Thursday, November 5, 2009

CPSIA - Further Developments in Brass Bushings Case

There have been a couple further developments in this case:

a. Both Anne Northup and Nancy Nord put out press releases today lambasting the Learning Curve decision. The (apparent) polarization of the debate has now gone very public. The shame of it is that the Republicans seem to be the ones advocating for common sense while the Democrats continue to support decisions that would puzzle the man on the street. There is no reason that common sense should divide the Commission. Of course, it would be wrong to accuse the Democratic appointees of lacking common sense. Still, it's hard to argue with the position of the Republicans from the perspective of real world problems and risks. At least they are speaking out against Congressionally-sponsored folly compelling the agency to hold hearings about how many angels can dance on the head of a pin.

b. Commissioner Bob Adler called me today to retract his accusation discussed at the end of my last blogpost in a short section entitled "Interesting Side bar". Mr. Adler was contacted by representatives of Learning Curve who were upset at the idea that they had been selling toy cars in violation of the ban. It turns out that this is not true. When Mr. Adler became of his mistake, he (decently) sought to correct the record immediately. For that, he is to be commended. I want to make clear - the testimony at the LCI hearing that I reported actually took place BUT the substance of Mr. Adler's remarks was incorrect. Mr. Adler expressed his regret to me, and asked that I pass it along to you.

You have to admit that this is rather ironic. Mr. Adler accused Learning Curve of exhibiting "bad optics". Bad optics, indeed. The source of his misinformation was a staffer to one of the Commissioners who bought a LCI car from and assumed that this meant that LCI was violating the ban. This staffer took it upon himself/herself to pass on this assumption as a FACT to Mr. Adler. Actually, the inventory for sale on Amazon had been bouncing around for some time, and did not come from LCI after the ban went into effect.

To me, this mistake (and that's all it was) demonstrates several important points:
  • The CPSC has a VERY HARD TIME understanding supply chains. There may be a tendency among some people working at the CPSC to see the economy as a very simple, linear beast. It's not. This situation illustrates the danger is making assumptions about how the economy is organized or underestimating the complexity of how goods go to market. Let's not forget the immortal words of Felix Unger in The Odd Couple TV Show: "When you assume you make an ass out of u - you - and me."
  • To a business person (like me), it feels so often that the CPSC holds businesses guilty until proven innocent. Mr. Adler made a mistake, and that's to be expected of all of us mortals, BUT it feels too easy for the CPSC to judge us without digging too deeply into the merits. Maybe the business community isn't a nest of vipers. Just a thought. . . .
  • The Commission has a tremendous ability to do harm. This (minor) incident will certainly not enhance LCI in any way. The Commission treads with elephant feet - it needs to try to be a ballet dancer.
  • The problem of "bad optics" is resident at the CPSC today. The issue of tone and appearance and how they affect market participants - that is VERY deserving of consideration at the CPSC TODAY.

I hope this incident is reviewed carefully at the CPSC for "lessons learned". Mr. Adler's culpability here is not, IMHO, the issue. The bigger concern is the hair trigger, the guilty-until-proven-innocent atmosphere, the power to do harm, the effect of words and actions and inactions on behavior in the market. The Commission needs to pause for a moment and use this incident to do some soul searching. If that exercise is productive, we will all be grateful that this mistake took place.


Paul said...

We all make mistakes. It’s always interesting to observe how one chooses to face the consequence that will speak of his/her character.

So glad to learn that unlike Chairperson Tenenbaum, Mr. Alder, as both a commissioner of CPSC and a life-long career legal professional scholar, hasn’t forgotten that “fact” is the fundamental corner stone of our legal system.

More importantly, he seems to be willing to stand up for that as a commissioner of CPSC.

And my friends and I believe, you are making them to open their eyes and ears to the facts.

jennifer said...

so true again rick. i have many pet peeves with what is happening but i believe one of the biggest is going to the cpsc website and seeing gotcha's everywhere. i realize they need to highlight recalls etc. but it is in NO WAY friendly to someone making a children's product. it is almost like you can visual a staffer rubbing their hands together and waiting to catch the next company that makes a mistake. they have spent months researching things that don't pose risks but then don't research something like this.

the other part i still can't wrap my head around is the politics. these are real businesses, employing real people, making safe products and these decisions impact everyone. congress has asked them to find the language to make common sense rulings. after a year they can't find the language so common sense tells me it is their responsibility to go back and say so. maybe there is something going on in the background and some new breakthrough they will be announcing but from my perspective the dems look like puppets of congress and it isn't a good look.

Rick Woldenberg, Chairman - Learning Resources Inc. said...

Commissioner Adler posted his retraction on the CPSC website: