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It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liber

It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liberal orthodoxy until the mid 2010s, by which point it was clear that lowering costs by offshoring labor had hollowed out the middle class in America. Money has a multiplyer effect. Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. Also, as the article itself states: > [The Jones act] aims to promote and maintain the American merchant marine fleet for commercial and defense purposes. The act has nothing to do with making things cheaper. Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways.

frankus 4y ago
Historically the US has favored protectionism over subsidies, but my understanding is that subsidies are almost always a more economically optimal way of ensuring that strategically-important domestic industries are able to survive.
- actually_a_dog 4y ago
  Then the "free market" zealots would just be crying about subsidies instead of tariffs and regulatory barriers. There's really no winning this battle.
  - actually_a_dog 4y ago
    I love how the only reply to this is to mash the down arrow. Never change, HN, never change.
- missedthecue 4y ago
  Eternally subsidizing massive shipbuilding infrastructure as an insurance policy against WW3 seems beyond silly in my view. And remember, it has to be massive shipbuilding infrastructure or you're not doing any good. Having one or two shipyards that aren't very good at shipbuilding does zero if you need to suddenly build a lot of ships locally for "national security" which seems to be the argument of the pro-jones act commenters.
jcranmer 4y ago
Except, as far as I'm aware, the Jones Act hasn't prevented the collapse of the merchant marine fleet--in other words, it's failed to do its primary goal, and it has some pretty heft costs for everyone who doesn't live in mainland US.
- yamtaddle 4y ago
  Seems like this is a case where the "soft touch" approach—set rules and let the market create the outcome you wanted—isn't working, so maybe a more direct approach would be a better idea for the purpose of ensuring a healthy merchant marine fleet, if that's still something we want to do.
  - JAlexoid 4y ago
    Why does US "need" a 100% internally built, owned and operated merchant marine fleet? Most of US is accessible via freight rail or road freight transport. Ships transport almost exclusively foreign made products, today. That's the primary reason why the merchant fleet is wasting away - there's no demand for marine transportation between US ports, other than required by Jones Act. I have 0 interest in building something that has little to no use in a free market.
    - yamtaddle 4y ago
      Shipbuilding capacity, especially, is extremely important for being able to project power globally in the most extreme situations. So if that's something we're still interested in doing, it's a very good idea to prevent that capacity from falling under some level.
      - JackFr 4y ago
        The problem is, the Jones Act has harmed our shipbuilding capacity as well. According to the artcle our ship building capacity is 1% of China's and US built ships cost 6-8 times as much. That's not helpful.
ch4s3 4y ago
> it's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country This is a pretty squishy claim, but there's a mountain of work in economics showing that the Jones Act punishes Puerto Rico, Hawaii, and Guam. > lowering costs by offshoring labor had hollowed out the middle class in America Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US. The Jones Act has actually been shown to have made US ship building and ports less competitive by shielding them from competition. US ships and ports are basically 3rd rate at this point.
- juve1996 4y ago
  > Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US. I don't buy it - US manufacturing simply wasn't competitive with overseas prices. If it was just automation, it would still be here - only automated. It's not.
  - twoodfin 4y ago
    On a dollar-of-stuff-produced basis, US manufacturing has continued to grow and remains only a fraction behind China: https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/ https://www.brookings.edu/research/global-manufacturing-scor... It’s the jobs that went away, not the manufacturing sector or the dollars.
    - juve1996 4y ago
      From the article: "Manufacturing is enjoying a resurgence in the United States. After years of falling output and a diminishing percentage of the labor force, the last few years have seen renewed growth." Resurgence implies it was not great for a long time. To add - now that automation makes us competitive with cheap overseas labor, it makes sense to invest. It didn't make sense to ivnst in 1975 - hence, the rust belt.
lame-robot-hoax 4y ago
The Jones Act hasn’t even done that though. So what’s the point?
lotharcable 4y ago
