Recently uncovered documents show that someonealmost certainly in jestsuggested that the government Charge all past and present members of the Cato and Mercatus Institutes with treason for opposition to the Jones Act, which is a costly piece of legislation you probably dont know exists but which makes sure your paycheck doesnt go as far as it could.
The story broke in The Dispatch and caused an immediate stir. In a recent issue of Discourse, the Mercatus Centers Veronique de Rugy summarized the case against the Jones Act. If you dont know, the Jones Act requires that ships traveling between US ports be US-built, US-flagged, mostly US-crewed, and mostly US-owned. As de Rugy puts it, The Jones Act is detestable beacuse it perfectly embodies the inefficiencies and injustices of protectionism, unfair regulations, and cronyism. She explains how Cato research suggests that every dollar of additional income Americans take home due to the Jones Act is offset by more than one dollar in losses.
Permit me to pile on. You might wonder just why every dollar of Jones Act-related gains to some Americans is more than offset by more than a dollar of losses for other Americans. First, the Jones Acts requirements mean were wasting resources. The land, labor, and capital being used to build ships in the United States would be better deployed elsewhere, and we can be pretty sure of this because its cheaper to produce ships abroad and for them to be crewed by non-Americans.
Second, since the prices are higher, we have less (and more expensive) shipping between American ports. Without Jones Act restrictions, we would have more (and cheaper) shipping between US ports. And while were repealing wasteful policies, lets see if we can get rid of the rules that prevent foreign airlines from flying domestic routes. But thats another idea for another column.
The treason dragnet is going to have to go way beyond Cato and Mercatus. Support for free international tradeand by implication, opposition to mercantilist holdovers like the Jones Actis more or less universal within the economics profession regardless of ideology. In 2017, NPRs Planet Money did an episode on the Jones Acts absurdity that featured Nobel Laureate Joseph Stiglitz, a notable man of the left. Hes hardly anyones idea of a free market zealot.
Ive done contract work for both Cato and Mercatus and have long admired how they have defended the principles underlying free and prosperous societies. If joining an economists consensus on a policy that wastes resources and impoverishes the country is treason, then I guess that makes just about every economist in the country guilty.