes. We 0:00:43.120 --> 0:00:45.520 did actually talk about it quite a bit in different contexts, 0:00:45.640 --> 0:00:49.839 but we've never done an episode actually talking about the 0:00:49.880 --> 0:00:50.600 infamous law. 0:00:51.000 --> 0:00:53.760 That's right, and since we waited so long, I guess 0:00:53.960 --> 0:00:55.800 we had to do it a little bit differently. 0:00:55.840 --> 0:00:56.120 Style. 0:00:56.160 --> 0:00:59.040 We had a style, yep. So for those of us 0:00:59.040 --> 0:01:02.160 who came to our life event in Washington, DC recently, 0:01:02.200 --> 0:01:05.120 you will have seen exactly what format we did this in. 0:01:05.200 --> 0:01:07.720 But it's a debate. So we had someone who is 0:01:07.959 --> 0:01:11.639 pro Jones Act debating with someone who is anti Jones 0:01:11.720 --> 0:01:15.520 Act live on stage. Things got heated, things got emotional, 0:01:15.680 --> 0:01:17.760 but always entertaining and informative. 0:01:17.880 --> 0:01:20.440 It was heated, you know, I've joked, you know, like 0:01:20.640 --> 0:01:23.959 people have very strong feelings about the Jones Act, And 0:01:24.000 --> 0:01:27.120 when we did it live on stage, we separated our 0:01:27.160 --> 0:01:28.800 two guests at the end of the stage, you know, 0:01:28.880 --> 0:01:31.200 sort of tongue in cheek you out because but actually, 0:01:31.240 --> 0:01:33.880 you know, it's like really intensive. People feel very strongly 0:01:34.400 --> 0:01:37.800 about this law, which restricts if you're going to ship 0:01:37.880 --> 0:01:40.479 something from one point in the US to another point 0:01:40.520 --> 0:01:43.319 in the US by water, it has to be on 0:01:43.600 --> 0:01:47.200 a US built, a US crewed, in US flagged ship. 0:01:47.400 --> 0:01:49.080 People feel very strongly. 0:01:48.720 --> 0:01:49.360 About this law. 0:01:49.560 --> 0:01:52.000 That's right, and it's kind of interesting also to look 0:01:52.040 --> 0:01:55.160 at it as a little peatree dish of industrial policy. 0:01:55.800 --> 0:01:58.040 I think is one of the reasons we first started 0:01:58.080 --> 0:02:00.320 getting interested in this, along with a lot of the 0:02:00.320 --> 0:02:04.600 supply chain disruptions that we were experiencing around the pandemic time. 0:02:05.120 --> 0:02:09.040 But our two debaters were Zadafuntest, the vice president for 0:02:09.120 --> 0:02:13.040 Government Affairs at the Transportation Institute, and Colin Grabow, and 0:02:13.160 --> 0:02:17.239 associate director at the Cato Institute's Herbert A. Deful Center 0:02:17.280 --> 0:02:21.240 for Trade Policy Studies. Zada took the pro side and 0:02:21.360 --> 0:02:24.720 Colin took the anti side, And as I said, we 0:02:24.800 --> 0:02:27.880 had some pretty good arguments on both sides. So take 0:02:27.919 --> 0:02:30.880 a listen see if it changes your mind. I'm sure 0:02:30.880 --> 0:02:33.720 if you're listening to this you probably already have an opinion. 0:02:33.919 --> 0:02:37.320 But here we go. Before we start, I got to 0:02:37.360 --> 0:02:39.959 ask how many people have heard of the Jones Act. 0:02:39.960 --> 0:02:40.160 Here? 0:02:42.600 --> 0:02:45.840 Wait, actually, let's just hear, like get a temperature of 0:02:45.919 --> 0:02:49.079 both sides. So shout if you think the Jones Act 0:02:49.080 --> 0:02:54.840 should be repealed, and shout if you think we should 0:02:55.000 --> 0:02:55.960 keep the Jones Act. 0:02:58.000 --> 0:03:00.919 Wow, shout if you just feel strongly about the Jones 0:03:00.960 --> 0:03:06.079 Act either way. Yeah, all right, everyone has an opinion. Okay, 0:03:06.160 --> 0:03:09.359 we are giving up on our longest running joke and 0:03:09.440 --> 0:03:11.760 finally doing the Jones Act episode. We thought we'd do 0:03:11.840 --> 0:03:14.680 something a little bit special. Instead of just having one guest, 0:03:14.720 --> 0:03:16.960 we actually have two. It's going to be an all 0:03:17.040 --> 0:03:20.440 thoughts debate, someone arguing the pro side and someone on 0:03:20.520 --> 0:03:21.760 the con side. 0:03:21.919 --> 0:03:24.800 That's right, We're not going to formally declear a winner. 0:03:25.240 --> 0:03:27.800 Everyone's a winner. They're not formal. 0:03:27.600 --> 0:03:31.120 Rules in terms of you know, there's no mike mute 0:03:31.200 --> 0:03:34.120 or anything. But we are hoping we are going to 0:03:34.200 --> 0:03:37.920 have a spirited discussion about this very controversial law. People 0:03:37.960 --> 0:03:40.920 feel really strongly about this law one way or another, 0:03:41.200 --> 0:03:42.360 and so we are going. 0:03:42.160 --> 0:03:45.280 To finally, we don't actually do a lot of debates on. 0:03:45.200 --> 0:03:46.880 The show at It's a rule at my house that 0:03:46.920 --> 0:03:49.280 you can't talk about politics or the Jones Act or 0:03:49.320 --> 0:03:53.040 crypto at Thanksgiving. Okay, So without further ado, we do 0:03:53.120 --> 0:03:55.120 have the perfect guests. We're going to be speaking with 0:03:55.400 --> 0:03:59.000 Zada Funtest. She is the vice president for Government Affairs 0:03:59.040 --> 0:04:00.760 at the Transportation Institute. 0:04:01.120 --> 0:04:02.600 And we have Colin Grabow. 0:04:02.640 --> 0:04:05.360 He is a policy analyst at the Cato Institute. So 0:04:05.480 --> 0:04:08.120 welcome to the stage, Zarda and Colin. 0:04:11.200 --> 0:04:14.120 All right, Colin and Sarah, thank you so much. We're 0:04:14.160 --> 0:04:17.600 finally talking the Jones Act. Colin, why don't we start 0:04:17.640 --> 0:04:20.159 with you? Why should we get rid of the edge? 0:04:20.560 --> 0:04:22.520 Why did you even agree to come out here and 0:04:22.560 --> 0:04:26.960 talk about some random shipping law from the early nineteen hundreds, 0:04:27.400 --> 0:04:29.080 and why do you devote time to it and why 0:04:29.080 --> 0:04:29.840 do you want to kill it? 0:04:30.400 --> 0:04:33.160 Well, Joe Tracy, first off, thanks for having me to 0:04:33.200 --> 0:04:35.760 debate this issue. Thanks for doing ending the long running 0:04:35.800 --> 0:04:39.080 joke and finally talking about it. So, yeah, the Jones Act, Well, 0:04:39.200 --> 0:04:41.839 why am I so against it? I think the US 0:04:41.920 --> 0:04:44.720 maritime policy should try to achieve two goals. It should 0:04:44.760 --> 0:04:48.400 provide us with efficient domestic transportation by water, which is 0:04:48.440 --> 0:04:50.760 really important because we have lots of water in the 0:04:50.839 --> 0:04:54.000 United States. We have thousands of miles of coastline home 0:04:54.040 --> 0:04:57.120 to major metropolitan areas. We have the Great Lakes, we 0:04:57.200 --> 0:04:59.880 have a vast network of inland waterways, have a. 0:05:00.160 --> 0:05:01.760 Contiguas and territories. 0:05:04.680 --> 0:05:08.320 So we have this big resource and we totally underutilize 0:05:08.360 --> 0:05:11.719 it by making the cost of transportation so expensive. The 0:05:11.760 --> 0:05:14.560 other thing we need to do is meet national security goals. 0:05:14.600 --> 0:05:17.400 We need to have shipyards, we need to have ships, 0:05:17.440 --> 0:05:19.599 we need to have mariners to crue those ships. And 0:05:19.600 --> 0:05:21.760 I don't think the Jones Act does a good job 0:05:21.800 --> 0:05:24.480 of meeting either one of those goals. So I talked 0:05:24.480 --> 0:05:27.159 about shipping water transfer being expensive. 