The NSSEA (National School Supply & Equipment Association) is calling for letters in support of the pending CPSIA Amendment legislation (ECADA). Please send the below letters BY FAX to your House Representative and to members of the House Committee on Energy and Commerce. You can get the fax numbers off each Representative's website. The mark-up may happen as soon as Monday June 20th (but is not scheduled yet to my knowledge).
Now's the time to stand up and be counted!!! There are two forms of letter below (Manufacturer and Dealer/Retailer). Please modify as appropriate.
Letter from Manufacturers:
Dear XXXXXX:
I am writing as a constituent and concerned member of the National School Supply & Equipment Association (NSSEA) to express my support for HR 1939, the Enhancing CPSC Authority and Discretion Act of 2011 (ECADA). We urge you to support this important bill that fixes problems created by the Consumer Product Safety Improvement Act (CPSIA) while maintaining the core provisions of this law that ensures the safety of consumers.
[INSERT INFORMATION ABOUT YOUR BUSINESS, INCLUDING NUMBER OF EMPLOYEES]
The safety of our products and the safety of our customers are our top priorities. Unfortunately, we have encountered many problems in trying to comply with the well intentioned but overly burdensome CPSIA. We have been forced to spend thousands of dollars for unnecessary lead and phthalate testing and continue to deal with compliance programs that change multiple times to meet constantly changing rules. ECADA provides common sense reform to sections of CPSIA which have burdened our industry during these challenging economic times. Given your strong record as a friend of small business and manufacturers, I hope that I can count on your support for this bill.
A costly new rule mandating a burdensome, unreasonable testing regime, the lifting of the stay on third party testing for lead substrates, and the retroactive application of a tighter lead standard despite overwhelming evidence showing that this new limit is not technologically feasible are just several challenges that my company will face this year if the reforms in ECADA are not approved by Congress soon. ECADA reduces the most excessive regulatory burdens created by CPSIA while maintaining protection for consumers. The bill enhances the Consumer Production Safety Commission’s (CPSC) ability to investigate complaints and prioritize testing based on cost-benefit analysis, and improves the CPSC’s public database by ensuring more accurate information.
As manufacturers and small business struggle to recover from the worst recession in decades, it is vital that government does not impose costly and unnecessary regulations that have no positive impact and hinder the fragile recovery. I urge you to vote for ECADA to ensure that companies like mine can continue to provide quality products and services that are so important to our children's education.
Sincerely,
XXXXXXXX
Letter from Dealers/Retailers:
Dear XXXXXX:
I am writing as a constituent and concerned member of the National School Supply & Equipment Association (NSSEA) to express my support for HR 1939, the Enhancing CPSC Authority and Discretion Act of 2011 (ECADA). We urge you to support this important bill that fixes problems created by the Consumer Product Safety Improvement Act (CPSIA) while maintaining the core provisions of this law that ensures the safety of consumers.
[INSERT INFORMATION ABOUT YOUR BUSINESS, INCLUDING NUMBER OF EMPLOYEES]
The safety of our products and the safety of our customers are our top priorities. Unfortunately, we have encountered many problems in trying to comply with the well intentioned but overly burdensome CPSIA. As a distributor, we fear that the range of products offered by our suppliers will continue to narrow due to the costs manufacturers incur for unnecessary lead and phthalate testing. In turn, the needs of American students will be unmet, including those children with disabilities and special learning needs, because fewer specialized products will be available to our customers.
CPSIA has caused considerable confusion in the marketplace due to the constantly changing rules and regulations associated with the law. ECADA reduces the most excessive regulatory burdens created by CPSIA while maintaining protection for consumers. The bill provides common sense reform to sections of CPSIA which have burdened our industry during these challenging economic times. The bill enhances the Consumer Production Safety Commission’s (CPSC) ability to investigate complaints and prioritize testing based on cost-benefit analysis, and improves the CPSC’s public database by ensuring more accurate information.
Given your strong record as a friend of small business and manufacturing, I hope that I can count on your support for this bill. As small business struggles to recover from the worst recession in decades, it is vital that government does not impose costly and unnecessary regulations that have no positive impact and hinder the fragile recovery. I urge you to vote for ECADA to ensure that companies like mine can continue to provide quality products and services that are so important to our children's education.
Sincerely,
XXXXXXXX
Showing posts with label "Common Sense". Show all posts
Showing posts with label "Common Sense". Show all posts
Tuesday, June 14, 2011
Wednesday, April 27, 2011
CPSIA - The CPSIA Testing "Dilemma"
As the House considers how to move a CPSIA Amendment forward, the issue of third party testing looms large. Why?
That's a really good question.
You may recall reports that FOUR Members of Congress asked consumer advocates for a list of "victims" of lead-in-substrate at the April 7th hearing. No names were offered nor were they promised. This makes perfect sense to the consumer advocates - after all, lead harms "silently" and consequently, it's okay for them to assert that there are victims without being able to prove it. You can call that "Consumer Group Accountability". Nice work if you can get it. So I wonder - if a consumer advocate hears voices in his/her head, do the voices' deranged instructions need to go in the law, too? It seems to me that if a consumer advocate perceives something, we must accept that it's real, no questions asked. I assume the answer is yes these days.
Notwithstanding the "gravity" of Rachel Weintraub's assurances, the assertion of invisible lead victims flies in the face of ordinary experience, not to mention logic. Let's posit that lead harms silently and MOST victims would go undetected. [I am POSITING this, not conceding this. I can't buy the assertion that NO victim would ever be detectible - even the advocates don't take that ridiculous position.] It is indisputable that lead poisoning comes from exposure to lead. You must come in physical contact with it AND it must make its way into your blood stream. The mechanisms for lead entering a child's bloodstream are limited to two - breathe it in or take into your digestive system. Breathing in lead-in-substrate has never been identified as a pathway, so it appears that the only mechanism possible for lead poisoning from lead-in-substrate is ingestion through contact. You have to put it in your mouth.
Notably, kead poisoning is identified by elevated blood lead levels. Hence another factor must be considered - namely the lead mass consumed in relation to the volume of blood circulating in a child. In other words, one must consume XXX milligrams of lead per period to obtain and maintain dangerous blood levels depending on your age (body mass). Clearly exposure is the critical factor here - the more lead you ingest, the higher your blood lead level would be (theoretically). [To read a real scientist's explanation of this mechanism of lead poisoning in children and all the footnotes and asterisks to this simplified description, read Dr. Barbara Beck's testimony from the April 7th House hearing.] Ignoring absorption rates and other provisos from the real world for purposes of this discussion, it all boils down to exposure, right?
Consider that there are 50+ million children in the United States in the regulated age range. [The VAST majority of lead problems occur in children under five.] Those 50+ million children span a wide spectrum of life styles, habits, living quarters, adult supervision and mental health. They have literally TRILLIONS of annual interactions with products regulated by the CPSIA. Based on my experience and observation, I will assert that some of them, a material but small number, interact obsessively with children's products and mouth them inappropriately. These few children are extreme cases. You read about kids like this all the time. They are the kids who munch down 20 high strength magnets just for the heck of it. Those kids would exhibit lead poisoning from lead-in-substrate if it were possible in the real world.
So where are these kids? Can we find any of them? Apparently not. They are not in the medical literature. They are not in the popular media. They and their parents have not appeared as witnesses at CPSC hearings or on the Hill. They are not known to the nutjob consumer advocates. They are not known to the ignorant Democratic staffers who staunchly defend this law. [Even though there are 2.2 billion children in the world, most of whom live in conditions ripe with the possibility of lead-in-substrate poisoning, they are not known anywhere else on Earth either, to my knowledge.] They are not known to ANYONE ANYWHERE.
There's a simple reason for this - they don't exist.
And if there are no known victims and not one extreme example can be found here or anywhere, I have to ask - why does my government insist that we test our products obsessively? To what end?
What permits the federal government to blindly demand this of me? Why isn't the government required to PROVE that there is a REASON that we must burn our money? If this is all "politics", why aren't jobs, market vitality, well-stocked schools and lean government ALSO "political" considerations? Is scamming the public about health risks to kids the only way Dems know how to buy votes?
And one more thing - if all of our products comply with the (ridiculous and unjustified) lead standards but we don't test, should I go to jail? Is this law about safety . . . or about process? Does Washington really think we're all morons?
You can answer that for yourself.
That's a really good question.
You may recall reports that FOUR Members of Congress asked consumer advocates for a list of "victims" of lead-in-substrate at the April 7th hearing. No names were offered nor were they promised. This makes perfect sense to the consumer advocates - after all, lead harms "silently" and consequently, it's okay for them to assert that there are victims without being able to prove it. You can call that "Consumer Group Accountability". Nice work if you can get it. So I wonder - if a consumer advocate hears voices in his/her head, do the voices' deranged instructions need to go in the law, too? It seems to me that if a consumer advocate perceives something, we must accept that it's real, no questions asked. I assume the answer is yes these days.
Notwithstanding the "gravity" of Rachel Weintraub's assurances, the assertion of invisible lead victims flies in the face of ordinary experience, not to mention logic. Let's posit that lead harms silently and MOST victims would go undetected. [I am POSITING this, not conceding this. I can't buy the assertion that NO victim would ever be detectible - even the advocates don't take that ridiculous position.] It is indisputable that lead poisoning comes from exposure to lead. You must come in physical contact with it AND it must make its way into your blood stream. The mechanisms for lead entering a child's bloodstream are limited to two - breathe it in or take into your digestive system. Breathing in lead-in-substrate has never been identified as a pathway, so it appears that the only mechanism possible for lead poisoning from lead-in-substrate is ingestion through contact. You have to put it in your mouth.
Notably, kead poisoning is identified by elevated blood lead levels. Hence another factor must be considered - namely the lead mass consumed in relation to the volume of blood circulating in a child. In other words, one must consume XXX milligrams of lead per period to obtain and maintain dangerous blood levels depending on your age (body mass). Clearly exposure is the critical factor here - the more lead you ingest, the higher your blood lead level would be (theoretically). [To read a real scientist's explanation of this mechanism of lead poisoning in children and all the footnotes and asterisks to this simplified description, read Dr. Barbara Beck's testimony from the April 7th House hearing.] Ignoring absorption rates and other provisos from the real world for purposes of this discussion, it all boils down to exposure, right?
Consider that there are 50+ million children in the United States in the regulated age range. [The VAST majority of lead problems occur in children under five.] Those 50+ million children span a wide spectrum of life styles, habits, living quarters, adult supervision and mental health. They have literally TRILLIONS of annual interactions with products regulated by the CPSIA. Based on my experience and observation, I will assert that some of them, a material but small number, interact obsessively with children's products and mouth them inappropriately. These few children are extreme cases. You read about kids like this all the time. They are the kids who munch down 20 high strength magnets just for the heck of it. Those kids would exhibit lead poisoning from lead-in-substrate if it were possible in the real world.
So where are these kids? Can we find any of them? Apparently not. They are not in the medical literature. They are not in the popular media. They and their parents have not appeared as witnesses at CPSC hearings or on the Hill. They are not known to the nutjob consumer advocates. They are not known to the ignorant Democratic staffers who staunchly defend this law. [Even though there are 2.2 billion children in the world, most of whom live in conditions ripe with the possibility of lead-in-substrate poisoning, they are not known anywhere else on Earth either, to my knowledge.] They are not known to ANYONE ANYWHERE.
There's a simple reason for this - they don't exist.
And if there are no known victims and not one extreme example can be found here or anywhere, I have to ask - why does my government insist that we test our products obsessively? To what end?
What permits the federal government to blindly demand this of me? Why isn't the government required to PROVE that there is a REASON that we must burn our money? If this is all "politics", why aren't jobs, market vitality, well-stocked schools and lean government ALSO "political" considerations? Is scamming the public about health risks to kids the only way Dems know how to buy votes?
And one more thing - if all of our products comply with the (ridiculous and unjustified) lead standards but we don't test, should I go to jail? Is this law about safety . . . or about process? Does Washington really think we're all morons?
You can answer that for yourself.
Friday, April 1, 2011
CPSIA - More Good News and Bad News
We trust our government, right? They really know what they're doing, and we can certainly trust their judgment (not to mention their websites ending in "dot gov"). That goes without saying. In fact, we need lots more government. As Ronald Reagan once said, the most encouraging words in the English language are "I'm from the government and I'm here to help!" Or did he say they were the most terrifying . . . . I am probably confused.
Anyhow, one thing we know for sure is that there is no safe level of lead. NO SAFE LEVEL - get it?! And money is a petty concern when you are facing a scourge like LEAD. Money grubbing businessmen! Ooooh, I really hate people who want to hoard money rather run lots of tests for lead when the risk to CHILDREN is so great. Arghh, thank heavens for the government - they will save us. Yes, save us.
We know all this. It's a given. But isn't the situation in JAPAN something of a challenge to these bedrock assumptions? I hold a degree in Chemical Engineering, so I know this-and-that about numbers and science. A little knowledge can be a dangerous thing (just look at Congress), so I don't hold myself out as an expert. Just opinionated. That said, I can't QUITE square up the government's terror over lead in all manifestations in children's products in light of its calm reassurances about the radioactive material spewing into the environment from Japanese nuclear reactors disabled in the recent tragic earthquake. I wonder if Jan Schakowsky, Henry Waxman and Dick Durbin know about this.
Lead, bad . . . nuclear material, safe? I thought radiation was a much more threatening problem for human health, so wouldn't safe radioactive material imply safe lead? Dumb ole' me . . . . Here's what the press and our government say:
Huffington Post "Radiation Leaks Into Groundwater Under Japan Nuclear Plant": Radiation has been detected in Japanese GROUNDWATER now. Okay, let's get this straight. Groundwater flows freely, right? There are giant aquifers that convey water over long distances. Water also seeps through the ground, pulled by gravity and surface tension. Groundwater feeds into the drinking water system (Japanese drinking water, in this case) and also into the sea. Hmmm. I dimly recall that polluted groundwater is associated with some of the worst environmental disasters in history, like Love Canal. The groundwater contamination in Japan acknowledged thusfar is said to be "just" iodine-131. Notably, the authorities have also found plutonium in the soils, but haven't "found it" in the groundwater yet. They're also not talking about radioactive cesium, either.
Iodine-131 is no problem, it turns out. Safe, safe, safe: "The groundwater contamination was found in concentrations 10,000 times higher than the government standard for the plant. The iodine-131, a radioactive substance that decays quickly, was nearly 50 feet (15 meters) below one of the reactors, according to TEPCO spokesman Naoyuki Matsumo. Seiki Kawagoe, an environmental science professor at Tohoku University, said the radioactive substances were unlikely to affect drinking water, noting that radiation tends to dissipate quickly in the ground, as it does in the ocean." [Emphasis added]
Phew!
And don't worry, the cavalry is coming - the government is ON THE CASE! "The other concern is that contaminated water from the plant could seep into underground waterways and eventually into rivers used for drinking water. Tomohiro Mogamiya, an official with the Ministry of Health, Labor and Welfare's water supply division, said that was 'extremely unlikely' since groundwater would flow toward the ocean, and the plant is right on the coast. . . . 'When people return to the area we will test the water to make sure it is safe,' said Masato Ishikawa, an official with the Fukushima prefecture's food and sanitation division." [Emphasis added]
Sounds like a plan. What could go wrong?
Here's a small note on iodine-131: It has a half-life of eight days, so its mass decreases faster than other radioactive materials. Plutonium decays with a half-life of 24,000 years. I am feeling so calm about all this. The government has told me not to worry!
At least it's not lead.
UPI "EPA: Radiation levels in U.S. milk 'safe'" Japanese nuclear meltdown radioactive materials that are uncontrollably spraying into the air, water, soil, food sources and being conveyed all over the world, are now in the United States food chain. The EPA has detected the presence of Japanese radioactive materials in U.S. milk sources.
Who drinks milk anyhow?
