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Harrison Bergeron in the Skies

by Index Investing News
November 27, 2023
in Economy
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Last April, I did a post discussing the factors behind the severely restricted number of flights between the US and China. In recent months, the US government has allowed more flights, but only under the condition that Chinese airlines fly a much longer route between the two countries. US airlines had complained that they were at a competitive disadvantage, due to their inability to fly over Russian airspace because of the Ukraine sanctions dispute.

US airlines are at a competitive disadvantage, just as US exporters to Hawaii that are limited by the Jones Act are at a competitive disadvantage to Chinese exporters to Hawaii.  But would that be a reason to extend the Jones Act to the rest of the world?

Requiring the Chinese airlines to avoid Russian airspace has the following effects:

1. Turning a painful 13-hour flight from the East Coast to China into an excruciating 20-hour marathon.

2.  Sharply raising ticket prices.

3.  Increasing global warming.

4.  Reducing tourism between the two countries.

This last item is especially important, as I believe that tourism is one of the best ways to improve international relations.  Covid travel restrictions pushed the world toward nationalism.

The Biden administration suggests that global warming is one of the most severe crises facing the human race.  But when it comes to a choice between nationalism and environmentalism, their actions suggest they care more about nationalism.  They’ve also put trade barriers on the importation of clean technologies.  Don’t tell me what you care about, show me what you care about.

PS.  Readers of Kurt Vonnegut may recognize the reference in the post title.

PPS.  One recent study estimated the impact of the Jones Act on the Hawaiian economy:

Thanks to this new research, we now know that local families pay almost $1,800 every year because of the act, including $389 for housing costs, $248 for groceries and restaurants, and $62 for gasoline. Overall, the act costs Hawaii’s economy an extra $1.2 billion a year, with side effects including thousands of lost jobs and lower tax revenues for our state and local governments.

 

 



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