Saturday, February 20, 2010

CPSIA - Power Imbalance

When the respected Chairman of the CPSC uses a prominent keynote speech to tell us:

"But now that our team of experts has gone back to the process of building the database, I want those in industry to stop fighting old battles and get prepared."


"Well, to all of you here today, I say don’t believe everything you read on the Internet, except what you read on Web sites that end in dot gov." [Emphasis added]

I believe it is an abuse of power by a public official.

Let's think about how the cards are stacked in favor of the Chairman:
  • She is appointed by the President to a fixed term of office and is not subject to removal but for malfeasance,
  • She gets the microphone and media attention at her pleasure and is a regular on popular TV news shows,
  • She has a PR machine working for her full-time,
  • She supervises the writing of the rules and policy setting (including implementation of the CPSIA), the issuance of penalties, the prosecution of recalls and other cases (up to and including criminal charges), oversees appointment of senior staff, interacts with Congress and the Executive Branch on behalf of the agency, and oversees open forums with stakeholders as well as the solicitation of comments and other feedback loops with stakeholders, and
  • She speaks for the Federal Government on consumer product safety.

That's a lot of firepower. Most people don't want to cross someone with so much power or influence as well as the almost unrestrained ability to prosecute. Let's not forget another quote from her speech: "A new Commission that has new powers – and we are not afraid to use them. If you resist our efforts to recall children’s products, be forewarned, this Commission stands ready to be creative in the use of our enforcement authorities." [Emphasis added] She has a lot of power and wants you to know she's ready to squish you.

The Chairman is essentially judge and jury in cases and policies that matter a lot to safety stakeholders. Her warnings to "to stop fighting old battles" can be taken as a warning to people like me. It is hard to not believe that she is trying to be intimidating. Likewise, with her federal imprimatur, her remark that you should not "believe everything you read on the Internet, except what you read on Web sites that end in dot gov" feels like an effort choke off debate. Be forewarned, indeed.

This power dynamic is not my imagination. Others facing the overwhelming power of the federal government routinely have had to cave, right or wrong. For example, the latest issue of Fortune magazine features an interview with Stasia Kelly, former General Counsel of AIG. She tried, in vain, to negotiate with Kenneth Feinberg, the federal "Pay Czar" on behalf of her company. Eventually she quit her job, rather than face the consequences of Mr. Feinberg's unilateral plan. Here is an excerpt from the interview:

"The next huge event for you was the June 2009 entry of Kenneth Feinberg, the special master of compensation for seven companies, AIG very much included, that had received TARP funds and not paid them back. You were AIG's point person in dealing with Feinberg. I've read you emerged from that experience disliking it heartily. Was it bad from the beginning?

Yes, because, first of all, it's very hard to negotiate when you have no power. Feinberg had the power -- unfettered power. Our new CEO, Bob Benmosche, and I tried very hard to let him know what compensation we thought we required to attract and retain the kind of people we needed to pay off our debt to the taxpayers and deal with the risk in FP. We had the New York Fed and Treasury behind us on that. But Feinberg had political and populist considerations to worry about and a need to set amounts that would satisfy those. As we negotiated over the months, it became increasingly obvious to me that we were not going to end up in a good place." [Emphasis added]

High officials at the CPSC have enough administrative and political power to be tremendously coercive. This goes double for small companies who lack the financial or political firepower to blunt a government attack. You can't overlook the fact that the powerful Henry Waxman is essentially the CPSIA's "sponsor" and hence, the principal off-stage player behind this leadership group. When they use their bully pulpit to stifle debate, they are essentially borrowing and wielding his power. This is a caustic environment, and it is not lost on anyone listening to their speeches. While the "have's" may like it, the "have-not's" (like me) chafe. This is a bad approach to building a community.

The folks running the CPSC are just trying to do their jobs. So am I. There's room for both of us. Safety doesn't have to be all about politics (see the Kelly quote above) and if leadership at the agency can guide us to a place where it isn't all about politics and populism, the stakeholder fractiousness might die down. Until then, I would appreciate it if leadership would stop trying to stifle debate or discredit independent sources of commentary. It's not our fault we don't have a "dot gov" URL.


Esther said...

This is why I have stopped sending comments. What is the point? It's wasted energy. They aren't listening. They may claim they want our comments, but they are in no way hearing us. Instead, they are making back room deals to fulfill their own agendas. In their minds, if the intended purposes is to protect children, then there is no need for debate. My own Republican representative told me this, "If the law is to protect children, I will vote for it." Well, I'm of the opinion that they, those that have been appointed or elected, can own this boondoggle of a law. Perhaps it is good that we go on the record. But how often? What will it take? The only power we the people have anymore is the right to vote - that or it's revolution. When we read the Declaration of Independence, it essentially gives the people permission to revolt when their leaders take or abuse power. It may seem silly to pull out the Declaration of Independence in a discussion about the safety of children. But there is no law or regulation that can guarantee 100% safety of anyone. Read the second paragraph of the Declaration of Independence and see how the CPSIA fits in. The more tightly the government tries to control the marketplace, the less freedom we have to come up with common sense solutions. We will be left living in mediocrity asking for permission to step off the curve in fear of what might happen. We know that life, whether for a child or an adult, is not without difficulty and mistakes. We must have the freedom to learn from them or we will never truly become better at what we do.

Anonymous said...

In Tenenbaum's recent speech, she mentioned that she's not going to tolerate any foot dragging from ASTM. This was in the context of crib safety. Can anyone shed some light on what the spat is all about?

Anonymous said...

All I can say is thank your for keeping this alive and fighting. You have put yourself at great professional and personal risk I would imagine. As Esther said, I have been told again and again by my representatives that NOTHING will be done about this. They do not care and they will not step out to protect jobs, and again, I will say this law works AGAINST the safety of our children.

When everything we touch is dangerous we must either choose to be insane and focus 100% of our energy into it or ignore it. Ignoring it (the government's cries of wolf)is where the rational people are headed. That is going to dry up the coffers for those interest groups that I believe COULD play a valuable role in our lives. They COULD.

The resale industry is in a "shut-up or be closed down" mode and that is unfortunate.