I believe children drink milk. Not a worry, says the EPA: "'These types of findings are to be expected in the coming days and are far below levels of public health concern, including for infants and children,' the EPA said on its Web site. A radiation reading from milk in Spokane, Wash., on March 25 was 0.8 picocuries per liter, less than that of a normal banana, which naturally contains radioactive potassium. 'Radiation is all around us in our daily lives, and these findings are a minuscule amount compared to what people experience every day,' FDA senior scientist Patricia Hansen said in a statement." [Emphasis added]
That settles it, right? The EPA says we're all safe. Radiation is all around us, in the air, the water, our food. We get a little bit every second of the day, just like lead. Lead? What?!
I am afraid you just don't get it, so here is ABC News putting it all in perspective: "A person would have to drink almost 1,500 gallons of milk -- two firetrucks full -- in eight days to reach the conservative safe limit." [Emphasis added]
Kids sometimes get pretty thirsty . . . .
Where did the radioactive material in milk come from? The Associated Press discounts gremlins and fairies: "The U.S. Environmental Protection Agency this week said Japan's radioactive fallout is showing up in milk in Washington and California, most likely after a cow ate tainted grass or drank puddles of rainwater containing it. Iodine-131, the type that was found, is short-lived and decays fairly quickly, becoming harmless."
This suggests that we should get used to eating Japanese nuclear material. But it's really safe, so stop your worrying. It's not lead, after all.
None of this should change anyone's mind on lead. Lead is a REAL PROBLEM. There is no safe level for lead. Radioactive iodine, radioactive cesium, a little bit of plutonium - THAT we can handle, radiation is everywhere, you know. Lead is a different matter. There are SOOOO many victims of lead . . . but we can't really identify them. But they gotta be there, right? Hmmm.
Don't forget the children, no safe level of lead, no safe level of lead, no safe level of lead . . . .
Anyhow, one thing we know for sure is that there is no safe level of lead. NO SAFE LEVEL - get it?! And money is a petty concern when you are facing a scourge like LEAD. Money grubbing businessmen! Ooooh, I really hate people who want to hoard money rather run lots of tests for lead when the risk to CHILDREN is so great. Arghh, thank heavens for the government - they will save us. Yes, save us.
We know all this. It's a given. But isn't the situation in JAPAN something of a challenge to these bedrock assumptions? I hold a degree in Chemical Engineering, so I know this-and-that about numbers and science. A little knowledge can be a dangerous thing (just look at Congress), so I don't hold myself out as an expert. Just opinionated. That said, I can't QUITE square up the government's terror over lead in all manifestations in children's products in light of its calm reassurances about the radioactive material spewing into the environment from Japanese nuclear reactors disabled in the recent tragic earthquake. I wonder if Jan Schakowsky, Henry Waxman and Dick Durbin know about this.
Lead, bad . . . nuclear material, safe? I thought radiation was a much more threatening problem for human health, so wouldn't safe radioactive material imply safe lead? Dumb ole' me . . . . Here's what the press and our government say:
Huffington Post "Radiation Leaks Into Groundwater Under Japan Nuclear Plant": Radiation has been detected in Japanese GROUNDWATER now. Okay, let's get this straight. Groundwater flows freely, right? There are giant aquifers that convey water over long distances. Water also seeps through the ground, pulled by gravity and surface tension. Groundwater feeds into the drinking water system (Japanese drinking water, in this case) and also into the sea. Hmmm. I dimly recall that polluted groundwater is associated with some of the worst environmental disasters in history, like Love Canal. The groundwater contamination in Japan acknowledged thusfar is said to be "just" iodine-131. Notably, the authorities have also found plutonium in the soils, but haven't "found it" in the groundwater yet. They're also not talking about radioactive cesium, either.
Iodine-131 is no problem, it turns out. Safe, safe, safe: "The groundwater contamination was found in concentrations 10,000 times higher than the government standard for the plant. The iodine-131, a radioactive substance that decays quickly, was nearly 50 feet (15 meters) below one of the reactors, according to TEPCO spokesman Naoyuki Matsumo. Seiki Kawagoe, an environmental science professor at Tohoku University, said the radioactive substances were unlikely to affect drinking water, noting that radiation tends to dissipate quickly in the ground, as it does in the ocean." [Emphasis added]
Phew!
And don't worry, the cavalry is coming - the government is ON THE CASE! "The other concern is that contaminated water from the plant could seep into underground waterways and eventually into rivers used for drinking water. Tomohiro Mogamiya, an official with the Ministry of Health, Labor and Welfare's water supply division, said that was 'extremely unlikely' since groundwater would flow toward the ocean, and the plant is right on the coast. . . . 'When people return to the area we will test the water to make sure it is safe,' said Masato Ishikawa, an official with the Fukushima prefecture's food and sanitation division." [Emphasis added]
Sounds like a plan. What could go wrong?
Here's a small note on iodine-131: It has a half-life of eight days, so its mass decreases faster than other radioactive materials. Plutonium decays with a half-life of 24,000 years. I am feeling so calm about all this. The government has told me not to worry!
At least it's not lead.
UPI "EPA: Radiation levels in U.S. milk 'safe'" Japanese nuclear meltdown radioactive materials that are uncontrollably spraying into the air, water, soil, food sources and being conveyed all over the world, are now in the United States food chain. The EPA has detected the presence of Japanese radioactive materials in U.S. milk sources.
Who drinks milk anyhow?
I believe children drink milk. Not a worry, says the EPA: "'These types of findings are to be expected in the coming days and are far below levels of public health concern, including for infants and children,' the EPA said on its Web site. A radiation reading from milk in Spokane, Wash., on March 25 was 0.8 picocuries per liter, less than that of a normal banana, which naturally contains radioactive potassium. 'Radiation is all around us in our daily lives, and these findings are a minuscule amount compared to what people experience every day,' FDA senior scientist Patricia Hansen said in a statement." [Emphasis added]
That settles it, right? The EPA says we're all safe. Radiation is all around us, in the air, the water, our food. We get a little bit every second of the day, just like lead. Lead? What?!
I am afraid you just don't get it, so here is ABC News putting it all in perspective: "A person would have to drink almost 1,500 gallons of milk -- two firetrucks full -- in eight days to reach the conservative safe limit." [Emphasis added]
Kids sometimes get pretty thirsty . . . .
Where did the radioactive material in milk come from? The Associated Press discounts gremlins and fairies: "The U.S. Environmental Protection Agency this week said Japan's radioactive fallout is showing up in milk in Washington and California, most likely after a cow ate tainted grass or drank puddles of rainwater containing it. Iodine-131, the type that was found, is short-lived and decays fairly quickly, becoming harmless."
This suggests that we should get used to eating Japanese nuclear material. But it's really safe, so stop your worrying. It's not lead, after all.
None of this should change anyone's mind on lead. Lead is a REAL PROBLEM. There is no safe level for lead. Radioactive iodine, radioactive cesium, a little bit of plutonium - THAT we can handle, radiation is everywhere, you know. Lead is a different matter. There are SOOOO many victims of lead . . . but we can't really identify them. But they gotta be there, right? Hmmm.
Don't forget the children, no safe level of lead, no safe level of lead, no safe level of lead . . . .
Sunday, March 27, 2011
CPSIA - Star-Tribune Op-Ed Blasts CPSIA for ATV Effects
[Editor's Note: I have a postscript to add to this Op-Ed. See the bottom for an additional fact to consider.]
Mike Larson: Toy lead ban puts kids on ATVs at risk
By MIKE LARSON
March 27, 2011
Commentary
In a month or so, the snow will be gone, the Twins will again be fighting for a pennant and thousands of families will be hitting the trails on ATVs looking for fun and adventure.
Unfortunately, this year more kids are likely to be riding larger, adult-sized ATVs because thousands of dealers like me can't sell youth model ATVs or mini bikes.
Why? Because of a ridiculous political fight in Washington, D.C., that is putting our kids in danger.
ATV dealers and others in our industry are caught in the middle of a political tug-of-war because of the Consumer Product Safety Improvement Act (CPSIA), a law that included new, strict standards for lead in toys -- but created such a broad definition of "children's products" that it ended up banning the sale of youth model ATVs, mini-bikes and other off-highway vehicles because they contain small amounts of lead.
Yes, you read that correctly: ATVs and motorcycles designed to meet the size and performance needs of young riders ages 6 to 12 became "banned hazardous substances" under the new law.
Because lead must be ingested in order to be a health risk, the small amounts of lead that are embedded in metal parts, like the frame and the battery terminals to enhance the safety and functionality of these components, pose no risk to kids.
While not one case of lead poisoning can be documented from children riding youth model ATVs, the Consumer Product Safety Commission's own data shows that more than 90 percent of youth injuries and fatalities occur on larger, adult-size vehicles.
In fact, the CPSC, the ATV industry, safety advocates and parents all agree that it's critical to keep youth riders off adult-sized ATVs, and have cooperated for years to educate ATV riders that children should ride only ATVs that are the correct size for them.
The CPSC's own scientists agree that the presence of lead in these products does not present a health hazard to children. CPSC staff wrote to Rep. John Dingell, D-Mich., who helped write the bill:
"The possibility that children will suffer significant lead exposures from [youth model ATVs] appears to be remote at best....A child using an adult ATV as a substitute would face a far graver and more immediate risk than that of the possible lead exposure from the youth ATVs."
Dingell is now calling for Congress to fix the law.
The CPSC also tried to temporarily address the ban by issuing a stay of enforcement in 2009.
Unfortunately, this hasn't helped because the many manufacturers and dealers have chosen not to sell the smallest youth model ATVs because of the risks of selling under the stay, and there's now a limited availability of these products for consumers.
In fact, half of the major ATV manufacturers are no longer selling youth model off-highway vehicles.
The financial impact on our industry has been devastating. Many dealerships throughout the country have closed because of losing the sales of youth-sized machines on top of an already depressed market. Many dealerships have had to lay off workers to stay open. These actions add job losses to an already challenging economic environment.
ATV and motor-sports enthusiasts have sent hundreds of thousands of letters and e-mails to Congress urging an end to the ban. Sen. Amy Klobuchar has pledged her support, and we urge her and other Minnesota members of Congress to take a leadership role in resolving this ridiculous situation. We've heard a lot of talk from both Republicans and Democrats that this ban must end, but for two years nothing has been done as politics has prevented Congress from addressing this problem.
Kids aren't licking or eating their ATVs, but they just might ride adult-sized ATVs thanks to this ban. Congress is putting kids in danger by refusing to address this problem.
Mike Larson is owner of Larsons Cycle in Cambridge, Minn.
Editor's Postscript: I attended a meeting of stakeholders on January 6th in Washington hosted jointly by Republican and Democratic staff for the House Committee on Energy and Commerce to discuss possible changes to the CPSIA. [I wrote about this meeting a couple times earlier this year.] At this meeting, Cindy Pelligrini of the AAP admitted that the fact that the CPSIA tacitly banned youth model ATVs was fine with her and her employer. Why? As she noted, the AAP has long wanted youth model ATVs banned. Changing the law would only open the door to a reversal of this other policy objective of theirs. In other words, the AAP is using its standing with Democratic legislators to push an agenda with a "double benefit". Rather than fighting to ban youth model ATVs directly, a battle it would certainly lose, the AAP used the indirect route of overselling a lead standard that they knew ATVs could not meet. ATVs weren't banned under this law by accident. They were hardly an "unintended consequence." The damage to Minnesota businesses has been significant under this law. Next time, Ms. Klobuchar should pick her allies more carefully.
Mike Larson: Toy lead ban puts kids on ATVs at risk
By MIKE LARSON
March 27, 2011
Commentary
In a month or so, the snow will be gone, the Twins will again be fighting for a pennant and thousands of families will be hitting the trails on ATVs looking for fun and adventure.
Unfortunately, this year more kids are likely to be riding larger, adult-sized ATVs because thousands of dealers like me can't sell youth model ATVs or mini bikes.
Why? Because of a ridiculous political fight in Washington, D.C., that is putting our kids in danger.
ATV dealers and others in our industry are caught in the middle of a political tug-of-war because of the Consumer Product Safety Improvement Act (CPSIA), a law that included new, strict standards for lead in toys -- but created such a broad definition of "children's products" that it ended up banning the sale of youth model ATVs, mini-bikes and other off-highway vehicles because they contain small amounts of lead.
Yes, you read that correctly: ATVs and motorcycles designed to meet the size and performance needs of young riders ages 6 to 12 became "banned hazardous substances" under the new law.
Because lead must be ingested in order to be a health risk, the small amounts of lead that are embedded in metal parts, like the frame and the battery terminals to enhance the safety and functionality of these components, pose no risk to kids.
While not one case of lead poisoning can be documented from children riding youth model ATVs, the Consumer Product Safety Commission's own data shows that more than 90 percent of youth injuries and fatalities occur on larger, adult-size vehicles.
In fact, the CPSC, the ATV industry, safety advocates and parents all agree that it's critical to keep youth riders off adult-sized ATVs, and have cooperated for years to educate ATV riders that children should ride only ATVs that are the correct size for them.
The CPSC's own scientists agree that the presence of lead in these products does not present a health hazard to children. CPSC staff wrote to Rep. John Dingell, D-Mich., who helped write the bill:
"The possibility that children will suffer significant lead exposures from [youth model ATVs] appears to be remote at best....A child using an adult ATV as a substitute would face a far graver and more immediate risk than that of the possible lead exposure from the youth ATVs."
Dingell is now calling for Congress to fix the law.
The CPSC also tried to temporarily address the ban by issuing a stay of enforcement in 2009.
Unfortunately, this hasn't helped because the many manufacturers and dealers have chosen not to sell the smallest youth model ATVs because of the risks of selling under the stay, and there's now a limited availability of these products for consumers.
In fact, half of the major ATV manufacturers are no longer selling youth model off-highway vehicles.
The financial impact on our industry has been devastating. Many dealerships throughout the country have closed because of losing the sales of youth-sized machines on top of an already depressed market. Many dealerships have had to lay off workers to stay open. These actions add job losses to an already challenging economic environment.
ATV and motor-sports enthusiasts have sent hundreds of thousands of letters and e-mails to Congress urging an end to the ban. Sen. Amy Klobuchar has pledged her support, and we urge her and other Minnesota members of Congress to take a leadership role in resolving this ridiculous situation. We've heard a lot of talk from both Republicans and Democrats that this ban must end, but for two years nothing has been done as politics has prevented Congress from addressing this problem.
Kids aren't licking or eating their ATVs, but they just might ride adult-sized ATVs thanks to this ban. Congress is putting kids in danger by refusing to address this problem.
Mike Larson is owner of Larsons Cycle in Cambridge, Minn.
Editor's Postscript: I attended a meeting of stakeholders on January 6th in Washington hosted jointly by Republican and Democratic staff for the House Committee on Energy and Commerce to discuss possible changes to the CPSIA. [I wrote about this meeting a couple times earlier this year.] At this meeting, Cindy Pelligrini of the AAP admitted that the fact that the CPSIA tacitly banned youth model ATVs was fine with her and her employer. Why? As she noted, the AAP has long wanted youth model ATVs banned. Changing the law would only open the door to a reversal of this other policy objective of theirs. In other words, the AAP is using its standing with Democratic legislators to push an agenda with a "double benefit". Rather than fighting to ban youth model ATVs directly, a battle it would certainly lose, the AAP used the indirect route of overselling a lead standard that they knew ATVs could not meet. ATVs weren't banned under this law by accident. They were hardly an "unintended consequence." The damage to Minnesota businesses has been significant under this law. Next time, Ms. Klobuchar should pick her allies more carefully.
Saturday, March 26, 2011
CPSIA - Remember the Victims (If You Can Find Them)
Rumorville has it that a draft amendment to the CPSIA is pending in the next few days. As I contemplate what that might mean, I think back to where the CPSIA began and what has been achieved in its wake.
As an aside, there are actual poisoning risks in the world. As previously noted, the Japanese nuclear crisis seems pretty real to me. In the past 24 hours, the owner of the disabled Japanese reactors told the press that they evacuated one of the reactors (again) because the radiation level was now a mere 10 million times "normal" levels. As if to make the point that they are out of their depth, the Japanese utility later announced that it wasn't really 10 million times too high, just 100,000 times. It's always good to check your work.
