CPSIA - Final CPSIA Amendment (HR 2715) Moves to President's Desk for Signature

Here is the final form of the CPSIA Amendment  (HR 2715) that should become law sometime this week.

I want to quote from another blog (thank you, Steven Hansen) on this amendment's path to the President's desk:

"This bill and the path it has taken is an example of why people are very frustrated with Congress and getting legislation passed in general. These 'legislative' fixes have been getting passed around in backrooms for months and when they finally did come to a 'vote' the 'fix' was already in and they sailed thru in minutes or seconds on votes that were purely formalities. There was really no warning that this would be passed when it did or in this fashion. If you did not get what you wanted in here well that's too bad because you are not likely to see any further relief for some time. Apparently Congress is going to be in recess until after Labor day as they had to work so hard to pass the debt ceiling bill."

Mr. Hansen is completely correct.  We know that even Republican members found out about this amendment when it was docketed for a House floor vote.  Mark-up, schmark-up.  The Senate also made the decision (if that is even possible, since the Senate is an inanimate organization without a mind) to shift to HR 2715 without debate, and passed it with a voice vote.  These decisions were literally made in minutes behind closed doors and Members of Congress had no time to read (and perhaps no interest to read) the "noncontroversial" bill.  After three years of intense bickering, a small group of individuals made the decision for all of us that this bill is good enough to "fix" the CPSIA.  There won't be another "fix" to this law again, perhaps EVER.  You know the bill sucks if Henry Waxman is clucking about it.  In fact, most of the text of the bill was his handiwork almost entirely (functional purpose, testing "relief" (Eshoo), database (Markey), small batch "relief").

And what did we get for all our good government dollars?  I have previously given my quick assessment of this law and have no interest in repeating the exercise at this point.  I would like, however, to highlight low lights of the bill:

Winners:   ATVs, Bicycles, Resale Goods, Books, Libraries

Losers:  See above list, and if you're not on it . . . you.

Technical Fixes of Past Congressional Screw-ups: 

• 100 ppm lead standard is prospective now.  And WHY wasn't Congress able to do this for 300 ppm or 600 ppm?  Good question.  The five CPSC Commissioners called for this particular change back in January 2010.  What's the hurry now???
• Changes to testing requirement to "representative" rather than "random" samples.  And we just hired our third statistician, too!
• Restricts the phthalates ban to accessible plasticized components.  i guess Congress isn't worried about kids with serpent tongues any longer.
• Makes FUTURE crib standards prospective.  And who said the $32 million in recently discarded good fixed-sided crib inventory died in vain?!

Shame, Shame, Shame:

Small batch manufacturers, the most micro of businesses (under $1 million in total turnover) must register prior to utilizing any of the nifty cost-saving testing innovations now being cooked up by the very open-minded CPSC.  This is the CPSC's version of the sex offender registry.  Is there ANY basis for singling these people out for special attention?  Why doesn't Mattel have to register, too?  Oh, come on, you know we must have different rules for Mattel!  They need their own firewalled labs and so on for their efficiency.  [Here's a good example of their efficiency.]  It's only fair, the real safety worry is the crafters . . . .

The only good news is that none of the small batch manufacturers will ever have to suffer this indignity. The clever gnomes of Congress have figured out how to appear to give something to those heart-rending  little nobodies without doing squat.  How do they do that?  The only "relief" that the CPSC may implement must meet this standard:  "Any such alternative requirements shall provide for reasonable methods to assure compliance with any applicable consumer product safety rule, ban, standard, or regulation." [Emphasis added]  This CPSIA term has already been interpreted by this Commission multiple times.  The word "assure" ensures that no relief will ever be given since nothing can "assure" compliance other than prophylaxis.  Notably, the Commission has purportedly looked for this "out" for three years and came up with nada.  And Bob Adler has been "agonizing" over it for that entire time.  [I feel AWFUL for him, he suffers for each of us.] How will another year or two of agonizing produce a different result?

Suckers are welcome to wait longingly for this promised "relief" but they will be disappointed again and again.  Protest is futile.

Disgusting, Repellent Hypocrisy:

Consider the amazing gimme provided to bicycle manufacturers:

"(B) METAL COMPONENT PARTS OF BICYCLES.—The third party testing requirements established under subsection (a) shall not apply to metal component parts of bicycles with respect to compliance with the lead content limits in place pursuant to section 101(b)(6) of the [CPSIA]."

They don't have to test their metal components at all.  AT ALL, EVER.  Bicycle manufacturers are different than you and me.

Let me be clear - I think testing metal components on bikes is a stupid and pointless waste of time and money.  The bike industry testified in the CPSC 100 ppm hearing that when they tested a single part in ten places, they got ten different results.  Whoa!  They proved they had an unsolvable problem and apparently Congress listened.  How heartwarming!

I gave similar testimony and submitted similar data about our products at the same hearing in the same panel sitting at the same table.  Congress must have gone deaf by that time.  Oddly, the CPSC staff included this data and my testimony in their 100 ppm report.  So perhaps Congress isn't just deaf, they may be blind, too.  Or perhaps they just don't bother with the details.

Inquiring minds want to know about this particular term benefiting bicycle manufacturers:

1.   The AAP testified that there is a real risk that kids might lick their bicycles.  Problem?  Apparently not, but the testimony was taken morbidly seriously at the time.  I wonder why Congress wants to protect bike lickers now.

2.   Perhaps you recall that the CPSC rejected the request of Learning Curve to exempt its brass bushings on toy car wheels.  This decision was a "major victory" for safety because, get ready for it, there was lead in the brass bushings although Bob Adler noted there was no danger even to a child at the "tipping point" in lead exposure.  [Adler voted to reject LC's petition nevertheless. He "had" to, the law left him no choice.]  Later the Consumers Union warned against playing brass instruments in a band because of the dreaded lead in brass.   [Degchi (Curry cookware) is one of many traditional Indian cooking utensils and pots made of brass.  Where are all the Indian victims from generations of eating off brass?]  The CPSC also held the line against bikes, pens and ATVs over the purported lead content of their metal components because the Dems asserted that there is no safe level of lead.  Is Congress signalling that metal components are uniquely safe in bicycles?  How did Congress figure this out?  Is there something in the Congressional record on this point?

The term about testing metal bicycle components first appeared in this bill when it went to the House floor on suspension.  Bills on suspension cannot be amended.  Hmmm.

3.   I recall Rachel Weintraub intoning during testimony at the CPSC and in Congress that consumers expect their products to be tested before sale.  [Former Commissioner David Pittle told the same tale at a CPSC hearing.]  Bicycles won't be tested before sale now.  How will consumers be able to sleep peacefully?  How will they know which items are not tested (ATVs, books, bikes, resale goods of all types) and which are tested?  Won't they have the same uncertainty again?  I can feel the fabric of our society tearing a little bit . . . .

4.   Bicycle manufacturers have indicated that tests of metal components vary depending on where you test the component.  There is unpredictable variability in their test results because . . . metal components are not precisely homogeneous.  Metals are used in components in many children's products, not just bikes.  It follows that all metal components pose the same issue.  It also follows that metals pose an equal risk of lead poisoning regardless of the product they are used in.  So why must we test our grommets and staples when bikes can tool around untested?

5.   Is there a reason why OTHER components on a bicycle (presumably made of plastic and vinyl) must be tested?  Is there a known health hazard there that bike companies must protect against?  Will those tests achieve anything for anyone?  And why must every other product category still subject to the CPSIA test every component, whether metal or plastic?

6.   The CPSC has held that it is "technologically feasible" to make every component of every children's product compliant to the 100 ppm standard.  There were no exceptions to their conclusion.  Why did Congress in its infinite wisdom decide that bicycles alone could be forgiven the need to meet this standard and alone to not have to test its metal components?  [The other problem child under this provision, ATVs and motocross, was written out ENTIRELY.]  Why weren't bikes made to comply with the astute judgment of the CPSC and shift over to new materials to meet the "toughest lead standard in the world"?  After all, that only costs money, and Bob Adler assured us that the cost would be minor and worth it.  Can't be too safe and, of course, we all know that safety delayed is safety denied.  Isn't this action of our all-knowing Congress denying safety?

As I have noted, this law picks winners and losers.  Applying reason and rationality to this arbitrary allocation of spoils is a pathetic waste of time at this point.  Congress has decided what's best for all of us, and with the Tenenbaum gang in charge at the CPSC, you shouldn't spend much time hoping things are going to change in the future. Henry Waxman and Rachel Weintraub won.

CPSIA - Consumers Union is Hazardous to Your Health

Lies, innuendos, misstatements, twists - which is it this time?

Today Ami Gadhia, one of the Consumers Union CPSIA hacks (a.k.a. "Policy Counsel") weighed in with her usual bunk about the lurking "dangers" in children's products.  In particular, today's tripe is a protest against modifying the CPSIA.  Her writings and utterances are invariably infuriating for their lack of perspective, tall tales and general fear mongering.  In her article "Turning Back the Clock on Child Safety Protections", Ms. Gadhia continues her fine tradition of twisting and obfuscating the facts.  Considering her background in the subject matter and her law degree, one must assume ill-intent.  This can't be accidental.

