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Comment by eh9 | Hacker News Reader

I’m from Puerto Rico and people there have been fighting for this since I can remember.

This disproportionately hurts the poorest people there the most. Groceries are already exorbitantly expensive, doubly so because of this misguided act.

Never mind the fact that Puerto Rico is in the middle of recovering from a Cat1 hurricane that nearly took the island out for a month (power outages still ongoing). While the island should have been prepared for that, it was still in the middle of recovering from Maria (a cat 5 hurricane in 2017).

How much slower has relief been because of the jones act? How much longer can we keep subjecting people to colonialism?

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I live in Puerto Rico. I'm curious about the actual mechanics of how the Jones Act affects PR. For context, I'm against the Jones Act regardless of the exact effects it may or may not have---but I'm still curious about the mechanics.

For instance, I used to believe we couldn't get produce from the DR without it first going through a US port (typically Jacksonville).

But in reality, the Jones Act doesn't prevent ships from bringing DR produce directly to PR, even foreign ships.

I'd like to get a specific example of something economically useful that the Jones Act forbids.

For instance, you couldn't have a trade route by a DR ship that goes San Juan -> Ponce -> DR, if you want to be able to pick up goods in San Juan and drop them in Ponce. But is that really useful, anyway?

Perhaps allowing non-US ships to brings goods between Florida and PR would be the biggest gain of dropping the Jones Act? Because shipping would be much cheaper. Like the case in the article where it's cheaper to bring fuel to the Northeast from Africa than from Texas.

I think the issue is that a non-Jones ship going from DR to PR could then not continue on to another US port, which means that PR would have to have enough demand to unload the entire ship there or at another foreign port.

The issue really comes into play with the fact that a non-Jones ship couldn't stop at a US port on the way to another US port, and that really hurts smaller outlying ports that are between a foreign nation and mainland US.

It's a bit of a further tangent, but my understanding is that this has a particular weird impact on cruise ship destinations and related tourism cash/investments. Because cruise ships aren't exempt from the Jones Act either and are often foreign flagged (many cruise ship companies are nominally headquartered in the Bahamas and fly Bahamanian flags on their ships), they also have to make sure that they alternate ports in the way that meets the Jones Act. They can't go from Florida or New Orleans straight to Puerto Rico without stopping somewhere else first (and with US sanctions still "weird" with Cuba the obvious stop isn't generally possible either) or travel directly between Puerto Rico and the USVI without a stop somewhere in between (such as DR).

This seems silly for a number of reasons. I know a bit too much about it because a cruise charter group I go on cruises with has wished for certain itineraries to make logistics easier (PR has better concert logistics than most other islands, for instance, if you are trying to set up a single day concert in a park), but there are too few available PR routes for the sake of variety precisely because some of those routes that might be desirable are basically illegal under the Jones Act. It's not a showstopper in this group's case, but it is silly.

A non-US ship can go to PR and then another US port. From the article:

"The concrete results are that a foreign ship can enter a U.S. port to drop off its foreign cargo, it can even from there sail to different U.S. ports to drop off other foreign goods, but it is not allowed to pick up any domestic goods in a U.S. port and bring those goods to another U.S. destination if it doesn’t meet the four conditions listed above."

Thanks for the clarification. I was running off of memory from a Peter Schiff podcast where he talked about the Jones Act.

That is still an issue though. Those ships need to try and maximize on board cargo at every port. They have wasted dollars if they don't. There is zero reason for this law to exist except to prohibit free trade and stomp out domestic competition.

It's pretty simple. PR isn't a major market, that means that delivering goods from US to PR isn't valuable enough to have economies of scale to kick in.

Add to that that most freight in The Lower 48 is ground(rail and road) - there's little demand for all American merchant fleet.

Low demand for services = low demand for new ships = older inefficient ships = high maintenance costs = lower profit or high prices = small markets get screwed (PR, Guam, Hawaii, etc)

Shipping Florida or Texas to PR would be where you see a benefit to PR. Currently, shipping an American-made good (car made in SC, maybe) to PR requires using the US merchant fleet, which is more expensive.

Or uanavailable, because the ship rusted away...

