The Libertarian Gotcha
The Consumer Product Safety Improvement Act, a bill signed into law in 2008 in response to the Year of the Recall, is generating quite a bit of controversy for a measure designed to protect children from lead and other unsafe consumer products. Thrift and resale shops, along with small toy manufacturers, have complained since the law's passage that its ban on the manufacturing and sale of products with more than the tiniest amount of lead and its requirement for third-party testing would drive these small establishments out of business.
In essence, the criticism is that the CPSIA's regulation of children's products is both too strict and overly broad because it includes a comprehensive ban on the manufacture and sale of everything from older children's books to toys and clothes. A June Reason magazinearticle outlines how "hipster moms" -- owners of mom-and-pop toy shops -- and conservative politicians are uniting against the repressive "regulatory state" imposed by the law. Mother Jones blogger Kevin Drum, no right-winger, called the ban "draconian."
To add insult to injury, Reason's blog Hit and Run passed on word from the AP earlier this week that the Consumer Product Safety Commission had permitted Mattel, one of the biggest culprits during the Year of the Recall, to use its own laboratories in countries like Malaysia and Mexico to fulfill the law's mandatory testing requirements. Reason concluded that Mattel's lobbying, which resulted in a provision allowing these in-house labs to be certified by the CPSC, has given Mattel "a cost advantage on mandatory testing, and a handy new government-sponsored barrier to entry for its competitors." Drum wrote, simply, "this just stinks."
Proposed changes to the law that would exempt the small toymakers and resale shops from the CPSIA's requirements seem reasonable. A food safety bill passed by the House in June included exemptions for farmer's markets and other direct-to-consumer sellers. Plus, consumers who shop at thrift stores usually know that they are buying a product whose quality is degraded by age or use and might be dangerous: the type of shop itself provides a signal to consumers about what they are purchasing. If they are concerned about toy safety, they can go elsewhere.
And yet, there is something suspicious about the battering that the CPSIA is taking. Indeed, in recent months complaints of "statist" regulation have become more frequent as conservatives complain that bureaucrats are entering parts of our lives that were previously sacred. For instance, the financial services industry worries that a Consumer Product Safety Commission would stifle financial innovation, though we -- and economists -- are at pains to describe exactly what financial innovation has done for us recently. Regulation has once again become a whipping boy that cannot possibly improve consumers' lives, but can only create "barriers to entry" for small businesses.
I can understand the concerns of the small toymaker. But let's not forget that children's products that contain lead are dangerous. Let's not assume that the CPSC is unyielding to toymakers' concerns when the agency has issued statements (even if less than crystal clear) that it will not enforce the CPSIA ban against the children's products like children's books that contain lead but have never caused lead poisoning. Let's also not forget that not everyone who shops at a thrift store is a "hipster mom" who can shop elsewhere: should we not protect consumers who shop second-hand out of necessity?
The libertarian "gotcha" in the CPSIA is the story about the certification of Mattel's labs. The lesson is that regulation inevitably has significant unintended consequences that hurt the small guy and that its purpose is inevitably contorted to the benefit of the big guy with the resources to lobby.
As compelling as this story is, though, it is incomplete. Prior to the CPSIA, Mattel would certify the safety of its children's products only if it felt like it and always in the lab of its choice. That is, the libertarian preference existed prior to the CPSIA and the result was a year in which Mattel had to recall 13 products. Now, the Consumer Product Safety Commission must certify that the labs used by Mattel actually meet the Commission's safety standards. In fact, the CPSC disapproved one of Mattel's labs that applied for certification. Previously, Mattel's cost-advantage came from outsourcing manufacturing and testing services and fabricating faulty and dangerous products. Now, its cost-advantage must come from manufacturing quality products that meet CPSC standards.
This is not to say that Mattel did not exert inappropriate or undesirable influence over the CPSC or to downplay the concerns of small businesses. But the suggestion that regulation always distorts the market in ways that harm both consumers and producers is wrong. The goal is better regulation, not less.
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(continued from previous post)
Instead of allowing a well written law to be written by those who understand science, the pompous bureaucrats in Washington thought they could dabble in science under the guise of child safety.
And, to top it off, when the scientists at the agency responsible for safety challenged the law, they were accused of "being politically motivated" and "against child safety" only because they challenged the scientific bases of the law (of which they are limited).
And let me be clear, the above example is just one of many within the law that does not make products safer, costs companies (and thus consumers) a lot more money and is simply distracting companies from making real safety improvements.
While there are portions of the law that are good and much needed (this coming from a manufacturer), there are many more sections that are awful can causing the children's product industry billions of dollars in testing and the scrapping of products, all due to politics.
I understand your skepticism on calling the law draconian, but let me focus on just one part of the law to show how ineffective and dangerous it is.
One of the new "safety" provisions for lead is a restriction of lead in all children's products. This sounds nice, except when you look at what this really means. Lead is ubiquitous in our environment and especially in metals. While this part was to deal with lead in children's jewelry and lead in PVC lunch boxes (both topics in 2006/2007 for specific reasons), Congress failed to realize that putting in such a broad requirement impacts products that are perfectly safe. Some examples:
- Bike tire valve stems - These are made of brass alloys that require lead for machinability. Lead in these alloys simply cannot cause any harm. However, now ALL brass with lead alloys is banned.
- Scrap metal (metal, screws, etc.) - The metal industry relies on the recycling of metals to make new materials. Lead is a contaminant. The new CPSIA limit of 100 ppm that goes into effect in 2011 will devastate the child product industry. You can have one screw with no detectable lead, but then another one with 150 ppm due to the scrap metal industry. This is impossible to control. Additionally, ANY metal has the potential of having low level contamination WITHIN THE METAL MATRIX. This does not present any risk of lead exposure to children if the piece cannot be swallowed; NONE!
Despite the recalls of 2007, toys were generally safe. The recalls were caught by companies' internal testing (note: NOT required by government) and the amounts of lead in any given toy were, in many cases, so small that you'd have to literally eat a thousand or more of the toys in one sitting to get any appreciable amount of lead poisoning. I cannot fathom how intelligent, thinking people can believe it would make any sort of sense for even a large corporation to intentionally poison their customer base.
I don't know one person who wants kids to get lead poisoning. But if we want to do something about it, going after the lead content of toys is like trying to solve global warming by putting icecubes in your drink. Thanks to the efforts of the EPA and CDC and laws passed in 1978 and 1996 banning lead in paint and gasoline, lead poisoning has been in exponential decline. The single biggest cause of lead poisoning (upwards of 75% of cases) is existing pre-ban lead paint in houses. After that, it's lead in soil and lead in foreign cosmetics and home remedies. You can literally count on one hand the number of cases of lead poisoning from consumer goods every year-- and most of those are caused by ADULTS' products like candle charms and bracelet charms. A standard for lead in jewelry was needed, but there was absolutely no reason why that had to extend to ALL children's products.
Part 3 of 3
3. Whether testing in and of itself will solve the problems of 2007 (Mattel did extensive testing before the CPSIA), or whether products are inherently safe based on the inputs (ie. the quality and the nature of the inputs) and the production process is an important point to consider. Not that there isn't a place for testing...testing has been a part of the industry for many many years....and for the most part has been very helpful in the very low recall rate that has actually been enjoyed by US consumers in that time. But shouldn't the quality of materials and production count towards safety?
If Congress didn't intend for companies like Mattel to 3rd party test, why would they require small US producers, with no history of recalls to do so? Is this a barrier to entry? Yes. Is this unfair competition? Clearly, yes (even if Mattel had to do 3rd party testing, simple economies of scale tips the balance of power their way). Is this killing the small handmade children's products market? Definitely yes, and that is already happening. Does this law improve safety? A resounding no! Does it need to be amended by Congress? YES.
Part 2 of 3
2. The CPSC has given producers various testing & certification exemptions for products that inherently do not contain lead. That is very nice...but the penalties for any violation are so extreme that retailers are taking it into their own hands to require testing certification for these same, exempt, products. Additionally, there are many reports of retailers imposing even stricter standards causing even more additional testing to meet their ad hoc standards. Until this law is FIXED, there will be chaos in the market. That does not meet any reasonable person's definition a situation that is good for the economy, safety, consumers, or innovation.
Yes, and we should note that it's no defense under this law that a retailer sold a product they were assured was lead-free. If you sold it, you are liable, even if the manufacturer certified it met the standards. So retailers are doing their own testing on top of the manufacturer's testing. But even that testing won't save them if somebody walks into their store with an XRF gun and manages to find the one snap in a million that through natural variations in lead content has just very slightly above the allowable amount of lead. When good-faith efforts are penalized just as much as bad-faith efforts, which do you imagine we'll see more of?
