Protectionism has a multiplier effect: tariffs multiply additional market-distorting interventions. Jake Grant explains.
Oh, and lookie here: what protectionism giveth protectionism can taketh. (HT Bob Graboyes)
Formally known as the Merchant Marine Act of 1920, the Jones Act mandates that the domestic transportation of waterborne cargo be performed by vessels that are U.S.-flagged, U.S.-crewed, U.S.-owned, and U.S.-built. Vessels produced in U.S. shipyards, however, cost as much as eight times more than equivalent ships constructed overseas. Paired with reduced competition from these restrictions, the Jones Act results in artificially-inflated transportation costs for the goods American consumers purchase.
Americans would rebel if domestic airlines were forced to purchase U.S.-built planes or trucking firms were denied access to imported vehicles, knowing full well the result would be higher prices. Yet the Jones Act persists, decade after decade, in large part because of the unflinching support offered by legislators such as Rep. Hunter to the special interests that benefit from reduced competition and increased costs to consumers.
(See also here.)
Peter van Doren clears the air regarding CAFE standards.
My Mercatus Center colleague Adam Thierer writes wisely about the regulation of technology. A slice:
But societal attitudes toward technological change often shift rapidly. They do so even faster today as citizens quickly assimilate new tools into their daily lives and then expect that even more and better tools will be delivered tomorrow. As more people begin to realize how new technologies improve our lives in meaningful ways, it becomes extremely hard for policymakers to take those innovations away or even tell us not to expect better ones. This relationship between technological change and societal expectations acts as an extraordinarily powerful check on the ability of regulators to “roll back the clock” on innovative activities.
