Ship Happens with Protectionism: Why a Jones Act Waiver Should Lead to Repeal

Ship happens when the government tries to protect an industry, and the maritime industry is no exception. Passed in 1920, the Jones Act is a federal statute requiring all goods transported between U.S. ports be carried on ships that are built, owned, flagged, and crewed by Americans. Instead of "protecting" consumers, the Jones Act actually makes it more difficult to get goods to consumers. Unsurprisingly, the Jones Act waiver that President Trump instated in March acts as an example of what happens when protectionist rules get out of the way. 

What the waiver has accomplished in such a short time is striking. The Cato Institute shows that the waiver has enabled 300 voyages carrying 80 billion barrels of cargo. What happened with the Jones Act in the West Coast, Alaska, and Hawai'i is even more telling. Under the waiver, this region had 20.7 billion barrels arrive. This is much higher than the 7.7 billion barrels carried over the entire 2009-2025 period.  

Similarly, Puerto Rico imported 800,000 barrels of propane under the waiver, which is more than double the amount of propane imported in the last 22 years combined. Even if the waiver only covered energy and fertilizer cargoes, it offers a glimpse as to how much protectionism has suppressed domestic commerce. 

These examples show how protectionism has a predictable way of backfiring. The Jones Act protects domestic shipbuilders from competition on domestic routes, businesses and consumers pay the price. By requiring the vessels to be U.S.-owned, U.S.-flagged, and U.S.-owned, the law restricts the number of ships that can enter ports. 

The Competitive Enterprise Institute summarized research on the Jones Act. Not only can the Jones Act make shipping costs up to three times the costs of foreign shipment, but removing the Jones Act would actually increase output by 71 percent, according to a report from the OECD.

When businesses can only select from a limited number of eligible vessels, they face less competition and fewer alternatives when demand rises or ships are unavailable. That scarcity pushes freight rates higher. It's basic supply and demand. When demand remains constant, restricting supply has this tendency to raise prices. 

Those higher prices don't stop at the dock. Businesses either absorb the expense and reduce their profits, or they pass the cost onto the consumers. Regardless of the choice, these decisions ripple throughout the U.S. economy. 

By allowing for more competition, the waiver eases the artificial scarcity, expands shipping capacity, and makes previously uneconomical shipments more viable. In other words, relaxing a law intended to protect American maritime commerce can help more American businesses move more American goods to American consumers. 

The Jones Act is supposed to be protecting American shipping, maritime jobs, and national security. As CEI points out in a study about the Jones Act, the national security argument is questionable at best. What the law does a fine job of is protecting a small handful of politically connected industry players at the expense of everyone else. The current waiver demonstrates what can happen when you remove onerous restrictions: more opportunities for Americans to do business with one another. For the same of American citizens and businesses, it's long past time that we get rid of this protectionist monstrosity.

Québec Electing a Separatist Part Doesn't Mean That Québec Will Secede from Canada

Does Québec want to separate from Canada? You would think that because the Parti Québecois (PQ), Québec's separatist political party, won the provincial elections earlier this week. The PQ had been on the decline in 2012, and has not enjoyed the heyday it had in the 1970s-1990s. If anything, it was close to extinction in 2022 with winning just 3 legislative seats. But the PQ has made a comeback this week by winning 59 of the legislature's 127 seats, even thought it received 27.9 percent of the popular vote. 

Although that is quite the comeback for a political party that was on its way out, it might be too premature to say that Québec wants to secede. According to the most recent poll, which was from Research Co., 27 percent of the voters were in favor of seceding from Canada. Polling from Léger, as well as Pallas Data and Synopsis Recherche, show that a minority of Quebecers would like to separate from Canada.

So what gives? You would think that the PQ's main shtick, which is secession, would have been at the top of Quebecers' list of priorities. As we have seen in the United States and other countries, it is amazing what an unpopular incumbent can bring out in people. They were choosing a government, not answering a yes-or-no referendum about whether Québec should be a separate country. The PQ itself wasn't campaigning on that single issue, even though it is historically its bread and butter. It played on dissatisfaction with the incumbent party and how it handled housing, cost of living, homelessness, French language, immigration, and government efficiency. 

Also, the PQ isn't planning on an independence referendum before Trump leaves the White House in 2029. That might be a combination of not wanting Trump to distort the debate and making sure that the PQ gives itself enough time to govern before it makes larger strides. Regardless, it is a reminder of what such entities as Scotland and Catalonia have encountered with regard to secession. 