The arguments I've seen are:

a) you would get more competition / lower prices on trade routes from the US to PR. b) foreign flagged vessels could stop in PR on their way to the US, drop off PR goods, and load PR manufactured goods.

It's hard to argue that those possibilities wouldn't have _some_ impact on CoL... but they wouldn't change the bigger reality that PR is an island that doesn't have any natural resources, imports 85% of its food, and is a second class entity within the country it belongs to.

People say PR is a second class entity, but I think almost any US state would be far better off with Puerto Rico's deal.

PR gets to harvest its own taxes, whereas the other states are tax fiefdoms for the Federal bureaucracy. This is truly a superpower for Puerto Rico.

In return, PR doesn't get to vote for president, or have senators or congressmen. But I can tell you, all those are worthless. My state's representatives (when I lived in a state) served the Federal bureaucracy in practice, not the people of the state. They are cronies for their political parties.

I personally believe that PR's mediocre economic situation is because their own elites steal all the money they get (like the $80 billion or whatever they defaulted on), and because the vast majority of Puerto Ricans have already gone to the States, creating a massive brain drain. I do not believe it's because of the Jones Act or some other form of colonialism.

>I'd like to get a specific example of something economically useful that the Jones Act forbids.

The Jones Act obliges some pretty absurd contortions and workarounds to construct offshore wind, of which many many gigawatts are planned to be built in the future off the coasts of the US. This directly increases risk, cost, complexity, and uncertainty compared to offshore wind development in other countries.

The highly specialized vessels which are capable to do this work are in very limited supply globally, and exceedingly few are (or will be) US-flagged and JA compliant. These are the heavy crane vessels, jack up vessels, precision rock placement vessels, cable lay vessels, etc of which practically nothing suitable exists in the US-flagged fleet. Some US vessels are being built (Dominion’s turbine installation jack-up or GLDD’s fall pipe vessel), however, these are absolutely insufficient on their own, and vastly more expensive (and uncompetitive elsewhere) compared to the rest of the global fleet.

The Jones act restricts trips between US ports to US ships. So transport between San Juan and Jacksonville needs to be a US ship. It doesn't technically restrict ships between DR or another other foreign port and PR. But the Jones act prevents a ship going from DR to Jacksonville from stopping in San Juan along the way. San Juan isn't a large enough market, so it doesn't make financial sense to make a trip only there, or to stop in San Juan then another foreign port, then Jacksonville.

According to the article, a foreign ship can stop at multiple US ports, as long as it only offloads. A ship can go from DR to Jacksonville and stop in San Juan on the way.

Formally exempting overseas territories like Puerto Rico seems to me a reasonable compromise.

But why do it at all? There's no evidence that the Jones Act has worked. The US ship building industry lags far behind places like South Korea that churn out bigger, better, and cheaper ships on a faster basis. South Korean ship builders aren't poorly paid either, they just have to compete on a global market.

> But why do it at all? There's no evidence that the Jones Act has worked.

But there are more options than that, like strengthening the Jones Act to make it work better. It's a false choice to present the options as a binary repeal or keep.

How could you make it work better by strengthening it? There are decades of work in economics point to how shitty the Jones Act is. It punishes island territories and makes US ship building less competitive.

> How could you make it work better by strengthening it? There are decades of work in economics point to how shitty the Jones Act is.

So? Those people who did that "work" have certain priorities, but those priorities aren't the only ones.

One annoying thing about economists (or at least many of the ones that spend their time pontificating to the public like this) and economics-minded people, is that they're almost always fixated on a small number of oversimplified metrics that they think should be overoptimism to the exclusion of all else.

I'm all for repealing it, but politics is frequently about compromises. Start with the most obvious need, prove the world doesn't explode when you do.

I see your point, but a half measure is likely to stick around just as long as the Jones Act.

If congress wants to phase it out and give some no interest loans to ship builders to modernize, then I guess I'm fine with that.

> Formally exempting overseas territories like Puerto Rico seems to me a reasonable compromise.

If you're going to exempt Hawaii, Puerto Rico, Guam, etc. then why not just repeal it entirely? At that point it doesn't really do anything.