Let me debunk her junk one-by-one:

a.  "Turning Back the Clock on Child Safety Protections":  The Op-Ed's title is absurd in light of the actual bill's wording.  The CPSIA Amendment (ECADA) is a mild and surgical bill intended to offer minimal but effective relief from over-regulation while preserving the structure of the CPSIA.  Killing the CPSIA is politically impossible, it appears, so this is the best that can be offered at this time.  Ms. Gadhia must be asserting that ANY change in the CPSIA is a setback.  This argument is always left unproven - but no one ever holds her accountable so why not tell the tall tale?  The consumer groups rely on the appeal of the "zero sum" argument which also goes unchallenged.  It goes like this:  ANY change in the CPSIA which might benefit a business is THEREFORE a setback for children's safety.  If the Cubs lose 15-5, they are somehow better off if they instead lose 13-5.  Right. . . .

b.  Ms. Gadhia, like her fellow manipulators in the consumer "advocacy" field, relies on an emotional appeal to kick off her crock - the story of a child who swallowed magnets, leading to gory injury.  A few notes on this line of reasoning:

• The CPSIA is NOT a toy law.  Despite Ms. Gadhia's relentlessly repetitive references to toy safety, the law applies equally to ALL children's products, from shoes and t-shirts to pens to rhinestones to ATVs and bikes to books to educational products to carpet to what-have-you.  By focusing on toy gore, Ms. Gadhia lulls her reader into overlooking the awesome overreach of this bill.  We don't want kids injured by magnets . . . ergo, we should ban all hazards in all things.  Huh?
• The magnet hazard she refers to had never been seen by the agency previously.  It was a classic latent hazard, unregulated specifically because it was unrecognized.  You can see Gib Mullan, the current General Counsel of the House Energy and Commerce Committee and former General Counsel and Director of Compliance at the CPSC say ON VIDEOTAPE (at the CPSC Tracking Labels hearing) that the agency first thought the problem was a small parts issue, not a strong magnets issue.  No law can effectively regulate UNKNOWN hazards.  Claiming that the CPSIA "solves" this safety issue is pure baloney.
• The magnet hazard was addressed promptly and effectively by the agency without the need for changes implemented by the CPSIA. The agency had this power under its 1972 enabling legislation and following laws.
• Sometimes bad things happen to good people.

c.  Ms. Gadhia intones ominously about banned phthalates and their links to "a variety of health risks".  As has been well-documented here, that provision was placed in the law at the last minute by Diane Feinstein, true to her San Francisco roots.  This is the same place that worked for years to ban circumcision.  Yes, they are really scientific in that community.  For a discussion of phthalates, please watch the 60 Minutes segment in which I appeared.

d.  Ms. Gadhia trots out yet another misleading but longstanding justification for not changing the CPSIA - namely that it passed by an overwhelming majority of Congress.  I fail to grasp the intellectual power of this "infallibility of Congress" argument, and further note that dozens of members of Congress have been trying to change the law ever since.  There has been more than a dozen bills floated to amend this "perfect" law since August 2008.  In addition, the timing of passage of this law (three months ahead of the 2008 Presidential poll electing Mr. Obama) made it very dangerous politically to vote against this terrible law if you wanted to keep your job in Congress.  Even Mr. Bush had to sign it for political reasons.  The political and media frenzy in 2008 made rationality impossible, and minds were made up.  Have you ever made a bad call when you were furious?  'Nuf said . . . by everyone except the dangerous Ms. Gadhia.

e.  The Consumers Union storyteller informs us that ECADA "would poke some serious holes in the product safety net".  What a dream if Ms. Gadhia were actually right that this amendment would actually dent the CPSIA that I hate.  It doesn't, regrettably.  To "prove" her points, she lists four lies:

• "The bill undermines safety testing for children's products".  The bill eliminates MANDATORY testing as required by the CPSIA.  It does not ban testing, nor does it discourage or remove the incentive to test.  Excessive testing is one of the original problems cited in the bill, and has cost our company well in excess of $1 million since the passage of the bill - all without making even one product in our product range safer, even a little bit.  This term is the brainchild of the consumer groups (Rachel Weintraub?), reasoning that if the government didn't require mandatory testing, no testing would be done.  This misconception overlooks the enforcement of the new standards.  It is IMPOSSIBLE to assess whether you comply with the standard without testing.  Enforcement of the standard, as is anticipated, means that everyone WILL test.  What is being eliminated is the role of Mother Government "helping" us by telling us how to run our businesses.  If the standard is enforced, people will HAVE TO test.  If they don't enforce the standard, they won't enforce mandatory testing either. What's the big deal here?  Just the opportunity for Ms. Gadhia to mindlessly bang her drum.
• "The bill undermines lead protections".   Ms. Gadhia informs us that consumer confidence would "erode" if the current one-size-fits-all standard is replaced with "a variety of standards that will be different depending on when the product was manufactured, the age of the child for whom the product is designed, whether it contains small parts, and other factors."  OMG - standards that are reasonably tailored to the individual hazard and individual product!  NO - please tell me we still live in a world where books, t-shirts, diamonds and rubies, ATVs, bicycles, appliances, pens, carpets, DVDs and toys are ALL subject to exactly the same rules. What is the world coming to???  I presume Ms. Gadhia thinks we are idiots, or else this is all she has, which ain't much.  Anyone surprised?
• "The bill undermines the effectiveness of the new crib safety standard".  I have previously addressed this issue - the three Dem Commissioners made this same baseless accusation a few days ago.  See my reply in this space.
• "The bill undermines the new public database for people to report and read about product safety problems".  Ms. Gadhia warns "the provisions in this legislation would place onerous burdens on the person making the complaint, thereby discouraging parties with valuable safety information from reporting."  Whoa - you mean we won't get to see stuff like this, this and this again???

Ms. Gadhia needs to get one last jab in:  "The Leisy family's experience shouldn't happen to another child."  Okay, I don't want to see any child injured ever again for any reason . . . but does Ms. Gadhia even make a coherent argument here?  Does one thing have ANYTHING to do with another?

It's time to turn back the clock on irrationality and lowest common denominator government.  Who should set the tone for us - the Anthony Weiners of the world (did you hear that his wife is pregnant?) or people that are interested in children's safety AND the viability of American businesses that provide jobs to your neighbors and valued products to your kids?  I think it's time that our representatives in Congress, especially those in Congress calling themselves Democrats, to stand up for WHAT'S RIGHT rather than what's easy or what's safe (for their job security).  We pay them to lead, not to cower.  PASS ECADA AND END THE CPSIA CHARADE!

CPSIA - ECADA Manager's Amendment

Here is the Manager's amendment to the CPSIA Amendment (ECADA).  [Essentially changes offered by Mary Bono Mack.] The changes apparently include changes in lead in jewelry (age limits), removal of testing requirement for inaccessible components for phthalates, removing toys from outdoor recreational products and adding "class of products" to functional purpose exclusion process.

CPSIA - What's Missing from the CPSIA Amendment?

I have summarized my comments on the pending CPSIA amendment in my two prior blogposts.  In this post, I explain what's MISSING from the amendment:

a.  Preemption:  The United States needs ONE law on safety for children's products - not 51.  The CPSIA amendment should include strong preemption language to stop rogue state laws and to streamline compliance costs for the entire industry. Industry wastes huge resources dealing with competing and inconsistent regulatory schemes across the country that add little to safety but disrupt commerce.  It goes without saying that small businesses can't keep up with it (which is especially perplexing in California).  Is it fair to burden small business with a hopeless compliance chore?  Is it good public policy?  I think Mattel has enough of an advantage already. . . .

This preemption should also apply to consumer "right to know" laws as they relate to lead and phthalates.  In other words, the Illinois lead labelling law and California's Proposition 65 should be preempted explicitly by federal statute.  These laws were developed to avoid federal preemption.  Lawyers and mercenary consumer groups don't need the handout anymore - the right-to-know "tax" should be lifted from the marketplace.

b.  Testing Frequency.  The amendment addresses part of the mess surrounding the so-called "15 Month Rule" but does not touch the subject of testing frequency.  The CPSC's budding efforts to regulate testing frequency (and sampling for testing) have the potential to wreak new havoc as the government pushes its way into decisions long made by private businesses.  What's the justification for this intrusion?  I guess Congress thinks they can run our businesses better than we can.  Unfortunately, there's no evidence to suggest that they know better than we do, and furthermore, there is no data to suggest that the decisions made by manufacturers on testing frequency have ANYTHING to do with injuries.  The pursuit of a perfect suite of paperwork is not the same as keeping kids safe. 

The amendment should steer the CPSC away from meddling in the internal affairs of manufacturers and instead refocus it on substantial product hazards.  That's why we have a CPSC, the only reason.
c.  Penalties.  When the CPSIA was originally passed, one of the provisions trumpeted by the agency was its fancy new right to impose huge penalties.  And it didn't take long for the agency to try out its new rights.  Unfortunately, as documented in this space, the penalties rarely reflected reason, just emotion.  Penalties tended to vary by the level of anger at the CPSC, not the magnitude of the "crime" or any sense of proportionality.  Chairman Inez Tenenbaum actually bragged publicly about effectively putting Japanese retailer Daiso out of business  in the U.S. in her 2010 ICPHSO keynote speech.   Daiso recalled a few thousand dollars of cheap toys (about one pallet's worth) in five recalls with no injuries reported byt eh CPSC.  Not exactly a crime against humanity, in my view.  Nevertheless, Daiso was hit with penalties in excess of $2 million.  The Daiso fiasco looks very much like vindictiveness or headline-seeking.  