Part 1 of 3
1. "If they are concerned about toy safety, they can go elsewhere." This is a quote from you. No one else. No one, anywhere has suggested that unsafe toys should be sold. On Feb 9th, thrift stores has products that were deemed safe. Overnight they became "unsafe" because they were not tested as they came in (not to say quality control & testing mechanisms were not in place at the time of production to ensure they met safety standards). More importantly, the "danger" that is supposedly lurking in second hand children's products is for the most part myth. Lead must be ingested, which is why it is predominantly a problem from old paint (that flakes and gets into the air) and old pipes (gets into the water). It is not a danger in metal buttons or zippers!
Because of this law is not based on science or risk analysis, yet causes huge potential legal liabilities (CPSC exemption to testing or not) plastic items, clothing with zippers & buttons, and and much more will not be available at "responsible" thrift stores to the "non-hipster" parents you refer to that actually really really need these things.
The point of the reason article wasn't just that regulation distorts markets, but more specifically that it favors big business.
Here are a few examples:
Big tobacco - Phillip Morris loves cigarette regulation such as banning flavored cigarettes - except for menthol which of course aren’t banned - since it kills off specialty brands and potential competition.
Big Coal - On 60 minutes earlier this year, they were shocked, SHOCKED! to find out that the coal plants favored regulation. What's so hard to figure out? No more new plants for existing one's to compete with, insuring their demand for the next half century.
2) Let's look at the bank bailout. Many libertarians like myself despise the Federal Reserve because it is a privately run entity posing as a government agency. Without the bailout, the BIG BANKS (LIKE BIG GOVERNMENT, WHEN SOMETHING GETS TOO BIG, IT BECOMES INEFFICENT) would have had to break up into smaller entities. Despite the initial financial panic, the country would have been better off in the long run. Remember, we did not have a Great Depression until we had a central bank. The central belief is that smaller and abundant is better for the good of our society. Until you learn to understand this basic aspect of libertarianism, please don't write a critique of its ideals. Thanks!
I find left and right wingers rejection of libertarianism to be kind of funny but misguided. I will admit right here that I am a left wing libertarian. And like Ron Paul, I find liberal's rejection of this ideology quite baffling. Let me make a few things clear!
1) Libertarians have anarchist tendencies (INCLUDING MYSELF) but the basic fear of regulation which is warranted is that government interference hinders small business and creates large corporations. In fact, this historically is a true fact. Government policies are usually mandated across the board and the people who usually suffer are the small business people. Look what the FDA has done for Big Pharma or the Agribusiness and Beef Industry has done to the Dept. of Agriculture. The problem arises with the fact that the government entity usually gets taken over by the industry that it is trying to regulate and the government agency then goes about eliminating all competition to the privileged company. So, businesses (WHO RUN THIS GOVERNMENT) control the government. This leads me to my second point-CONT!
Let's just be realistic for a second, here. Real lead poisoning came from small trinket toys made entirely of lead that kids ingested. Also, from kids eating paint chunks where 14 layers of old lead based paint flaked off a wall of an old house or something.
That's dangerous, not trace amounts of lead in one coat of baked on paint that kids will never get off a toy. As usual, gov regulators went way overboard, drunk on their power. They should learn a some actual science, like "the dose makes the poison".
How are libertarians getting wrapped up in this? That's an excuse. There are as many libertarian 'gotchas' as there are laws. Prohibition being the most glaring. But this law is just annoying and is overreaching. It's not that libertarians are annoyed, it's that EVERYONE is annoyed. Yet another gigantic government blunder, this time so obvious, everyone gets it. It's one thing to be a do-gooder, but a do-nothing parading as a do-gooder is really obnoxious.
Hmm, it doesn't annoy me, or any of my friends who have kids. In fact, they're grateful for this. Who is this "EVERYONE" to whom you are referring?
Oh, and I think I still have some lead army men stowed away in a box somewhere. If you have a kid, you're welcome to them.
I remind you that army men are for adults in position of authority to play with. The army men themselves are more likely to be children.
The poisoning of our children and pets was caused by purchasing products from a country that does not regulate its businesses.
You say: "But let's not forget that children's products that contain lead are dangerous." Not true. Lead may be dangerous but not all products containing lead are actually dangerous in any way. Why? Because lead is only dangerous if it can reach the bloodstream. The vast majority of products regulated by the CPSIA involve lead that is simply NOT bio-available (it's not soluble lead). In addition, human factor analysis reveals that the presence of lead in many cases is irrelevant. Is the presence of lead (if any) in bicycle seats a valid concern? Do you like to lick your bicycle seat after a long ride? The vast sums of money wasted on nonsense like this has to come from somewhere. Wherever the source, dollars can't be spent twice, and thus, use of the money on more effective safety efforts, the development of new products, the marketing of products, the employment of people, etc., is foreclosed by this overly broad and unfocused law. If every risk is a priority, nothing is a priority.