What "hollowed out middle class" in America are things like "The Jones Act". The major problem in America is not foreign competition. The barrier to industry is not opening up relations with China. The major problem in America, and has been since at least the 1970s is a managerial crisis. It is a crisis imposed on the working class by incompetent monolithic bureaucracies in government and in corporate culture. The problem is exactly the sort of problems imposed on the public by things like the "Jones Act". It is that incompetent buffoons attempt to impose rules on the country to accomplish one thing, which fails utterly, and then has a whole host of undesirable side effects that are aggressively ignored and/or downplayed by apologists like yourself. It is this managerial crisis that saw the rise of massive conglomerates in the 60s and 70s that ate up industry all over the midwest, liquidated them, and leveraged the assets to purchase more small and medium business. This was considered marvels of efficiency then... which in actually has turned out to be a series of accountancy scams and pyramid schemes that all hinged on exploiting incompentely design regulation. It is the protectionism and subsidies and cronyism in this country that has destroyed it's competitiveness. It has never been, and probably never will be, the willingness of the American worker to compete with foreign labor. Advocating for more protectionism and cronyism and regulatory capture is going to make the problem worse, not better. IF you need proof of this look no further to what the Federal government has done to the semiconductor industry in the past year.
- hn_throwaway_99 4y ago
  This is just opinion spewing. That said, the comment you are replying to didn't provide any sources, but if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion that outsourcing had a real negative effect on large swaths of Americans. Also, as a counterpoint, lots of other countries that have had a more robust middle class in the past 2 decades have stricter regulations than the US does.
  - Aunche 4y ago
    > if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion If your topic is broad enough, you can abuse napkin math any way you want to reach any sort of conclusion. Virtually all instances of protectionism has caused the industry being protected to stagnate. We saw this with automobiles, and we're seeing this with Boeing. If Intel weren't facing competition from TSMC and Samsung, they would happily milk their 14mm process for who knows how long. The only time when protectionism is a unequivocally a good thing is with services with no obvious societal benefit. I don't think China loses out from not having Instagram or Facebook. Even if their domestic alternatives are worse, they aren't missing out on much. Likewise, I don't think we'd lose out much if everyone was forced to use Youtube Shorts instead of TikTok.
edouard-harris 4y ago
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. After untangling the double-negative, this is equivalent to saying: "It's basically been proven at this point that simply lowering cost necessarily leads to better outcomes for the country." Is this in fact what you meant? The rest of your comment suggests you may believe the opposite.
- ddoolin 4y ago
  There is no double negative; "does not" is the only negative in the statement. "Disproven" is not a grammatical negative.
eru 4y ago
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. Huh? When did this happen? Neoliberal orthodoxy still reigns supreme. > So if you take dollars and send them elsewhere, [...] The US can print as many dollars as they need. In fact, when dollars go overseas, a inflation targeting central bank will automatically print more.
- kelseyfrog 4y ago
  A disproven orthodoxy can still reign supreme. Take the Catholic Church post-enlightenment to the mid 20th-century for example. Just because an orthodoxy fails and falters doesn't mean that it will fade away. There isn't an equivalent of atheism for economics - there are no "aneoliberals" or "aeconomicists". Anyone who declared themselves "aeconomicist" would be ridiculed. That reaction should give anyone pause though. Ridicule is a powerful reality-maintenance mechanism. Economics is an extremely powerful reality-creating assemblage. Attempts beyond descriptive are met with intense skepticism and cynicism. Even here, in purported a bastion of competing ideas, normative economics are routinely lambasted. The most common reality-maintenance mechanism is the reflexive "come up with a better idea then" response. It serves as a means of shutting down all discourse which ends up being antithetical and ultimately hypocritical to the mingling of ideas and curious questioning we claim to adhere to. The end result is implicit support for the status quo. Even if that isn't what is typically intended, it is functionally equivalent.
  - TrickardRixx 4y ago
    All my friends who think neoliberalism = "placing one's head in one's ass" call themselves "socialists". You are correct that they're ridiculed, though.
    - kelseyfrog 4y ago
      This is actually a really good example of re-enforcing the normalcy of ridicule in that it licenses others to do the same to the same groups of people. It's precisely this reality-enforcing mechanism that I'm attempting to point out. It's endlessly both funny and sad that even giving folks the ability to recognize it doesn't actually change anything.
DaveExeter 4y ago
Obviously there are winners and losers, but overall, the benefits to society favor repealing the Jones Act.
- ROTMetro 4y ago
  No, they don't actually.
legitster 4y ago
> Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. What? You're basically arguing for trickle-down economics here. No - subsidizing small special interest groups is not in our collective best interest. Making shipping cheaper absolutely leads to better outcomes. And if you are worried about offshoring labor, the Jones Act makes it specifically more expensive to ship domestically than internationally.
- kotlin2 4y ago
  I'm not arguing trickle-down economics. The concept I'm talking about is called the "money multiplier" [0]. Think about it like this: You go to the store and buy some bread for $1. GDP has increased by $1. Now the store owner saves 20% of the store's income and spends the other 80%. So after your purchase, the store owner goes to the bakery supply store and buys $0.80 of flour. Now GDP has increased by $1.80 from your initial $1 purchase. Trickle-down economics is more about how income is distributed in a society. [0]: https://en.wikipedia.org/wiki/Money_multiplier https://en.wikipedia.org/wiki/Money_multiplier
  - legitster 4y ago
    You're thinking of a "fiscal multiplier" - which is only applicable when you are distributing from a central source like a government or a bank. https://en.wikipedia.org/wiki/Fiscal_multiplier https://en.wikipedia.org/wiki/Fiscal_multiplier Otherwise this is a common Broken Window fallacy - your example forgets that that dollar you spent would have been spent elsewhere. So all of those multipliers would have happened regardless of who gets the dollar (a key problem with Trickle-Down economics). If you have to pay $5 more per loaf because of the Jones Act, we don't generate greater than $5 of economic activity because I will be buying less bread and you will be selling less of it. So there will be somewhere between $1 and $5 in economic deadweight loss.
    - kotlin2 4y ago
      Yes, I linked to the wrong Wikipedia page. Thanks. But no, it's not an instance of the broken window fallacy. Let's say the store owner buys the bread directly from China, and by doing so can offer bread at 20% less than before. So, I pay $0.80 for bread. The store owner saves 20%, which is $0.16. And let's say pay $0.40 for the bread from the Chinese supplier, leaving the baker with $0.24 to spend. I also have an additional $0.20 to spend. If I spend it, the merchant I spent it with saves 20% and spends the other $0.16, then the total GDP contribution is 0.80 + 0.20 + 0.24 + 0.16 = 1.4. I spent $1, but only only received a multiplier of 1.4 instead of 1.8 in the original case. This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total. This, of course, assumes there is a trade deficit with the overseas country.
JAlexoid 4y ago
Neo-liberalism that literally pulled half of the planet out of permanent poverty? >goals of the act can be met in other ways American merchant fleet is all but gone by now. Yet you're suggesting that we keep this act, pretending that doing the same thing would yield a radically opposite result? PS: PATRIOT Act has a few goals, that have nothing to do with a lot of the content.
- tsimionescu 4y ago
  China pulled half of the planet out of permanent poverty, no neo-liberalism there (no freedom either, so no love lost on them from my side).
  - JAlexoid 4y ago
    China (and Chinese people) was one of the major beneficiaries of your detested "neo-liberalism".
    - MJsGlove 4y ago
      By largely adopting anti neoliberal policies…
- ddoolin 4y ago
  Right out of poverty and into a new kind of servitude, maybe. OP really should've used "capitalism" entirely but I suppose that would go down even worse.
- kotlin2 4y ago
  > Neo-liberalism that literally pulled half of the planet out of permanent poverty? My original quote said "better outcomes for the country." Yes, a lot of people were pulled out of poverty, but their gains came and the expense of middle-class Americans. Maybe you're a globalist and you think this is a good outcome. I just hope you never have a nation state-level problem, e.g. unfair competition in the market place. The help you receive from the Chinese government, despite all of their gains, is likely to be quite minimal if you're not a Chinese citizen.
hedora 4y ago
I suggest re-reading the article. It has almost nothing to do with "lowering costs"; the fact that it costs 8x more to build a ship in the US is one of many pieces of evidence supporting the argument that the Jones Act has failed to protect the US shipbuilding industry.
deleted 4y ago
[deleted]
kyrra 4y ago
The major issue with the Jones act is that it prevents domestic transport of goods on water unless it is a built/flagged US ship. This accounts for a tiny fraction of transport within the US (3%): https://data.bts.gov/stories/s/Moving-Goods-in-the-United-States/bcyt-rqmu/ https://data.bts.gov/stories/s/Moving-Goods-in-the-United-St... Getting rid of this single part of the Jones Act would help a lot, and I don't see it hurting, as it accounts for such a tiny fraction of our transport today.
eftychis 4y ago
At what point was it alluded that the Jones Act was to make things cheaper? This is the first I hear of this. (I am actually asking, not rhetorical.)
scythe 4y ago