0:05:27.160 --> 0:05:27.760 Why is that? 0:05:27.960 --> 0:05:29.640 Well, we should back up and say what is does 0:05:29.640 --> 0:05:31.760 the Jones Act? Do Jones Act? 0:05:31.880 --> 0:05:34.480 Everyone's giving history lessons tonight, so you might as well 0:05:34.520 --> 0:05:35.520 go all the way back. 0:05:36.160 --> 0:05:39.240 Oh, so the Jones Act is section twenty seven. If 0:05:39.240 --> 0:05:42.120 the Merchant mari Enact of nineteen twenty was essentially states 0:05:42.160 --> 0:05:44.320 that if you want to move goods by water, you 0:05:44.320 --> 0:05:46.600 have to use a vessel that meets for conditions, it 0:05:46.640 --> 0:05:49.320 has to be US flagged, it has to be US built, 0:05:49.680 --> 0:05:51.840 it has to be crewed by Americans. It has to 0:05:51.839 --> 0:05:54.400 be at least seventy five percent owned by Americans. Now, 0:05:54.400 --> 0:05:59.159 these provisions make water transportation extremely expensive. Less than one 0:05:59.200 --> 0:06:02.040 percent of the world world ships comply with the US 0:06:02.120 --> 0:06:04.799 flag requirement. That means ninety nine percent of the world 0:06:04.800 --> 0:06:06.520 ships are off the table if you want to move 0:06:06.560 --> 0:06:08.839 something within the United States. If you look at a 0:06:08.960 --> 0:06:12.440 map of all the ships operating than US waters, they're. 0:06:12.279 --> 0:06:13.279 Full of foreign ships. 0:06:13.279 --> 0:06:16.080 We have foreign ships everywhere. We can't use them. So right, 0:06:16.120 --> 0:06:19.920 there's let's supply the US flag ships are about four 0:06:19.960 --> 0:06:23.400 times more expensive to operate than foreign flagships, and when 0:06:23.400 --> 0:06:25.960 it comes to building that ship, they cost about four 0:06:26.000 --> 0:06:29.440 to five times more to build than those built overseas, 0:06:30.000 --> 0:06:32.320 so that has huge capital costs. 0:06:32.360 --> 0:06:32.880 You put that. 0:06:32.800 --> 0:06:35.799 Combination together and you're going to get very expensive shipping. 0:06:36.160 --> 0:06:39.000 You know how expensive. There was a Federal Reserve Bank 0:06:39.000 --> 0:06:40.840 of New York study in twenty twelve. The founder was 0:06:40.920 --> 0:06:43.320 twice as expensive to send a container from the East 0:06:43.320 --> 0:06:46.480 Coast to Puerto Rico, where the Jonzac applies as to 0:06:46.600 --> 0:06:50.520 send to neighboring Jamaica or the Dominican Republic. In twenty seventeen, 0:06:50.640 --> 0:06:53.760 the CEO of a JONESAC shipping company admitted that Jones 0:06:53.839 --> 0:06:57.400 A tankers were three to four times more expensive than 0:06:57.440 --> 0:07:00.680 internationally flag tankers. I mean just yesterday at Center and 0:07:00.800 --> 0:07:04.680 you in Connecticut rather testify for the state legislature, saying 0:07:04.720 --> 0:07:06.600 that his first job out of college, he used to 0:07:06.640 --> 0:07:09.080 work in bulk shipping, and that moving goods within the 0:07:09.160 --> 0:07:13.320 United States was five, sometimes ten times more expensive than 0:07:13.400 --> 0:07:17.200 using internationally flagged vessels. So this is the profound cost. 0:07:17.240 --> 0:07:20.840 I mean, distance is a barrier to a trade between Americans, 0:07:20.880 --> 0:07:24.400 and this makes water transportation incredibly expensive. It's a barrier 0:07:24.680 --> 0:07:26.200 just doing business with each other. 0:07:26.640 --> 0:07:28.560 Okay, so the one thing we can agree on is 0:07:28.720 --> 0:07:32.200 America is hashtag blessed in terms of inland water ways. 0:07:32.480 --> 0:07:35.600 But Sada, I want to bring you in, so feel 0:07:35.640 --> 0:07:37.960 free to give us your own history lesson. But the 0:07:38.040 --> 0:07:42.240 Jones Act doesn't exist just to boost prices of shipping. 0:07:42.320 --> 0:07:45.640 There are other reasons, such as security. So why don't 0:07:45.640 --> 0:07:48.320 we go way back in history and talk a little 0:07:48.320 --> 0:07:50.680 bit more about why this act actually exists? 0:07:50.800 --> 0:07:53.160 Sure, So the reasons for the Jones Act are the 0:07:53.160 --> 0:07:54.840 same today as they were. 0:07:54.760 --> 0:07:56.640 When it passed in nineteen twenty. 