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21.7.10

Big govt regulation also at fault for LA shipyard decline

As noted recently, unwise defense policy by the Pres. Barack Obama Administration precipitated a naval contracting crisis that means Louisiana, unless unlikely events unfold, will lose thousands of jobs in shipbuilding over the next few years. But the actions of Obama to ratchet back unnecessarily naval forces, described more precisely, acted as just the straw that broke the camel’s back, with an interesting parallel to the same rationale that caused the Democrat-run federal government to allow the oil spill disaster in the Gulf of Mexico to turn into a catastrophe.

Also as recently noted, adherence to an ideology that government knows best and that puts special interests over the common good has afflicted the Obama Administration’s response to the crisis. One manifestation of this attitude was the refusal of Obama to waive the Merchant Marine (Jones) Act of 1920, which needlessly delayed cleanup assistance. This same law also played into the dynamics that put the U.S. shipbuilding industry into a delicate position where now loss of government contracts can doom shipyards like Avondale.

After World War II, with tremendous capacity and little competition, U.S. shipyards reigned supremely. But they did not change as did the times. Foreign competition heated up while domestic builders continued to kowtow to union demands, raising costs to build. Further, regulations like the Jones Act created tremendous disincentives for a domestic industry: why build domestic ships when the cost of using them in transport became so high that it is now cheaper is many instances for U.S. industries to transship from a U.S. to foreign port and then back to the U.S., or to use only foreign materials, than to ship U.S. products directly from port to port?

Even as market pressures have reduced the wage differential that the largely-unionized shipyards in the U.S. had to suffer (not without bitter fights in the past), and the U.S. isn’t the only part of the developed world to have experienced shipbuilding decline, that past has put U.S. shipyards in a noncompetitive posture too dependent upon government contracting with few commercial contracts. Ill-advised defense policy then pushes more and more of them out of business.

A welcome change in defense philosophy could turn things around, but, absent that, this reality adds another imperative for repeal of the Jones Act. The clock can’t be turned back to restore the industry or to have the Obama Administration act more expeditiously without the Jones Act to have prevented oil slick damage, but ridding us of it going forward at least would stop U.S. taxpayers from subsidizing maritime-related jobs to the tune of nearly $4 million each annually, to give the shipbuilding and carriage industries a chance to get new markets, and to reduce costs to other U.S. manufacturers. Other anti-competitive regulatory regimes must be reviewed and altered with the goal of reviving the U.S. maritime industry in mind.

It’s bad enough that the Democrat-run federal government put its boot on the vulnerable neck of Louisiana first by Obama’s inadequate response to the oil spill, then increasing the pain by his politically-motivated drilling moratorium that serves no useful purpose . Worse now, it increases the pressure still more by policies to cripple more than just the state’s offshore drilling sector. This needs to change before these policies damage the state further.

6 comments:

Mr. Harris Plutocrat said...

What a moron. Where to begin with such a Pravda-inspired posting from Jeff Sadow.

Lets start with the obvious: "[Obama's] same rationale that caused the Democrat-run federal government to allow the oil spill disaster in the Gulf of Mexico to turn into a catastrophe." WOW. What, Mr. Sadow, could Obama have done to prevent this catastrophe? Your precious little sandberms? Is that your solution to everything? Perhaps some sand berms along the border will help prevent all those people you look down on from entering the country in search of a better life for their family. The sheer ability to mount full responsibility for this oil spill onto Dems is awe-inspiring. First Cheney waives the very regulations that gave us a rare chance to prevent the blowout, and this is somehow Obama's fault. It's so weird how you can so readily convince yourself that up is down. You don't just reprint these GOP talking points, you internalize them and put them into your own words. If we were in North Korea, you would be the peasant whose song for the leader would be most boisterous and heart-felt.

Oh and good point about Obama "putting special interests over the common good." When the Dems worked on wall street reform, republicans huddled with wall street lobbyists to do their bidding. When Dems worked on health care reform, republicans huddled with lobbyists to do their bidding. When Dems brought up the energy bill, Republicans took marching orders from energy lobbyists. Dems have to a much greater extent pushed bills to limit the influence of lobbyists. The republicans fill their ranks with PROFESSIONAL lobbyists. And now, Boehner brings in more lobbyists to actually create the republican agenda "America Speaking Out" (which is basically "Republicans Speaking for Lobbyists". Yet in Sadow's little world, it is the Dems taking marching orders from lobbyists.

Mr. Harris Plutocrat said...

And so what about that Jones Act ship. Are you really trying to convince people that some mysterious swedish ship was going to motor into town and magically sweep up all the oil and clean off all the pelicans? What the hell are you smoking up there?

Naturally, Jeff demands smaller government not interfering in the economy. That is, not until it's a Louisiana shipyard suckling from the federal teat. In that case, anything other than wholesale federal dollars poured into Louisiana money holes, well, that's just "putting the boot on the vulnerable neck of Louisiana". Actually, Jeff, your Soviet policy of endlessly ramping up military spending into untenable levels is a recipe for economic collapse. We simply can't afford to endlessly pour more and more wasteful dollars into military machines. Your own inability to even ponder what limits in military expenditures may exists betrays just how much of a shill, simpleton for the GOP you are.

Only the Dems stand ready to have a meaningful, difficult, substantive discussion about what military expenditures are needed during this economic crisis. The other side just wants to shriek that any cuts (actually, any increase that isn't high enough) means that we want to surrender to Iran.

Anonymous said...

"adherence to an ideology that government knows best and that puts special interests over the common good has afflicted the Obama Administration’s response to the crisis." How can this possibly be limited only to the Obama Administration? This is a plague that inflicts all American politics. How could one be so deluded as to believe that Republicans are any different? The evidence is overwhelming that they are not.

Anonymous said...

H-Airy writes:
"When Dems worked on health care reform, republicans huddled with lobbyists to do their bidding."

Via Salon.com:
"...implementation of the massive healthcare bill just enacted by the Congress will be overseen by a former high-level executive of the nation's largest private health insurer."
http://www.salon.com/news/healthcare_reform/index.html

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