Why We Can't Have Nice Things

From his second-floor office overlooking the harbor in Norwalk, Connecticut, Bob Kunkel can see Long Island looming over the horizon to the south.

It's only about 10 miles away, straight across the blue waters of the Long Island Sound. But shipping anything from Connecticut to Long Island—or back again—likely means loading a truck, sending it down Interstate 95 toward New York City, passing through some of the most congested highways in the whole country, and eventually meandering toward the final destination.

Kunkel, president of Alternative Marine Technologies, a design and construction supervision firm, says there ought to be a better way. This part of the country was built because Americans used to ship a lot of cargo by water—and he'd like to start doing that again.

"One Connecticut governor told everybody I-95 was a parking lot," he says. "So what are we doing to fix it? You're not going to build another highway. I mean, the costs are phenomenal."

Unfortunately, the costs to ship anything by water in the United States are phenomenal too, thanks to a federal law from 1920 that severely limits the number of cargo vessels operating here. The Jones Act requires that ships moving goods from one American port to another must be American-built, American-flagged, American-crewed, and registered in the United States.

That's a major stumbling block for Kunkel's plan to ease truck traffic along the I-95 corridor in Connecticut. He'd like to buy four mid-sized cargo vessels—big enough to fit more than 80 tractor-trailers but far smaller than the massive container ships built to cross oceans—to move goods from New Jersey to Long Island, bypassing the bottleneck of New York City.

A boat like that costs about $65 million on the international market, he says. But to get one that complies with the Jones Act will cost $125 million, or more.

"So now the numbers don't work," Kunkel tells Reason. "If we can't compete with trucking or support trucking, then there's no sense building the ship."

In the third episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're looking at just some of the ways that the Jones Act drives up prices, makes it more difficult to ship goods to places like Puerto Rico and Hawaii, and snarls supply chains for American industries.

"It's just a very classic case of everything wrong with Washington," says Colin Grabow, a research fellow at the Cato Institute.

Further reading for this week's episode:

The Case Against the Jones Act, by Colin Grabow and Inu Manak

"How a Century-old Law Contributes to CT Traffic," by Jordan Nathaniel Fenster, CT Insider

"Building a Maritime Highway Across the Long Island Sound," by Ira Breskin, The New York Times

"The Obscure Maritime Law That Ruins Your Commute," by Scott Lincicome, The Atlantic

"Protectionist Policies Set To Inflate the Cost of Rebuilding Hawaii," by Colin Grabow

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact-checking by Katherine Sypher

The post Why We Can't Have Nice Things: Jones Act Traffic Jam appeared first on Reason Magazine.

It's now been nearly 100 years since Congress overhauled the United States' general tariff system—a system that is by now "quite antiquated and designed for a different time and a different economy," says Ed Gresser.

And that's not all, says Gresser, a former assistant U.S. trade representative who now serves as vice president for the Progressive Policy Institute, a left-of-center think tank. The tariff code is also "quite regressive and somewhat misogynist." Inexpensive goods like cheap sneakers are generally taxed at a higher rate than pricier items like leather boots, and women's underwear is charged a higher tariff rate than boxers and briefs.

In the second episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the weird and wonky tariff system that imposes hidden taxes on Americans every day. Protectionism usually benefits some special interest at the expense of everyone else, but some of the industries supposedly being protected by these tariffs don't even exist in the U.S. anymore.

"The most effective lobbyist in Washington is muscle memory," says Steve Lamar, president and CEO of the American Apparel and Footwear Association.

The supply chains for basic necessities like T-shirts, shoes, and underwear stretch all the way around the world today. But America's tariff code still acts like those are niche domestic industries. On this week's episode of Why We Can't Have Nice Things, we're explaining what that means for consumers and why we've recently moved in the wrong direction—by applying even more tariffs on top of some of the most highly taxed imports.

Further reading for this week's episode:

"U.S. Underwear Tariffs Are Unfair to Women," by Ed Gresser

"U.S. Tariffs on Cheap Stainless Steel Spoons Are 5 Times Higher Than on Sterling Silver Spoons," by Ed Gresser

"The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade," by Pietra Rivoli

"If Biden's Trade Policy Was Really Driven by 'Equity,' Trump's Tariffs Would Already Be Gone," by Eric Boehm

Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher

The post Why We Can't Have Nice Things: The Ghosts of Protectionism Past appeared first on Reason Magazine.

"When you walk into the store and there you don't see that packaging…you start to panic," says Kenzie Jaicomo, a new mom whose child was just a few months old when a sudden shortage of baby formula hit the United States last year.

"What am I going to feed my baby?" she remembers thinking, staring at an empty shelf in a neighborhood grocery store.

In the first episode of Why We Can't Have Nice Things, a new podcast series from Reason, we're diving into the causes and consequences of last year's baby formula shortage. Though it was a crisis kicked off by unexpected supply chain issues and contamination problems at a major production facility in Michigan, the roots of the shortage ran straight through Washington, D.C., where poor government policy left American infants hungry and their parents scrambling.

With domestic supply chains snarled, it would have made sense for American grocery stores to turn to foreign producers for replacement supplies of baby formula. Unfortunately, there are "absurdly high" tariffs on imported formula, explains Gabriella Beaumont-Smith, a trade policy analyst at the Cato Institute.

"There are these distribution channels that are basically not established" because the tariffs make it too costly, she says. "And we're talking about baby formula. This is a necessity and we shouldn't be taxing it that high or at all."

It took last year's crisis for Congress to consider lifting those tariffs—and only on a temporary basis. The dairy lobby and other special interests like the isolated, and fragile, American market for baby formula just the way it is.

On this week's episode of Why We Can't Have Nice Things, we'll explain how this crisis unfolded, why the government's efforts to alleviate the shortage mostly failed, and ask whether a free market might have done a better job. Spoiler alert: It would have.

Further reading/viewing for this week's episode:

"Formula for a Crisis," by Scott Lincicome, Beaumont‐​Smith, and Alfredo Carrillo Obregon

"My Baby Needed Special Formula From Europe. U.S. Trade Policy Made It Almost Unobtainable," by Kelli Pierce

"The Government Hasn't Learned a Thing From the Baby Formula Shortage," by Emma Camp

"FDA Finally Admits It Caused the Baby Formula Shortage," by Eric Boehm

"The Mystery of the Missing Baby Formula," by ReasonTV

Written by Eric Boehm; produced and edited by Hunt Beaty; additional editing by Ian Keyser. Additional mixing by Luke Allen. Fact-checking by Katherine Sypher.

The post Why We Can't Have Nice Things: The Great Baby Formula Shortage of 2022 appeared first on Reason Magazine.

Trade crossed with politics equals protectionism. That's the formula for Why We Can't Have Nice Things, a new limited-run podcast series from Reason launching on August 3.

Join host Eric Boehm over the next six weeks as he examines how markets could deliver the goods for consumers—if only the government didn't keep getting in the way.

The show will take a deep dive into some of the frustrating and foolish parts of American trade policy, including the 1960s trade war that artificially inflated the price of pickup trucks and the government policies that contributed to last year's worrying shortage of baby formula. These are stories about how special interests influence policy, and why all of us end up paying for it.

It's Why We Can't Have Nice Things. Check out the trailer for the new show, and click here to subscribe.

The post Trailer: Why We Can't Have Nice Things Season 1 appeared first on Reason Magazine.