0:07:56.960 --> 0:07:59.720 And also some form of you know, Jones AC can 0:07:59.760 --> 0:08:02.920 also be referred to as cabotage laws. Some former cabotage 0:08:02.960 --> 0:08:03.760 law has existed. 0:08:03.840 --> 0:08:05.360 What's cage meanin. 0:08:05.120 --> 0:08:07.600 It basically means if you're moving goods between two points, 0:08:07.640 --> 0:08:09.880 that you want those goods to move on a vessel 0:08:09.920 --> 0:08:13.160 register to your country. Right, And it's really extremely common. 0:08:13.240 --> 0:08:16.040 Eighty percent of the world's coastline is governed by some 0:08:16.080 --> 0:08:17.120 former cabotage. 0:08:17.360 --> 0:08:18.680 You see it in other industries. Right. 0:08:18.720 --> 0:08:21.880 You can't take air China from New York to la Right. 0:08:22.320 --> 0:08:23.760 So it's extremely common. 0:08:23.520 --> 0:08:25.240 Across modes across the world. 0:08:25.720 --> 0:08:27.200 But I love the Jones Act, and I love it 0:08:27.280 --> 0:08:30.080 so much you can really I like to put the 0:08:30.080 --> 0:08:34.600 reasons I like it into three categories. Economic security, national security, 0:08:34.640 --> 0:08:38.920 and homeland security. Economic security is pretty obvious, right, because 0:08:38.920 --> 0:08:42.120 of that US crew US owned requirement, It's created about 0:08:42.120 --> 0:08:44.960 six hundred and fifty thousand jobs, six hundred and fifteen 0:08:45.040 --> 0:08:50.400 thousand and one if you include Collins. And also all 0:08:50.480 --> 0:08:56.520 those and all those jobs are for Americans, right, Those 0:08:56.520 --> 0:08:59.960 Americans are paying taxes. Those companies are paying American taxes. 0:09:00.520 --> 0:09:05.120 That economic security also includes self sufficiency, which especially matters 0:09:05.120 --> 0:09:07.160 in our non contiguous trades, which I hope we get 0:09:07.160 --> 0:09:09.800 into a little bit more. The men and women who 0:09:09.880 --> 0:09:12.920 crew our Jones Act vessels are the exact same people 0:09:12.920 --> 0:09:16.319 who crew our sealed vessels in time of emergency. Not 0:09:16.360 --> 0:09:18.920 only that, but you also get a shipyard industrial base. 0:09:19.040 --> 0:09:20.640 I've heard you all talk on the show. You all 0:09:20.679 --> 0:09:24.440 well know that navy shipbuilding is really feast or famine, right. 0:09:24.480 --> 0:09:27.880 There's a lot of unpredictability in that market, and so 0:09:27.960 --> 0:09:30.320 the Jones Act is kind of a final line of 0:09:30.360 --> 0:09:33.520 defense that ensures you do have some shipyard workers. You 0:09:33.600 --> 0:09:36.480 have a shipyard industrial base that can be spun up 0:09:36.559 --> 0:09:39.640 when needed. Third category is homeland security. 0:09:39.720 --> 0:09:41.080 Right, that's pretty obvious. 0:09:41.200 --> 0:09:44.360 You don't want to just open up our beautiful inland waterways, 0:09:44.400 --> 0:09:45.559 our great lakes. 0:09:45.559 --> 0:09:46.640 To the cheapest option. 0:09:47.080 --> 0:09:50.480 The US flag that Colin mentioned matters quite a bit, right. 0:09:50.559 --> 0:09:53.200 It means that our vessels are inspected by the Coastguard. 0:09:53.480 --> 0:09:56.000 We know that they're not polluting and linking. It means 0:09:56.040 --> 0:09:58.360 that the mariners are known by the Coastguard. They've gone 0:09:58.360 --> 0:10:01.480 through background checks, they've been t trained to the highest 0:10:01.480 --> 0:10:05.440 standard worldwide. And so you know, think about those inland waterways. 0:10:05.440 --> 0:10:08.040 Those are you know, those run by stadiums, they run 0:10:08.080 --> 0:10:09.960 by refineries, they run. 0:10:09.840 --> 0:10:10.920 By personal homes. 