Children put toys in their mouths, stop being disingenuous.
The problem is that the law is so "broad and unfocused" that many products that shouldn't and most likely won't go into kids' mouths are being affected. Also, the CPSC is not allowed under the CPSIA to take real-life risks from lead exposure into account when ruling. Therefore, an item like a rhinestone (where the tiny amount of lead contained is locked into its structure and won't leach out in harmful amounts even if a child eats the rhinestone) is banned because the CPSC must essentially uphold zero lead tolerance.
Bicycles tried to get exempted, and in its order denying the request, the CPSC itself admitted that the lead in the bicycles didn't pose a real risk to kids, that the lead was necessary for the structural integrity of the bikes, but that its hands were tied. The CPSC also indicated it wouldn't pursue bike makers, but children's bikes are still technically illegal now and makers are open to danger from private lawsuits. Not that children will be putting these bikes into their mouths.
PRe-1985 books are also "unsafe" under CPSIA because of the possibility that they might contain trace amounts of lead in their ink. No one is going to shoulder the cost of testing them, and the testing process would destroy the books anyway. Some younger kids might put books in their mouths, but kids would have to eat shelves of books with leaded ink to be exposed to enough lead to be harmed by it.
lead paint isn't water soluble either. Yet when children eat it..... lead gets into their blood stream. Lead bullets get lead into our water supply too. Yet it's elemental lead when shot from the gun. In the environment it leaches into the soil and into streams as soluble compounds/molecules.
And what's the hang up over bicycle seats?
OK, this isn't bicycle seats, but try this on for size: the brass used in bicycle tire valve stems has just barely too much lead in it to meet the standards. Without the lead, the brass can't be machined. There are such things as titanium valves, but they are so expensive that they'd make children's bikes a luxury item, not to mention they'd put charities that give poor children bikes out of business. The valve is considered "accessible" because a child can touch it, if they take the cap off. In theory, a teeny tiny bit of lead could get on their finger, and then they could put their finger in their mouth. How much lead are we talking about? So little that your child would have to wander the neighborhood removing the valve stems from all the bicycle tires and EATING them before he'd even start to lose an IQ point.
Yeah, LITTLE kids put little kid stuff in their mouths. But even the mouthiest little kid has never, to my knowledge, so much as licked a bicycle tire valve stem.
Who said we were libertarian? It is NOT libertarian to demand regulations that work, which do what they are designed to do. It is not libertarian to demand regulations that are fair to small and micro businesses without gaping loopholes for large corporations. The CPSIA is a bad law that needs to be fixed--there's no getting around that. Sure, libertarians may be quicker to recognize this fact, but that does not mean all who want to improve the CPSIA are libertarian.
Most of the members of the Handmade Toy Alliance, including me, were arguing for better consumer safety laws in the wake of the 2007 toy recalls. We just never dreamed that the CPSIA would be so skewed and unfair. How are we supposed to support our families when it costs upwards of $3,000 to test one item that we make in quantities of a couple hundred a year?
The Handmade Toy Alliance has never embraced repeal of the CPSIA. Rather, we are offering common sense reforms that will save small businesses without compromising safety. You can read them at http://sites.google.com/site/handmadetoyalliance/Home/our-proposal-to-modify-the-cpsia .
Mattel spent $1.3 Million lobbying to make the CPSIA the way they wanted it. It is not libertarian to complain that they got a really good deal. It is time for the left to stand up and demand changes to the CPSIA.
You have a good point and I think your proposals should be taken seriously. But still, I'm more worried about children being exposed to lead than the survival of some small businesses.
I appreciate you seeing our point and reading the proposals that the Handmade Toy Alliance has been working towards. And, we agree that we don't want children to be exposed to toxins in their everyday environment. But, I do need to point out that we are talking about 1000's of small businesses throughout the country- not just a few. Home sewers, grandmas knitting bonnets, wood makers hand carving toys, etc. And, we are talking about businesses that have NEVER had saftey issues, recalls, etc. Our member businesses are intimately involved in the construction of each and every product - from sources materials, to creating the product, to packaging and selling (often direct) to the consumer. The CPSIA was written as a one size fits all piece of legislation. It has a guilty until proven philosophy and does not allow for flexibility on how one proves that their product is safe. We want children safe too. We just recognize that this law does not do that. It's time to look at a common sense amendment that includes risk analysis.
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