It's one thing to win an election. Winning a referendum for independence is another. In 2014, Scotland held its independence referendum and decided to remain in the United Kingdom. Catalonia's attempt to become independent in 2017 produces a constitutional political confrontation with Spain. Québec has tried it twice, in 1980 and 1995, and lose both times. Québec isn't the province it was in the previous century, and Quebecers very well might want to stay, even in spite of its consternation with the Canadian government. 

The PQ has won the government of Québec, but it hasn't won Québec......at least not yet. Québec went through two separatist waves last century, and it's still part of Canada. Other countries also show the complication of people who conceptually want secession and gaining the political feasibility to make it a reality. Even though Québec elected a political party that has historically been separatist, that is a far cry from actual secession. 

Rosh Hashanah and the Art of Getting Knocked Down and Back Up Again

We often imagine teshuvah, the Jewish concept of repentance, as turning around and heading in a new direction. We recognize what went wrong, resolve to change, and begin again. This happens with New Year's resolutions, too. You commit to exercising regularly, but an injury or a demanding work schedule get in the way. You want to spend more time studying Torah, but work deadlines and household responsibilities give you less time than you hoped for. You decide to become more financially responsible, but then a car breaks down or an unexpected bill that wipes out months of savings.

I'm sure we can all come up with personal examples, but the idea is the same: we want to do better, but life gets in the way. And by the time we come back and try to accomplish the goal again, the structure we began to build beforehand has already collapsed. I recently went to a shiur (class on a Torah topic) with a Jewish organization called Hadar. This class offered a different suggestion. Perhaps the metaphor isn't simply turning around or returning. Perhaps it is rebuilding. 

When Moses was at the Burning Bush, he asked G-d the deceptively simple question of "What is Your name?" G-d's answer was אהיה אשר איהי (Exodus 3:14). This phrase has been elusive. It has been translated as "I am that I am" or "I am that I will be." What is interesting is that regardless of translation, the word איהי is a verb. 

This grammatical concept can be helpful with viewing teshuvah. We tend to imagine ourselves as if we were finished things that merely need occasional fixing. But we remain works in progress, shaped by experience and capable of revision. Part of teshuva, therefore, is the recognition that becoming is part of becoming human. 

There is a Midrash (Tanhuma 11:8) that complicates the metaphor of building in a fascinating way. During the dedication of the Miskhan (Tabernacle), Moses repeatedly dismantled and reassembled the Tabernacle. That is a strange picture of construction: building something only to take it apart again. 

R. Shalom Noah Berezovsky, in his text Netivot Shalom, takes that metaphor and applies it to the spiritual work of a human being. We, too, build structures in our lives. Sometimes, they collapse. The answer he suggests is not to despair, but to rebuild. 

That means teshuvah is not just a theoretical exercise. Even after reflection, there is a point where we have to do something with that knowledge. We prepare, we build, we repair, and sometimes, we have to dismantle so we can build something better. Sometimes taking something apart is not proof that the building was a mistake, but a lesson on learning to build it properly. 

That's where the metaphor gets messier. The hardest part of teshuvah might not be recognizing what needs to change. It may be what happens that even when we put in our best efforts to try to change, it doesn't hold. Or even worse, it collapses. The old habit reemerges. A relationship or job falls apart. At that point, it is all too easy to conclude that failure proves that we cannot change for the better. 

To channel Chumbawamba, "I get knocked down, but I get up again. But you're never gonna keep me down." For me, that nostalgic line is reminiscent of better days, but it reminds us that getting back up is not easy. And it's not supposed to be. Sometimes, it can mean taking the beating of your life, accepting that something we worked towards has been decimated, and then deciding that collapse of said vision or goal will not be the end of the story. 

Teshuvah is not about not falling down. If anything, falling down at some point is inevitable because to err is to be human. It is the willingness of persevering when we do fall down. 

But rebuilding does not mean constructing something the same exact way as you did before. If something collapses, we should learn something from that collapse. Maybe the structure was too weak. Maybe it was too ambitious or the design was wrong. Maybe the building was unsustainable. 

Whatever the reason, teshuvah shows us that we should take the reason(s) seriously. But we don't necessarily return to that blueprint. We can revise it the best we can for our lives. Rebuilding is not repetition, but revision based on the new information. Teshuva doesn't ask us to build perfectly. It asks us to be better builders. 