Hawaii isn't a territory and represents significant Jones act related commerce. While I'm not pro jones act it's worth noting Hawaii/Alaska have congressional participation in the democratic process so you can say it's kind of 'their fault' because they're held to the 'social contract' of the majority vote, to whatever weight that validates following laws.

Territories do not have congressional representation and thus cannot be faulted for failures of democratic federal decision making. I think even from the pro-jones act perspective there's a compelling argument to exempt territories.

>How much longer can we keep subjecting people to colonialism?

Puerto Ricans call themselves subjects of colonialism yet continually reject both statehood and complete independence. It seems like Puerto Ricans want the worst of both worlds.

Puerto Rico currently benefits from massive federal grants and subsidies, while having a power structure/leadership that doesn’t have to report/be accountable to the US gov’t in certain ways, and doesn’t have the same taxation. For instance, most Puerto Rico residents don’t need to pay federal income taxes.

It leads to some interesting incentives for folks there, especially in gov’t, if they know how to poke certain populist buttons.

The voting demographics also favor one party over the other, if one cares to look, and if admitted as a state may cause swings and imbalances in the current two-party detente. This is similar to Washington D.C.

The current balance has a lot of defacto non-obvious benefits for politicians that their constituents might not appreciate if they fully knew about them.

> For instance, most Puerto Rico residents don’t need to pay federal income taxes.

Most US households in general haven't paid federal income tax in the past couple of years. In a good year it's close to 50-50.

There is a difference between ‘required to do the math, but gets money back/doesn’t owe anything’ and ‘completely exempt’. Puerto Rico is exempt except for certain classes of payments (mainly ‘money directly from the feds’ and ‘money that is intentionally going straight back to the mainland’.

There is a whole ecosystem of companies in the island for instance which use this for tax arbitrage, providing services for mainland folks at lower rates because of it, which they couldn’t do if they had the same tax rates.

The economy there is… unusual, partially because of it’s current semi-favored situation. If it had to play in an even playing field from the mainland US, it isn’t clear what it would look like, but it would probably shift to even more of a resort/retirement place (like Hawaii), which is not to the locals benefit in many cases.

At least if they want jobs that aren’t just hospitality type jobs, which aren’t for everyone.

Multiple referendums in the last decade where Puerto Ricans voted for statehood:

https://en.wikipedia.org/wiki/2020_Puerto_Rican_status_refer...

US government's rejecting Puerto Rico's statehood

a third of the votes in the 2012 were blank in protest. Can not say that that vote proved anything at all. The 2020 vote seems definitive enough though, although it was quite close.

Even as a protest vote an intentional abstention still supports the majority. (At least according to Robert's Rules. Which I know isn't directly applicable to referendums such as this but is still a useful interpretative lens.)

Well the abstainers were explicitly against being a state so I don’t think it makes sense to just put them with the majority.

The abstainers weren't being explicit about that in the vote itself. They left an implicit vote so it could be (and was!) interpreted however one liked.

That said, most of my awareness is Wikipedia and second-hand account, but I heard most of the abstainers weren't protesting "against statehood" but against the meaningless nature of the vote itself because it was non-binding to anyone, its results weren't going to be used to do anything (and indeed did not ultimately matter other than a couple of wishy-washy President Obama words but no actions).

I'm probably wrong on that interpretation, too, but the two votes after the 2012 vote seem to align with that: there is a desire for statehood over alternatives, but that there also seems to a feeling of neglect that they can vote all they want and Congress itself has yet to certify the votes or to make the necessary movements towards an actual, binding vote.

Yeah; the democrats said this would be a priority under Biden (giving them two free senate seats!), but haven't moved on it.

I suspect Manchin and pals want to make sure we continue to be ruled by a minority of the voters.

Manchin is in the Democratic caucus. Even if you think he generally votes R, he gives the Democrats a majority for rules issues and committees, making him far more D friendly than any R.

PR voted for statehood THREE TIMES already... THREE!!! (2012, 2017, 2020)

https://en.wikipedia.org/wiki/Puerto_Rico_political_status_p...

Turns out different people want different things.

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