0:10:11.200 --> 0:10:14.280 You don't want to just have whoever there just because 0:10:14.320 --> 0:10:16.680 they happen to be the cheapest and save a couple bucks. 0:10:16.960 --> 0:10:18.920 Okay, but thank you first of all. 0:10:18.960 --> 0:10:21.000 And I take your point about the six hundred and 0:10:21.040 --> 0:10:25.800 fifty thousand jobs, but you know there's three hundred something 0:10:25.920 --> 0:10:31.120 million Americans who aren't employed by the Jones Act per 0:10:31.280 --> 0:10:36.240 Collins argument, paying more for any goods. Why should the 0:10:36.280 --> 0:10:39.000 rest of US three hundred and thirty million Americans who 0:10:39.000 --> 0:10:41.840 aren't employed, and me and Tracy maybe partially because it 0:10:41.840 --> 0:10:46.040 comes up so often, who aren't Jones Act employed? What 0:10:46.120 --> 0:10:48.120 about the cost of that? So why should we be 0:10:48.120 --> 0:10:48.800 bearing that cost? 0:10:48.880 --> 0:10:50.960 So I take it to the with the cost argument, right, 0:10:51.000 --> 0:10:52.839 and I don't necessarily think that's true. You can look 0:10:52.840 --> 0:10:55.120 at the US Virgin Islands, right, which does not have 0:10:55.160 --> 0:10:57.920 the Jones Act, and compare prices there to Puerto Rico, 0:10:58.200 --> 0:11:00.800 and you'll see that the Virgin Islands is actually more expensive. 0:11:01.360 --> 0:11:04.520 And what matters to consumers isn't just cost anyway, right, 0:11:04.600 --> 0:11:08.120 It's reliability. It's that stability in the marketplace and knowing 0:11:08.160 --> 0:11:10.840 everybody is playing by the same set of rules, knowing 0:11:10.880 --> 0:11:14.000 that shipment will show up, and that really matters. And also, 0:11:13.960 --> 0:11:17.240 I would say the Jones Act doesn't involve any government dollars, right, 0:11:17.520 --> 0:11:20.520 So the taxpayer is not paying to subsidize this fleet. 0:11:21.000 --> 0:11:22.880 But if you got rid of the Jones Act, you 0:11:23.000 --> 0:11:26.240 would have to eventually pay for those mariners, pay for 0:11:26.240 --> 0:11:29.240 those shipyard workers, and make those investments. So the government's 0:11:29.280 --> 0:11:31.560 going to pay for that regardless. So do you want 0:11:31.600 --> 0:11:33.720 it to be taxpayer dollars or do you want it 0:11:33.760 --> 0:11:36.719 to be ameliorated and sort of baked into something just 0:11:36.760 --> 0:11:38.880 the cost of doing business in the United States. 0:11:39.240 --> 0:11:41.080 I think it's helpful for these types of things to 0:11:41.080 --> 0:11:43.960 think about the counterfactual sometimes. So I'm going to ask 0:11:44.040 --> 0:11:46.760 both of you to respond to this question. But if 0:11:46.760 --> 0:11:49.800 we got rid of the Jones Act tomorrow, waived a 0:11:49.840 --> 0:11:53.560 magic maritime wand or whatever, and I went away, what 0:11:53.679 --> 0:11:56.600 would the world look like? Let's do call in first. 0:11:57.040 --> 0:11:58.959 Well, I think that's a great question, because the real 0:11:59.000 --> 0:12:01.760 cost the Jones Act is not that it costs x 0:12:01.800 --> 0:12:04.120 amount of dollars more to send a container to Puerto Rico. 0:12:04.160 --> 0:12:05.840 It's what does the United States look like with the 0:12:05.920 --> 0:12:08.120 Jones Act versus what does the United States look like 0:12:08.200 --> 0:12:10.600 without the Jones Act? And the United States without the 0:12:10.679 --> 0:12:13.000 Jones Act is a country that is better connected to 0:12:13.040 --> 0:12:16.400 each other through more efficient supply chains. We can envision, 0:12:16.440 --> 0:12:20.480 for example, right now, we make shipment of oil so 0:12:20.600 --> 0:12:23.920 expensive that we export it all over the place, but 0:12:24.040 --> 0:12:26.599 East Coast refineries will import it from say Nigeria or 0:12:26.640 --> 0:12:29.680 Saudi Arabia instead of Texas because it's just not competitive 0:12:29.720 --> 0:12:32.400 after you factor in the cost of shipping. Some goods 0:12:32.400 --> 0:12:35.439 are impossible to ship within the United States because of 0:12:35.480 --> 0:12:37.040 the Jones Act. With the United States is one of 0:12:37.080 --> 0:12:40.840 the world's leading exporters of liquified petroleum gas basically propane. 0:12:41.240 --> 0:12:44.360 Puerto Rico buys it from foreign sources. Phy buys it 0:12:44.400 --> 0:12:46.520 from as far away as West Africa. Not because it's 0:12:46.559 --> 0:12:50.199 more expensive. There are zero ships to transport. It's literally 0:12:50.240 --> 0:12:53.480 impossible because of the Jones Act. We've seen examples of 0:12:53.960 --> 0:12:57.360 lumber producers in Pacific Northwest saying, look, we go to 0:12:57.520 --> 0:12:59.480 send our lumber to other parts of the United States. 0:12:59.520 --> 0:13:02.160 We're getting beat out by Canadian competitors that can use 0:13:02.160 --> 0:13:05.120 more efficient international shipping, so we're being put on the 0:13:05.120 --> 0:13:08.080 back foot. We've seen government report side examples of steel 0:13:08.440 --> 0:13:11.360 in the Western United States being purchased from Asia instead 0:13:11.360 --> 0:13:15.040 of Eastern producers. Why because multiple times it says Jones 0:13:15.080 --> 0:13:17.640 Act shipping makes it uncompetitive for Americans to sell to 0:13:17.720 --> 0:13:20.640 other Americans. So we think about all the supply chains 0:13:20.679 --> 0:13:23.040 that we better connected, all the efficiencies that would bring. 0:13:23.360 --> 0:13:25.400 On the more micro level, you can think of, say, 0:13:25.720 --> 0:13:28.679 ferry operators in Washington State that could buy ferries a 0:13:29.080 --> 0:13:31.120 half a third of the cost of what they're paying 0:13:31.120 --> 0:13:34.640 now to modernize their fleets and improve transportation. So I 0:13:34.679 --> 0:13:38.520 think that the difference between the US as is versus 0:13:38.520 --> 0:13:41.840 without the Jones Act, it would be a huge, huge gain. 0:13:42.080 --> 0:13:43.560 Sara, I'm glad you asked that. 0:13:44.040 --> 0:13:46.800 World without the Jones Act is a pretty scary place, right, 0:13:46.840 --> 0:13:49.160 because I want you to remember the content. 0:13:49.160 --> 0:13:51.000 I'm serious. I want you to think about the context 0:13:51.080 --> 0:13:52.040 we're living in. Right. 0:13:52.360 --> 0:13:55.480 The People's Republic of China has made a strategic decision 0:13:55.920 --> 0:13:58.480 to overinvest in its own maritime capability. 0:13:58.800 --> 0:14:00.800 They are deliberately. 0:14:00.240 --> 0:14:03.400 Undermining the prices low bullying the prices for shipbuilding, for 0:14:03.440 --> 0:14:06.560 shipping services, for ship to shore cranes. They want to 0:14:06.600 --> 0:14:10.000 be the only provider out there, right, They want the 0:14:10.040 --> 0:14:12.760 whole world to be dependent on them for shipping because 0:14:12.800 --> 0:14:15.560 they know that is the backbone of commerce, right, is 0:14:15.600 --> 0:14:18.240 how we transport these goods. So if we waive that 0:14:18.280 --> 0:14:21.320 magic wand first off, so six hundred fifty thousand people 0:14:21.360 --> 0:14:23.240 would be out of work, which would be a brain 0:14:23.320 --> 0:14:25.640 on your taxpayers, right, so we would have to pay 0:14:25.640 --> 0:14:30.800 for that. You would basically eliminate the American shipbuilding industry overnight. 0:14:31.000 --> 0:14:35.440 Because even Japan, even South Korea cannot keep up with 0:14:35.600 --> 0:14:39.320 Chinese subsidies. They're exiting the container ship market, they're exiting 0:14:39.360 --> 0:14:43.360 other shipbuilding markets. So absolutely China would swoop in and 0:14:43.360 --> 0:14:47.440 do that. You would also have ships of unknown provinces, right, 0:14:47.480 --> 0:14:49.760 but they'd probably be owned by China through various shell 0:14:49.800 --> 0:14:55.360 companies crewed by unbedded mariners, sailing moving hazardous materials at 0:14:55.520 --> 0:14:58.920 best case, up and down our inland waterways past all 0:14:58.960 --> 0:15:02.200 these soft targets. So if you wanted to keep that 0:15:02.240 --> 0:15:06.160 security on the seas, right, you would have to I 0:15:06.200 --> 0:15:08.360 don't know, quadruple the sides of the Coast Guard or 0:15:08.360 --> 0:15:11.320 the CBP to do those vessel inspections right now that 0:15:11.440 --> 0:15:13.960 you know, Coast Guard CBP you know, are active at 0:15:13.960 --> 0:15:17.240 international courts, certain courts where foreign vessels can come and visit. 0:15:17.680 --> 0:15:19.600 But you would have to really increase that. 0:15:19.640 --> 0:15:22.560 I mean, keep in mind, the Coastguard is smaller than 0:15:22.560 --> 0:15:25.520 the NYPD. They do not have the bandwidth to handle 0:15:25.720 --> 0:15:28.800 all these unregistered ships that we don't know how safe 0:15:28.800 --> 0:15:30.560 they are, we don't know how much they're polluting, you 0:15:30.600 --> 0:15:33.600 don't know who's on there. I think it is very scary. 0:15:33.720 --> 0:15:37.240 I was totally serious. 0:15:49.680 --> 0:15:53.680 To Collins point about, you know, various entities within the 0:15:53.800 --> 0:15:56.960 United States having the important you talked about national security 0:15:57.040 --> 0:16:01.200 or economic security, and the fact that for like base commodities, 0:16:01.680 --> 0:16:04.720 you know, for example, at times when there's a really 0:16:04.760 --> 0:16:08.960 tough winter in New England that we can't ship LNG 0:16:09.280 --> 0:16:13.840 from Houston to New England. Doesn't that create an economic 0:16:13.920 --> 0:16:17.000 vulnerability for the US, the fact that we can't supply 0:16:17.080 --> 0:16:20.120 ourselves with our own raw materials in certain instances. 0:16:20.360 --> 0:16:22.440 So I don't think that's true. And I think that 0:16:22.480 --> 0:16:24.760 your New England LNG example. 0:16:24.480 --> 0:16:26.840 Is a really good one, right because what happens all 0:16:26.880 --> 0:16:29.560 too frequently is the Jonzact becomes a cover and a. 0:16:29.600 --> 0:16:31.760 Scapegoat for other policy failures. 0:16:31.920 --> 0:16:35.440 Right, New England has an energy policy issue that I 0:16:35.520 --> 0:16:38.560 love ships, But the cheapest, most efficient way to move 0:16:38.640 --> 0:16:45.680 natural gas is as gas in a pipeline, right, if 0:16:45.720 --> 0:16:47.880 they want, And so if they want, they also don't 0:16:47.880 --> 0:16:51.840 have storage capacity, right, which means they cannot buy natural 0:16:51.880 --> 0:16:55.560 gas during low season. They're only ever buying it at peak, 0:16:55.880 --> 0:16:57.920 and their need is a radic so they don't have 0:16:57.960 --> 0:17:00.480 a long term charter. They're buying it on the spot. 0:17:01.040 --> 0:17:03.600 And what's really expensive about liquified. 0:17:03.200 --> 0:17:05.280 Natural gas is that liquification. 0:17:05.920 --> 0:17:08.840 So if you were to take gas out of Pennsylvania, 0:17:08.960 --> 0:17:10.919 first you got to move it down a pipeline. You 0:17:11.000 --> 0:17:14.280 got to liquify it and then move it and then 0:17:14.400 --> 0:17:16.480 regasify it. And then you can only do this it's 0:17:16.680 --> 0:17:18.280 very small amounts, right, which is going to be more 0:17:18.320 --> 0:17:21.360 expensive because it really matters is that kind of volume. 