And that brings us to the New Year. Rosh Hashanah offers us a beginning, but not a clean slate. The previous year is with us, whether it is our successes, joys, failures, emotional baggage, or whatever lessons we learned along the way. 

So we don't need to promise to ourselves "This year, I will get everything right." We can instead say something more modest and honest: "I know more than I did before. I know what some of my failures cost. I may still fall, but I am willing to build again." Starting with what we have learned might lead us to a more durable form of hope and faith.

As much of a Type-A perfectionist that I am, perhaps this year I need to ask if I can finally get everything right. Perhaps a better question may be: What am I willing to build, even if I know that some of it may eventually fall apart? 

As scary as it sounds, I don't know what will endure and what will not. None of us do. But we can choose how we respond when something collapses. We can walk away, or we can get knocked down and then we can get up again.....to build. 

Hodgepodge for Week of August 24, 2026: Deportation, Head Start, LGB v. T, Occupational Licensing

It's been a busy week for me, but there is still plenty going on in the world. I don't have the time to give it the full treatment, but I still want to get at some stuff that is going on. 

The cost of mass deportation: Earlier this month, the Left-leaning Economic Policy Institute (EPI) released a deportation calculator and estimated that the government is going to spend $268.9 billion. I don't see eye to eye with EPI on a lot, but I agree that money could be spent on a lot of better things than deportation. As I pointed out in 2024, mass deportation is enormously expensive, disrupts the labor force and economy, raises prices, and ultimately imposes substantial costs on everyday Americans. 

The costs of Head Start's regulatory micromanagement: The Competitive Enterprise Institute (CEI) covered a recently proposed rule about cutting the red tape in Head Start. Head Start is the federal program that provides early education services and related services to lower-income children. HHS proposes to save as much as $2.2 billion with its deregulation. CEI covers the examples of staff-to-child ratios, family service caseloads, and mandatory bus monitors to illustrate how Washington micromanages local programs with costly rules that lack evidence that they work. 

LGB divorcing from the T: The Log Cabin Republicans, which represents the lesbian, gay, and bisexual (LGB) of the Republican Party, has announced that it will no longer advocate for transgender rights. Part of this divergence is due to such issues as radical gender ideology, biological men in women's sports, and gender reassignment surgery on minors. I find this to be a welcomed change given the extremeness of the trans activists. 

In 2024, I wrote a two-parter on this topic. The first part was about how the alliance between LGB and T did not make sense, in no small part because each group has different characteristics and goals. The second part was about how bringing the transgender activism and gender ideology are harming LGB individuals. I hope this trend extends beyond the Log Cabin Republicans. 

Occupational licensing: Back in 2014, I wrote about the perils of occupational licensing and how it is a harmful barrier to entry in multiple jobs, whether it is a florist, dentist, hair stylist, or a nanny. I also came across corresponding research in 2018 showing how costly it is and how it adversely affects the labor market. The Archbridge Institute has released its latest State Occupational Licensing Index. The bad news is that 20 percent of Americans are subject to occupational licensing. But there is some good news. One, there are fewer occupations that have occupational licensing. Two, more states are passing universal licensing recognition laws. Three, the licensing variation reminds us that this burden is not inevitable. 

New York City's Pied-à-Terre Tax: Mamdani's Heavy Foot on High-End Second Homes

If you own a multimillion-dollar apartment in New York City but don't live there full-time, prepare to pay for the "privilege." New York City's (NYC) new pied-à-terre tax imposes an additional tax on certain expensive residential properties that aren't their owners' primary homes. A recent appeals ruling has allowed the city to proceed with implementing the tax while the legal battle ensues. The targets may be wealthy enough to make the policy politically appealing, especially in this political climate of "eat the rich." But none of this answer the more important question: Is taxing pied-à-terres actually a good idea? 

At first glance, the pied-à-terre looks like just another property tax, except on high-end real estate. In the case of pied-à-terre, it asks the question of what is the primary residency of the property. A $10 million apartment in NYC, therefore, receives very different tax treatment based on whether the owner lives in NYC or another state. 

That distinction matters because it creates an incentive that doesn't exist with a regular property tax: change the property's status and you may change the tax bill. And this isn't a trivial surcharge. The NYC Comptroller's analysis estimates that the tax could increase the property tax burden on a $10-15 million home by 89 percent, and on a $25 million home by 261 percent. 