In the U.S., we remain blissfully, almost quaintly obsessed with lead. Lead is THE problem we need to solve, apparently, according to the junior scientists who called themselves the 110th Congress. As far as I can tell, the CPSC has enthusiastically embraced this point of view.
Why?
Well, we have been told monotonously that there is NO safe level for lead. Commissioner Bob Adler wrote a 21-page treatise to "prove" the point (rebutted by yours truly here). And the consumer groups, ably represented by Don Mays of Consumer Union and Dana Best of the AAP, repeated the slogan in their February 16th testimony on the urgent need to reduce lead levels to 100 ppm. When the lead zealots speak of the dire need to protect against this "scourge", they never speak in terms of CPSC injury statistics. That makes sense. As I have documented, there have been fewer lead injuries in a decade than the fingers on your right hand.
But isn't this all about injuries? If there is REALLY no safe level for lead, shouldn't it be easy to find victims? Ahem, the consumer groups state that lead harms "silently". You can't tell you are being harmed, you see! When questioned about "victims", those few deigning to respond to my stupid questions (Jan Schakowsky and a staffer for a Senate Democrat) point to a meeting held in May 2008 with victims of lead poisoning. Nonetheless, they have never produced victim case histories and typically simply wag their fingers at me over lead poisoning.
I am no fan of lead or of lead poisoning, believe me, but I think I am entitled to an answer. If the object of the law is the prevention of childhood injuries, and if this May 2008 meeting was the critical basis for the push for the CPSIA, who were the victims at the meeting? How many victims were seen, and how were they poisoned?
Before we answer this question, it is important to note that the issue here is NOT lead-in-paint. As is well-known, lead-in-paint has been illegal for decades. Victims of lead-in-paint from products sold today are victims of violations of law. We are looking to find victims of lead-in-substrate. The over-arching regulation of lead-in-substrate is the source of the regulatory misery that befell ATVs, bicycles, pens, musical instruments, books, educational materials, rhinestones, t-shirts, shoes, and so on. Do these victims exist? No lead zealot or CPSIA apologist has ever produced even one lead-in-substrate victim in three years. Were they at the May 2008 meeting?
The Internet knows all. Parents of two childhood victims of lead-in-paint were present at the 2008 meeting, as identified in several press reports. See "Parents Visit Congress to 'Get the Lead Out' of Toys", as well as "Congress vs. lobbyists over tainted toys" and this transcript of the Lou Dobbs Show (May 23, 2008) thoughtfully provided by the plaintiffs lawyer front Center for Justice and Democracy. There is no mention of any child harmed by lead-in-substrate. Two victims of lead-in-paint spurred this legislation. That's it.
Without a demonstration that there are actual victims of lead-in-substrate in existence, the CPSIA has no proven factual basis. It's all pure conjecture. Playing fast and loose with the facts, the lead zealots have SOLD the idea that this law was necessary, all without PROOF. Perhaps in the heady days of 2007/8, the legislators didn't recognize the significance of the data problem. But today, members of the 112th Congress, facing the prospect of an amendment to fix the CPSIA, cannot afford the same ignorance. Constituents have been screaming for years now - and apparently with good reason.
The misuse of data, the zealots' twisting of fear of lead-in-paint into a blind fear of everything, got us into this mess. Questions need to be asked as the new amendment is processed. Why are we doing this? Who is really being protected here?
In desperation, the consumer groups are saying just about anything to keep their law in place. Spreading fear of bicycle licking and trombone playing is certainly not beneath them. Dr. Dana Best sums up the consumer groups' dubious, twisted "argument" for the need for a tightened CPSIA:
"An object containing 77 ppm of lead is capable of raising a child's blood lead level to a level that would result in the loss of one IQ point. . . . Ingestion of an item containing 300 ppm of lead would result in the loss of almost four IQ points . . . . When averaged across even a modest population of children, the public health harm caused by lead is significant. Considering that there are about 75 million children in our nation, impacting one-half of one percent of all children would mean an exposure of 3.75 million children. . . . For one million children, [the loss of lifetime income from one IQ point per child] would total over $8.3 billion." [Emphasis added]
Yet Dr. Best cannot deliver the goods to prove her farfetched theories and even more farfetched mathematics. Stating the danger in terms of 3.75 million possible victims is corrupt and immoral when you cannot deliver even one victim.
Let's cross our fingers that Congress is resolved to not be fooled again. If there is a hearing, ask for real data, real case histories, real proof.
I can't wait to hear about the kid who licked the ATV engine block and was poisoned by . . . lead? Give me a break.
As an aside, there are actual poisoning risks in the world. As previously noted, the Japanese nuclear crisis seems pretty real to me. In the past 24 hours, the owner of the disabled Japanese reactors told the press that they evacuated one of the reactors (again) because the radiation level was now a mere 10 million times "normal" levels. As if to make the point that they are out of their depth, the Japanese utility later announced that it wasn't really 10 million times too high, just 100,000 times. It's always good to check your work.
In the U.S., we remain blissfully, almost quaintly obsessed with lead. Lead is THE problem we need to solve, apparently, according to the junior scientists who called themselves the 110th Congress. As far as I can tell, the CPSC has enthusiastically embraced this point of view.
Why?
Well, we have been told monotonously that there is NO safe level for lead. Commissioner Bob Adler wrote a 21-page treatise to "prove" the point (rebutted by yours truly here). And the consumer groups, ably represented by Don Mays of Consumer Union and Dana Best of the AAP, repeated the slogan in their February 16th testimony on the urgent need to reduce lead levels to 100 ppm. When the lead zealots speak of the dire need to protect against this "scourge", they never speak in terms of CPSC injury statistics. That makes sense. As I have documented, there have been fewer lead injuries in a decade than the fingers on your right hand.
But isn't this all about injuries? If there is REALLY no safe level for lead, shouldn't it be easy to find victims? Ahem, the consumer groups state that lead harms "silently". You can't tell you are being harmed, you see! When questioned about "victims", those few deigning to respond to my stupid questions (Jan Schakowsky and a staffer for a Senate Democrat) point to a meeting held in May 2008 with victims of lead poisoning. Nonetheless, they have never produced victim case histories and typically simply wag their fingers at me over lead poisoning.
I am no fan of lead or of lead poisoning, believe me, but I think I am entitled to an answer. If the object of the law is the prevention of childhood injuries, and if this May 2008 meeting was the critical basis for the push for the CPSIA, who were the victims at the meeting? How many victims were seen, and how were they poisoned?
Before we answer this question, it is important to note that the issue here is NOT lead-in-paint. As is well-known, lead-in-paint has been illegal for decades. Victims of lead-in-paint from products sold today are victims of violations of law. We are looking to find victims of lead-in-substrate. The over-arching regulation of lead-in-substrate is the source of the regulatory misery that befell ATVs, bicycles, pens, musical instruments, books, educational materials, rhinestones, t-shirts, shoes, and so on. Do these victims exist? No lead zealot or CPSIA apologist has ever produced even one lead-in-substrate victim in three years. Were they at the May 2008 meeting?
The Internet knows all. Parents of two childhood victims of lead-in-paint were present at the 2008 meeting, as identified in several press reports. See "Parents Visit Congress to 'Get the Lead Out' of Toys", as well as "Congress vs. lobbyists over tainted toys" and this transcript of the Lou Dobbs Show (May 23, 2008) thoughtfully provided by the plaintiffs lawyer front Center for Justice and Democracy. There is no mention of any child harmed by lead-in-substrate. Two victims of lead-in-paint spurred this legislation. That's it.
Without a demonstration that there are actual victims of lead-in-substrate in existence, the CPSIA has no proven factual basis. It's all pure conjecture. Playing fast and loose with the facts, the lead zealots have SOLD the idea that this law was necessary, all without PROOF. Perhaps in the heady days of 2007/8, the legislators didn't recognize the significance of the data problem. But today, members of the 112th Congress, facing the prospect of an amendment to fix the CPSIA, cannot afford the same ignorance. Constituents have been screaming for years now - and apparently with good reason.
The misuse of data, the zealots' twisting of fear of lead-in-paint into a blind fear of everything, got us into this mess. Questions need to be asked as the new amendment is processed. Why are we doing this? Who is really being protected here?
In desperation, the consumer groups are saying just about anything to keep their law in place. Spreading fear of bicycle licking and trombone playing is certainly not beneath them. Dr. Dana Best sums up the consumer groups' dubious, twisted "argument" for the need for a tightened CPSIA:
"An object containing 77 ppm of lead is capable of raising a child's blood lead level to a level that would result in the loss of one IQ point. . . . Ingestion of an item containing 300 ppm of lead would result in the loss of almost four IQ points . . . . When averaged across even a modest population of children, the public health harm caused by lead is significant. Considering that there are about 75 million children in our nation, impacting one-half of one percent of all children would mean an exposure of 3.75 million children. . . . For one million children, [the loss of lifetime income from one IQ point per child] would total over $8.3 billion." [Emphasis added]
Yet Dr. Best cannot deliver the goods to prove her farfetched theories and even more farfetched mathematics. Stating the danger in terms of 3.75 million possible victims is corrupt and immoral when you cannot deliver even one victim.
Let's cross our fingers that Congress is resolved to not be fooled again. If there is a hearing, ask for real data, real case histories, real proof.
I can't wait to hear about the kid who licked the ATV engine block and was poisoned by . . . lead? Give me a break.
Tuesday, March 22, 2011
CPSIA - In My Fantasies, the CPSC is Just Like Homeland Security
On Monday, March 15, the Department of Homeland Security did something we probably will never see from this CPSC:
"[Docket No. DHS–2011–0015]
Reducing Regulatory Burden; Retrospective Review Under Executive
Order 13563
AGENCY: Office of the General Counsel, DHS.
ACTION: Notice and request for comments.
SUMMARY: Pursuant to Executive Order 13563, ‘‘Improving Regulation and Regulatory Review,’’ issued by the President on January 18, 2011, the Department of Homeland Security (Department or DHS) must develop a preliminary plan to facilitate the review of existing DHS significant regulations through the use of retrospective analyses. The preliminary plan will include criteria for identifying existing DHS significant rules that might be modified, streamlined, expanded, or repealed, so as to make DHS’s regulatory program more effective or less burdensome in achieving its regulatory objectives. The Department is soliciting views from the public on how best to develop its preliminary plan. The Department is also seeking views from the public on specific existing significant DHS rules that the Department should consider as candidates for modification, streamlining, expansion, or repeal. These efforts will help DHS ensure that its regulations contain necessary, properly tailored, and up-to-date requirements that effectively achieve regulatory objectives without imposing unwarranted costs." [Emphasis added]
Imagine that, an agency that wants to streamline and to avoid imposing unwarranted costs!
Of course, Homeland Security is not facing anything as dreaded as LEAD - have I mentioned that there is NO safe level of lead? - and can probably cut a few corners without any untoward effects. Homeland Security doesn't seem too busy, just checking a few boarding passes, looking serious and so on. I guess when you have an unimportant, almost trivial responsibility in the government, you can afford to review your rules for fat, waste and stupidity. But when CHILDREN'S SAFETY is concerned, and bicycle licking is possibly at stake, well then, you can't take ANY chances.
Damn the cost, man, we have to be SAFE!!!
"[Docket No. DHS–2011–0015]
Reducing Regulatory Burden; Retrospective Review Under Executive
Order 13563
AGENCY: Office of the General Counsel, DHS.
ACTION: Notice and request for comments.
SUMMARY: Pursuant to Executive Order 13563, ‘‘Improving Regulation and Regulatory Review,’’ issued by the President on January 18, 2011, the Department of Homeland Security (Department or DHS) must develop a preliminary plan to facilitate the review of existing DHS significant regulations through the use of retrospective analyses. The preliminary plan will include criteria for identifying existing DHS significant rules that might be modified, streamlined, expanded, or repealed, so as to make DHS’s regulatory program more effective or less burdensome in achieving its regulatory objectives. The Department is soliciting views from the public on how best to develop its preliminary plan. The Department is also seeking views from the public on specific existing significant DHS rules that the Department should consider as candidates for modification, streamlining, expansion, or repeal. These efforts will help DHS ensure that its regulations contain necessary, properly tailored, and up-to-date requirements that effectively achieve regulatory objectives without imposing unwarranted costs." [Emphasis added]
Imagine that, an agency that wants to streamline and to avoid imposing unwarranted costs!
Of course, Homeland Security is not facing anything as dreaded as LEAD - have I mentioned that there is NO safe level of lead? - and can probably cut a few corners without any untoward effects. Homeland Security doesn't seem too busy, just checking a few boarding passes, looking serious and so on. I guess when you have an unimportant, almost trivial responsibility in the government, you can afford to review your rules for fat, waste and stupidity. But when CHILDREN'S SAFETY is concerned, and bicycle licking is possibly at stake, well then, you can't take ANY chances.
Damn the cost, man, we have to be SAFE!!!
Wednesday, December 22, 2010
CPSIA - The Worm Continues To Turn
The day we all feared, the day we knew would come someday . . . well, the Federal Register says it's coming soon. According to a notice of "Final Rule Stage" published on December 20, the CPSC is moving forward on the so-called "15 Month" Rule.
You have to chuckle at the "15 Months" part. This rule was legally mandated to be enacted 15 months after the CPSIA was signed into law. The presumed date of enactment would then have been November 14, 2009, a mere 14 months ago now. They didn't even published a first draft until May 2010. If the agency can somehow finish this project by January 14, it could be called the "15 Months Times Two" Rule. Then again, it's basically inconceivable that they will make it. Eventually they'll need another name for this thing.
The urgency behind finishing up this rule is that the testing and certification stay expires on February 10, 2011. Remember that Bob Adler already said he wouldn't vote an extension of this stay because . . . he hates stays. Perhaps he prefers market chaos and economic depression instead. Anyhow, to avoid the showdown, they need to get their ducks in a row, hence the need to get this rule going.
I sent in comments on the first draft of this rule on August 3. I wasn't a big fan . . . and I guess other people had reservations, too. According to www.regulations.gov, the CPSC received 112 comments letters (that may overstate the number, because regulations.gov seems to have some duplicates). I haven't read them myself, but I assume I am the only one who saw any flaws in this rule. The rest of the letters are probably just "thank you" notes.
Anyhow, it's worth noting that the Chinese New Year occurs on February 3, 2011 so take my word for it, all the Chinese factories will be closed on Feb. 3rd and probably won't reopen until Feb. 10 at the earliest after a two-week holiday. Some workers are gone three or even four weeks for this holiday. In a "best case" scenario, the CPSC can't take action on this rule until they officially acknowledge the public comment "thank you" notes and hold a public Commission meeting. Do the math - if they choose to take action on this rule now, we will get about ten minutes notice to begin conforming. I can't see any risk of market chaos again . . . can you?
Here's a fairly obvious fact for you - we have not incorporated any of the pending rules into our supply chain or manufacturing processes. Why? You tell me what I'm supposed to do. The rule that has been published is deeply flawed and, basically, stupid. It is not a final rule. 112 comment letters were filed on it. It could change . . . it BETTER change. How am I supposed to implement rules that haven't been published or possibly even written? Telepathy? I don't read minds and I haven't implemented the unknowable, either.
If this does not make your blood boil enough, consider these excerpts from the notice of Final Rule Stage:
You have to chuckle at the "15 Months" part. This rule was legally mandated to be enacted 15 months after the CPSIA was signed into law. The presumed date of enactment would then have been November 14, 2009, a mere 14 months ago now. They didn't even published a first draft until May 2010. If the agency can somehow finish this project by January 14, it could be called the "15 Months Times Two" Rule. Then again, it's basically inconceivable that they will make it. Eventually they'll need another name for this thing.
The urgency behind finishing up this rule is that the testing and certification stay expires on February 10, 2011. Remember that Bob Adler already said he wouldn't vote an extension of this stay because . . . he hates stays. Perhaps he prefers market chaos and economic depression instead. Anyhow, to avoid the showdown, they need to get their ducks in a row, hence the need to get this rule going.
I sent in comments on the first draft of this rule on August 3. I wasn't a big fan . . . and I guess other people had reservations, too. According to www.regulations.gov, the CPSC received 112 comments letters (that may overstate the number, because regulations.gov seems to have some duplicates). I haven't read them myself, but I assume I am the only one who saw any flaws in this rule. The rest of the letters are probably just "thank you" notes.
Anyhow, it's worth noting that the Chinese New Year occurs on February 3, 2011 so take my word for it, all the Chinese factories will be closed on Feb. 3rd and probably won't reopen until Feb. 10 at the earliest after a two-week holiday. Some workers are gone three or even four weeks for this holiday. In a "best case" scenario, the CPSC can't take action on this rule until they officially acknowledge the public comment "thank you" notes and hold a public Commission meeting. Do the math - if they choose to take action on this rule now, we will get about ten minutes notice to begin conforming. I can't see any risk of market chaos again . . . can you?
Here's a fairly obvious fact for you - we have not incorporated any of the pending rules into our supply chain or manufacturing processes. Why? You tell me what I'm supposed to do. The rule that has been published is deeply flawed and, basically, stupid. It is not a final rule. 112 comment letters were filed on it. It could change . . . it BETTER change. How am I supposed to implement rules that haven't been published or possibly even written? Telepathy? I don't read minds and I haven't implemented the unknowable, either.
If this does not make your blood boil enough, consider these excerpts from the notice of Final Rule Stage:
- "The U.S. Consumer Product Safety Commission is charged with protecting the public from unreasonable risks of death and injury associated with consumer products." [Emphasis added] The CPSIA makes consideration of RISK by the CPSC illegal. Bummer, huh? Someone should have told the CPSC because they still claim to be concerned with "risk" of injury.
- "When deciding which of these approaches to take in any specific case, the Commission gathers and analyzes the best available data about the nature and extent of the risk presented by the product." And then ignores it??? See also the final bullet below.
- "As for exemptions [from the "15 Month Rule"], the statute does not appear to give the Commission the authority to exempt firms from the testing or certification requirements, so it may not be possible to exempt firms within section 14 of the CPSA." In other words, HTA, you can lump it. And the CPSC is telling you who to blame - Congress.
- "The congressional mandate to issue this regulation does not require the Consumer Product Safety Commission to do a cost/benefit analysis for this regulation. Therefore, a cost/benefit analysis is not available for this regulatory action." Head-in-sand syndrome. I bet you'll be able to do a cost/benefit analysis pretty quickly when your costs go up again by 20x.
- "[It] is not possible to provide an analysis of the magnitude of the risk this regulatory action addresses." Ahem. And it's okay to put forward a rule of this complexity and far-reaching impact while flying entirely blind because . . . why???
Let's not forget that there's a new Congress being sworn in January 5th. The incoming Republican House majority has pledged to shrink the federal government and to closely examine how regulatory agencies are governing. Hmmm. Help may be on the way . . . soon.
Wednesday, December 1, 2010
CPSIA - My Written Testimony at Senate Hearing 12-2-10
As you may know, there will be a Senate CPSC oversight hearing tomorrow. The hearing will be held by the Subcommittee on Consumer Protection, Product Safety and Insurance of the Senate Committee on Commerce, Science and Transportation. You can see the witness list here. The subject of the hearing is "Oversight of the Consumer Product Safety Commission: Product Safety in the Holiday Season"
I have submitted the following written testimony. I will not be testifying at this hearing.
STATEMENT OF RICHARD M. WOLDENBERG
Chairman, Learning Resources, Inc.
Vernon Hills, Illinois
I have submitted the following written testimony. I will not be testifying at this hearing.
STATEMENT OF RICHARD M. WOLDENBERG
Chairman, Learning Resources, Inc.
Vernon Hills, Illinois
December 2, 2010
As an operator of a small business making educational products and educational toys, I have had a front row seat for the implementation of the Consumer Product Safety Improvement Act of 2008 (CPSIA) by the Consumer Product Safety Commission (CPSC). On the occasion of your CPSC oversight hearing, I want to highlight the economic damage wrought by the CPSIA without achieving any material improvement in safety statistics. I also want to bring to your attention the open hostility of the CPSC toward the corporate community in the implementation and enforcement of the CPSIA, and conclude with my recommendations for legal reforms to restore common sense to safety administration without reducing children’s safety.
As an operator of a small business making educational products and educational toys, I have had a front row seat for the implementation of the Consumer Product Safety Improvement Act of 2008 (CPSIA) by the Consumer Product Safety Commission (CPSC). On the occasion of your CPSC oversight hearing, I want to highlight the economic damage wrought by the CPSIA without achieving any material improvement in safety statistics. I also want to bring to your attention the open hostility of the CPSC toward the corporate community in the implementation and enforcement of the CPSIA, and conclude with my recommendations for legal reforms to restore common sense to safety administration without reducing children’s safety.
Children are our business. As educators, as parents and as members of our community, we have always placed the highest priority on safety. We would not be in the business of helping children learn if we didn’t care deeply about children and their safety. The CPSIA has dramatically impacted our business model, reduced our ability to make a profit and create jobs, pared our incentive to invest in new products and new markets, and generally made it difficult to grow our business. We would gladly accept these burdens if the law made our products safer, but the fact is that it hasn't. Our company, Learning Resources, Inc., has recalled a grand total of 130 pieces since our founding in June 1984 (all recovered from the market). Our management of safety risks was highly effective long before the government intervened in our safety processes in 2008.
The precautionary approach of the CPSIA attempted to fill perceived “gaps” in regulation by making it illegal to sell children’s products unless proven safe prior to sale. Yet the law has yielded few quantifiable safety benefits other than a reduction in recent recall rates for lead-in-paint (already illegal in children’s products for decades). Ironically, this progress in reducing recalls has taken place in a 27-month period in which, like the time before the CPSIA, testing of children’s products prior to sale was not mandatory. Consumer confidence wasn’t dented by the lack of mandatory testing. The justifications for the over-arching and excessively expensive CPSIA regulatory scheme just don’t hold water.
In any event, the reduction in recall rates is only a minor triumph and was not due to mandatory testing or harsh new lead standards, but most likely a (hyper) energized regulator and a great deal of publicity. Recall statistics can be highly misleading because the rate and number of recalls depend on many factors and do not generally correlate to injuries to children. In other words, product recalls are not tantamount to childhood injuries. The purpose of the CPSIA is to reduce injuries, not product recalls – yet CPSC recall statistics show that there have been almost no reported injuries from lead or phthalates in children’s products in the last decade (one death and three unverified injuries from 1999-2010, all from lead or lead-in-paint). The billions of dollars now being spent by the corporate community annually on testing and other compliance activities have not reduced injuries – there weren’t any to reduce. Whatever peace of mind has been generated by lower recall rates comes at a very high price.
The CPSIA significantly broadened the reach of federal safety regulation well beyond what was needed to deal with the lead-in-paint toy violations of 2007 and 2008. Under the CPSIA, the definition of a “Children’s Product” subject to regulation now encompasses ALL products designed or intended primarily for a child 12 years of age or younger (15 U.S.C. §2052(a)(2)). This definition ensures that virtually anything marketed to children will be subject to the restrictions of the Consumer Product Safety Act (CPSA), irrespective of known or quantifiable risk of injury. Put another way, this definition ensures that many product categories with a long tradition of safety are now subject to the withering requirements of this law for the first time simply because they fall within the overly broad definition of a Children’s Product. The affected safe products span the U.S. economy books, t-shirts and shoes, ATVs, bicycles, donated or resale goods, musical instruments, pens and educational products. The CPSC declined to use its discretion to narrow this definition in its recent “final rule” interpreting “Children’s Product”, thus ensuring continued market chaos and economic waste.
The consequences of the change in the consumer safety laws to a precautionary posture has had notable negative impacts and promises to create further problems, namely:
The consequences of the change in the consumer safety laws to a precautionary posture has had notable negative impacts and promises to create further problems, namely:
a. Increased Costs. The new law creates a heavy burden for testing costs. From 2006 to 2009, our company’s testing costs alone jumped more than eight-fold. We estimate that our testing costs will triple again after the CPSC (as anticipated) lifts its testing stay in 2011, and could multiply again if the CPSC enacts (as anticipated) its draft “15 Month Rule” on testing frequency and “reasonable testing programs”. Testing costs are often thousands of dollars per product. Having employed one person to manage safety testing and quality control for many years, we now have a department of five, including me, plus an outside lawyer on retainer. These jobs are funded by discontinuing sales, marketing and product development jobs – the CPSIA is NOT an ersatz stimulus program. Personnel, legal and other out-of-pocket safety expenses (besides testing) have more than quadrupled in the last three years – all without any change in our super-low recall rates or injury statistics.
b. Increased Administrative Expenses. The CPSIA requires that all products include tracking labels on both the packaging and the product itself. Rationalized as “analogous” to date labels on cartons of milk, tracking labels are in reality nothing but pure economic waste as applied to the vast array of “Children’s Products” under the CPSIA. As noted, our company has a virtually unblemished 26-year track record of safety so tracking labels promise to add little value in the event of recalls that are unlikely to occur. Ironically, with the strict new rules governing product safety, we believe the already low chance of a product recall has been reduced further. As noted above, the money to pay for all this administrative busy work comes from foregone business opportunities. We are being forced to shrink our company to apply tracking labels that no one will use.
An equally frustrating bureaucracy has sprung up around recordkeeping under this law. Burdensome requirements spawned by the government’s new involvement in our quality control processes forced us to make large new investments in information technology with no return on our investment. In addition, the pending CPSC draft policy on component testing promises to convert the simple task of obtaining a complete suite of safety test reports into a major recordkeeping chore. We will now be forced to manage each component separately, tracking test reports on each component one-by-one. This promises to multiply our recordkeeping responsibilities – and the related risk of liability for failing to comply – by more than an order of magnitude.
c. Reduced Incentive to Innovate. The increased cost to bring a product to market under the CPSIA will make many viable – and valuable – products uneconomic. To cover the cost of developing, testing and safety-managing new products, the prospective sales of any new item (“hurdle rate”) is now much higher than under prior law. This means that low volume “specialty market” items are less likely to come to market and many new small business entrants may find themselves priced out of the market. The CPSIA makes it much harder to start a new business serving the children’s market because the rules so heavily favor big business. Because of CPSIA transactional costs, high volume items now have a huge cost advantage over low volume items. This will hurt many small but important markets like educational products for disabled children. Our company, with its 1500 catalog items, is probably now a dinosaur under the CPSIA –the law provides a strong economic incentive to restructure our business around 50-150 items and to focus on high volume markets only. Schools would suffer from the loss of niche educational products.
d. Crippled by Regulatory Complexity. Our problems don’t end with testing costs or increased staffing. We are being crippled by regulatory complexity. Almost 28 months after passage of the CPSIA, we still don’t have a comprehensive set of regulations. Please consider how mindboggling the rules have become. There were fewer than 200 pages of safety law and CPSC rules that pertained to our business until 2008. These rules clearly defined our responsibilities and could be taught to our staff (in fact, many were rarely applicable to us). Today, the applicable laws, rules and interpretative documents exceed 3,000 pages. As a practical matter, it is simply not possible to master all of these documents – and yet it’s potentially a felony to break any of these rules. Sadly for us, the rules and CPSC staff commentary keep changing, are still being written and are rarely if ever conformed. How can we master and re-master these rules and teach them to our staff while still doing the full-time job of running our business? Ironically, the recalls of 2007 and 2008 were never a “rules” problem – those famous recalls were clearly a compliance problem. Imagine what will happen now with an unmanageable fifteen-fold increase in rules. No small business “ombudsman” can make that problem go away.
e. Small Business Will Certainly Suffer. The CPSIA was written in response to failings of big companies, but hammers small and medium-sized companies with particular vengeance. Our small business has already lost customers for our entire category on the grounds that selling toys is too confusing or too much of a “hassle”. This is our new reality. The highly-technical rules and requirements are beyond the capability of all but the most highly-trained quality managers or lawyers to comprehend. Small businesses simply don’t have the skills, resources or business scale to manage compliance with the CPSIA. For this reason, small businesses bear the greatest risk of liability under the law, despite being responsible for almost no injuries from lead in the last decade. The double whammy of massive new regulatory obligations and the prospect of devastating liability are driving small businesses out of our market.
In implementing and administering the CPSIA, the CPSC created a harsh regulatory environment for the business community over the past 28 months. Consider the following:
1. Unjustified Recalls. In June, in response to an inquiry by a Congressman and followed up by media inquiries, the CPSC pressed McDonalds to recall 12 million Shrek glasses for “high” cadmium content, despite the agency’s admission on Twitter that the glasses were not toxic. The recall effort was justified as being done “out of an abundance of caution”, a frightening regulatory standard when applied to products acknowledged to be safe by the regulator itself. McDonalds lost millions of dollars as a result, not to mention suffering from widespread and persistent bad publicity.
2. Unjustified Penalties and Coercive Tactics. The CPSC assessed a $2.05 million penalty against a hapless Japanese dollar store chain (Daiso) for five separate tiny recalls involving 698 units and 19 items. These items sold for between $1 and $4 each. There were no reported injuries from sales of the Daiso trinkets. Ms. Tenenbaum bragged about this extraordinarily excessive prosecution in a speech in March 2010 to the Consumer Federation of America: “We secured an injunction that completely stops Daiso from importing children’s products into the country. . . . Daiso has a very high hurdle to jump over to ever get back in the import business again.” Regulated companies take stunning examples like Daiso as a warning that outsized and disproportionate force may be used by this agency with little provocation.
The regulated community has also expressed alarm over the threatened use by the agency of unilateral press releases “to warn the public” about alleged dangers in specific products as a way to coerce “voluntary” recalls. Such threats have been used where facts may be in dispute to justify a recall. Under the law, the CPSC may only implement mandatory recalls subject to a court order, a slow process perhaps but also expensive and labor-intensive. “Voluntary” recalls can be much quicker and cheaper, only requiring “agreement” between the agency and the subject company. In more than one case, CPSC has threatened unilateral releases to try to "convince" a firm to undertake a "voluntary" recall but after the firm took the risk of standing up to the staff and the staff conducted further investigation, the CPSC decided that recalls were not even necessary. Not all firms can bear the expense of such a process or take the risk of calling the staff's bluff because issuance of a release would likely damage the firm and their brand, possibly irrevocably. Many supposedly "voluntary" recalls have resulted. Abusive tactics of this nature have severely damaged trust between the CPSC and the regulated community.
3. Disregard of Public Comments. The agency has garnered considerable criticism for overlooking or disregarding comments from the corporate community solicited in its public rulemaking processes. Ignoring or disregarding inconvenient public comments contrary to the agenda of the controlling party makes a mockery of the legally-mandated public comment process. Notable instances include the recent approval of interpretative rule on “Children’s Products” and the rules implementing the public database of safety incidents. The database debate was so fouled by the majority’s refusal to entertain the legitimate concerns of industry that the two minority Commissioners proposed their own draft rule – which the CPSC at first refused to post on its website.
4. Unjustified Hostile Rulemakings. The CPSC has implemented rules governing the public database that adversely affect the Constitutionally-guaranteed due process rights of our businesses. There is no adequate public policy justification for the erosion of the remarkable civil rights that distinguish the American legal system among all international legal systems – yet the Commission voted 3-2 to allow falsehoods to be posted without recourse in a database the CPSC will maintain. In other cases, the agency has published draft rules (yet to be acted on) which could force companies like ours to spend as much as $10,000 per item per year to meet ARBITRARY rules on testing frequency or “reasonable testing programs” – notwithstanding strong evidence that these rules are wasteful, unnecessary and financially irresponsible. The pendency of rules like this creates destabilizing market uncertainty and forces business decisions that have no basis other than fear of future regulation. For instance, Wal-Mart has already instituted a 100 ppm lead standard months ahead of the POSSIBLE implementation of the standard by the CPSC – simply because the CPSC has been so slow to act.
The CPSIA went off track by taking away the CPSC’s authority to assess risk. If the CPSC were again required to regulate based on risk, safety rules could focus on those few risks with the real potential to cause harm to children. All risks were not created equal.
I recommend several steps to reduce cost, liability risk and complexity all without sacrificing children’s product safety:
A. Mandate that the CPSC base its safety decisions, resource allocation and rules on risk assessment. Restore to the Commission the discretion to set age and product definition criteria for the 300 ppm lead standard and phthalate ban. Freeze the lead standard and lead-in-paint standard at their current levels unless the CPSC determines that a change is necessary to preserve public health and safety.
B. The definition of “Children’s Product” should not include anything primarily sold into or intended for use in schools or which is used primarily under the supervision of adults. Other explicit exceptions should include apparel, shoes, pens, ATVs, bicycles, rhinestones, books and other print materials, brass and connectors. Exclusions from the definition should take these products entirely outside the coverage of the CPSIA (including mandatory tracking labels).
C. Lead-in-substrate and phthalate testing should be based on a “reasonable testing program”, not mandated outside testing. The tenets of a reasonable testing program should be set by the reasonable business judgment of the manufacturer. Resellers should be entitled by rule to rely on the representations of manufacturers. Phthalate testing requirements should explicitly exempt inaccessible components, metals, minerals, hard plastics, natural fibers and wood.
D. Definition of “Children’s Product” should be limited to children six years old or younger and should eliminate the difficult-to-apply “common recognition” factor of Section 3(a)(2)(c) of the CPSA. Definition of “Toy” (for phthalates purposes) should be limited to children three years old or younger and should explicitly refer only to products in the form used in play.
E. Eliminate CPSC certification of laboratories (rely on the market to provide good resources). Fraud has only very rarely been a problem with test labs and is already illegal.
F. Impose procedural limits to insure fairness in penalty assessment by the CPSC under the CPSIA. Completely reformulate penalties to restrict them to egregious conduct (including patterns of violations), reckless endangerment or conduct resulting in serious injury.
G. Rewrite the penalty provision applicable to resale of used product so that violations are only subject to penalty if intentional (actual knowledge or reckless endangerment) and only if the violation led to an actual injury. Eliminate the “knowing” standard with its imputed knowledge of a reasonable man exercising due care.
H. Mandatory tracking labels should be explicitly limited to cribs, bassinets, play pens, all long-life “heirloom” products with a known history of injuring the most vulnerable children (babies or toddlers).
I. Public injury/incident database should be restricted to recalls or properly investigated incidents only. Manufacturers must be given full access to all posted incident data, including contact information. The “due process” civil liberty interests of the corporate community MUST BE PROTECTED.
I urge your committee to address the fundamental flaws in the CPSIA to restore order to the children’s product market and to protect small businesses from further damage. I appreciate the opportunity to share my views on this important topic.
Thursday, November 4, 2010
CPSIA - Dear President Obama
An Open Letter to President Obama:
Dear President Obama,
Tuesday's election results were a message to your administration. The "shellacking" you experienced was a referendum on your economic policies as well as a passionate call for smaller government.
Readers of my blog have heard all about these issues for two years. It is frustrating to me that you and your administration remain in the dark. You weren't listening.
My industry, children's products, suffered mightily at the hands of your administration. Admittedly the problem began on Mr. Bush's watch but it was your Democrats who refused to relent or admit their errors. Since passage of the Consumer Product Safety "Improvement" Act in 2008, your party has refused to consider our industry's increasingly pathetic pleas for mercy. The result has been utter market chaos and dramatic financial loss. This regulatory "railroad job" has driven many of us into politics against you and your party out of desperation and profound anger over this undeserved and insensitive treatment.
If you take the midterm election results seriously, you must reexamine the impact of this law on our industry and promptly offer sensible relief.
The problems with the CPSIA can be divided into four categories - Cost, Complexity, Risk and Intrusion. Please give up the idea that these problems can be overcome with tax relief or some sort of economic incentive. If you break my leg, I won't be able to get up and run like an Olympic champion no matter how many carrots you dangle in front of my nose. It's time to be accountable for the damage that the CPSIA wrought - and then directly address it.
Cost: The many ridiculous new rules in the CPSIA dramatically raise the cost of operating our businesses. It goes far beyond the asphyxiating testing costs that the CPSIA imposes. Wasteful administrative costs are skyrocketing in every direction. For instance, tracking labels do not magically appear on our products - we must hire people to redesign each of our products and our manufacturing processes, and we must hire yet more people to make sure we don't screw up these tasks. We sell or manufacture literally thousands of skus (items) - but have had only one tiny recall in the last 26 years. This is PURE UNADULTERATED WASTE. We nevertheless must incur these costs to keep the CPSC happy.
These well-documented costs come from somewhere. You may wonder why we're not hiring. [In fact, I have previously disclosed in this space that our head count continues to decline, an uninterrupted trend since 2007 to this very day.] Well, we must fund these unproductive costs from productive activities - sales, marketing, product development - you know, activities that produce new revenue. [Please note: your proposed tax increases will be paid from the same kitty.] Unlike you, we can't solve our money problems by printing more dollar bills - we have to EARN them. If you make us waste our money, we must shrink our business to pay these new costs. WE GIVE UP GROWTH TO PAY THESE WASTEFUL COSTS.
I find it exasperating to have to explain this to you.
Complexity: We now face perhaps 3,000 pages of new safety rules and laws applicable to our business. I have never included rules on childcare or infant items in this total. For those miserable companies who stubbornly persist in making this kind of item, their total is probably well in excess of 3,000 pages. Each word of those pages is a possible felony.
The pre-CPSIA total was about 100 pages of rules, most of which were inapplicable to our business. There was very little to remember - which made it easy for us to administer our business. We could teach the rules, we could remember the rules, we could follow the rules, we could set up sensible priorities oriented around safety (not merely compliance). This is no longer the case.
Face it, President Obama, NO ONE understands these new rules. I include the CPSC on that list. There are just too many rules, and they are riddled with inconsistencies, flaws and head scratchers. The rules are also a mess, existing in many forms, in many places, never correlated or conformed, and are certainly not indexed. The rules have no underlying logic, so it is not possible to anticipate how any rule should work or does work - you have to find the rule and study it, preferably with an expensive lawyer helping you. Even finding a particular rule is quite a treasure hunt.
We are pretty busy - this does not enhance our productivity.
I believe that unless one is a rabbinic scholar or some kind of savant, it is not possible to master 3,000 pages of dense and inconsistent rules. The CPSC has done little to make sense of these rules.
Consider the paradox of musical instruments - full-sized musical instruments are not considered "Children's Products" even if marketed EXCLUSIVELY to children. Does that make ANY sense to you? Remember, these are SAFETY rules so if musical instruments are unsafe for some reason, wouldn't logic suggest that we should not let children interact with them? And if they're safe, then they shouldn't be regulated at all. Right? Interestingly, the CPSC says that if you shrink the same instruments down for children, they WOULD BE considered "Children's Products" and subject to the CPSIA, even if marketed side-by-side with slightly larger, full-sized instruments which are not regulated. This makes absolutely no sense, is completely indefensible as public policy and creates a terrible quandary for any business attempting to interpret and apply these rules.
The complexity and opacity of the rules outstrips EVERYBODY'S abilities. We are completely stymied - and it's your fault. You and your team refused our advice on how to resolve these issues.
Risk: The CPSIA is a tort lawyers' dream. With the coming public database, our industry will be a feeding trough for these vipers. To say the least, you have permitted the government to set up a system DESIGNED to be gamed by lawyers and litigants.
How do you think business people will react to this massive expansion of the tort system? Please note that NO ONE contends that there are more injuries to address - it is absolutely clear that the effect of the CPSIA is to create many more claims of action. More cost, more risk - and as a result, there WILL be less economic activity.
Good job, guys!
Add to this misery the current practice of this CPSC to press for recalls that do not meet the CPSA's legal standards for recalls (substantial risk of injury or death) and to impose huge vindictive penalties. The agency is on the war path, trying with all its might to scare us to death. This is an especially powerful economic depressant for small businesses which typically lack the resources to resist these pressures. Small businesses are more conservative and tolerate risk less comfortably as they manage their own money and see themselves as having more to lose than mass market companies or public companies.
The aggression of the new CPSC is out of control. The current Chairman likes to BRAG about her big penalties. Trust has been utterly destroyed in the manufacturing community. In two short years, the CPSC squandered its reputation as a partner in safety, someone to be trusted. Who in their right mind would trust this CPSC? If you doubt me, ask McDonald's how they feel about being pressured to recall 12 million acknowledged safe Shrek glasses (and the ensuing media frenzy over cadmium - all without ANY documented injuries from cadmium in children's products EVER). Or ask Schylling Associates or Daiso how they feel about penalties imposed on them for rule violations without any injuries. By all appearances, those penalties reflected regulatory anger, not endangered public safety.
[While you're at it, ask the CSPC why they never completed their FOIA disclosure to me on the Schylling penalty.]
Seemingly, almost any violation of these rules can be twisted into a felony charge now. We joke in our office about visiting each other in jail - but it's not really funny at all. I simply cannot fathom conducting my affairs in a way that risks being charged with a felony. As a lawyer, the criminal risk imposed by the CPSIA is completely unacceptable to me and highly offensive. I often say that felonies cannot be committed accidentally - except in the Children's Product industry. The unavoidable accumulation of trivial infractions with heavy penalty risk gives the CPSC winning leverage in any negotiation. The game is FIXED. Everyone knows it, too.
This is no stimulus plan, by the way.
Intrusion: It's this simple - we have a new partner who showed up two years ago - the U.S. government. They don't know anything about our business and have never run any operation similar to ours but they now reserve the right to check all our work and to second-guess us. Mother May I? That's the new game in our business.
Could we live without ANY of this? Yes, most definitely. While the zealots behind this self-destructive law like to emphasize the POSSIBILITY of injury from lead and love to repeat the simple-minded chestnut that there is "no safe level of lead", they FAIL utterly to tie these claims of POSSIBLE injury to data of ACTUAL injury. There is no "nexus". Lead may be "bad" but it has no history of causing injury in children's products. Leaded gasoline, house paint and industrial pollution are the culprits that caused blood lead levels to rise materially - that's undeniably true. Congress missed the boat entirely with the CPSIA - it's all cost, no benefit.
Lead injuries from children's products are virtually unknown. My study of CPSC recalls in 1999-2010 totals one death (from a piece of jewelry) and three unverified injuries from lead in 11 years. Given the truly massive size of our industry and the children's marketplace, and the literally trillions of interactions with our industry's products each year, this injury total is statistically equivalent to ZERO. Instead of punishing our industry, you should give us a good citizenship award. We have earned the trust of U.S. consumers.
The path forward is clear but frankly, I Still don't think you get it. Trust has been broken. Until you and your administration DEMONSTRATE that you are taking a DIFFERENT path, we will continue to conduct a war against the CPSC and Congress. This defective law deserves a FULL repeal. It is misconceived and has cost countless jobs. I hope you and your associates will not continue to deny the obvious, to fly in the face of data and reason. The voters are on to this scam. They voted many Democrats out of work in midterm elections. If you and your team don't wise up quickly, in the over-regulation of our industry and other industries, they'll vote the rest of you out in two years.
The problem was never the law. Before Congress "improved" it, the CPSA was a powerful law that enabled the CPSC to closely supervise children's markets. Let's not forget that the recalls in 2007/8 were conducted under PRIOR law - the unamended CPSA had plenty of teeth. The recalls in 2007/8 were clearly a COMPLIANCE problem, not a problem with the rules themselves. For various reasons, some people weren't following the law closely enough. As objectionable as that may be, it is also important to remember that the 2007/8 recalls were associated with virtually NO injuries. So what should we have done, in lieu of all the tough new standards and venal penalty provisions in the CPSIA?
The agency should have been reorganized to work on compliance more effectively. The agency needed to invest in education, outreach to industry and more effective partnership with industry. This idea that we in the business community can't be trusted is revolting and completely untrue - it is a populist idea you and your allies flogged to get elected. If you want to keep your jobs for much longer, you need to drop this caustic idea. We are not bad people or incompetent people - we can be trusted and can be good partners (as our record proves). No, not everyone will be good or conscientious. Bad people and incompetent organizations cannot be legislated away (at a reasonable cost). Still, the data indicates that a lower cost approach of partnership and education will produce very good results.
Fixing this law will be a stimulus plan that creates JOBS. Please give us back control of our financial statements and we will find a good way to spend our own money to grow our businesses. We don't need your help - we need you to GET OUT OF THE WAY.
Yours sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
Vernon Hills, Illinois
Dear President Obama,
Tuesday's election results were a message to your administration. The "shellacking" you experienced was a referendum on your economic policies as well as a passionate call for smaller government.
Readers of my blog have heard all about these issues for two years. It is frustrating to me that you and your administration remain in the dark. You weren't listening.
My industry, children's products, suffered mightily at the hands of your administration. Admittedly the problem began on Mr. Bush's watch but it was your Democrats who refused to relent or admit their errors. Since passage of the Consumer Product Safety "Improvement" Act in 2008, your party has refused to consider our industry's increasingly pathetic pleas for mercy. The result has been utter market chaos and dramatic financial loss. This regulatory "railroad job" has driven many of us into politics against you and your party out of desperation and profound anger over this undeserved and insensitive treatment.
If you take the midterm election results seriously, you must reexamine the impact of this law on our industry and promptly offer sensible relief.
The problems with the CPSIA can be divided into four categories - Cost, Complexity, Risk and Intrusion. Please give up the idea that these problems can be overcome with tax relief or some sort of economic incentive. If you break my leg, I won't be able to get up and run like an Olympic champion no matter how many carrots you dangle in front of my nose. It's time to be accountable for the damage that the CPSIA wrought - and then directly address it.
Cost: The many ridiculous new rules in the CPSIA dramatically raise the cost of operating our businesses. It goes far beyond the asphyxiating testing costs that the CPSIA imposes. Wasteful administrative costs are skyrocketing in every direction. For instance, tracking labels do not magically appear on our products - we must hire people to redesign each of our products and our manufacturing processes, and we must hire yet more people to make sure we don't screw up these tasks. We sell or manufacture literally thousands of skus (items) - but have had only one tiny recall in the last 26 years. This is PURE UNADULTERATED WASTE. We nevertheless must incur these costs to keep the CPSC happy.
These well-documented costs come from somewhere. You may wonder why we're not hiring. [In fact, I have previously disclosed in this space that our head count continues to decline, an uninterrupted trend since 2007 to this very day.] Well, we must fund these unproductive costs from productive activities - sales, marketing, product development - you know, activities that produce new revenue. [Please note: your proposed tax increases will be paid from the same kitty.] Unlike you, we can't solve our money problems by printing more dollar bills - we have to EARN them. If you make us waste our money, we must shrink our business to pay these new costs. WE GIVE UP GROWTH TO PAY THESE WASTEFUL COSTS.
I find it exasperating to have to explain this to you.
Complexity: We now face perhaps 3,000 pages of new safety rules and laws applicable to our business. I have never included rules on childcare or infant items in this total. For those miserable companies who stubbornly persist in making this kind of item, their total is probably well in excess of 3,000 pages. Each word of those pages is a possible felony.
The pre-CPSIA total was about 100 pages of rules, most of which were inapplicable to our business. There was very little to remember - which made it easy for us to administer our business. We could teach the rules, we could remember the rules, we could follow the rules, we could set up sensible priorities oriented around safety (not merely compliance). This is no longer the case.
Face it, President Obama, NO ONE understands these new rules. I include the CPSC on that list. There are just too many rules, and they are riddled with inconsistencies, flaws and head scratchers. The rules are also a mess, existing in many forms, in many places, never correlated or conformed, and are certainly not indexed. The rules have no underlying logic, so it is not possible to anticipate how any rule should work or does work - you have to find the rule and study it, preferably with an expensive lawyer helping you. Even finding a particular rule is quite a treasure hunt.
We are pretty busy - this does not enhance our productivity.
I believe that unless one is a rabbinic scholar or some kind of savant, it is not possible to master 3,000 pages of dense and inconsistent rules. The CPSC has done little to make sense of these rules.
Consider the paradox of musical instruments - full-sized musical instruments are not considered "Children's Products" even if marketed EXCLUSIVELY to children. Does that make ANY sense to you? Remember, these are SAFETY rules so if musical instruments are unsafe for some reason, wouldn't logic suggest that we should not let children interact with them? And if they're safe, then they shouldn't be regulated at all. Right? Interestingly, the CPSC says that if you shrink the same instruments down for children, they WOULD BE considered "Children's Products" and subject to the CPSIA, even if marketed side-by-side with slightly larger, full-sized instruments which are not regulated. This makes absolutely no sense, is completely indefensible as public policy and creates a terrible quandary for any business attempting to interpret and apply these rules.
The complexity and opacity of the rules outstrips EVERYBODY'S abilities. We are completely stymied - and it's your fault. You and your team refused our advice on how to resolve these issues.
Risk: The CPSIA is a tort lawyers' dream. With the coming public database, our industry will be a feeding trough for these vipers. To say the least, you have permitted the government to set up a system DESIGNED to be gamed by lawyers and litigants.
How do you think business people will react to this massive expansion of the tort system? Please note that NO ONE contends that there are more injuries to address - it is absolutely clear that the effect of the CPSIA is to create many more claims of action. More cost, more risk - and as a result, there WILL be less economic activity.
Good job, guys!
Add to this misery the current practice of this CPSC to press for recalls that do not meet the CPSA's legal standards for recalls (substantial risk of injury or death) and to impose huge vindictive penalties. The agency is on the war path, trying with all its might to scare us to death. This is an especially powerful economic depressant for small businesses which typically lack the resources to resist these pressures. Small businesses are more conservative and tolerate risk less comfortably as they manage their own money and see themselves as having more to lose than mass market companies or public companies.
The aggression of the new CPSC is out of control. The current Chairman likes to BRAG about her big penalties. Trust has been utterly destroyed in the manufacturing community. In two short years, the CPSC squandered its reputation as a partner in safety, someone to be trusted. Who in their right mind would trust this CPSC? If you doubt me, ask McDonald's how they feel about being pressured to recall 12 million acknowledged safe Shrek glasses (and the ensuing media frenzy over cadmium - all without ANY documented injuries from cadmium in children's products EVER). Or ask Schylling Associates or Daiso how they feel about penalties imposed on them for rule violations without any injuries. By all appearances, those penalties reflected regulatory anger, not endangered public safety.
[While you're at it, ask the CSPC why they never completed their FOIA disclosure to me on the Schylling penalty.]
Seemingly, almost any violation of these rules can be twisted into a felony charge now. We joke in our office about visiting each other in jail - but it's not really funny at all. I simply cannot fathom conducting my affairs in a way that risks being charged with a felony. As a lawyer, the criminal risk imposed by the CPSIA is completely unacceptable to me and highly offensive. I often say that felonies cannot be committed accidentally - except in the Children's Product industry. The unavoidable accumulation of trivial infractions with heavy penalty risk gives the CPSC winning leverage in any negotiation. The game is FIXED. Everyone knows it, too.
This is no stimulus plan, by the way.
Intrusion: It's this simple - we have a new partner who showed up two years ago - the U.S. government. They don't know anything about our business and have never run any operation similar to ours but they now reserve the right to check all our work and to second-guess us. Mother May I? That's the new game in our business.
Could we live without ANY of this? Yes, most definitely. While the zealots behind this self-destructive law like to emphasize the POSSIBILITY of injury from lead and love to repeat the simple-minded chestnut that there is "no safe level of lead", they FAIL utterly to tie these claims of POSSIBLE injury to data of ACTUAL injury. There is no "nexus". Lead may be "bad" but it has no history of causing injury in children's products. Leaded gasoline, house paint and industrial pollution are the culprits that caused blood lead levels to rise materially - that's undeniably true. Congress missed the boat entirely with the CPSIA - it's all cost, no benefit.
Lead injuries from children's products are virtually unknown. My study of CPSC recalls in 1999-2010 totals one death (from a piece of jewelry) and three unverified injuries from lead in 11 years. Given the truly massive size of our industry and the children's marketplace, and the literally trillions of interactions with our industry's products each year, this injury total is statistically equivalent to ZERO. Instead of punishing our industry, you should give us a good citizenship award. We have earned the trust of U.S. consumers.
The path forward is clear but frankly, I Still don't think you get it. Trust has been broken. Until you and your administration DEMONSTRATE that you are taking a DIFFERENT path, we will continue to conduct a war against the CPSC and Congress. This defective law deserves a FULL repeal. It is misconceived and has cost countless jobs. I hope you and your associates will not continue to deny the obvious, to fly in the face of data and reason. The voters are on to this scam. They voted many Democrats out of work in midterm elections. If you and your team don't wise up quickly, in the over-regulation of our industry and other industries, they'll vote the rest of you out in two years.
The problem was never the law. Before Congress "improved" it, the CPSA was a powerful law that enabled the CPSC to closely supervise children's markets. Let's not forget that the recalls in 2007/8 were conducted under PRIOR law - the unamended CPSA had plenty of teeth. The recalls in 2007/8 were clearly a COMPLIANCE problem, not a problem with the rules themselves. For various reasons, some people weren't following the law closely enough. As objectionable as that may be, it is also important to remember that the 2007/8 recalls were associated with virtually NO injuries. So what should we have done, in lieu of all the tough new standards and venal penalty provisions in the CPSIA?
The agency should have been reorganized to work on compliance more effectively. The agency needed to invest in education, outreach to industry and more effective partnership with industry. This idea that we in the business community can't be trusted is revolting and completely untrue - it is a populist idea you and your allies flogged to get elected. If you want to keep your jobs for much longer, you need to drop this caustic idea. We are not bad people or incompetent people - we can be trusted and can be good partners (as our record proves). No, not everyone will be good or conscientious. Bad people and incompetent organizations cannot be legislated away (at a reasonable cost). Still, the data indicates that a lower cost approach of partnership and education will produce very good results.
Fixing this law will be a stimulus plan that creates JOBS. Please give us back control of our financial statements and we will find a good way to spend our own money to grow our businesses. We don't need your help - we need you to GET OUT OF THE WAY.
Yours sincerely,
Richard Woldenberg
Chairman
Learning Resources, Inc.
Vernon Hills, Illinois
Monday, October 25, 2010
CPSIA - Governmental Biases On Display at CPSC
802 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 8 days left until Election Day.
The WSJ published a short article about the psychology of governments called Studying the Biases of Bureaucrats (subtitled "Five Ways Regulators Think Wrong"). The application of psychology to economic decisions has produced a few Nobel Prizes - the implications of psychology on decision-making is well-known and generally accepted.
See if you recognize the Democrats who run the CPSC in some of these bureaucratic decision-making foibles:
". . . [P]sychologists have shown that we systematically overestimate how much we understand about the causes and mechanisms of things we half understand. The Swedish health economist Hans Rosling once gave students a list of five pairs of countries and asked which nation in each pair had the higher infant-mortality rate. The students got 1.8 right out of 5. Mr. Rosling noted that if he gave the test to chimpanzees they would get 2.5 right. So his students' problem was not ignorance, but that they knew with confidence things that were false." [Emphasis added]
My comment: Is the author suggesting the election of chimpanzees to the CPSC Commission? Hmmm, you must admit it's a creative suggestion. . . .
"The issue of action bias is better known in England as the "dangerous dogs act," after a previous government, confronted with a couple of cases in which dogs injured or killed people, felt the need to bring in a major piece of clumsy and bureaucratic legislation that worked poorly. . . . It takes unusual courage for a regulator to stand up and say 'something must not be done,' lest 'something' makes the problem worse." [Emphasis added]
My comment: This hypothetical regulator does not work at the CPSC. The aversion of the current Democratic CPSC leadership to not regulating is continually reinforced. Consider for instance, the CPSC's willingness to make a mockery of protecting the public against harm in the definition of "Children's Products". In that recent master stroke, the Commission approved a rule that says that the musical instruments marketed to schools (even exclusively) will be unregulated (even if made entirely of "dangerous" brass) if the instruments are full-sized (a so-called general use item) BUT will fully regulate kid-sized instruments. Big instruments made of brass apparently do not deserve their regulatory attention but little ones do, even if BOTH are used exclusively by kids. Big instruments won't poison kids but little ones will, apparently.
Spineless or just plain stupid - you make the call!
"Motivated reasoning means that we tend to believe what it is convenient for us to believe. If you run an organization called, say, the Asteroid Retargeting Group for Humanity (ARGH) and you are worried about potential cuts to your budget, we should not be surprised to find you overreacting to every space rock that passes by. Regulators rarely argue for deregulation."
My comment: Ho-hum, has anyone EVER seen this at the CPSC? Since the WSJ metaphor relates to rocks, I would note that we must warn consumers that the rocks in our rock kits may contain lead which might be harmful if swallowed. We do NOT have to warn people that our rocks ALSO contain rocks - yet another reason to not to eat them. We also don't warn consumers to not eat our fossils because it destroys the fossil record - but we do warn them about lead in fossils. Nice!
It's so fun to contribute to making a mockery of safety! I find it gratifying (not).
"The focusing illusion partly stems from the fact that people tend to see the benefits of a policy but not the hidden costs. As French theorist Frédéric Bastiat argued, it's a fallacy to think that breaking a window creates work, because while the glazier's gain of work is visible, the tailor's loss of work caused by the window-owner's loss of money—and consequent decision to delay purchase of a coat—is not. Recent history is full of government interventions with this characteristic."
My comment: Invisible costs are the true cancer of the CPSIA. I recently voted NO on a market expansion of our company into a product class that I felt would attract WAY too much regulatory attention at the maniacal CPSC these days. Why take a chance? With the government almost promoting the destruction of our industry and its supply chain (see today's WSJ for yet another scare tactic by Inez Tenenbaum), there is just no reward for moving into certain markets. And how will the regulators measure this effect? There is no evidence of our choice to NOT enter a market. That must mean it never happened . . . right??? Perhaps that's what they think. They only believe bodies (that are still warm and only if they are stacked high - and even then, we know that "anecdotes are not evidence"). No bodies are evident when you opt out.
Case closed?
"'Affect heuristic' is a fancy name for a pretty obvious concept, namely that we discount the drawbacks of things we are emotionally in favor of. For example, the Deepwater Horizon oil spill certainly killed about 1,300 birds, maybe a few more. Wind turbines in America kill between 75,000 and 275,000 birds every year, generally of rarer species, such as eagles. Yet wind companies receive neither the enforcement, nor the opprobrium, that oil companies do."
My comment: Or here's an example from the CPSIA world: deaths from lead number just one, and injuries number just three (all alleged, none verified) over ll years (CPSC data) but deaths and injuries from swimming pools are greater on an average DAY. So what's our national obsession, at least of the Democrats? Lead. Makes a lot of sense. Not.
The CPSC - it's a psychologist's dream . . . but it's our nightmare.
The WSJ published a short article about the psychology of governments called Studying the Biases of Bureaucrats (subtitled "Five Ways Regulators Think Wrong"). The application of psychology to economic decisions has produced a few Nobel Prizes - the implications of psychology on decision-making is well-known and generally accepted.
See if you recognize the Democrats who run the CPSC in some of these bureaucratic decision-making foibles:
". . . [P]sychologists have shown that we systematically overestimate how much we understand about the causes and mechanisms of things we half understand. The Swedish health economist Hans Rosling once gave students a list of five pairs of countries and asked which nation in each pair had the higher infant-mortality rate. The students got 1.8 right out of 5. Mr. Rosling noted that if he gave the test to chimpanzees they would get 2.5 right. So his students' problem was not ignorance, but that they knew with confidence things that were false." [Emphasis added]
My comment: Is the author suggesting the election of chimpanzees to the CPSC Commission? Hmmm, you must admit it's a creative suggestion. . . .
"The issue of action bias is better known in England as the "dangerous dogs act," after a previous government, confronted with a couple of cases in which dogs injured or killed people, felt the need to bring in a major piece of clumsy and bureaucratic legislation that worked poorly. . . . It takes unusual courage for a regulator to stand up and say 'something must not be done,' lest 'something' makes the problem worse." [Emphasis added]
My comment: This hypothetical regulator does not work at the CPSC. The aversion of the current Democratic CPSC leadership to not regulating is continually reinforced. Consider for instance, the CPSC's willingness to make a mockery of protecting the public against harm in the definition of "Children's Products". In that recent master stroke, the Commission approved a rule that says that the musical instruments marketed to schools (even exclusively) will be unregulated (even if made entirely of "dangerous" brass) if the instruments are full-sized (a so-called general use item) BUT will fully regulate kid-sized instruments. Big instruments made of brass apparently do not deserve their regulatory attention but little ones do, even if BOTH are used exclusively by kids. Big instruments won't poison kids but little ones will, apparently.
Spineless or just plain stupid - you make the call!
"Motivated reasoning means that we tend to believe what it is convenient for us to believe. If you run an organization called, say, the Asteroid Retargeting Group for Humanity (ARGH) and you are worried about potential cuts to your budget, we should not be surprised to find you overreacting to every space rock that passes by. Regulators rarely argue for deregulation."
My comment: Ho-hum, has anyone EVER seen this at the CPSC? Since the WSJ metaphor relates to rocks, I would note that we must warn consumers that the rocks in our rock kits may contain lead which might be harmful if swallowed. We do NOT have to warn people that our rocks ALSO contain rocks - yet another reason to not to eat them. We also don't warn consumers to not eat our fossils because it destroys the fossil record - but we do warn them about lead in fossils. Nice!
It's so fun to contribute to making a mockery of safety! I find it gratifying (not).
"The focusing illusion partly stems from the fact that people tend to see the benefits of a policy but not the hidden costs. As French theorist Frédéric Bastiat argued, it's a fallacy to think that breaking a window creates work, because while the glazier's gain of work is visible, the tailor's loss of work caused by the window-owner's loss of money—and consequent decision to delay purchase of a coat—is not. Recent history is full of government interventions with this characteristic."
My comment: Invisible costs are the true cancer of the CPSIA. I recently voted NO on a market expansion of our company into a product class that I felt would attract WAY too much regulatory attention at the maniacal CPSC these days. Why take a chance? With the government almost promoting the destruction of our industry and its supply chain (see today's WSJ for yet another scare tactic by Inez Tenenbaum), there is just no reward for moving into certain markets. And how will the regulators measure this effect? There is no evidence of our choice to NOT enter a market. That must mean it never happened . . . right??? Perhaps that's what they think. They only believe bodies (that are still warm and only if they are stacked high - and even then, we know that "anecdotes are not evidence"). No bodies are evident when you opt out.
Case closed?
"'Affect heuristic' is a fancy name for a pretty obvious concept, namely that we discount the drawbacks of things we are emotionally in favor of. For example, the Deepwater Horizon oil spill certainly killed about 1,300 birds, maybe a few more. Wind turbines in America kill between 75,000 and 275,000 birds every year, generally of rarer species, such as eagles. Yet wind companies receive neither the enforcement, nor the opprobrium, that oil companies do."
My comment: Or here's an example from the CPSIA world: deaths from lead number just one, and injuries number just three (all alleged, none verified) over ll years (CPSC data) but deaths and injuries from swimming pools are greater on an average DAY. So what's our national obsession, at least of the Democrats? Lead. Makes a lot of sense. Not.
The CPSC - it's a psychologist's dream . . . but it's our nightmare.
Sunday, October 24, 2010
CPSIA - Jan Schakowsky Wants to Design Your New Home, Too.
801 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 9 days left until Election Day.
801 days without ANY help. Amazing . . . .
Rep. Jan Schakowsky, the Illinois Congresswoman who informed the WSJ that I am a "cynical special interest" because I dared to participate in the upcoming midterm elections, is not content with rearranging your business and the Children's Product industry. Now she wants to redesign your new home.
Does she have good taste, you ask. Well, read on and see what you think of Jan Schakowsky as your architect or decorator.
Your home is your last refuge, right? Not if she gets her way - but then again, she knows what's best for you! After all, a bigger government involved in every aspect of your life is a BETTER government. The estimable Ms. Schakowsky is the sponsor of HR 1408 Inclusive Home Design Act of 2009. In other words, this law-in-the-makings is her handiwork.
She brags about this pending legislation on her Facebook page in posts dated October 6, so she must be pretty psyched about it. I gather she wants the electorate to know of her excellent leadership in Congress, so I thought I'd help out. Happy to lend a hand to such a "great" leader.
Best I can tell, Ms. Schakowsky latest brain wave is to require you to redesign your new home to be disability-friendly if you get "federal assistance". The so-called purpose of the act is "[t]o require all newly constructed, federally assisted, single-family houses and town houses to meet minimum standards of visitability for persons with disabilities."
And what might she have in mind, precisely? Anyone who receives "federal assistance" needs to design new homes to meet several ADA-like standards even if they are useless to the buyers. No matter that this will cost money or that you don't want it. It's good for you, Jan says so. It may also make it difficult for you to find new homes without these features. Like cod liver oil, you'll get used to it!
As noted, to get into this spot, you need to receive federal assistance. Here's a sample of what might constitute "federal assistance":
"any assistance that is provided or otherwise made available by the Secretary of Housing and Urban Development or the Secretary of Veterans Affairs, or any program or activity or such agencies, through any grant, loan, contract, or any other arrangement, after the expiration of the one-year period beginning on the date of the enactment of this Act, including . . . grants, subsidies, or any other funds . . . services of Federal personnel . . . any tax credit, mortgage or loan guarantee or insurance. . . ."
In other words, if you even brush against the federal government in constructing your new home, you are COVERED by this law. Tax credit for your new energy-efficient furnace? You're IN. HUD loan refinance for a development of several homes? You're IN. Fannie Mae or Freddie Mac involved? You're IN. Vet benefits? You're IN. Inspected by a federal employee for some reason? You get the idea.
Hey, here's the REAL idea - the government belongs in EVERY aspect of your life. Ms. Schakowsky doesn't even think you should be allowed to measure the door frames in your house without her oversight. It doesn't even matter if you have a disabled person living in the house - you MIGHT be visited by one and certainly, you would not able to accommodate that visit without Ms. Schakowsky's supervision.
Perhaps you should invite her, too, just to work out the kinks. Uh-oh, I sense an amendment coming!
Had enough yet? If not, vote DEM on November 2nd so society can be reengineered a little bit more. On the other hand, if you have the vaguest sense that this is a runaway train and might need to be stopped before it's too late . . . vote the other way.
The Dems brought this on themselves. They put people like Schakowsky in leadership roles. The Children's Product industry is in tatters as a result. PLEASE STOP THE INSANITY ON NOVEMBER 2ND!!!
801 days without ANY help. Amazing . . . .
Rep. Jan Schakowsky, the Illinois Congresswoman who informed the WSJ that I am a "cynical special interest" because I dared to participate in the upcoming midterm elections, is not content with rearranging your business and the Children's Product industry. Now she wants to redesign your new home.
Does she have good taste, you ask. Well, read on and see what you think of Jan Schakowsky as your architect or decorator.
Your home is your last refuge, right? Not if she gets her way - but then again, she knows what's best for you! After all, a bigger government involved in every aspect of your life is a BETTER government. The estimable Ms. Schakowsky is the sponsor of HR 1408 Inclusive Home Design Act of 2009. In other words, this law-in-the-makings is her handiwork.
She brags about this pending legislation on her Facebook page in posts dated October 6, so she must be pretty psyched about it. I gather she wants the electorate to know of her excellent leadership in Congress, so I thought I'd help out. Happy to lend a hand to such a "great" leader.
Best I can tell, Ms. Schakowsky latest brain wave is to require you to redesign your new home to be disability-friendly if you get "federal assistance". The so-called purpose of the act is "[t]o require all newly constructed, federally assisted, single-family houses and town houses to meet minimum standards of visitability for persons with disabilities."
And what might she have in mind, precisely? Anyone who receives "federal assistance" needs to design new homes to meet several ADA-like standards even if they are useless to the buyers. No matter that this will cost money or that you don't want it. It's good for you, Jan says so. It may also make it difficult for you to find new homes without these features. Like cod liver oil, you'll get used to it!
As noted, to get into this spot, you need to receive federal assistance. Here's a sample of what might constitute "federal assistance":
"any assistance that is provided or otherwise made available by the Secretary of Housing and Urban Development or the Secretary of Veterans Affairs, or any program or activity or such agencies, through any grant, loan, contract, or any other arrangement, after the expiration of the one-year period beginning on the date of the enactment of this Act, including . . . grants, subsidies, or any other funds . . . services of Federal personnel . . . any tax credit, mortgage or loan guarantee or insurance. . . ."
In other words, if you even brush against the federal government in constructing your new home, you are COVERED by this law. Tax credit for your new energy-efficient furnace? You're IN. HUD loan refinance for a development of several homes? You're IN. Fannie Mae or Freddie Mac involved? You're IN. Vet benefits? You're IN. Inspected by a federal employee for some reason? You get the idea.
Hey, here's the REAL idea - the government belongs in EVERY aspect of your life. Ms. Schakowsky doesn't even think you should be allowed to measure the door frames in your house without her oversight. It doesn't even matter if you have a disabled person living in the house - you MIGHT be visited by one and certainly, you would not able to accommodate that visit without Ms. Schakowsky's supervision.
Perhaps you should invite her, too, just to work out the kinks. Uh-oh, I sense an amendment coming!
Had enough yet? If not, vote DEM on November 2nd so society can be reengineered a little bit more. On the other hand, if you have the vaguest sense that this is a runaway train and might need to be stopped before it's too late . . . vote the other way.
The Dems brought this on themselves. They put people like Schakowsky in leadership roles. The Children's Product industry is in tatters as a result. PLEASE STOP THE INSANITY ON NOVEMBER 2ND!!!
Friday, October 15, 2010
CPSIA - Tune in to Fox News on Monday AM
792 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 18 days left until Election Day.
I am scheduled to appear on Fox News "Fox & Friends" program on Monday at 6:15 AM EST to discuss the CPSIA and my involvement in politics as a means to address our many CPSIA problems.
Let's set some Nielsen ratings records for Fox on Monday!
I am scheduled to appear on Fox News "Fox & Friends" program on Monday at 6:15 AM EST to discuss the CPSIA and my involvement in politics as a means to address our many CPSIA problems.
Let's set some Nielsen ratings records for Fox on Monday!
Monday, October 11, 2010
CPSIA - WSJ Profiles RW in Article on Business Backlash
POLITICS
OCTOBER 12, 2010
Business Backlash Grows
By ELIZABETH WILLIAMSON
VERNON HILLS, Ill.—Rick Woldenberg runs an educational-products company from a suburban Chicago office stacked with brightly colored toys. He supported President Barack Obama in 2008. But he has turned on Democrats this year.
Sally Ryan for The Wall Street Journal
Rick Woldenberg, chairman of Learning Resources in Chicago, backed President Barack Obama in 2008 but is now raising money for Republicans.
Mr. Woldenberg is angry that Congress and the Obama administration won't revise expansive new rules on lead testing in children's products that he says will kill his business, Learning Resources Inc. So he is raising money for Republicans among Chicago business owners to help the GOP—so much money that he is rattling the incumbent in what has been one of the safest Democratic seats in Mr. Obama's home state.
"If Democrats are going to put me out of business, I'm going to put them out of business first," he said.
Disaffected business owners like Mr. Woldenberg have emerged as a potent force in the 2010 campaign. The U.S. Chamber of Commerce, which plans to spend $75 million in this election cycle, says it has exceeded its targets for raising money from small businesses every quarter this year, despite the poor economy. More small-business candidates are running for public office than at any time in a generation, say officials at the National Federation of Independent Business, the capital's chief small-business lobby.
Business contributions are fueling campaign efforts by conservative and business groups, which are gearing up to spend as much as $300 million to help Republicans this fall.
Mr. Obama and Congressional Democrats have wooed small-business owners with a series of tax breaks and a $30 billion lending program that was the centerpiece of a Small Business Jobs Act Mr. Obama signed last week at a White House ceremony attended by a group of supportive entrepreneurs.
But many small-business owners still fault Mr. Obama and Congressional Democrats for what they see as a costly explosion of new rules and regulations.
"I think Obama ran as more of a moderate, and business people here are now realizing that this huge expansion of government is not sustainable," said Leo Dombrowski, an attorney at Wildman, Harrold, Allen & Dixon LLP in Chicago, whose clients are fighting new environmental rules.
Mr. Woldenberg has helped raise more than $470,000 for Joel Pollak, a 32-year old Harvard Law School graduate who is challenging Rep. Jan Schakowsky in Chicago's 9th district, a friend of Mr. Obama who is an author and ardent defender of the new children's-product lead law. That's 20 times more than any Republican has ever raised for a run against Ms. Schakowsky, who won 75% of the vote in the last election and is vying for a 7th term.
"This is a war," he said. "Individuals can make a difference, and I want my kids to see it."
Over the past few months, Mr. Pollak said, he and Mr. Woldenberg have been trying to tap into "donors residing outside the district with a strong business or personal motivation." The Pollak campaign scored a fundraising appearance by Republican economic policy star Rep. Paul Ryan of Wisconsin. Mr. Pollak took the podium and pointed out Schakowsky campaign manager Alex Armour, who was in the crowd videotaping the event.
Ms. Schakowsky is polling at slightly more than 60%, according to her internal polls, a solid lead but narrower than in the past. The campaign has hired four field staffers for the first time, and is sending less money to Democrats in closer races.
"I'm not worried about it, but I'm taking it seriously," she said. Ms. Schakowsky said Mr. Woldenberg's success as a fundraiser, is proof that "very cynical … special interests are highly engaged in the campaign."
As for the lead law, she said she was proud of it. "The goal is to save children from toys that are toxic."
Mr. Woldenberg's efforts include addressing 130 people in a Holiday Inn ballroom in suburban Skokie, Ill., during Mr. Pollak's "Chicagoland Business Breakfast" in late September.
He held up a "box of rocks," the company's igneous rock collection kit, and read its new consumer warning.
"Caution: federal law requires us to advise that the rocks in this educational product may contain lead and might be harmful if swallowed,'" he read, to laughter.
"This is humiliating," he said, ticking off the costs of the law. "I'm hoping Joel can help us."
Two dozen attendees took the microphone, voicing concerns with health-care, tax, environmental and workplace rules. They included Jay Stieber, vice president of restaurant chain Lettuce Entertain You Enterprises Inc., and chairman of the Illinois Restaurant Association, who has his headquarters in the 9th district. He and his family have contributed the maximum $4,800 to Mr. Pollak.
"The hospitality industry is the biggest employer in Illinois, and my partners and I have been lifelong Democrats," he said, but changed sides because "I can't stand here and tell you what health-care is going to cost."
Write to Elizabeth Williamson at elizabeth.williamson@wsj.com
OCTOBER 12, 2010
Business Backlash Grows
By ELIZABETH WILLIAMSON
VERNON HILLS, Ill.—Rick Woldenberg runs an educational-products company from a suburban Chicago office stacked with brightly colored toys. He supported President Barack Obama in 2008. But he has turned on Democrats this year.
Sally Ryan for The Wall Street Journal
Rick Woldenberg, chairman of Learning Resources in Chicago, backed President Barack Obama in 2008 but is now raising money for Republicans.
Mr. Woldenberg is angry that Congress and the Obama administration won't revise expansive new rules on lead testing in children's products that he says will kill his business, Learning Resources Inc. So he is raising money for Republicans among Chicago business owners to help the GOP—so much money that he is rattling the incumbent in what has been one of the safest Democratic seats in Mr. Obama's home state.
"If Democrats are going to put me out of business, I'm going to put them out of business first," he said.
Disaffected business owners like Mr. Woldenberg have emerged as a potent force in the 2010 campaign. The U.S. Chamber of Commerce, which plans to spend $75 million in this election cycle, says it has exceeded its targets for raising money from small businesses every quarter this year, despite the poor economy. More small-business candidates are running for public office than at any time in a generation, say officials at the National Federation of Independent Business, the capital's chief small-business lobby.
Business contributions are fueling campaign efforts by conservative and business groups, which are gearing up to spend as much as $300 million to help Republicans this fall.
Mr. Obama and Congressional Democrats have wooed small-business owners with a series of tax breaks and a $30 billion lending program that was the centerpiece of a Small Business Jobs Act Mr. Obama signed last week at a White House ceremony attended by a group of supportive entrepreneurs.
But many small-business owners still fault Mr. Obama and Congressional Democrats for what they see as a costly explosion of new rules and regulations.
"I think Obama ran as more of a moderate, and business people here are now realizing that this huge expansion of government is not sustainable," said Leo Dombrowski, an attorney at Wildman, Harrold, Allen & Dixon LLP in Chicago, whose clients are fighting new environmental rules.
Mr. Woldenberg has helped raise more than $470,000 for Joel Pollak, a 32-year old Harvard Law School graduate who is challenging Rep. Jan Schakowsky in Chicago's 9th district, a friend of Mr. Obama who is an author and ardent defender of the new children's-product lead law. That's 20 times more than any Republican has ever raised for a run against Ms. Schakowsky, who won 75% of the vote in the last election and is vying for a 7th term.
"This is a war," he said. "Individuals can make a difference, and I want my kids to see it."
Over the past few months, Mr. Pollak said, he and Mr. Woldenberg have been trying to tap into "donors residing outside the district with a strong business or personal motivation." The Pollak campaign scored a fundraising appearance by Republican economic policy star Rep. Paul Ryan of Wisconsin. Mr. Pollak took the podium and pointed out Schakowsky campaign manager Alex Armour, who was in the crowd videotaping the event.
Ms. Schakowsky is polling at slightly more than 60%, according to her internal polls, a solid lead but narrower than in the past. The campaign has hired four field staffers for the first time, and is sending less money to Democrats in closer races.
"I'm not worried about it, but I'm taking it seriously," she said. Ms. Schakowsky said Mr. Woldenberg's success as a fundraiser, is proof that "very cynical … special interests are highly engaged in the campaign."
As for the lead law, she said she was proud of it. "The goal is to save children from toys that are toxic."
Mr. Woldenberg's efforts include addressing 130 people in a Holiday Inn ballroom in suburban Skokie, Ill., during Mr. Pollak's "Chicagoland Business Breakfast" in late September.
He held up a "box of rocks," the company's igneous rock collection kit, and read its new consumer warning.
"Caution: federal law requires us to advise that the rocks in this educational product may contain lead and might be harmful if swallowed,'" he read, to laughter.
"This is humiliating," he said, ticking off the costs of the law. "I'm hoping Joel can help us."
Two dozen attendees took the microphone, voicing concerns with health-care, tax, environmental and workplace rules. They included Jay Stieber, vice president of restaurant chain Lettuce Entertain You Enterprises Inc., and chairman of the Illinois Restaurant Association, who has his headquarters in the 9th district. He and his family have contributed the maximum $4,800 to Mr. Pollak.
"The hospitality industry is the biggest employer in Illinois, and my partners and I have been lifelong Democrats," he said, but changed sides because "I can't stand here and tell you what health-care is going to cost."
Write to Elizabeth Williamson at elizabeth.williamson@wsj.com
Sunday, October 10, 2010
CPSIA - What Are We Trying Achieve?
787 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 23 days left until Election Day.
Sean Oberle published a lengthy contemplation of the issue raised in my last post on the relationship between compliance and safety as objectives for regulators and for industry. Mr. Oberle's essay speaks for itself, so I will not attempt to summarize it. He concludes with the following message: "Therein lies the frustrating and frightening aspect of product safety. Those of you tasked with ensuring product safety – industry rep, consumerist, and regulator alike – are trying to quantify ambiguity amid a chaos of demands … all of them in flux … I don't envy you."