It's not about simply "making things cheaper". It's that the costs imposed by the Jones Act are so imbalanced that they lead to effects like this: >Significant opportunity costs also can be observed in the loss of revenues experienced when, for example, a hog farmer in North Carolina purchases corn feed from Canada instead of from a farmer in Iowa because exorbitant delivery costs make the latter’s price uncompetitive. Clearly, this is not effectively protecting American business from foreign competition. Even if that is considered a reasonable goal, it should actually, you know, be met. >Any earnest proposal to repeal the Jones act should address how the [military] goals of the act can be met in other ways. [brackets mine] The Jones Act was passed in 1920. At that time, US military spending was a tiny fraction of what it is today, and the idea that the Navy would borrow commercial ships instead of simply using its own was a lot more sensible. Today, the US Navy is by far the largest in the world, focuses primarily on blue-water power projection rather than defense of the homeland, and naval battles are primarily fought by aircraft, which was unimaginable in 1920. If the Jones Act continues to bring military benefits, the onus, in my opinion, rests on its supporters to show what they are, because modern naval warfare looks almost nothing like it did in 1920.
- kilolima 4y ago
  Just to respond to a few of your more landlubberly comments: Naval battles are fought by aircraft carried on ships. Modern naval warfare is still about global power projected by ships. That hasn't changed since 1920. Global power projection has always been the focus of the US Navy since its inception. North Carolina and Iowa are far from each other separated by mountains. Until the advent of giant cargo airships, it will always be cheaper to move bulk goods by sea.
  - scythe 4y ago
    >Naval battles are fought by aircraft carried on ships. In other words, there's a whole new cost and technology center. Modern naval warfare was unimaginable in 1920. The fact that "there is a boat involved" is not sufficient justification. >Global power projection has always been the focus of the US Navy since its inception. The US Navy was founded in 1794. So no. >North Carolina and Iowa are far from each other separated by mountains. Iowa is on the Mississippi, the Chicago Portage exists, the Erie canal exists, etc. I was quoting the author who had studied the issue: you should give your opponents more credit than that.
P5fRxh5kUvp2th 4y ago
This is also why the free market trumpeteers are wrong. Companies charge the most they can, any lowering of internal costs will only change the external costs under 1 circumstance. When lowering the external cost will increase volume enough to make up for the lower cost. Tech has changed the game so it's much easier for a winner to take most. The free market idea has always assumed local competition, that's no longer the case. When Apple and Google can collaborate on how much to charge for a phone it becomes more difficult to associate lower costs of production with lower cost to consumers.
- missedthecue 4y ago
  There is another reason why companies lower cost, and it's because of competition. We have seen company after company in all sorts of sectors lose revenues because of competition, so your theory that they only lower costs to increase volume doesn't hold water.
  - P5fRxh5kUvp2th 4y ago
    Please read my post again, lowering of internal costs does not lower external costs unless doing so increases profit due to volume changes. You're arguing that a company with competition may choose to lower its price whether or not internal costs have lowered (or not). That's a different question entirely.
    - missedthecue 4y ago
      If lower internal costs are achieved there is more flexibility to competitively price your product, i.e. reduce prices. The classic example is televisions. They no longer cost $3000 because of competition and internal cost reduction.
      - P5fRxh5kUvp2th 4y ago
        This is taken into account with the volume change point. internal cost sets the lowest bar possible without a profit, it does not set what the price will be in the face of competition because companies charge as much as they can to maximize profit. That maximization either comes in the form of per-unit profit or volume profit.
lame-robot-hoax 4y ago
> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liberal orthodoxy until the mid 2010s, by which point it was clear that lowering costs by offshoring labor had hollowed out the middle class in America. Money has a multiplyer effect. Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. Literal gibberish. What you are describing is a fiscal multiplier which is the change in national income via government spending, or a money multiplier from a central bank. What actually happens in the scenario described is deadweight loss. Consumers spend more to obtain less goods. See figure 1. https://corporatefinanceinstitute.com/resources/knowledge/economics/price-floor/ https://corporatefinanceinstitute.com/resources/knowledge/ec...
- bobkazamakis 4y ago
  >What actually happens is deadweight loss. People buy less goods, suppliers make less money. Literal gibberish. Let's not imply things in a vacuum that don't have second-order effects. Where does this magical margin come from? Oh look, it's wages for that same worker who would be buying these goods!
dragonwriter 4y ago
> Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways. Spend money directly on the thing you are trying to support rather than trying to bank shot private money into it by restrictions.
abigail95 4y ago
this is what googling and reading economics on wikipedia gets