The NYC Comptroller shows how consequential the behavioral changes can also be. Once accounting for a behavioral change due to this incentive, the estimated revenue drops from $500 million per annum to as much as $340 million, or 34 percent. 

That should be a warning sign for those who thinks the pied-à-terre tax is a gold mine. The more a property tax depends on how taxpayers use, classify, or structure their property, the more opportunities it creates for behavior to change in response. 

France is a fine case study showing what happens when you do that. Since 2015, French municipalities in areas with housing shortages have been permitted to impose a purchase on the housing tax for second homes. A recent study in the Journal of Urban Economics found something interesting. While the French tax did raise revenue, there was also a substantial decline in properties categorized as second homes. 

This matters because the government incurred the administrative burden of distinguishing between the primary and secondary residences without necessarily getting the behavior it wanted in return. If the property de facto remains a second home, the tax has produced compliance costs and distorted the owner's decisions without putting another home the market. 

Even better, NYC has been down a similar path before. NYC eliminated a property-tax abatement for non primary residence in 2013, especially those worth more than $5 million. As a Tax Foundation study shows, nonresident ownership fell by 0.6 percent for every 1 percent increase in tax liability. The effect was half as large for properties worth less than 1 million than it was for properties worth more than $5 million. 

The average New Yorker might ask why they should care about rich people getting their second homes taxes. The answer is that the city does not merely tax these people. It benefits from having them here. Second-home owners pay taxes but consumer fewer public services than full-time residents. Their income and spending in New York can generate additional tax revenue, while their presence effectively spreads the cost of government across a larger tax base. This is why the Tax Foundation warns that the tax could backfire if it causes enough wealthy nonresidents to give up their second property altogether. 

The pied-à-terre tax is not simply about the rich. France and New York have already shown that taxpayers respond when government changes the incentives surrounding property ownership. Those responses aren't costless. Money spent restructuring ownership, changing how a property is classified, or making different investment decisions is money and resources diverted from other uses. 

Economists have long recognized that these avoidance, compliance, and substitution costs as real costs of taxation, not merely transfers from taxpayers to government. The average New Yorker may never see those costs on a tax bill, but they are still costs borne by the economy in which New Yorkers live.  

Mamdani has decided that distorting the housing market is an acceptable price for taxing people who are politically convenient to tax. But "Eat the Rich" is not a substitute for sound economic policy. New Yorkers deserve better. 

Washington Propping Up the Yen Won't Fix Japan's Monetary Woes

In response to the weakening yen, the U.S. Treasury decided on July 31 to commit up to $10 billion to prop up the yen. The yen initially strengthened upon the news. But it begs the question as to why America came to the rescue. It's not like Japan is some weak, unstable country. Japan is a sovereign and developed nation with one of the world's largest economies. Plus, it's not like Washington doesn't have enormous deficits, a national debt that has exceeded $40 trillion, and the U.S. Treasury has its own problems. 

Neither is this an isolated incident. Last year, the U.S. Treasury allocated $20 billion for a currency swap with Argentina. I know a currency swap is different, but it makes me wonder if Washington should be the currency backstop of every country that shows the slightest hint of struggle.

From a look at the data, it looks like currency intervention does something, at least in the short-term. A study from the International Monetary Fund (IMF) examining 26 countries shows that intervention can affect exchange rates positively in the short-run. Plus, the IMF points out that Japan intervened twice to prop up the yen in the 1990s. Guess what happened? Those gains were reversed within two weeks. 

Granted, that doesn't tell us what will happen this time. But if past economic history is any indication, the effects are likely to be temporary and should not substitute for macroeconomic adjustment. So if intervention simply buys time without fixing the underlying problem, what happens when it wears off? 

Japan can either allow the yen to return where market forces push it, or it can intervene again. If it chooses the latter, we could end up with a cycle of "yen falls, governments intervene, yen rises, intervention wears off, yen falls again." Sounds like a blast, doesn't it? 

This isn't theoretical. The yen is already showing signs of weakening. As of August 12, it was trading at around ¥159 per dollar, after briefly being at ¥155 per dollar at the beginning of the intervention. That doesn't automatically mean Japan will run out of money or that the intervention was necessarily unjustifiable, but it makes me wonder how many times governments will intervene in response. 

What began as a one-time rescue can turn into dependency, and that is where moral hazard enters the scene. The basic problem is one I discussed when Washington was deciding whether to bail out Silicon Valley Bank in 2023. The problem with rescuing people from the consequences from their decisions is the incentive created for the next decision.  