The threat of such disproportionate punishment may look entirely theoretical . . . until it's your turn.

Call me a starry-eyed idealist, but I believe in due process and reasonable recourse to the courts.  If the agency is going to go hog wild with penalties, Congress should impose reasonable restraints on the process.  Unfettered government power is un-American.  Procedural limits providing basic due process rights and restraining the coercive tactics of the agency would be an appropriate addition to the amendment.  This problem is no secret - ICPHSO sponsored a presentation on this problem at the 2011 February meeting by three distinguished CPSC bar practitioners.  If the agency can't control its animal instincts, then the law should be changed to limit its powers.  I also recommend that penalties be limited to egregious conduct, reckless endangerment or conduct resulting in serious injury. 

d.  Restore Risk Assessment.  The basic problem underlying the CPSIA, as is apparent again and again in my comments, is termination of the CPSC's obligation to assess risk.  In fact, they are not allowed to assess risk anymore under the CPSIA, just follow the rules written by staffers in the 110th Congress.  Of course, this renders the standard of substantial risk hazard moot.  Even more problematic, the CPSC shows signs of losing sight of its mission.  Is the mission proper testing . . . or safety?  The recent hearings on pool drains illustrates this problem.  The hearing was all about the definition of proper pool drain testing.  The CPSC wasn't investigating actual injuries, because there weren't any, but instead questioning test results.  That's what passes for safety administration nowadays.

We need a CPSC focused on risks and injuries.  A phobic safety agency adds costs to our economy with little to show for the extra investment.  We need to get our compass working again.  Congress must mandate that the CPSC base all its decisions on the substantial product hazard standard and risk assessment.

e.  Allow resellers to rely on representations of manufacturers,  Fear of liability has caused many layers of the supply chain to repetitively test and retest the same product, all in the pursuit of the perfect suite of test reports.  These costs are harming manufacturers and raising prices to consumers.  Injury statistics do not support the thesis that anyone is safer, however.  The solution is for Congress to set a legal standard that permits retailers to rely on the representations of their suppliers (manufacturers).  This bright line rule should help end the atmosphere of distrust between retailers and their suppliers.  Don't worry, there will still be plenty of testing to make everyone happy (including the always deserving testing labs).

f.  End whistleblower provision.  The whistleblower provision was added in the same fever of vindictiveness that infused the "throw in the kitchen sink" CPSIA in 2008.  The problem is that there is no evidence that there were any "evil" companies at work in the children's market.  Incompetent organizations or failed operators, perhaps, but criminals and bad guys, no.  "Bad guys" are rare in the children's market, frankly.  The whistleblower provision has the potential to be a disruptor, a manipulator mainly useful to pad the income of tort lawyers. 

Additional attention by the CPSC to outreach and education of manufacturers is much more likely to produce results.  Without evidence that true venality is an actual risk in this market, there is no justification for retaining the whistleblower provision.

g.  Remove phthalates ban!  There are no known victims of phthalates.  The CPSC has been operating under this total ban for now almost three years - and has only ONE recall of 40 little inflatable toy baseball bats (our friend Daiso) to show for it.  That's it, my friends.  How much money, how many planeloads of dollar bills have been torched testing and retesting product for the presence of these chemicals in the meantime?  The CPSC hasn't even bothered to finish up testing standards or certify even ONE lab to perform the tests.  They don't appear to think this is a public health emergency.

Ket's end the charade.  When Diane Feinstein isn't looking, drop the phthalates ban!

CPSIA - Analysis of Pending House CPSIA Amendment (Sections 3-11)

Continuing with my analysis of the pending draft of the CPSIA Amendment:

Section 3  Application of Third Party Testing Requirements: Merry Christmas, this provision ends mandatory phthalate and lead-in-substrate testing! Yes, Virginia, you read that right - there is a Santa Claus after all. Of course, as noted in my earlier blogpost, you are still subject to broad standards applying to many of your products. How will you know if you comply without some testing? You won't. Hmmm - a Catch-22!  The limitations in the definition of Children's Products echo here.  Removing mandatory testing is not the whole solution, unfortunately.

You still must test for lead-in-paint, small parts, children's metal jewelry and certain juvenile products.

The provision does not remove the CPSC from the process of certifying labs. This needless expansion of the role of our government in this market has never had a sufficient justification, in my view. Why are they in this business? What problem does it solve? Can ANYONE provide evidence that the market wasn't "working" before the CPSC arrived on the lab certification scene? This CPSIA provision is probably a historic consumer group wish-list item or perhaps a staffer's stray term that was never removed. The CPSIA was drafted in a fever of "our government failed us", so it's only natural that the law inserted the CPSC into every nook and cranny of the market. In this case, their conscription has not proven valuable, just another wasteful expense of the federal government that we all will pay for (again and again and again).

Ironically, the provision seems to create even more involvement in certification by the agency, if it chooses to require third party testing. Among other things, the agency must assess testing "capacity". That should prove "interesting".

This section provides some exemption for crafters, products focused on disabled persons (this phrasing only awkwardly covers certain "special needs" children) and one-of-a-kind items. The definition of the exemption incorporates the unfortunate term "not economically practicable" for testing to be excused. I can only imagine the serious of hearings and "stakeholder" meetings required to define what is and is not covered by this new term. This anticipatory compromise (perhaps as a concession to as-yet-encountered resistance in the Senate) likely spoils the workings of this well-intended provision.

A small quantity exemption modeled on Henry Waxman's formula has survived into this draft, unfortunately. The rule incorporates an arbitrary and otherwise meaningless volume rule to identify those companies too small to be required to test. I have never understood why Congress would want to let small companies flaunt safety rules because of their size. Is it okay to be poisoned by a little company but not by a big one? Isn't this law about SAFETY first and foremost? Perhaps we would do better to home in on REAL problems and leave everything else basically unregulated? After all, the substantial product hazard standard gives the agency a LOT of power to change course if they identify a new and REAL problem at a later time.

Under this amendment, the amoeba that is the CPSIA spread in yet another new direction. Today's new priority is apparently small parts. Why? Not explained. Has someone concluded that the former reliance on voluntary standards for small parts failed? On what basis? Does a lab putting products through a choke tube really save lives over relying on voluntary compliance (without specifying the use of outside labs)? Perhaps the best solution is to hold companies responsible for compliance with ASTM F963 without requiring testing (thus preserving the agency's ability to enforce), and holding the line on lead-in-paint testing? After all, L-I-P is easily tested and probably should always be subject to testing owing to the nature of the hazard. I don't know that small companies deserve an "out" on L-I-P because of the ease of controlling sources of paint and getting documentation on lead content. On the other hand, I don't understand why small parts needs this special mention.

Perhaps the sweetest term in this entire document is the new requirement that the agency perform a cost-benefit analysis on ANY mandated third party testing and further, that the testing imposes the least possible burden. This is a pure post-midterm election "smaller government" provision and something to be cherished. This requirement will be applied retroactively on any mandatory testing passed after August 14, 2009. Nice!!!

Finally, this provision makes the "15 Month Rule" voluntary by the CPSC, rather than Congressionally-mandated. Does this mean that it's dead? I can't say for sure. Let's hope so. Better yet, why not change this provision to get the CPSC out of the business of telling us how to be reasonable? Reasonableness is a term that courts have successfully interpreted for years without Congress' help. Why not let the courts decide what's reasonable if there is a dispute?

Section 4  Application of and Process for Updating Durable Nursery Products Standards:  I skipped this as it relates to cribs. Not my area.

Section 5  Application of Section 106 to FDA-Regulated Products:  Pulls in FDA rules into mandatory toy safety standards enforceable by the CPSC.  Does not apply to me, not sure which is you this will impact.

Section 6  Application of Phthalates Standard:  This provision limits the application of the phthalates ban to only certain parts of a "toy" (as defined). 

First, the rule makes ALL phthalates rules PROSPECTIVE from the date of enactment.  For those of you sitting on old inventory with the vain hope that someday it will saleable, this might be your lucky day!

The rule also gives the agency the power to exempt products from the phthalates ban if deemed "not necessary to protect children's health".  This can be done only by rule under the amendment, so don't expect anything quick or cheap. This will be a long, drawn-out and arduous process - in other words, it is highly unlikely to occur.

As noted above, the term "necessary to protect children's health" conflicts with (or at least differs from) the substantial product hazard standard already in use. This is wrong and should be changed.  Congress should use ONE standard for all matters relating to health under the CPSA, namely substantial product hazard, and it should resist the urge to introduce new standards throughout this document. That will only confuse things and make matters worse.

The provision adds a firm deadline for the end of the ban of the three phthalates the subject of the CHAP, if the agency does not act promptly after the CHAP is concluded.  This provision seems to express distrust between Congress and the current administration of the CPSC.  Will safety zealots hijack the CHAP process?  This provision aims to prevent it.  Hmmm.

Subsection (e) fiddles with the definition of "toy" to align it with the definition in the now mandatory ASTM F963 standard.  Not sure how this will affect you (or me).  The ASTM standard includes many different age ranges (by item) so some may even expand.  Many will contract. 

Finally, the revised definition excludes parts that can only be "licked".  Frankly, based on my recollection of the CPSC's serious approach to this in the past, I anticipate that they will assume children have serpent tongues making almost everything "lickable".  Sadly, Congress probably can't rely on the CPSC to take a simple definition and let companies administer it.  This provision is an invitation to make "rules".  I would suggest that the amendment be modified to specifically permit companies to exercise their reasonable business judgment on what is "lickable".  I would point out that in the absence of victims that people besides Diane Feinstein can identify, the need to treat the possible presence of phthalates in these items as a public health crisis is unsupported. The CPSC, on the other hand, WILL treat it as a crisis since Congress banned the substances in toys. That makes it quite serious for the agency.  To restore sanity, Congress will either need to give very specific instructions to the CPSC, or mandate the use of risk assessment to resolve this matter.

Personally, I am tired of all this, and hope Congress can find a way to put this to bed.  I don't relish another three years of hearings, comment letters, begging and the like.  Let My People Go - build some easy rules, let us exercise judgment and re-focus the agency on substantial product hazards.

The rule does NOT limit the application of the ban to ONLY plasticized parts, meaning that testing costs to assure compliance may remain in place for wood, metal, labels and other sundry items. Believe it or not, that's where we are now.  [The CPSC seems stuck on phthalates right now - no final rules have been promulgated on this simple ban and no labs have been certified since August 2008.] It is a complete waste of money, particularly since only Diane Feinstein knows of victims of this purported hazard.  The rule should be revised to limit toy industry legal exposure for what is best characterized as a ban based on conjecture and fear, not actual science or identifiable injury victims.

Section 7  Exemption Authority for Tracking Labels Requirement:  This provision gives the agency the ability (by regulation) to exclude specific products or classes of products from the tracking label requirement if the Commission determines that it is not "economically practicable" to apply tracking labels.  Even for those products thrown a lifeline, they may still have to provide the information through alternative means devised by the CPSC.

I believe cynically that our very existence, the very fact that we are still breathing today, can be used to rebut the argument that tracking labels are not "economically practicable".  A better rule would be to let us decide for ourselves whether we want to use tracking labels.  Companies can be relied upon to decide on an economically rational basis.  If it's a good use of money, we'll do it. Otherwise, we won't.

In the case of our company, in fact, that's what we used to do.  Some of our items had tracking labels, most did not.  Our motivation had nothing to do with recalls.  That's because our recall record was so good that tracking labels never made sense as a "defensive" move. The few tracking labels we added were to assist us on quality issues (generally relating to the production of electronic items).  We used product identifiers to improve our supply chain and raise our quality levels.  Why not let businesses exercise judgment and live with the consequences?  Make good decisions, innovate in value-added ways  and profit, OR make bad decisions, cut corners and lose.  Simple.  This provision should be revised accordingly.

I have also suggested in the past that mandatory tracking labels be restricted to long-life, heirloom-style products, mainly juvenile products like cribs.   These items have a checkered past, and are used with the most vulnerable children (babies).  There is reason to believe tracking labels will have some value in this arena, and in addition, since these items are generally big ticket items, the cost of the labels is not material.  As for everything else, forget it.

Section 8  Requirements for Public Database:  The very encouraging changes proposed in this section would provide basic safety net protections to innocent companies possibly subject to unmerited attack in the database. I have not taken the time to compare these provisions to the Nord/Northup draft rule on the database, but believe they are consistent or at least Nord/Northup provided inspiration for these changes. The changes reduce the scope of people who can file a report, and gives companies more authority to resist publication of material inaccuracies.

The time frames for circulation of data needs to lengthened considerably.  The prospect of "doom" flaunted by consumer groups needs to be downplayed. While the drama of pending disaster makes grist for the newspaper mill, it is unrealistic and has driven the database process in an abusive direction unnecessarily.  Giving more time for back and forth means that the agency will have fewer occasions to knowingly publish false information. In addition, there is always the possibility that working together on a more relaxed schedule will allow the CPSC and businesses to work together better.

My interaction with the agency has reduced my confidence in getting a fair hearing on material inaccuracy.  We presented information rebutting definitively an accusation made by a consumer, and we were told that we had not demonstrated "material inaccuracy".  That seemed to fly in the face of the facts but we could not rebut what the filer "thought".  I do not see anything in the new language that would prevent the agency from publishing that original filing.  If good faith were the metric, I would worry about it.  But today's CPSC is highly-politicized so I am not prepared to say I believe they will interpret clear language "clearly" or behave in a "reasonable" manner.  I call on Congress and the CPSC to jointly figure out how to solve this trust problem.  Should there be a way to appeal the judgment of the CPSC?  It would have to be simple and cheap - something administrative and independent - to give companies a way to protect themselves if they feel they're not getting a fair shake.  It may be worth the effort to restore faith in the database.

The database is a very expensive trifle.  I question whether we can afford it.  Think about how much time and resources will be devoted by the CPSC to the database.  Is this really the best way to spend our money on safety?  A "nice to have", perhaps, but probably not a "must have".

Misidentified products and reports proven materially inaccurate will not be allowed to be published under this amendment.  Thank heavens . . . .

Section 9-11:  Technical amendments as far as I can tell.

CPSIA - Answers to Supplemental House Questions (Hearing of Feb. 17th)

This is my Response for the Record to questions posed by Rep. Mike Pompeo after the February 17th hearing held by the Subcommittee on Commerce, Manufacturing and Trade:


February 17, 2011
Commerce, Manufacturing, and Trade Subcommittee:
“A Review of CPSIA and CPSC Resources"

Congressman Mike Pompeo

1. Did your company have to buy a copy of the F-963 standard? Why? How much did that cost?

Our company has purchased several copies of ASTM F963 over the years. According to the ASTM International website (http://www.astm.org/Standards/F963.htm), the current cost of F963 is $62, or $74 (redline version). [This means that the ASTM literally charges companies EXTRA to figure out what changed in this legally-mandated standard.] To my knowledge, this standard is only available from the ASTM. Ironically, even the CPSC is unable to provide access to this document (as acknowledged in this CPSC Powerpoint presentation http://www.cpsc.gov/BUSINFO/intl/toyweb2_en.pdf) which casts doubt on its ability to guide companies attempting to comply with the law. The lack of access and cost of access to this standard certainly makes compliance burdensome for small businesses.

The F963 standard has been updated regularly over the years, and we need to have access to the current version of the standard at all times. Until the CPSIA was enacted, the F963 standard was the tacit equivalent of a mandatory standard because the toy industry adopted it as a “voluntary” standard with the encouragement of the CPSC. At one time, voluntary standards were the preferred way the agency regulated many industries, including our industry. We have always used the F963 standard as a reference in product development and safety administration and frequently tested for compliance with the standard.

2. You’ve been dealing with all of the agency’s rules for the last few years. By my reckoning, an entrepreneur with, say, a good idea for a board game would have to pay to buy a copy of F-963 from ASTM (not a small price to pay for some small or start-up toymakers). Then, because the standard is literally dozens of pages long of densely spaced text, he’d have to hire a lawyer to tell which parts of the standard apply to his product. Then, he’d have to find a third-party test lab to test and certify a random sample of his actual production line for compliance with all of the F-963 requirements. And, if any product fails, you are basically back to the drawing board. And, of course, he’d have to do all this before ever selling a single toy. Do you think the next board game entrepreneur (e.g., Trivial Pursuit) might have a hard time getting off the ground under this regime? Has this agency effectively killed entrepreneurship in the toy market? Does a start-up company stand any chance of being able to navigate the CPSC’s new rules and regulations on its own?

The CPSIA has had the effective of creating new barriers of entry in the children’s product market, once one of America’s most entrepreneurial industries. The burdens are heavy in the toy industry but even worse in related industries like juvenile products. Large companies with steady cash flow enjoy considerable and valuable advantages over entrepreneurs who must put large sums of money at risk in their initial investment in compliance costs before receiving their first dollar of revenue. The effect of the CPSIA is one of picking winners and losers in affected markets. I question whether this is the appropriate role of the federal government in our markets.

We believe that these heavy costs will discourage investment in new products, by new entrants, by existing players and especially by small businesses. Recently, at the CPSC’s hearing on the looming 100 ppm lead standard, representatives of the bicycle industry noted that in the wake of the 300 ppm lead standard, many small bicycle manufacturers have already left the market and large companies cut their product lines considerably. I have long predicted a reduction in product diversity as a necessary consequence of the CPSIA. Other evidence of market contraction exists, as well. At this year’s ICPHSO, CPSC Acting Director of the Office of Compliance and Field Operations Robert (“Jay”) Howell noted the CPSC’s challenge in identifying a test lab that has or will agree to equip itself as a certified test lab for ATVs. Why? So many ATV manufacturers have stopped producing youth model ATVs under the effective ban by the CPSIA’s lead standards that testing labs can’t justify the capital investment to provide CPSIA compliance testing. Product diversity is declining all over the children’s product market.

Toymakers will experience the same depressing effect and yes, that means that the next Trivial Pursuit inventor may be washed out. We may never know because the absence of a new toy or novel game will be hard to detect in the ad-driven, promotional toy market. It is clear, however, that entrepreneurs are free to deploy their capital wherever they want – they are seeking returns on their capital - so the combination of high CPSIA compliance costs, high regulatory risk, high legal costs and a generally hostile regulatory environment seems unlikely to attract new entrants to the toy market. War stories will also discourage new entrants – the well-known experience of toymakers who have suffered under this regulatory regime.

