5 ms·

> And in the end it doesn't quite manage to solve the problems for the rest of PR. As long as the Jones Act is still in place, there is no tax policy Puerto Ri

> And in the end it doesn't quite manage to solve the problems for the rest of PR. As long as the Jones Act is still in place, there is no tax policy Puerto Rico could implement that would solve its economic problems in the long-term.

AnimalMuppet 8y ago
Could you explain exactly what about the Jones Act causes the problem, and how it does so? A casual glance failed to enlighten me.
- skybrian 8y ago
  As I understand it, prices are higher on U.S. islands due to not being able to ship cheaply from the mainland. (They'd be higher anyway, but this doesn't help.)
- chimeracoder 8y ago
  > Could you explain exactly what about the Jones Act causes the problem, and how it does so? A casual glance failed to enlighten me. The Jones Act requires Puerto Rico to use only a small number of US merchants for shipping to and from the mainland. Because those few merchants have an oligopoly, they're much more expensive than any of the alternatives. This raises the cost of everything that's not produced on the island itself, which directly or indirectly inflates all prices on the island. As a result, the island's exports become prohibitively expensive as well, which means that they can't really afford to buy much, but they also can't produce anything that's cheap enough for other places to want to purchase them. While the Jones Act technically applies to all states, Puerto Rico and Hawaii are uniquely affected by it due to their inability to ship anything by ground transit, since they're islands. (Hawaii also suffers due to the act, though they have representation in Congress that has enabled them to secure waivers at times and other exemptions to mitigate the impact. Puerto Rico does not.). Air shipments are not an option - air is always orders of magnitude more expensive than either ground or sea - shipping over water is always the cheapest.
  - dv_dt 8y ago
    It seems like the simplest thing to do would be to add an over-water maximum onto the Jones act that would essentially allow PR and HI an exception.
    - chimeracoder 8y ago
      > t seems like the simplest thing to do would be to add an over-water maximum onto the Jones act that would essentially allow PR and HI an exception. Given how heavily certain group lobbied to prevent the government from issuing just a temporary waiver after Hurricane Maria, I wouldn't bet on this happening anytime soon. Democrats support the Jones Act because their core constituents do. Republicans have a complicated history with lobbying for Puerto Rican issues. So neither party has an incentive to fix it, and neither party sees Puerto Evans as constituents.
      - dv_dt 8y ago
        > Democrats support the Jones Act because their core constituents do. I bet 99% of their constituents don't even know what the Jones act is or would be perfectly willing to change it.
        chimeracoder 8y ago
        > I bet 99% of their constituents don't even know what the Jones act is or would be perfectly willing to change it. That's a bold claim. On what are you basing the assumption that many or most Democrats would be willing to change the Jones Act, if they knew what it was?
        dv_dt 8y ago
        No more bold than their constituents support it. I suspect that neither of us has viscerally satisfactory direct evidence for their respective positions.
        8y ago
throwaway5752 8y ago
That is like 99th on a list of 100 of PR's problems. https://www.cnbc.com/2017/12/18/broken-bonds-wall-streets-role-in-wiping-out-puerto-ricans-savings.html https://www.cnbc.com/2017/12/18/broken-bonds-wall-streets-ro..., poor access to capital/need for capital after Maria, and an apathetic (if not antagonistic) administration are absolutely worse right now. How much would you really estimate is wasted above what would be paid for non-US flagged ships? How would a race to the bottom in terms of flag-of-convenience destinations be detrimental to the long term interests of the US shipping/shipbuilding industries? Would repealing it have any security impacts? Who would benefit most from it. I don't expect you to answer those, but they are all complicated questions and worthy of better discussion than this.
- chimeracoder 8y ago
  > That is like 99th on a list of 100 of PR's problems Look, I never said that the Jones Act was Puerto Rico's only problem. I said it's a major problem, and that it alone is significant enough to hamper Puerto Rico's economy indefinitely. As a separate note, it's weird to frame it (as you do) as the aftermath of Maria and the federal government's apathy being worse, when in reality the two are heavily linked. The Jones Act severely hindered the recovery efforts from Maria. (Every other hurricane since Katrina has prompted a temporary waiver from the Jones Act in order to aid relief - including Harvey, which happened just before Maria). Yes, keeping the residents of Puerto Rico in the dark for a year and without reliable access to shelter and clean water is obviously an immediate problem. I'm saying that even if the lights were turned back on overnight, that still won't fix the long-term problems either.
  - throwaway5752 8y ago
    They waived the Jones Act after Maria, albeit briefly. I think PR's debt problems are an order of magnitude worse than the excessive cost of shipping. They need to be a full US state, and they need federal aid to fix their balance sheet (beyond PROMESA). I think a Jones Act subsidy would be a reasonable policy to preserve a US shipbuilding industrial base while not doing so on AK, HI, PR, et al's dime.
- 8y ago
Vivtek 8y ago
Ah. Yes. You're right. There's no tax policy Puerto Rico could implement, because tax policy is a weak tool to start with. Now I see how I mistook the argument you were making.

AnimalMuppet 8y ago

Could you explain exactly what about the Jones Act causes the problem, and how it does so? A casual glance failed to enlighten me.

skybrian 8y ago
As I understand it, prices are higher on U.S. islands due to not being able to ship cheaply from the mainland. (They'd be higher anyway, but this doesn't help.)
chimeracoder 8y ago
> Could you explain exactly what about the Jones Act causes the problem, and how it does so? A casual glance failed to enlighten me. The Jones Act requires Puerto Rico to use only a small number of US merchants for shipping to and from the mainland. Because those few merchants have an oligopoly, they're much more expensive than any of the alternatives. This raises the cost of everything that's not produced on the island itself, which directly or indirectly inflates all prices on the island. As a result, the island's exports become prohibitively expensive as well, which means that they can't really afford to buy much, but they also can't produce anything that's cheap enough for other places to want to purchase them. While the Jones Act technically applies to all states, Puerto Rico and Hawaii are uniquely affected by it due to their inability to ship anything by ground transit, since they're islands. (Hawaii also suffers due to the act, though they have representation in Congress that has enabled them to secure waivers at times and other exemptions to mitigate the impact. Puerto Rico does not.). Air shipments are not an option - air is always orders of magnitude more expensive than either ground or sea - shipping over water is always the cheapest.
- dv_dt 8y ago
  It seems like the simplest thing to do would be to add an over-water maximum onto the Jones act that would essentially allow PR and HI an exception.
  - chimeracoder 8y ago
    > t seems like the simplest thing to do would be to add an over-water maximum onto the Jones act that would essentially allow PR and HI an exception. Given how heavily certain group lobbied to prevent the government from issuing just a temporary waiver after Hurricane Maria, I wouldn't bet on this happening anytime soon. Democrats support the Jones Act because their core constituents do. Republicans have a complicated history with lobbying for Puerto Rican issues. So neither party has an incentive to fix it, and neither party sees Puerto Evans as constituents.
    - dv_dt 8y ago
      > Democrats support the Jones Act because their core constituents do. I bet 99% of their constituents don't even know what the Jones act is or would be perfectly willing to change it.
      - chimeracoder 8y ago
        > I bet 99% of their constituents don't even know what the Jones act is or would be perfectly willing to change it. That's a bold claim. On what are you basing the assumption that many or most Democrats would be willing to change the Jones Act, if they knew what it was?
        dv_dt 8y ago
        No more bold than their constituents support it. I suspect that neither of us has viscerally satisfactory direct evidence for their respective positions.
        8y ago

throwaway5752 8y ago

That is like 99th on a list of 100 of PR's problems. https://www.cnbc.com/2017/12/18/broken-bonds-wall-streets-role-in-wiping-out-puerto-ricans-savings.html https://www.cnbc.com/2017/12/18/broken-bonds-wall-streets-ro..., poor access to capital/need for capital after Maria, and an apathetic (if not antagonistic) administration are absolutely worse right now. How much would you really estimate is wasted above what would be paid for non-US flagged ships? How would a race to the bottom in terms of flag-of-convenience destinations be detrimental to the long term interests of the US shipping/shipbuilding industries? Would repealing it have any security impacts? Who would benefit most from it. I don't expect you to answer those, but they are all complicated questions and worthy of better discussion than this.

chimeracoder 8y ago
> That is like 99th on a list of 100 of PR's problems Look, I never said that the Jones Act was Puerto Rico's only problem. I said it's a major problem, and that it alone is significant enough to hamper Puerto Rico's economy indefinitely. As a separate note, it's weird to frame it (as you do) as the aftermath of Maria and the federal government's apathy being worse, when in reality the two are heavily linked. The Jones Act severely hindered the recovery efforts from Maria. (Every other hurricane since Katrina has prompted a temporary waiver from the Jones Act in order to aid relief - including Harvey, which happened just before Maria). Yes, keeping the residents of Puerto Rico in the dark for a year and without reliable access to shelter and clean water is obviously an immediate problem. I'm saying that even if the lights were turned back on overnight, that still won't fix the long-term problems either.
- throwaway5752 8y ago
  They waived the Jones Act after Maria, albeit briefly. I think PR's debt problems are an order of magnitude worse than the excessive cost of shipping. They need to be a full US state, and they need federal aid to fix their balance sheet (beyond PROMESA). I think a Jones Act subsidy would be a reasonable policy to preserve a US shipbuilding industrial base while not doing so on AK, HI, PR, et al's dime.
8y ago

Vivtek 8y ago

Ah. Yes. You're right. There's no tax policy Puerto Rico could implement, because tax policy is a weak tool to start with. Now I see how I mistook the argument you were making.