frankus 4y ago

Historically the US has favored protectionism over subsidies, but my understanding is that subsidies are almost always a more economically optimal way of ensuring that strategically-important domestic industries are able to survive.

actually_a_dog 4y ago
Then the "free market" zealots would just be crying about subsidies instead of tariffs and regulatory barriers. There's really no winning this battle.
- actually_a_dog 4y ago
  I love how the only reply to this is to mash the down arrow. Never change, HN, never change.
missedthecue 4y ago
Eternally subsidizing massive shipbuilding infrastructure as an insurance policy against WW3 seems beyond silly in my view. And remember, it has to be massive shipbuilding infrastructure or you're not doing any good. Having one or two shipyards that aren't very good at shipbuilding does zero if you need to suddenly build a lot of ships locally for "national security" which seems to be the argument of the pro-jones act commenters.

jcranmer 4y ago

Except, as far as I'm aware, the Jones Act hasn't prevented the collapse of the merchant marine fleet--in other words, it's failed to do its primary goal, and it has some pretty heft costs for everyone who doesn't live in mainland US.

yamtaddle 4y ago
Seems like this is a case where the "soft touch" approach—set rules and let the market create the outcome you wanted—isn't working, so maybe a more direct approach would be a better idea for the purpose of ensuring a healthy merchant marine fleet, if that's still something we want to do.
- JAlexoid 4y ago
  Why does US "need" a 100% internally built, owned and operated merchant marine fleet? Most of US is accessible via freight rail or road freight transport. Ships transport almost exclusively foreign made products, today. That's the primary reason why the merchant fleet is wasting away - there's no demand for marine transportation between US ports, other than required by Jones Act. I have 0 interest in building something that has little to no use in a free market.
  - yamtaddle 4y ago
    Shipbuilding capacity, especially, is extremely important for being able to project power globally in the most extreme situations. So if that's something we're still interested in doing, it's a very good idea to prevent that capacity from falling under some level.
    - JackFr 4y ago
      The problem is, the Jones Act has harmed our shipbuilding capacity as well. According to the artcle our ship building capacity is 1% of China's and US built ships cost 6-8 times as much. That's not helpful.

ch4s3 4y ago

> it's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country This is a pretty squishy claim, but there's a mountain of work in economics showing that the Jones Act punishes Puerto Rico, Hawaii, and Guam. > lowering costs by offshoring labor had hollowed out the middle class in America Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US. The Jones Act has actually been shown to have made US ship building and ports less competitive by shielding them from competition. US ships and ports are basically 3rd rate at this point.

juve1996 4y ago
> Again this isn't a settled claim. Automation probably had more to do with the shift in workforce. Moreover all advanced economies have shifted to more service work, without necessarily experiencing some of the same difficulties as the US. I don't buy it - US manufacturing simply wasn't competitive with overseas prices. If it was just automation, it would still be here - only automated. It's not.
- twoodfin 4y ago
  On a dollar-of-stuff-produced basis, US manufacturing has continued to grow and remains only a fraction behind China: https://www.brookings.edu/research/global-manufacturing-scorecard-how-the-us-compares-to-18-other-nations/ https://www.brookings.edu/research/global-manufacturing-scor... It’s the jobs that went away, not the manufacturing sector or the dollars.
  - juve1996 4y ago
    From the article: "Manufacturing is enjoying a resurgence in the United States. After years of falling output and a diminishing percentage of the labor force, the last few years have seen renewed growth." Resurgence implies it was not great for a long time. To add - now that automation makes us competitive with cheap overseas labor, it makes sense to invest. It didn't make sense to ivnst in 1975 - hence, the rust belt.

lame-robot-hoax 4y ago

The Jones Act hasn’t even done that though. So what’s the point?

lotharcable 4y ago

What "hollowed out middle class" in America are things like "The Jones Act". The major problem in America is not foreign competition. The barrier to industry is not opening up relations with China. The major problem in America, and has been since at least the 1970s is a managerial crisis. It is a crisis imposed on the working class by incompetent monolithic bureaucracies in government and in corporate culture. The problem is exactly the sort of problems imposed on the public by things like the "Jones Act". It is that incompetent buffoons attempt to impose rules on the country to accomplish one thing, which fails utterly, and then has a whole host of undesirable side effects that are aggressively ignored and/or downplayed by apologists like yourself. It is this managerial crisis that saw the rise of massive conglomerates in the 60s and 70s that ate up industry all over the midwest, liquidated them, and leveraged the assets to purchase more small and medium business. This was considered marvels of efficiency then... which in actually has turned out to be a series of accountancy scams and pyramid schemes that all hinged on exploiting incompentely design regulation. It is the protectionism and subsidies and cronyism in this country that has destroyed it's competitiveness. It has never been, and probably never will be, the willingness of the American worker to compete with foreign labor. Advocating for more protectionism and cronyism and regulatory capture is going to make the problem worse, not better. IF you need proof of this look no further to what the Federal government has done to the semiconductor industry in the past year.

hn_throwaway_99 4y ago
This is just opinion spewing. That said, the comment you are replying to didn't provide any sources, but if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion that outsourcing had a real negative effect on large swaths of Americans. Also, as a counterpoint, lots of other countries that have had a more robust middle class in the past 2 decades have stricter regulations than the US does.
- Aunche 4y ago
  > if you google, for example, "china outsourcing effect on middle class", it's easy to find research supporting the conclusion If your topic is broad enough, you can abuse napkin math any way you want to reach any sort of conclusion. Virtually all instances of protectionism has caused the industry being protected to stagnate. We saw this with automobiles, and we're seeing this with Boeing. If Intel weren't facing competition from TSMC and Samsung, they would happily milk their 14mm process for who knows how long. The only time when protectionism is a unequivocally a good thing is with services with no obvious societal benefit. I don't think China loses out from not having Instagram or Facebook. Even if their domestic alternatives are worse, they aren't missing out on much. Likewise, I don't think we'd lose out much if everyone was forced to use Youtube Shorts instead of TikTok.

edouard-harris 4y ago

> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. After untangling the double-negative, this is equivalent to saying: "It's basically been proven at this point that simply lowering cost necessarily leads to better outcomes for the country." Is this in fact what you meant? The rest of your comment suggests you may believe the opposite.

ddoolin 4y ago
There is no double negative; "does not" is the only negative in the statement. "Disproven" is not a grammatical negative.

eru 4y ago

> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. Huh? When did this happen? Neoliberal orthodoxy still reigns supreme. > So if you take dollars and send them elsewhere, [...] The US can print as many dollars as they need. In fact, when dollars go overseas, a inflation targeting central bank will automatically print more.

kelseyfrog 4y ago
A disproven orthodoxy can still reign supreme. Take the Catholic Church post-enlightenment to the mid 20th-century for example. Just because an orthodoxy fails and falters doesn't mean that it will fade away. There isn't an equivalent of atheism for economics - there are no "aneoliberals" or "aeconomicists". Anyone who declared themselves "aeconomicist" would be ridiculed. That reaction should give anyone pause though. Ridicule is a powerful reality-maintenance mechanism. Economics is an extremely powerful reality-creating assemblage. Attempts beyond descriptive are met with intense skepticism and cynicism. Even here, in purported a bastion of competing ideas, normative economics are routinely lambasted. The most common reality-maintenance mechanism is the reflexive "come up with a better idea then" response. It serves as a means of shutting down all discourse which ends up being antithetical and ultimately hypocritical to the mingling of ideas and curious questioning we claim to adhere to. The end result is implicit support for the status quo. Even if that isn't what is typically intended, it is functionally equivalent.
- TrickardRixx 4y ago
  All my friends who think neoliberalism = "placing one's head in one's ass" call themselves "socialists". You are correct that they're ridiculed, though.
  - kelseyfrog 4y ago
    This is actually a really good example of re-enforcing the normalcy of ridicule in that it licenses others to do the same to the same groups of people. It's precisely this reality-enforcing mechanism that I'm attempting to point out. It's endlessly both funny and sad that even giving folks the ability to recognize it doesn't actually change anything.

DaveExeter 4y ago

Obviously there are winners and losers, but overall, the benefits to society favor repealing the Jones Act.

ROTMetro 4y ago
No, they don't actually.

legitster 4y ago

> Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. What? You're basically arguing for trickle-down economics here. No - subsidizing small special interest groups is not in our collective best interest. Making shipping cheaper absolutely leads to better outcomes. And if you are worried about offshoring labor, the Jones Act makes it specifically more expensive to ship domestically than internationally.

