The Jones Act of 1920 turned American shipping into a protected welfare case, and the results speak for themselves: a once-dominant maritime industry now controls less than 1% of global shipping. US citizens get to pay the price every time they buy anything that moves by water.
This century-old protectionist monument requires that all cargo moved between U.S. ports travel on ships that are American-built, American-owned, American-crewed, and American-flagged. Sounds patriotic until you realize American shipyards charge three to five times what Korean or Japanese yards charge for identical vessels. The law forces shippers to use the maritime equivalent of a gold-plated taxi for a cross-town trip.
Consider Hawaii, where this regulatory straitjacket inflates the cost of everything from gasoline to groceries by an estimated 15-20%. Puerto Rico faces similar punishment. A South Korean container ship can deliver goods from Los Angeles to Tokyo cheaper than an American ship can move the same cargo from Los Angeles to Honolulu. The economics are so perverse that it costs less to ship goods from the West Coast to Asia and back than to move them to Alaska.
The predictable happened. American shipping companies either fled to foreign flags or died. In 1950, U.S.-flagged ships carried 27% of American trade. Today that figure hovers around 2%. Meanwhile, the "protected" domestic fleet shrunk from over 2,000 vessels in the 1960s to roughly 175 today. Government protection consistently produces the opposite of its stated aim.
Free market economists have watched this slow-motion industrial suicide for decades while politicians claim they're "protecting American workers." The Jones Act protects about 95,000 maritime jobs while imposing billions in additional costs on 330 million Americans. That math works splendidly if you're a maritime union boss or a politician buying votes with other people's money.