Keith Hennessey's Personal Experience With A Jones Act Waiver

His post is not theoretical at all; he actually was involved in waiving the act last time 'round, during Hurricane Katrina.

So why no waiver? Because the US-flagged shipping industry wants the business.

Without a strong lean from President Bush on his Cabinet to “do everything we can,” the waivers would not have happened. Given the intense pushback from the narrow interest groups, Presidential leadership was required to make this happen. The benefits were small but, in my mind, easily worth it. When things are really bad in the Gulf, you do everything you possibly can, even if it’s small.

At the time the debate sounded like this:

A: We have found N foreign-flagged ships that can help us get this done.
B: We have American ships and crews you can use.
A: Maybe, but the foreign-flagged ships are better/faster/more flexible/ready now.
B: But we have American ships and crews you can use, and the marginal improvement in speed or flexibility is small.
A: Sure it’s small, but every little bit helps.

The Deputy Administration of the Maritime Administration (MARAD) has confirmed that one foreign-flagged skimmer has made a Jones Act waiver request. Yesterday, Dallas businessman Fred McAllister announced that “he has immediate access to 12 foreign ships and could pull in another 13 vessels in the next month.”

Before these recent developments, I had frequently read and heard the Administration argue “We don’t have any requests.” This is reminiscent of the house on Halloween with no lights on and an angry pet bull tied to a tree in the front yard. When asked why they don’t hand out candy to trick-or-treaters, they reply that they haven’t had any requests.

In my experience government officials in crisis management sometimes focus too much on what the government will do, and not enough on the incentive effects of what the government says to the private sector. A blanket waiver combined with a strong encouraging signal from government officials could, I think, spur significant private help, including from friends around the world. We’ll never know unless the President tries.

Thanks to ATaLien.

posted by Ace at 06:36 PM

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