0:17:21.840 --> 0:17:25.080 So even if the transportation we're free, you're already looking 0:17:25.200 --> 0:17:28.600 at having to charge quite a lot of money for 0:17:28.800 --> 0:17:30.920 gas in New England, right, So even though it was free, 0:17:30.960 --> 0:17:33.840 you still are going to bear that cost. So in 0:17:33.960 --> 0:17:36.919 order for gas in New England to be cheap, you 0:17:36.960 --> 0:17:39.920 would have to force energy producers and those kind of 0:17:39.960 --> 0:17:43.280 liquifying facilities to do this at below market rate. 0:17:43.520 --> 0:17:43.680 Right. 0:17:43.720 --> 0:17:45.560 We're in a capitalist society, so people are going to 0:17:45.640 --> 0:17:48.440 look for the cheapest option, and sometimes the cheapest option 0:17:48.640 --> 0:17:51.320 is not going to be American. So the liquified natural 0:17:51.359 --> 0:17:52.640 gas is a great example. 0:17:53.400 --> 0:17:55.560 Colin, could I ask you to respond to the sort 0:17:55.600 --> 0:17:59.439 of national security point, because when you hear statistics like 0:17:59.800 --> 0:18:02.200 the Coast Guard is smaller than the New York Police Force, 0:18:02.320 --> 0:18:03.359 that seems pretty worrying. 0:18:04.200 --> 0:18:04.400 Yeah. 0:18:04.440 --> 0:18:06.360 So a couple arguments that have been made here. One 0:18:06.400 --> 0:18:09.119 is about the alleged danger of foreign ships and having 0:18:09.119 --> 0:18:11.960 them in our waters. Folks. The choice here is not 0:18:12.080 --> 0:18:13.919 do we let foreign ships into our waters? And do 0:18:14.000 --> 0:18:16.639 we not? They're here, They're already here. You can go 0:18:16.600 --> 0:18:18.600 out like marine traffic dot com. It will show you 0:18:18.640 --> 0:18:20.000 all the ships in US waters. 0:18:20.240 --> 0:18:21.359 You can find foreign. 0:18:21.160 --> 0:18:23.960 Ships sailing up to Albany, New York. You can see 0:18:24.000 --> 0:18:27.679 them sailing past Philadelphia, up to New Orleans, up to Sacramento. 0:18:28.000 --> 0:18:28.399 That Jones. 0:18:28.440 --> 0:18:30.199 That doesn't say you can't come into US waters. It 0:18:30.280 --> 0:18:32.879 just regulates what you can do. Within US waters. So 0:18:32.920 --> 0:18:35.880 they're here and talk about hazardous materials. I mean, they're 0:18:36.280 --> 0:18:39.600 all the tankers coming out of Houston Corpus Christi with 0:18:39.760 --> 0:18:42.359 energy products. I mean the vast majority are foreigns, so 0:18:42.359 --> 0:18:45.480 they're already here. We have customs and border protection, we 0:18:45.480 --> 0:18:48.879 have the Coastguard to inspect these vessels. They are subject 0:18:48.920 --> 0:18:51.199 to port state control. So I find that a bit 0:18:51.240 --> 0:18:53.600 of a red herring. With regard to the issue with China, 0:18:53.760 --> 0:18:57.159 I find this ironic because Jones Act shipping companies are 0:18:57.160 --> 0:19:00.399 some of the biggest patrons of Chinese shipyards. I mentioned 0:19:00.400 --> 0:19:03.919 earlier that US built ships are incredibly expensive, you know, 0:19:03.960 --> 0:19:06.359 four to five times more. Well, one result of this 0:19:06.480 --> 0:19:08.399 is that people don't want to buy new ships, so 0:19:08.400 --> 0:19:11.320 they keep old ships going for a long time. Internationally, 0:19:11.400 --> 0:19:14.760 ships are used for twenty twenty five thirty years. The 0:19:14.840 --> 0:19:17.560 last seventeen Jones Act ships they were scrapped had an 0:19:17.560 --> 0:19:20.400 average age of like forty three. So they'd keep these 0:19:20.440 --> 0:19:22.600 old ships running, and they do it by sending them 0:19:22.640 --> 0:19:25.639 to China to get maintained a Chinese state owned shipyards. 0:19:25.760 --> 0:19:27.480 And they turn around and use the money they save 0:19:27.520 --> 0:19:29.439 from going to China instead of a US or an 0:19:29.480 --> 0:19:32.360 allied shipyard and say, please keep the Jones Act in place. 0:19:32.400 --> 0:19:35.280 It's really critical for a national security to stop China. 0:19:35.359 --> 0:19:37.679