On Monday, I listened to President Obama’s prime time press conference, which was focused on the President’s economic plans. When asked how we would know if the stimulus package due to be voted on today was successful, Obama stated that his “initial measure of success is creating or saving 4 million jobs.” The inclusion of the words “or saving” is, of course, a fairly big hedge, since the only way to really say for certain that his plan hasn’t saved 4 million jobs is if things get so bad that there are less than four million people working in this country. Still, I take the President at his word that saving jobs is a priority for him, and motivates his strong support for the stimulus package.
The irony is that even as Obama was speaking, thousands of small businesses in the U.S. were bracing for the effects of a new law that may very well put an entire industry out of business. As you may dimly recall, last year there was a scare involving lead paint in some toys from China. In response, Congress hastily passed the Consumer Product Safety Improvement Act, which required any manufacturer of children’s products to certify, starting on February 10, 2009, that there products did not contain a significant amount of lead.
It sounded like one of those common sense pieces of legislation that no sensible person could oppose. And, in fact, passage of the bill was nearly unanimous. The problem, however, is that the required certification is prohibitively expensive for most small businesses. So whatever the good intentions behind the law, its results are potentially devastating.
Due to public outcry, the Consumer Product Safety Commission agreed to stay enforcement of certain aspects of the new law for one year. Nevertheless, on February 9th the CPSC published guidelines telling thrift stores and other sellers of used goods that they could be held liable for selling uncertified books published prior to 1985, as well as books with metal or plastic components. The results have been far from pretty:
My daughter works in a used bookstore. TODAY they pulled all the books from the children’s section that had any kind of metal or plastic or toy-like attachment, spiral bindings, balls or things attached, board books, anything that might be targeted under this law, and they very quietly trashed them all. I say “very quietly” because the bookstore had a meeting with employees and told them to be careful not to start a panic. If anyone asked what they were doing they were told to say that they were “rearranging their inventory.” No one was allowed to tell anyone about the new law, and no one was allowed to take any of the doomed-for-destruction books home or give them away.
I just came back from my local thrift store with tears in my eyes! I watched as boxes and boxes of children’s books were thrown into the garbage! Today was the deadline and I just can’t believe it! Every book they had on the shelves prior to 1985 was destroyed! I managed to grab a 1967 edition of “The Outsiders” from the top of the box, but so many!
The lesson here, I think, is that laws often have serious and negative unintended consequences, and this danger only increases when a bill is passed in a hurry or out of a perceived necessity to “do something” about a given problem. It’s a lesson, I fear, that we will have to learn again and again over the coming years.
“which required any manufacturer of children’s products to certify,”
I believe a major component of the problem is that the verification requirement rests on the retailer and not the manufacturer. And no enforcement what soever is to take place at the border or at ports.
The law of unintended consequences is a beast, and it is one of many reasons that the vast majority of governance should take place at the smallest possible level, as per the Social Doctrine of the Church.
Most “feel good” legislation (CAFE gas standards, for instance) ends up causing far more harm than good.
And enforcement of this law ought to be taking place at the border and at ports, since most the problems were with objects produced in China.
Closing a mill has serious consequences. It even has negative consequences for the business that does it, at least initially; they do so because they believe it will make sense in the long run. But we don’t tell the business owner not to close mills because it may indeed be prudent for the business owner to close the mill. Likewise with government regulation, the existance of negative consequences in actions is a call for prudence and not some res ipsa loquitur.
A lot of this reminds me of HIPAA. You get lawyers (no offense) and consultants involved all trying to justify their buck, and you end up with people running around scared. Sarbanes Oxley was also like this. Not to be a defender of big business, but small businesses including Mom and Pops are responsible for a lot of preventable deaths and injuries in this country. Reading around for example, they talked about a woman at a farmers market selling a pacifer studded with lead crystals.
Does this mean I think Mom and Pop’s should be targeted? No. Does it mean I think Etsy should be closed? No. The government doesn’t have the resources to enforce at that level anyway. (Etsy invites complications beyond the scope of this comment.) Does this mean that people are operating outside the law? Yes, but the dirty secret is a lot fo these folks were operating outside the law anyway. They were already required not to have these things in there products. They were already liable if someone was harmed by having prohibited substances in their products. The testing requirement inhibits their ability to operate on the gray market. That is the end game at the small level.
Having said all of that, yes it is prudent to revisit the regulations so that small manufacturers can be more easily brought into compliance.
I for one thank the concerned legal departments across this great nation. I would have perished countless times had it not been for their tireless efforts. Why, just the other week the advice “Not a toy. Do not put bag over head” saved me from becoming a victim of natural selection.
While the moral of the quoted email forward is great, the fact that I have seen it should tell you it is like most email forwards–great story… Little fact.
I have no news reports to reflect this. Don’t think that businesses do things quietly like this.
That being said… Laws that make it HARDER for small businesses to survive, let alone thrive have no place in MY America.
BA– Darn. I’m trying so hard to be bi-partisan, and now you’ve trashed one of my few Republican social friends, Nancy Nord of the CPSC. :)