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To Promote Competition, Deregulate

Summary:
In a sweeping new executive order, US President Joe Biden has called on regulators to push for greater competition across a wide array of sectors and industries. But sometimes regulation itself is a big part of the problem. WASHINGTON, DC – US President Joe Biden recently issued an executive order calling on regulators to “further competition” in the shipping and rail industries, among others, because high and rising freight costs and delivery delays constitute a drag on economic activity by preventing businesses from obtaining timely inputs. But regulatory interventions won’t ameliorate that problem; deregulation will. America’s Vital Chip Mission Doug MillsPoolGetty

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In a sweeping new executive order, US President Joe Biden has called on regulators to push for greater competition across a wide array of sectors and industries. But sometimes regulation itself is a big part of the problem.

WASHINGTON, DC – US President Joe Biden recently issued an executive order calling on regulators to “further competition” in the shipping and rail industries, among others, because high and rising freight costs and delivery delays constitute a drag on economic activity by preventing businesses from obtaining timely inputs. But regulatory interventions won’t ameliorate that problem; deregulation will.

For over a century, US maritime transport has been regulated under the Merchant Marine Act of 1920 (the “Jones Act”) and the Foreign Dredge Act of 1906, both of which greatly restrict competition and raise costs. The Jones Act requires all shipping between domestic ports to be on vessels that are American-built (made with a majority of American-made parts), American-owned, American-operated, and manned by a crew that is at least 75% American.

The Case Against the Jones Act, a collection of essays edited by Colin Grabow and Inu Manak, details the many problems with this rule. For starters, the law both ignores and contributes to the fact...

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