As a practical matter, the rules and regulations put out by the CPSC to implement the CPSIA for toys are incomprehensible, not to mention incomplete. We are now 31 months into the CPSIA era, yet the CPSC has yet to promulgate a final phthalate standard or certify even one phthalates testing lab. EACH and EVERY toy must be “phthalate-free” but the CPSC has yet to tell us how to know it has achieved this goal. This means we are subject to the risk that they will invalidate all the work we have done since 2008. While this regulatory delay is simply outrageous, it is more likely proof of the defects in the CPSIA than a sign of failure by the CPSC. Even the largest companies have complained to the CPSC about the blizzard of rules and interpretations. One of great frustrations in attempting to comply with the new rules is that many CPSC legal interpretations have been given in private letters, orally in speeches or even in the form of voicemails. Access to such information may be critical but is obviously inaccessible to anyone not obsessively watching every minute of every video, reading every letter, attending every meeting or hearing and talking to every stakeholder in an attempt to master the breadth of this ever-morphing regulatory scheme.

3. Does the existence of a small business ombudsman at the agency solve the compliance problem?

The office of the Small Business Ombudsman serves a useful purpose as a friendly point of contact and possible advocate for small business within the agency. That said, there is no evidence that the office has power to make decisions, change policy or offer its own definitive interpretation of rules. For small businesses totally at a loss, the ombudsman is a good place to turn to for plain English answers to basic questions about rules. Notably, the office is not permitted to make decisions on behalf of the agency. The Ombudsman does not have the authority to make problems “go away”. For this reason, the ombudsman function appears to be the regulatory equivalent of a shoulder to cry on. The current ombudsman, Neil Cohen, has been a good friend to the small business community, but unfortunately, he doesn’t write the rules.

4. What problems do you anticipate occurring as a result of the public database?

We know that the public database will be administered on a post-it-and-forget-it basis. Based on our dealings with the agency, I believe that the agency will post all incidents unless a mistaken identity can be proven. As a consequence, we anticipate that the database will be allowed to be filled up with “incidents” that are conjectural, misleading or even proven WRONG. In the first and only filing against our company, an anonymous complaint accused one of our products of posing a small parts hazard. That accusation was based on an image viewed on a website – there is no indication that the filer had ever handled our product. Consequently, the filer had no reasonable basis for the small parts claim. As a matter of fact, we routinely test for small parts and have done so for years, and when we presented a valid CPSIA test report under F963 (and EN71, the European standard), we were told by the General Counsel of the CPSC that the claim would nevertheless be eligible to be published under current rules. Thus, we KNOW that the false and misleading filings will KNOWINGLY be published by the CPSC even if PROVEN false. We believe this flagrantly violates our basic right to due process and creates the potential for damaging “feeding frenzies” that can consume our products and brands.

Other claims may relate to “hazards” which affect a wide swath of products already well-known by regulators and industry. This presents many risks to industry and to brands. What will a consumer make of a "report of harm" relating to a general hazard and only one particular product? Is this a minor incident or a harbinger of a real risk? Should they stop using the product? Should they stop using the particular model or brand which is subject of the complaint? Given that many products may present the same hazard (for instance, that an electrical cord could pose a strangulation hazard), how does this information help consumers? Will consumers actually understand the issue and be able to put it into some sort of perspective? And when incidents accumulate, as they are likely to do, presumably the brands and models with the largest numbers in distribution will have more incidents even though, ironically, they may be better constructed and "safer" than the alternatives. Will consumers falsely conclude that the models with more incidents are less safe and turn to something that really is?

Responding to this type of complaint obviously creates a new and terrible dilemma for manufacturers. Should they expend resources to respond? Do they need to lay out "a brief" about the nature of the failure and why their product is named? Will people just view whatever they say as unreliable, self-serving information or will they really be able to internalize the data? As noted above, most people will not be able to put these incidents in any kind of perspective. The only thing we know for certain is that brands and companies will be the losers.

The public portrayal of the database belies the unverified nature of the filings. Notwithstanding the disclaimers made by the agency, even esteemed media outlets like The New York Times refer to the database as a “database of unsafe products”. Unsafe? That label presumes some kind of judgment or filter prior to filing, which even The New York Times must assume is being provided by the CPSC. Ironically, the CPSC is doing everything possible to avoid providing that service. The result may be disastrous for American manufacturers, importers, private labelers and retailers of children’s products. It will be yet another self-inflicted economic injury.

5. What can Congress do to return the agency to one that regulates on the basis of risk?

Congress should mandate that the CPSC use principles of risk assessment to make all decisions relating to regulation of children’s products. The legislatively-mandated use of judgment and proportionality will likely lead to better rulemaking and more regulatory common sense. It is the legislative banishing of the exercise of judgment that led to the devastation of the bicycle industry, the elimination of youth model ATVs from the market (even though those products owe their very existence to a concerted effort by the CPSC to protect children from injury on adult-sized ATVs), the banning of all products made of brass, the senseless and almost neurotic banning of rhinestones as embellishments on children’s clothing, shoes and jewelry, and so on. NONE of these changes in rules have been tied to even ONE avoided injury.

Congress should also mandate the use of principles of cost-benefit analysis by the agency in its rulemaking processes. Under the CPSIA, all considerations of economics have flown out the window with predictably disastrous results. We can operate our government better according to basic common sense notions of cost-benefit analysis.

CPSIA - CPSC's Shameful Failure of Leadership

On Monday, the CPSC will decide whether or not to extend the testing and certification stay that has been in place for two years. The 16-page document which sets out the parameters of the decision does not mention risk anywhere. That's because the law prohibits the CPSC from considering safety in its work under the CPSIA. [Ironically, the CPSC warns users that use of its http://www.saferproducts.gov/ website is at their own risk (see par. no. 2 in the user's agreement) - and ironically, we're talking about a "dot gov" website, too!]

The CPSC explains that extension of the stay is only one of its options. It can do nothing, it can roll all the existing stays forward, or just some of them (to heck with the ATV'rs and the bike industry). Presumably, they will choose to roll all of it forward to September 14, 2011. We can all be screwed on the same day. I like the symmetry of that!

The CPSC has not lost sight of the issues. They know they haven't finished their work. They note that two years ago on February 9. 2009 when the Commission first extended the testing stay. it was because delaying implementation of the testing requirement by a year "give[s] us the time needed to develop sound rules and requirements as well as implement outreach efforts to explain these [new] requirements of the CPSIA and their applicability."

How time flies! That didn't happen, so the Commission again extended the stay by another year on December 8, 2010. Why? Chairman Tenenbaum: "I voted to extend the stay on lead content testing and certification until February 10, 2011, in order to allow component testing adequate time to develop and to give our stakeholders adequate notice of new requirements." Commissioner Robert Adler: "One of the primary rationales advanced for extending the stay is to await the effective date of the so-called 15-month rule."

Where does the time go?? None of that ever happened. Hey, CPSC, take all the time you need!

So now the Commission is poised to kick the can down the road until September 14, 2011. Why that date? The CPSC Staff report notes that this gives the Commission time to sort out the new, lower lead standard due to be imposed on August 10, 2011. The CPSC is holding a hearing on February 16 on the feasibility of the 100 ppm standard. As Staff notes, if the Commission doesn't determine that 100 ppm is feasible, then they will have to set a standard between 300 ppm and 100 ppm that is feasible. "Feasibility" was defined in the CPSIA, lest there should be any disagreement, to exclude ANY consideration of economics. In other words, if it's possible at any price or under any condition, it is considered "feasible" and thus mandated by the law. I can save the CPSC some time - under that definition, it's definitely feasible. Completely unreasonable and unnecessary but "feasible".

The idea promoted in the Staff memo is that we will time to get used to all this if the stay lifts a month after the implementation of the new lead standard. [The concept of "learning disability" floats through my head. Have we heard this song before?] "Staff recommends that the Commission extend the stay to allow time for the Commission to determine whether it is technologically feasible to lower the amount of lead in children's products to 100 ppm." I guess once the Commission makes up its collective mind, the CPSC will wave a magic wand and make your business, your supply chain and your sales channel comply with the new rules in a matter of days. The fact that the rules are hazy after almost three years is no concern of theirs. Is it a concern of yours?

I love magical rules and magical plans! It must be a job requirement for Commissioners to be wizards, too.

All concerns over the "15 Month Rule" seem to have evaporated. This is presumably Robert Adler's doing (see his statement above, which is a rant that the 15 Month Rule and the stay are separable issues). The Staff report intones: "While a Commission decision to extend the current stay of enforcement will give industry an opportunity to test and certify finished products and components according to the final rule and provide the Commission time to clarify any confusion regarding the new rule, it is not necessary for the testing rule to be complete to lift the stay as to the initial test for lead compliance." Can't see any problem there, can you???

The CPSC doesn't want you to worry, however. They have apparently promulgated several documents that set out their policy and whatnot on lead, namely "Statement of Commission Enforcement Policy on Section 101 Lead Limits" (February 6, 2009) (6 pages); "Children's Products Containing Lead: Interpretative Rule on Inaccessible Component Parts" (August 7, 2009)(32 pages); "Statement of Policy: Testing and Certification of Lead Content in Children's Products" (October 2009)(5 pages); and "Interim Enforcement Policy on Component Testing and Certification of Children's Products and Other Consumer Products to the August 14,2009 Lead Limits" (December 28, 2009) (4 pages). If these four documents totalling 47 pages don't clear up everything, the CPSC is ready for you. "Manufacturers of children's products can seek guidance for what the Commission considers reasonable and representative testing in these rules."

You may have to wait a few years for a reply, but darn it, they're going to answer your question. And that's because they really CARE. We're the government and we're here to help!

A few more cock-ups aren't deterring the agency. The phthalates standard is still undrafted, likewise the certification procedures for phthalate testing labs. Oopsie! Well, they've been busy . . . and the much fantasized-over component testing "market" has failed to materialize. Imagine that, businesses that inadvertently serve the children's market with components or which derive a small percentage of sales from children's products aren't volunteering to test their items and expose themselves to the ravages of a crazy and out-of-control federal agency. Shocking!

Those of you who live in the past may recall my mentioning this very issue on November 6, 2008 (yes, 2008) when I addressed the CPSC Lead Panel. [It's a safe assumption no one was listening at the agency - opportunities for stakeholder feedback is not for listening, it's for venting.] I talked about the futility of expecting our suppliers of aluminum foil (widely used in schools in science kits) to test their products. After all, they are allowed to sell it for use with food without testing, so why should they test for me? If I asked them for a test for compliance with the CPSIA, they would certainly refuse and then ask in outrage why I was selling aluminum foil to kids anyway. As I said, who could see this coming? No one . . . .

For all the outrages that this sick situation brings to mind, NOTHING is as shameful as the CPSC's refusal to admit that this is all administrative, bureaucratic nonsense (or use your own word for "nonsense") that has nothing to do with SAFETY. Oh yeah, safety - isn't that word in the name of this agency - the Consumer Product SAFETY Commission. What about safety, guys? Are you concerned about that anymore? This failure of leadership is the basic issue I have with the folks running the agency today. There's a reason that bureaucrats are called "soul-less".

The fact is that this administration at the CPSC (Democrats) will not stand up for what's right - they are prepared to go down with the ship. It's ironic that they remain so strident and so stubborn. Mr. Obama can smell change in the air and even he has called for reconsideration of the deluge of regulations. The Republicans in the House have declared war on over-regulations and the House Energy and Commerce Committee has made reform of the CPSIA the top priority of Mary Bono-Mack's subcommittee.

As I have said again and again - this is YOUR government at work. Their shameful acts which are harming your markets and your business are destroying jobs, discouraging innovation and hurting children by impairing the activities of businesses devoted to children's welfare. This intolerable situation will only be fixed when you MAKE it change. You can do it and you must. There is a new Congress in town and they need to hear from you. Don't let the Democrats keep on wrecking your industry. This isn't about safety and never was. This is politics, pure and simple.

Make them pay for their sins. Call your Congressman.

CPSIA - Why Does The Press Push Bad Ideas?

Last week, Justin Pritchard of the Associated Press again pressed the point that glassware with lead in the enamel should be recalled. He expressed shock at the "stunning" news that the CPSC reconsidered its view that the glasses are subject to the noxious lead regulations of the CPSIA.

Why did Mr. Pritchard find this outcome "stunning"? After all, in response to a question about the risks involved in the glasses, Pritchard had this to say in a TV interview: "The [lead and cadmium] levels are low in the sense of . . . no one is going to touch this glass, put their hand to their mouth and fall ill. This is a low level over time concern." If the glasses are a low risk, why would he expect a federal regulator to waste time or resources on them?

Even more remarkably, Pritchard knows that the McDonalds Shrek glasses were found to be non-toxic by the CPSC. He broke the McDonalds story. The Shrek glasses present precisely the same "issue". He also knows lead is only restricted in children's products and that enamel coatings containing lead are permitted explicitly in the law (16 CFR 1303.2(b)(1)). There is no evidence that the presence of lead in the enamel has ever injured anyone. Ever.

So why is Pritchard continuing to push a story that he knows is defective? This puts it kindly. Let's rule out that he is seeking a Pulitzer or has an ill-motive. Why would he do this?

Of course, we know there is a bias in reporting and in investigating that favors reporting "bad news". Good news is not really considered news at all (except on the sports page). The media's incentive is to publish terrifying stories - it sells papers and banner ads, and it's natural for Congress to push legislation to save us from poorly understood threats as an extension of this trend. But something else is at play, it turns out.

This subject is analyzed in an interesting article by Jonah Lehrer in this week's New Yorker magazine entitled "The Truth Wears Off". Lehrer tries to explain why replication of scientific studies tends to show declining results over time. This is quite unexpected given that scientific studies are subject to peer reviews and are often published by periodicals with their own high standards of review. Lehrer notes that in small studies, weird results can show up (such as a 1930's study which claimed that one Duke University student had ESP but later retesting revealed the student's rapidly diminishing extrasensory powers . . .). In larger pools of data, results revert to a mean (this is called "funneling"). However even statistical significance doesn't explain the phenomenon. Lehrer shows that we only get to see certain slices of data. Most data won't be published because it's not interesting or doesn't confirm prejudices.

Put into a CPSIA context, Lehrer implicitly argues that media won't write a story announcing that lead-in-enamel on your glassware is safe. Nor that you were always fine and your children weren't in danger. Nor that there have been few injuries from lead in any children's products. Nor that the few known injuries in the context of the large volume of products in use is actually a GOOD result. Nor that there are no identified victims of "phthalate poisoning" or that incidents of cadmium poisoning in American children are virtually unknown. The excuse - it's not "newsworthy". What's the reality?

The reality is that we are exposed to a very imbalanced set of data. Quoting Michael Jennions, a biologist at the Australian National University, Lehrer argues that "the tendency of scientists and scientific journals [is] to prefer positive data over null results, which is what happens when no effect is found." If the null set (the "everything's fine" news) doesn't get reported, what does? Says Richard Palmer, a biologist at the University of Alberta, "We cannot escape the troubling conclusion that some - perhaps many - cherished generalities are at best exaggerated in their biological significance and at worst a collective illusion nurtured by strong a-priori beliefs often repeated."

The same mantra over and over? The words "Rachel Weintraub" suddenly pop into my mind.

Lehrer continues: "[T]he problem seems to be one of subtle omissions and unconscious misperceptions, as researchers struggle to make sense of their results. Stephen Jay Gould referred to this as the 'shoehorning' process." Referring to studies in Asia that consistently confirm that acupuncture is effective, and studies in the West that show much poorer results, "Palmer notes, this wide discrepancy suggests that scientists find ways to confirm their preferred hypothesis, disregarding what they don't want to see. Our beliefs are a form of blindness."

Or to quote Robert Adler, anecdotes aren't evidence.

John Ioannidis, an epidemiologist at Stanford University who once published a study entitled "Why Most Published Research Findings are False", calls the phenomenon "significance chasing" where scientists play with numbers trying to find "anything that seems worthy". In a news context, this is the same as Pritchard fingering the Super Hero glasses on the grounds that there is lead in the enamel even though he knows the Shrek glasses were safe. Maybe these other glasses are a problem?! Jeff Plungis of Bloomberg published an article on lead in Christmas light wires on December 8th because he apparently thought it was "interesting" and not well-known. Same thing.

Ioannidis says "It feels good to validate a hypothesis. It feels even better when you've got a financial interest in the idea or your career depends on it. And that's why even after a claim has been systematically disproved . . .you still see some stubborn researchers citing the first few studies that show a strong effect. They really want to believe that it's true." [Emphasis added]

Lehrer's article is a great read, I recommend it to you.

So you can stop scratching your head. Pritchard and Plungis, Adler and Tenenbaum, Waxman and Schakowsky, Weintraub and Green, will all continue to beat the same drum. They know they're right . . . they just can't prove it. And they will continue to repeat themselves in spite of the facts of this case:

• There are (virtually) no known victims.
• The impact of the law cannot be measured.
• The nexus between lead in children's products and purported injury to children is not proven. This means that the inclusion in the law of so many formerly unregulated categories of goods is absolutely unjustified.
• The benefits of prophylactic testing has been disproved by the passage of time - the last 29 months.
• The law targets small business and lets big business off the hook. Even since passage of the CPSIA, it is clear from data that big business are responsible for headline recalls.

I guess the media keeps on publishing these stories because it's human nature. Unfortunately, many jobs and many futures have been damaged in the service of a human weakness. I like to think we can rise about such limitations. It is in the hands of the CPSC and Congress to solve this problem.

Let's hope they do their job . . . sometime really soon.

CPSIA - Stories from the Front (My "Vivid" Imagination)

783 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 27 days left until Election Day.

Have I ever mentioned how the CPSIA is strangling us to death slowly, death by a thousand cuts? I know the media and the "leaders" at the CPSC want me to put up bodies, my word and my reasoning are not enough. I also realize the body they want to see most of all is mine. Sorry, guys, I am working to prevent the delivery of that evidence to you. After all, anecdotes aren't evidence. Somebody said that once . . . .

How about some other evidence (anecdotes) from our business in recent days?

a. Good news for the U.S. economy? We just added our SIXTH person to our growing department of compliance and safety folks. Please NOTE that the volume of work is going to EXPLODE when the testing stay is lifted, so these hires are just a starter. For many years, it was one or two people doing this job (including me). No longer . . . .

I know what you're thinking, this obviously confirms how much we needed the extra safety people. In addition, it follows naturally that everyone is so, so, SOOOO much safer now that we have six pairs of eyes on the ball, not the one or two pairs we relied on for years. And those are jobs being created by Congress and the CPSIA - we must be so much better off . . . right?

Well, let's take a look at those points.

First, are we adding jobs? No. The department is clearly growing, BUT those jobs do not create revenue. They create COSTS. We are adding those jobs without increasing new economic activity (we're not growing) - in other words, our burden to conduct the same or less business is growing. That's simply a drain. Even WORSE, as a company, it turns out we shrunk our headcount in 2007, 2008, 2009 AND 2010. So much for a recovery . . . . If we are shrinking our headcount this year but have a growth department like Compliance, what does that mean? It means that we are reducing our investment in revenue-generating activities like Marketing and Sales, and shifting our personnel investment into managing bureaucracy. To pay the cost of paper pushing, we are shrinking overall headcount.

What-a-stimulus-plan!

As for safety, we achieved a remarkable 26-year track record with far less investment and far fewer people. I firmly believe that more cooks in the kitchen sharply raise the probability of poorer results. Yes, more is NOT better. Why? Because the focus on our efforts is now COMPLIANCE, not safety. [We still work on safety first but it has a lot more competition from paper pushing.] Compliance monitoring and "gotchas" have become a perverse parlor game. Consider Sean Oberle's recent meditation on Mood Rings. The subject of whether the rings are SAFE never comes up, it's all about whether they fall within the rules or not. Safety is secondary in the CPSIA scheme - and everyone is losing sight of what we're trying to accomplish. Paper stacked to the rafters won't make anyone safer but then again, it's comforting to have so many rules to follow.

Do I recall correctly that Mattel with its many CPSC-certified internal labs just recalled about 11 million units of toys? Hmmm.

b. Profit Prevention in Full Bloom at Learning Resources. We had two lessons in the joys of safety compliance money-burning in recent days. Consider these stories and their implications on incentive, motivation, ability to fund our operations, fairness and most importantly, safety.

First Case: We sold a longstanding product incorporating a motor to a mass market retailer with its own testing regime. Their testing regime includes CPSIA tests and is administered according to their specifications by a certified test lab of their choosing. The motor for that item was tested and failed for phthalates. We don't know why - it has been made reliably without the six verboten phthalates since 2007 (many passed tests in our files). So we pulled a second sample from the same batch, and bingo, it passes. This happens all the time.

Of course, certified labs are never wrong. We are the only ones who are ever wrong. After all, the certified labs are CERTIFIED. No doubt that's how Mattel keeps its shop so clean. Oops, they had some big recalls recently, didn't they? I am confused . . . .

Anyhow, back to my story. Motor fails for phthalates and then passes. [Let's not dither over whether phthalates on internal components could even THEORETICALLY harm anyone. It's all about compliance.] Unfortunately for us, this nonsense took two weeks. So the customer penalized us by making the sale a guaranteed sale. If they don't sell out, we lose.

Total cost - unknown. Was any of this cost budgeted for? Of course not. Is our customer happy? No. Could we control against this risk? Probably not, as the explanation of the "failed" test is not and never will be known. We are not making pharmaceuticals here, we make injection molded toys, but we are being held responsible for chemistry and testing results that have no real world significance.

And, it is worth mentioning, all this cost and disruption had NO impact on safety. It only reduced our profit and made us miserable.

Second Case: Another motor case. In the mania over safety and compliance, many formerly minor "gotcha's" have become elevated in signficance. This time, we were trying to mollify a customer over EMC approval of a motor. Electrical motors emit a frequency, apparently, which is regulated. You know, the government doesn't want our motor-powered toy to bring down a plane. We are required to test several of our products, sometimes even calculators. In this case, the motor failed . . . although we have no record of planes crashing after several years of sales of this toy and its motor. Our customer then hired a consultant at its expense to tell us how to "fix" our motor. The result - we were told to add two resistors to the motor, which we did, but then it was too weak to power our toy.

Then we had to find another motor. This took time and finally, we found another motor and had to have it retested. This entire process took two months. Once testing was complete, we were so late with this Xmas order that we were forced to bring in inventory by air freight to make it up to the customer. This cost about $15,000 in air freight and testing costs were an estimated $5-6,000 more. Think of how safe the planes are now!

This customer is a big customer of ours and if we didn't air in product for them, they told us they would have cut us off.

We had a great relationship with the customer before this interaction. How do you think they feel about us now? Do you think they respect us as much? Do you think they believe we "know what we're doing" because our motor failed an obscure and meaningless test? Does it matter that it is basically impossible for a terrestrial toy of this magnitude to influence the operation of a plane miles up in the air? No matter what, we look bad and we lost all of our profit and more on this ordeal, not to mention our good name.

And no one was made safer.

Thanks Congress! Thanks CPSC! Thanks Democrats! Can't wait to show my appreciation in the future. I'll find a way.

CPSIA - Perpetrators of CPSIA Feel the Heat

Could we get this lucky? One of the Senators responsible for the penal phthalates ban in the CPSIA and a big CPSIA advocate, Barbara Boxer, seems to be fading in her effort to hold her "safe" seat in California. See "Poll: Fiorina beating Boxer in California". In another CA race involving a featured performer in this space, Jerry Brown (Democratic candidate for governor) is in a dead heat with Meg Whitman. Mr. Brown has already occupied the CA governor's mansion once before. This race is all about whether California voters learned their lesson last time.

Mr. Brown distinguished himself this week by suing bouncy house operators for lead-in-vinyl at the urging of the offensive Center for Environmental Health, bringing yet more prestige to the Golden State: "Jerry Brown: California's top bouncy house cop saves the day" ("L'Affaire Bouncy partially explains why Jerry has been slowly unveiling his gubernatorial campaign and positions: He's been busy investigating this insidious scourge of California's families. Fight on, Attorney General, fight on! UPDATE: Spotting the hanging curve ball out over the plate, Team Whitman has quickly assembled and lawyered a response to the L'Affaire Bouncy, as if it needed one: 'There's something very ironic about Jerry Brown, of all people, investigating the combination of hot-air and make-believe,' says Whitman spokesperson Sarah Pompei said.").

I hate to be out-quipped but gotta hand it to the Whitman folks, that's solid.

Of course, our dear Democratic leaders from California are also the innovative developers of the "Green Chemistry" initiative that will require that we all send in chemical analysis of all of our products for the state's approval and remediation. This bonanza for safety has the potential to drive our company out of the CA market for good. California is the fifth largest economy in the world - we don't want to leave it. The LA Times has consoled me with their assurance that we will all save money in medical expenses. We have descended into LaLa Land.

I remain stunned over this succession of deadly legislation all in a row. Even more shocking is how the Dems puzzle over WHY people are so angry about persistent unemployment or a lack of investment by business. Go figure.

Personally, I am cheering in all the races involving the principals behind the CPSIA, hoping for some additional unemployment in those districts (one job loss per district). In some cases, I am doing more than cheering. If you are also fed up and can't go forward this way any longer, I URGE you to take dynamic steps to take back YOUR nation. These folks don't own the place - you do.

Stay tuned!

CPSIA - Why Hasn't Data Changed Opinions at the CPSC?

I have recently published numerous blogs on CPSC recall data documenting the dearth of injuries and deaths from lead in the past decade. I am certainly not indifferent to the suffering of any victim, however, I note that data on injuries is a way to measure the urgency of the threat. There has been one death and three asserted injuries in the last eleven years from lead. We are a country of 300 million-plus and have a $15 trillion dollar economy - presumably, we need to prioritize.

I have also provided CPSC data on injuries and deaths from other hazards, such as cadmium (zero), pool drains (very low, but greater than lead), phthalates (zero) and pool and spa (extremely high, more in an average day than in a decade for lead, phthalates and cadmium put together). In fact, I documented the distribution of injuries and deaths among all recalled children's products over an 11-year period. At one death and three unverified injuries, lead comes in last among all recall categories with more than eight recalls over 11 years (lead and lead-in-paint accounted for 248 of 899 total recalls in the surveyed period of time). Literally every significant hazard facing children in consumer products is worse and much more dangerous than lead according to the CPSC's own data.

I have also shown that the data on recalls publicized by the CPSC tends to magnify the scale of lead recalls, making the recalls seem more threatening and the implied hazard more urgent than they really are. Among other things, the quantity of recalled products typically (if not always) includes inventory in the possession of the manufacturer. This inventory NEVER MADE IT TO THE MARKET. In addition, recall data also includes product still on the shelf at retailers. This inventory, which was sold by the manufacturer to the retailer, was never sold to consumers. Inventory in the possession of the manufacturer, its factories or its retailers has no conceivable potential to harm a child. The amount of product in the hands of consumers could be tiny. Please consider these facts when evaluating the claims of consumer groups on the "poor" effectiveness of recalls. The math gets all tangled up, doesn't it?

Call me crazy, but this seems like some rather shocking data. The deaths and injuries from lead and phthalates are so small that they are trumped in a single day by pool and spa deaths and injuries. [The reported deaths and serious injuries from pools and spas since Memorial Day, at least 210, are AT LEAST FIFTY TIMES THE NUMBER OF DEATHS FROM LEAD IN THE LAST ELEVEN YEARS. In other words, it will take more than 500 years for lead to produce as many deaths and serious injuries as the last 53 days from pools and spas (if the lead death and injury rate doesn't taper off).]

And yet the CPSC seems to have no interest in this data, their OWN data. Why? Well, the best I can say is that they believe every life is precious and thus, economics cannot be considered when designing a response to the hazard. I did not invent this view of the consumer group-dominated Commission - I asked this very question of a person in a position to know, and got this answer. So there you go.

Does this hold water, that economics are irrelevant and should never be considered? First, on the relevance of economics, I think that's a silly proposition. Of course economics matters. Please don't feign shock or disgust. Let's do an exercise: How much shall we spend to save a life? A child died from swallowing a lead charm on a single bracelet several years ago. This is the lone reported death from lead or lead-in-paint from a consumer product in at least 11 years and has been cited as a justification for the CPSIA maelstrom. In this space, I have adopted a proxy estimate of $5.6 billion in annual CPSIA compliance costs for the children's product industry (based on a submission of the HTA to support their Congressional testimony).

So, is $5.6 billion the "right" amount to spend annually to prevent the next loss of life? Sure, you say, spend the $5.6 billion each year, every life is precious. Okay, does the cumulative spend of $61.9 billion over 11 years (to match the period in which the one death occurred) sound a bit extreme? Can you think of anything else that might be a better use of $61.9 billion? [Like a new national highway system? A new electrical grid? A few more cruise missiles? A few months of national health care?] I would note that $62 billion is double the provisional losses of BP from the Gulf oil spill. That's a lot of coconuts, if you ask me.

Should we spend $61.9 billion on every cause of death? What about causes of death that are "worse", meaning that loss of life is greater? Should we spend proportionately? If our resources are limited (I used to think that was relevant but lately, who knows?), how should we allocate our limited dollars? Is it okay to prioritize? Does lead make the cut if we try to allocate rationally?

It is worth noting that the value of a life or an injury is a heavily-litigated subject. It is a staple of tort litigation to estimate damages by assessing the economic value of a life or an injury. The U.S. government also engages in the same analysis. Certain agencies are forbidden by law to issue regulations that do not show an economic profit, that is, the cost of the regulation must be outweighed by its economic benefits. [Money spent or saved by the public versus the government is not relevant to this analysis - a dollar's a dollar no matter who spends it.]

The benefits of the regulation are calculated by assessing the economic value of lives and injuries. To regulate otherwise is economically irrational - which is where the CPSC seems to be. More to the point, economic irrationality is against the weight of U.S. jurisprudence, not to mention laws limiting the ability of the government to issue regulations. Hate to sound trendy, but it is Big Government completely out of control to contend that lives are "priceless" and to assert that the cost to avoid injury or death should not be limited by economic considerations. Please note that the EPA assesses the economic "value" of a life at $6.1 million. For even more perspective, the EPA says that one IQ point lost to lead is worth $8,346. CPSIA compliance costs are not less than $5.6 billion EACH YEAR. Do the math.

Okay, this is bordering on insulting your intelligence. Yet, astoundingly, the CPSC doesn't get it. What about the behavior of the CPSC itself - do they ever consider economics? Again, at the risk of insulting your intelligence, of course they do. For one thing, they themselves have limited resources. They can't do everything they want, and have to make choices. They have a BUDGET. They can't hire everyone they want, can't inspect everything, can't process every claim immediately and so on. They also make practical judgments on some things. I reported recently the tarring the Commission received for making a practical judgment about how to implement the pool drain law. In that case, they chose to agree with the recommendations of industry, which is heresy in some circles . Certain members of Congress live in those circles . . . . No doubt the savaging of the Commission over that minor practical judgment will have the intended effect of eliminating whatever shreds of common sense or backbone extant at the CPSC and the Commission. Perhaps this is the end of their consideration of economics . . . .

Where does this leave us? Come on, guys, right where we were for the last two years! We continue to rail against this awful law, and the CPSC gets progressively more and more stone deaf. I feel increasingly like I am mumbling to myself, especially when they won't respond to their own data or other data-driven rational arguments. Given that the Dems have made their name by being totally deaf to the legitimate concerns of industry, what choices are left to us? I am turning more of my energies to the 2010 Midterm elections. I hope you will also do what you can to change the dynamic in Washington. You've seen what these people have done in the last 18 months. Ready for more?

I'm not. And I am doing something about it.

CPSIA - USA Today Highlights Damage Inflicted by CSPIA

Lead testing can be costly for mom and pop toy shops

By Eileen Blass, USAT
European toys line shelves in Randy Hertzler's Lancaster, Pa., basement. The small, family-owned business has been directly affected by the crackdown on lead in toys as many of the European brands that he has sold have now left the U.S. market.

By Jayne O'Donnell, USA TODAY
When other toy retailers and manufacturers were feeling a backlash against their made-in-China products in late 2007, Randy Hertzler was riding high. He imports and sells only European-made toys, which, like those made in the U.S., were all the rage when recalls of toys with lead paint dominated the news.

The tide has turned against Hertzler, however. He can't afford to do the testing that larger chains can to meet the sweeping child-safety law enacted in response to the recalls. And the companies he buys from have stopped selling him about a quarter of the products they used to, because of costs.

"Now Mattel is testing and making toys without any trouble at all, and those of us who were never the problem are in danger of losing our businesses," says Hertzler, who runs EuroSource, based in Lancaster, Pa., with his wife and two sons.

Nearly two years after the safety law was enacted, Congress and the Consumer Product Safety Commission are still struggling to reduce its burden on small businesses while eliminating the risk of lead and phthalates in children's products. The law limits lead in products intended for children and requires third-party testing for certification. It also requires testing to prove products are free of phthalates, chemicals found in plastics that may harm the hormonal system.
Many small manufacturers say the testing is cost-prohibitive. But its proponents say the Consumer Product Safety Improvement Act of 2008 was long overdue, as the U.S. has been far behind Europe in addressing lead and has been slow to recognize the effects even very low levels can have on children's IQs.

A coalition of small businesses and manufacturers, the Alliance for Children's Product Safety, has been aggressively fighting the law, saying it is threatening the livelihoods of mom and pop shops like Hertzler's and costing larger manufacturers billions in lost sales and compliance. The efforts have had some results, but the alliance is far from satisfied. For example, CPSC delayed enforcement of stringent new testing until February 2011, but the group says most retail chains are already requiring the testing.

House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., has drafted legislation to exempt most children's clothing and some products sold by thrift stores and allow less costly testing methods for very small manufacturers. In a written response to questions, Waxman said the measure would "grant significant and meaningful relief to many businesses while still protecting our children from dangerous products" but "does not represent a full satisfaction of anyone's wish list."

The American Academy of Pediatrics and the Center for Environmental Health say drastic changes were needed for U.S. laws to catch up with the research and to recognize the extent of the lead problem. And some advocates of the law question whether it's nearly as burdensome as suggested.

Helen Binns, a pediatrician, professor and chair of the academy's environmental health committee, says it's only recently become accepted that low levels of lead exposure have a proportionally higher impact than larger amounts. "The research keeps moving ahead and pointing us to the fact that to protect children, we have to take some new stances on what's safe and what isn't."

As early as 1996, the Center for Environmental Health was finding lead in everything from diaper cream to women's handbags and filing lawsuits against the companies that sold and made them.

"Every time we would find lead in some new kids' products, we'd get hundreds of calls from parents asking, 'Why do I have to worry about lead in this? Isn't stuff on shelves safe?' " says Center spokesman Charles Margulis. "We were making up the standards by our lawsuits. It was a terrible way to do it."

Margulis says every time the group would bring a case, businesses would say prices would go up and that they might have to close their doors. California environmental laws require hefty fines — as much as $2,500 a day per violation for each product — and Margulis says to avoid fines, "In every single case, companies changed the way they did business, and the price of the product didn't go up."

The Alliance for Children's Product Safety releases what it calls a CPSIA "casualty of the week" underscoring the effect the law has had on businesses. Among the recent victims: Colorado-based American Educational Products reports it is overwhelmed by paperwork related to the law and recently had a $5,000 rock order for a geology lesson canceled because of concerns about CPSIA compliance. Minnesota toy shop The Essence of Nonsense closed its doors because suppliers were limiting what it could sell because of the law.

"What the law should be about is ensuring safe products," says Edward Krenik, a spokesman for the children's product alliance. "We've crossed over into ridiculousness."

CPSC spokesman Scott Wolfson says Chairwoman Inez Tenenbaum believes the "marketplace has made adjustments" and that the law is having positive effects. He notes global suppliers are choosing lead-free buttons for adult and children's clothing, which is safer for everyone and helps shift the burden from small businesses to suppliers up the line. He says Tenenbaum is trying "to find the right balance between compliance and not putting companies out of business."

"You're left with two serious problems: The economy and children's health, and at some point you have to make really hard decisions," Binns says. "I'm just hopeful that some sound minds will prevail."