kotlin2 4y ago
I'm not arguing trickle-down economics. The concept I'm talking about is called the "money multiplier" [0]. Think about it like this: You go to the store and buy some bread for $1. GDP has increased by $1. Now the store owner saves 20% of the store's income and spends the other 80%. So after your purchase, the store owner goes to the bakery supply store and buys $0.80 of flour. Now GDP has increased by $1.80 from your initial $1 purchase. Trickle-down economics is more about how income is distributed in a society. [0]: https://en.wikipedia.org/wiki/Money_multiplier https://en.wikipedia.org/wiki/Money_multiplier
- legitster 4y ago
  You're thinking of a "fiscal multiplier" - which is only applicable when you are distributing from a central source like a government or a bank. https://en.wikipedia.org/wiki/Fiscal_multiplier https://en.wikipedia.org/wiki/Fiscal_multiplier Otherwise this is a common Broken Window fallacy - your example forgets that that dollar you spent would have been spent elsewhere. So all of those multipliers would have happened regardless of who gets the dollar (a key problem with Trickle-Down economics). If you have to pay $5 more per loaf because of the Jones Act, we don't generate greater than $5 of economic activity because I will be buying less bread and you will be selling less of it. So there will be somewhere between $1 and $5 in economic deadweight loss.
  - kotlin2 4y ago
    Yes, I linked to the wrong Wikipedia page. Thanks. But no, it's not an instance of the broken window fallacy. Let's say the store owner buys the bread directly from China, and by doing so can offer bread at 20% less than before. So, I pay $0.80 for bread. The store owner saves 20%, which is $0.16. And let's say pay $0.40 for the bread from the Chinese supplier, leaving the baker with $0.24 to spend. I also have an additional $0.20 to spend. If I spend it, the merchant I spent it with saves 20% and spends the other $0.16, then the total GDP contribution is 0.80 + 0.20 + 0.24 + 0.16 = 1.4. I spent $1, but only only received a multiplier of 1.4 instead of 1.8 in the original case. This should be pretty obvious because any money sent overseas stops being multiplied, even if you end up spending the same amount of money total. This, of course, assumes there is a trade deficit with the overseas country.

JAlexoid 4y ago

Neo-liberalism that literally pulled half of the planet out of permanent poverty? >goals of the act can be met in other ways American merchant fleet is all but gone by now. Yet you're suggesting that we keep this act, pretending that doing the same thing would yield a radically opposite result? PS: PATRIOT Act has a few goals, that have nothing to do with a lot of the content.

tsimionescu 4y ago
China pulled half of the planet out of permanent poverty, no neo-liberalism there (no freedom either, so no love lost on them from my side).
- JAlexoid 4y ago
  China (and Chinese people) was one of the major beneficiaries of your detested "neo-liberalism".
  - MJsGlove 4y ago
    By largely adopting anti neoliberal policies…
ddoolin 4y ago
Right out of poverty and into a new kind of servitude, maybe. OP really should've used "capitalism" entirely but I suppose that would go down even worse.
kotlin2 4y ago
> Neo-liberalism that literally pulled half of the planet out of permanent poverty? My original quote said "better outcomes for the country." Yes, a lot of people were pulled out of poverty, but their gains came and the expense of middle-class Americans. Maybe you're a globalist and you think this is a good outcome. I just hope you never have a nation state-level problem, e.g. unfair competition in the market place. The help you receive from the Chinese government, despite all of their gains, is likely to be quite minimal if you're not a Chinese citizen.

hedora 4y ago

I suggest re-reading the article. It has almost nothing to do with "lowering costs"; the fact that it costs 8x more to build a ship in the US is one of many pieces of evidence supporting the argument that the Jones Act has failed to protect the US shipbuilding industry.

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kyrra 4y ago

The major issue with the Jones act is that it prevents domestic transport of goods on water unless it is a built/flagged US ship. This accounts for a tiny fraction of transport within the US (3%): https://data.bts.gov/stories/s/Moving-Goods-in-the-United-States/bcyt-rqmu/ https://data.bts.gov/stories/s/Moving-Goods-in-the-United-St... Getting rid of this single part of the Jones Act would help a lot, and I don't see it hurting, as it accounts for such a tiny fraction of our transport today.

eftychis 4y ago

At what point was it alluded that the Jones Act was to make things cheaper? This is the first I hear of this. (I am actually asking, not rhetorical.)

