This is in response to the August 17th editorial by Creighton W. Goldsmith entitled “Article on Jones Act Full of Falsehoods, Misconceptions and Fake Science”

The argument that he presents that the difference in cost between the China/LA and Oakland/Honolulu freight rates is due solely to volume is disingenuous. Sure more volume will lead to lower prices, but it’s the Jones Act itself which is a major impediment to volume.

By guaranteeing that any foreign-flagged ship stopping over in Hawaii, from either China or the West Coast is legally forbidden to carry freight between the West Coast and Hawaii, the Jones Act bars the income-generating and expense-sharing volume such additional freight carriage would yield.

Without true competition, we cannot know what the true price is, but I wouldn’t be sticking my neck out very far by positing that it would be less… far less.

And, why do the shareholders of any corporation “deserve” a fair rate of return, as he closed his article with? Do the shareholders of an inept, poorly managed company which makes things that few customers want “deserve” a fair rate of return?

Did he ever notice that companies (electric utilities, land-line phone monopolies come to mind) which have legally guaranteed “fair rates of return” have little incentive to perform better, or manage costs?

Did he know that the “fair rate of return” under such arrangements is often two or three times what it is for competitive industries such as supermarkets, computer technology, and automobiles?

This might be “fair” to the businesses which gain those returns, but it is hardly fair to the consumers who bear such inflated prices and surly, take-it-or-leave-it service.

The market system allocates profits, and the capital to grow, to those entrepreneurs and businesses which operate to satisfy their customers best, and punishes those which fail to do so.

Matson Navigation and Horizon Lines gain our income not by providing the best service or the best prices, but by going to Washington DC and paying our legislators to outlaw competition.

That’s what the Jones Act is – a ban on competition.

That’s not free enterprise, that’s robber barony.

”’Jim O’Keefe is a baker in Hilo, and can be reached at mailto:jim@okeefebakery.com”’

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