If Japan can count on the U.S. to help support the yen whenever it comes under serious pressure, some of the consequences of Japan's economic policies are de facto being insured by Washington. That could reduce the pressure on Japanese policymakers to make difficult choices. The IMF is similarly concerned about moral hazard because investors may become less inclined to protect themselves against currency losses. The IMF also recommends against using currency intervention as a way to avoid monetary or fiscal adjustments. 

Speaking of which, Japan is avoiding its own adjustments. As for what those are, they are not mysterious. The American Enterprise Institute points to Japan's massive debt and low interest rates as major culprits. The Brookings Institution takes it one step further by arguing that Japan has capped long-term government bond yields, which transfers those bad fiscal dynamics into the yen further. 

So what happens after the U.S. spends its $10 billion? Japan will still have a ton of debt. It will still face its interest-rate dilemma. And investors will still be staring at the same fundamentals as they were before the intervention. 

In short, the U.S. government will have spent billions trying to fight market forces, but it cannot fight the economic reality that Japan's underlying fiscal and monetary problems won't disappear simply because Washington decides to buy yen. At best, it will buy Japan some time. But that will only do a smidgen of good if Tokyo addresses its fiscal and monetary woes. Otherwise, the yen will come under pressure again, and Washington will be doing the same song and dance. 

At some point, the U.S. has to recognize that Japan's currency is Japan's problem and that the U.S. shouldn't become the world's currency backstop, especially when Washington is incapable of managing its own finances. 

Mamdani's "Free" Universal Childcare and What Happens Socialism Meets Economic Reality

Socialists have a peculiar relationship with mathematics. Much like protectionists think that arithmetic is for globalists, socialists think that adding up the costs of a program is a form of capitalistic oppression. Costs are somehow lower than expected, savings are larger than advertised, and somehow someone is expected to pick up the tab. 

And this is where New York City Mayor Zohran Mamdani comes into play. On his campaign trail, he made a campaign promise for universal childcare at a price tag of $6 billion per annum. It turns out that his math was off and that it will cost about 50 percent more. According to a recent study from The New School's Center for New York City Affairs, it will cost anywhere from $8.7 billion to $9.3 billion. This is not about a single headline. It is the idea that making things "free" comes at a high price tag. 

Calling something "free" is one of the oldest tricks in politics. The word focuses attention on the person receiving the benefit while hiding the costs somewhere else. Universal childcare requires caregivers, facilities, equipment, and administration. Guess what? All of that costs money. 

Plus, when government sets the price of the service at zero, demand rises because consumers no longer face the normal costs of their choices. That means the government must fund a larger system than anticipated. Economics has a habit of ruining politically attractive slogans by introducing something called arithmetic. 

If this were just about a single overly optimistic estimate, that would be one thing. But Mamdani's childcare proposal fits the broader pattern of government programs that sound affordable until someone has to calculate the costs and pay the bills. 

Consider his other proposals. His rent freeze assumes that the government can make housing more affordable by restricting prices, while ignoring the incentives those prices create for landlords, maintenance, and future housing supply. His government grocery store proposal assumes that City Hall can enter a competitive market and somehow deliver better outcomes at a 30 percent discount. His free bus proposal fell through because he forgot that buses still require drivers, maintenance, and fuel, all of which cost money. 

Each proposal involves a different policy mechanism, but none of it can avoid the reality that resources are limited. Building still need maintenance, workers still need wages, and services still require resources. Costs do not vanish simply because a politician invokes the word "free."

The appeal of socialism has been its promise to remove difficult choices. If only government were ambitious enough, everyone could have what they want while nobody would have to sacrifice. Unfortunately, the world doesn't work that way. Every society faces tradeoffs. Pretending otherwise only ensures that those tradeoffs appear later and do so in much more painful forms. 

The best ideas survive scrutiny because they account for costs and benefits, not because they assume those pesky costs disappear. Campaign promises don't need to balance the books, but someone eventually has to pay a price for those who decide to implement them.

August 13, 2026 Addendum: Speaking of high price tags, the Cato Institute published a solid analysis of what it would cost if the Democratic Socialists of America got everything on their wish list, which includes universal health care, reparations, a federal jobs guarantee, housing for all, paid family leave, and free college. On the high end, it would cost $211.6 trillion over the next decade. Even in the low-bound estimate (which given what I previously wrote, is most likely a woeful understatement), it is still $71.2 trillion.