scythe 4y ago

It's not about simply "making things cheaper". It's that the costs imposed by the Jones Act are so imbalanced that they lead to effects like this: >Significant opportunity costs also can be observed in the loss of revenues experienced when, for example, a hog farmer in North Carolina purchases corn feed from Canada instead of from a farmer in Iowa because exorbitant delivery costs make the latter’s price uncompetitive. Clearly, this is not effectively protecting American business from foreign competition. Even if that is considered a reasonable goal, it should actually, you know, be met. >Any earnest proposal to repeal the Jones act should address how the [military] goals of the act can be met in other ways. [brackets mine] The Jones Act was passed in 1920. At that time, US military spending was a tiny fraction of what it is today, and the idea that the Navy would borrow commercial ships instead of simply using its own was a lot more sensible. Today, the US Navy is by far the largest in the world, focuses primarily on blue-water power projection rather than defense of the homeland, and naval battles are primarily fought by aircraft, which was unimaginable in 1920. If the Jones Act continues to bring military benefits, the onus, in my opinion, rests on its supporters to show what they are, because modern naval warfare looks almost nothing like it did in 1920.

kilolima 4y ago
Just to respond to a few of your more landlubberly comments: Naval battles are fought by aircraft carried on ships. Modern naval warfare is still about global power projected by ships. That hasn't changed since 1920. Global power projection has always been the focus of the US Navy since its inception. North Carolina and Iowa are far from each other separated by mountains. Until the advent of giant cargo airships, it will always be cheaper to move bulk goods by sea.
- scythe 4y ago
  >Naval battles are fought by aircraft carried on ships. In other words, there's a whole new cost and technology center. Modern naval warfare was unimaginable in 1920. The fact that "there is a boat involved" is not sufficient justification. >Global power projection has always been the focus of the US Navy since its inception. The US Navy was founded in 1794. So no. >North Carolina and Iowa are far from each other separated by mountains. Iowa is on the Mississippi, the Chicago Portage exists, the Erie canal exists, etc. I was quoting the author who had studied the issue: you should give your opponents more credit than that.

P5fRxh5kUvp2th 4y ago

This is also why the free market trumpeteers are wrong. Companies charge the most they can, any lowering of internal costs will only change the external costs under 1 circumstance. When lowering the external cost will increase volume enough to make up for the lower cost. Tech has changed the game so it's much easier for a winner to take most. The free market idea has always assumed local competition, that's no longer the case. When Apple and Google can collaborate on how much to charge for a phone it becomes more difficult to associate lower costs of production with lower cost to consumers.

missedthecue 4y ago
There is another reason why companies lower cost, and it's because of competition. We have seen company after company in all sorts of sectors lose revenues because of competition, so your theory that they only lower costs to increase volume doesn't hold water.
- P5fRxh5kUvp2th 4y ago
  Please read my post again, lowering of internal costs does not lower external costs unless doing so increases profit due to volume changes. You're arguing that a company with competition may choose to lower its price whether or not internal costs have lowered (or not). That's a different question entirely.
  - missedthecue 4y ago
    If lower internal costs are achieved there is more flexibility to competitively price your product, i.e. reduce prices. The classic example is televisions. They no longer cost $3000 because of competition and internal cost reduction.
    - P5fRxh5kUvp2th 4y ago
      This is taken into account with the volume change point. internal cost sets the lowest bar possible without a profit, it does not set what the price will be in the face of competition because companies charge as much as they can to maximize profit. That maximization either comes in the form of per-unit profit or volume profit.

lame-robot-hoax 4y ago

> It's basically been disproven at this point that simply lowering cost does not necessarily lead to better outcomes for the country. This was basically neo-liberal orthodoxy until the mid 2010s, by which point it was clear that lowering costs by offshoring labor had hollowed out the middle class in America. Money has a multiplyer effect. Each dollar spent is received by someone who then goes on to spend a part of that dollar and so on. So if you take dollars and send them elsewhere, that multiplyer effect is dampened. Things may be cheaper, but the economy is worse overall. Literal gibberish. What you are describing is a fiscal multiplier which is the change in national income via government spending, or a money multiplier from a central bank. What actually happens in the scenario described is deadweight loss. Consumers spend more to obtain less goods. See figure 1. https://corporatefinanceinstitute.com/resources/knowledge/economics/price-floor/ https://corporatefinanceinstitute.com/resources/knowledge/ec...

bobkazamakis 4y ago
>What actually happens is deadweight loss. People buy less goods, suppliers make less money. Literal gibberish. Let's not imply things in a vacuum that don't have second-order effects. Where does this magical margin come from? Oh look, it's wages for that same worker who would be buying these goods!

dragonwriter 4y ago

> Any earnest proposal to repeal the Jones act should address how the goals of the act can be met in other ways. Spend money directly on the thing you are trying to support rather than trying to bank shot private money into it by restrictions.

abigail95 4y ago

this is what googling and reading economics on wikipedia gets