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Economic Analysis from Dr. Thomas Grennes: The Jones Act

“The Jones Act Revisited” is a follow up piece by Emeritus Professor Thomas Grennes. It offers analysis on the legislation and its harmful effects on the economy. The conclusion is below and the entire article can be read here.



After a thorough evaluation of the arguments made by supporters of the Jones Act, the conclusion remains the same. The Jones Act is harmful to American consumers and businesses as a whole. Americans would gain from a major reform of the act, including a possible repeal. However, the supporters of the act have effectively protected it from repeal since 1920, and there is little evidence that their political support is diminishing. If repeal is not a reasonable option, reform of the act that would include relaxing the American-built requirement for ships would bring substantial benefits. A specific bill supported by the Hawaii Shippers’ Council would provide an exemption from the American-built requirement, but only for oceangoing ships traveling to or from the noncontiguous parts of the US (primarily Hawaii, Alaska, and Puerto Rico). The remaining features of the Jones Act would remain in place. To make the reform more palatable to shipyard employees, compensation could be paid to certain shipbuilders for a limited number of years. A precedent for such a buyout would be the tobacco buyout of 2004–2014.