Sean, boy are you right!
I think it's worth discussing a few issues on compliance versus safety since Mr. Oberle devoted so much ink (or electrons) to the topic.
1. The law defines what the CPSC can and cannot do. It's a shame no one told them . . . .
First and foremost, the CPSC exists because of the CPSA and its activities are governed by the CPSA. Recall authority is governed by Section 15 which limits the agency's recall authority to "substantial product hazards", namely a product that ". . . creates a substantial risk of injury to the public". [Section 12 gives the agency additional powers to seek a court order for "imminent hazards".] In other words, the CPSC does not have the legislative authority to tilt at windmills - it cannot demand recalls for anything unless it presents a "substantial risk of injury to the public".
Consider recalling 12 million glasses that the CPSC acknowledges in writing are SAFE. Substantial risk of injury?
Consider recalling more than seven million trikes sold over 14 years that caused six children to cut themselves. Children who were under three years of age and should have been under the care of attentive adults. Substantial risk of injury?
Consider recalling more than 400,000 Sarge cars because the little yellow dot on the wheel hubcap violated the lead-in-paint ban, and those dots were produced from two cans of paint. Substantial risk of injury?
One must distinguish between legerdemain and reality, between policy and what the law intended. It is a little focused-upon responsibility of the agency to exercise this judgment. Is it even possible for everything that happens to be a "substantial" risk? We know of cases where a single broken toy without an injury provoked an official investigation at the agency. Fair? Is this an activity that the CPSA authorizes? It is . . . if you are running the agency and you say it is. Arguably, the recall of the 480,000 Mattel Wheelies on September 30 was just such a case. Consumers apparently reported two broken cars with wheels that fell off, and no injuries were reported or implied. Substantial risk of injury? I question that.
2. The notion that we need all this supervision flies in the face of injury statistics. But it sure makes the CPSC look irreplaceable, doesn't it?
I have already published and discussed ad nauseum the historical injury statistics from lead based on CPSC recall notices - ONE DEATH and THREE UNVERIFIED INJURIES over 11 years (1999-2010). If we were facing such a dire public health crisis, why weren't kids dropping like flies from lead poisoning over such a long time period of "lax regulation"? If the harm was so widespread and so devastating, why aren't any of these actual victims known? Names, addresses, photos, case histories?
A friend replied to me recently reasoning that there is no safe level of lead. Okay, I concede that lead can be dangerous but it is absolutely true that lead in present throughout our environment and in the air, food and water that we consume every minute of every day. So since we take in lead from several sources all the time, we know we are building up lead and this leads to several questions. If lead is so harmful at all levels, why aren't we ALL showing the effect of our cumulative build-up of lead? How can you demonstrate that children's products contribute meaningfully to the asserted "problem"? How can you prove that "fixing" children's products will meaningfully change lead blood levels? And if you could prove those things (which cannot be done), how can you measure the return on investment of our multi-billion dollar annual investment? Remember, we can only spend those dollars one time - so is flushing them down the toilet on test reports REALLY our best use of scarce and irreplaceable dollars? How would you measure that?
But the more that the CPSC enforces the law against "bad" corporations, the more they scam the public into thinking they needed the help all along. They talk about recall statistics but never put them in the context of injury statistics. The proponents never compare lead injury statistics to other injury statistics like swimming pools.
[Is a child injured by lead "worse" that a child killed in a pool? It better be - because we are spending billions to prophylactically eliminate the possibility of purported lead injuries while leaving swimming pools open to continue a continuing skein of killings of more than one child each day. That's okay according to our Democrat-run Congress. Tell that to the family of drowning victim - they can take comfort in knowing that their child didn't have lead poisoning thanks to the relentless and remorseless enforcement of the CPSIA . . . .]
So as the regulators abuse and confuse the definition of hazard, they create an atmosphere of dependence. Oh thank you Mother Government for saving me! What would I do without you?!
3. Mr. Oberle reminds us that "Lack of incidents may not mean a product is safe." And just because you're paranoid doesn't mean they AREN'T out to get you.
Mr. Oberle does not take an offensive stance on this topic, btw. He is right, you can sometimes catch something dangerous before it creates harm. Presumably a quicker recognition of the hazard in Magnetix might have prevented injuries. Responsible companies need to always keep a lookout for insights that reveal latent hazards.
On the other hand, injury statistics are a useful tool. If, as is the case for lead, the assertion is that the hazard is widespread and present over a lengthy period of time, injury statistics become QUITE relevant. So, if lead was such a terrible problem in children's products (putting lead-in-paint aside, long ago banned), injury statistics over many years would reveal a latent problem. Think of the breadth of the definition of "Children's Products" and think of the years of recall data available for study. We are looking at TRILLIONS of interactions with children every year in the United States alone. Where are all the lead victims? We cannot say that we don't know the scale of this problem. We have apparently been running an "experiment" on the U.S. public for decades in the period the zealots label as "lax regulations" or "lax enforcement". If lead-in-substrate were so dangerous, wouldn't you expect to see SOME evidence of it?
If we must imagine the scale of the danger, can we spend imaginary dollars to deal with it?
4. The compliance hawks want to frame this as a financial question - how much is your safety worth? I think that's the wrong question - I think the question is "how long do you want to have a job?"
I have already reported that our compliance group is currently up to six people from a historical one or two, and of course, our products are no safer today than in the past. They were always safe and still are, but it costs us a lot more to operate. That's not good for you or for me.
So how do we pay for all this new bureaucracy? We have not raised prices, that's impossible these days. We are lucky to have customers and cannot spit in their faces with a price increase. Think of your business - it won't fly.
We also need to hit profitability targets because we need to remain financable. We do not get money from "money fairies" - we have to deal with a bank, just like you. Our bank prefers to see that we make money. I know that doesn't seem very civic-minded but I can't fault them for their POV. In any event, I think it's elementary that a business needs to make a profit to have the model sustain itself. Therefore, we cannot commit ourselves to ever-eroding profitability. When our costs rise, we cut elsewhere . . . just like you do.
Needless to say, we have skinnied up a lot since 2007. We have a much-reduced headcount and operate far more efficiently. This is how everyone behaved during the financial crisis and the jobs have not returned, in part because the economy remains sluggish. With our rising overhead relating to pointless regulations, what can we do? We must recover the money from activities that are focused on raising revenues. In effect, we are discontinuing activities that create growth to fund activities that are pure costs.
What's the math behind this? Consider how we recover a dollar of bureaucratic cost from productive activities. If you are already operating efficiently and cannot wring out big productivity gains (as may be the case post-financial crisis cost reductions), then how do you pay for an additional dollar of overhead cost? When you eliminate a "productive" dollar of cost to pay for an unproductive dollar of cost (e.g., you trade a dollar of marketing promotion for a dollar of test costs), it's not an even trade. No, because your dollar of productive cost creates gross margin whereas your overhead produces no profit whatsoever. Your productive dollar of cost produces gross profit which defrays your operating costs and produces marginal net profit on top of that. Wiping out the dollar of productive cost also wipes out the contribution to operating costs, so effectively, only the associated marginal net profit can defray the unproductive cost. Since profit percentages are generally low for most of us, the ratio of productive cost dollars needed to be sacrificed to cover unproductive costs is probably on the order of 2:1 or 3:1. Hire another QC person and fire the equivalent of two people elsewhere. In our case, we do it by attrition. We just shrink away.
As if this weren't bad enough, it's also a recipe for disaster or business death in a worst case. The continued erosion of productive spending to finance unproductive spending has a dramatic impact on growth. Revenue flattens out or stays in a downward trend. It's no surprise - you are starving your company of investment dollars as you spend at constant levels. You have simply shifted your spending from productive uses favoring growth to unproductive uses that will not create growth. Presumably, those of you with children have discussed the merits of eating fruits and vegetables versus eating potato chips. It's no different for a business and how it consumes dollars. We will never grow up to be big and strong if Mother Government restricts our financial diet this way.
Sean's right. I don't envy you . . . or me. This makes me very pessimistic about the future.
I hope you are mad as hell and won't take it anymore. In 23 days, you will get to vote. DO IT!
Sean Oberle published a lengthy contemplation of the issue raised in my last post on the relationship between compliance and safety as objectives for regulators and for industry. Mr. Oberle's essay speaks for itself, so I will not attempt to summarize it. He concludes with the following message: "Therein lies the frustrating and frightening aspect of product safety. Those of you tasked with ensuring product safety – industry rep, consumerist, and regulator alike – are trying to quantify ambiguity amid a chaos of demands … all of them in flux … I don't envy you."
Sean, boy are you right!
I think it's worth discussing a few issues on compliance versus safety since Mr. Oberle devoted so much ink (or electrons) to the topic.
1. The law defines what the CPSC can and cannot do. It's a shame no one told them . . . .
First and foremost, the CPSC exists because of the CPSA and its activities are governed by the CPSA. Recall authority is governed by Section 15 which limits the agency's recall authority to "substantial product hazards", namely a product that ". . . creates a substantial risk of injury to the public". [Section 12 gives the agency additional powers to seek a court order for "imminent hazards".] In other words, the CPSC does not have the legislative authority to tilt at windmills - it cannot demand recalls for anything unless it presents a "substantial risk of injury to the public".
Consider recalling 12 million glasses that the CPSC acknowledges in writing are SAFE. Substantial risk of injury?
Consider recalling more than seven million trikes sold over 14 years that caused six children to cut themselves. Children who were under three years of age and should have been under the care of attentive adults. Substantial risk of injury?
Consider recalling more than 400,000 Sarge cars because the little yellow dot on the wheel hubcap violated the lead-in-paint ban, and those dots were produced from two cans of paint. Substantial risk of injury?
One must distinguish between legerdemain and reality, between policy and what the law intended. It is a little focused-upon responsibility of the agency to exercise this judgment. Is it even possible for everything that happens to be a "substantial" risk? We know of cases where a single broken toy without an injury provoked an official investigation at the agency. Fair? Is this an activity that the CPSA authorizes? It is . . . if you are running the agency and you say it is. Arguably, the recall of the 480,000 Mattel Wheelies on September 30 was just such a case. Consumers apparently reported two broken cars with wheels that fell off, and no injuries were reported or implied. Substantial risk of injury? I question that.
2. The notion that we need all this supervision flies in the face of injury statistics. But it sure makes the CPSC look irreplaceable, doesn't it?
I have already published and discussed ad nauseum the historical injury statistics from lead based on CPSC recall notices - ONE DEATH and THREE UNVERIFIED INJURIES over 11 years (1999-2010). If we were facing such a dire public health crisis, why weren't kids dropping like flies from lead poisoning over such a long time period of "lax regulation"? If the harm was so widespread and so devastating, why aren't any of these actual victims known? Names, addresses, photos, case histories?
A friend replied to me recently reasoning that there is no safe level of lead. Okay, I concede that lead can be dangerous but it is absolutely true that lead in present throughout our environment and in the air, food and water that we consume every minute of every day. So since we take in lead from several sources all the time, we know we are building up lead and this leads to several questions. If lead is so harmful at all levels, why aren't we ALL showing the effect of our cumulative build-up of lead? How can you demonstrate that children's products contribute meaningfully to the asserted "problem"? How can you prove that "fixing" children's products will meaningfully change lead blood levels? And if you could prove those things (which cannot be done), how can you measure the return on investment of our multi-billion dollar annual investment? Remember, we can only spend those dollars one time - so is flushing them down the toilet on test reports REALLY our best use of scarce and irreplaceable dollars? How would you measure that?
But the more that the CPSC enforces the law against "bad" corporations, the more they scam the public into thinking they needed the help all along. They talk about recall statistics but never put them in the context of injury statistics. The proponents never compare lead injury statistics to other injury statistics like swimming pools.
[Is a child injured by lead "worse" that a child killed in a pool? It better be - because we are spending billions to prophylactically eliminate the possibility of purported lead injuries while leaving swimming pools open to continue a continuing skein of killings of more than one child each day. That's okay according to our Democrat-run Congress. Tell that to the family of drowning victim - they can take comfort in knowing that their child didn't have lead poisoning thanks to the relentless and remorseless enforcement of the CPSIA . . . .]
So as the regulators abuse and confuse the definition of hazard, they create an atmosphere of dependence. Oh thank you Mother Government for saving me! What would I do without you?!
3. Mr. Oberle reminds us that "Lack of incidents may not mean a product is safe." And just because you're paranoid doesn't mean they AREN'T out to get you.
Mr. Oberle does not take an offensive stance on this topic, btw. He is right, you can sometimes catch something dangerous before it creates harm. Presumably a quicker recognition of the hazard in Magnetix might have prevented injuries. Responsible companies need to always keep a lookout for insights that reveal latent hazards.
On the other hand, injury statistics are a useful tool. If, as is the case for lead, the assertion is that the hazard is widespread and present over a lengthy period of time, injury statistics become QUITE relevant. So, if lead was such a terrible problem in children's products (putting lead-in-paint aside, long ago banned), injury statistics over many years would reveal a latent problem. Think of the breadth of the definition of "Children's Products" and think of the years of recall data available for study. We are looking at TRILLIONS of interactions with children every year in the United States alone. Where are all the lead victims? We cannot say that we don't know the scale of this problem. We have apparently been running an "experiment" on the U.S. public for decades in the period the zealots label as "lax regulations" or "lax enforcement". If lead-in-substrate were so dangerous, wouldn't you expect to see SOME evidence of it?
If we must imagine the scale of the danger, can we spend imaginary dollars to deal with it?
4. The compliance hawks want to frame this as a financial question - how much is your safety worth? I think that's the wrong question - I think the question is "how long do you want to have a job?"
I have already reported that our compliance group is currently up to six people from a historical one or two, and of course, our products are no safer today than in the past. They were always safe and still are, but it costs us a lot more to operate. That's not good for you or for me.
So how do we pay for all this new bureaucracy? We have not raised prices, that's impossible these days. We are lucky to have customers and cannot spit in their faces with a price increase. Think of your business - it won't fly.
We also need to hit profitability targets because we need to remain financable. We do not get money from "money fairies" - we have to deal with a bank, just like you. Our bank prefers to see that we make money. I know that doesn't seem very civic-minded but I can't fault them for their POV. In any event, I think it's elementary that a business needs to make a profit to have the model sustain itself. Therefore, we cannot commit ourselves to ever-eroding profitability. When our costs rise, we cut elsewhere . . . just like you do.
Needless to say, we have skinnied up a lot since 2007. We have a much-reduced headcount and operate far more efficiently. This is how everyone behaved during the financial crisis and the jobs have not returned, in part because the economy remains sluggish. With our rising overhead relating to pointless regulations, what can we do? We must recover the money from activities that are focused on raising revenues. In effect, we are discontinuing activities that create growth to fund activities that are pure costs.
What's the math behind this? Consider how we recover a dollar of bureaucratic cost from productive activities. If you are already operating efficiently and cannot wring out big productivity gains (as may be the case post-financial crisis cost reductions), then how do you pay for an additional dollar of overhead cost? When you eliminate a "productive" dollar of cost to pay for an unproductive dollar of cost (e.g., you trade a dollar of marketing promotion for a dollar of test costs), it's not an even trade. No, because your dollar of productive cost creates gross margin whereas your overhead produces no profit whatsoever. Your productive dollar of cost produces gross profit which defrays your operating costs and produces marginal net profit on top of that. Wiping out the dollar of productive cost also wipes out the contribution to operating costs, so effectively, only the associated marginal net profit can defray the unproductive cost. Since profit percentages are generally low for most of us, the ratio of productive cost dollars needed to be sacrificed to cover unproductive costs is probably on the order of 2:1 or 3:1. Hire another QC person and fire the equivalent of two people elsewhere. In our case, we do it by attrition. We just shrink away.
As if this weren't bad enough, it's also a recipe for disaster or business death in a worst case. The continued erosion of productive spending to finance unproductive spending has a dramatic impact on growth. Revenue flattens out or stays in a downward trend. It's no surprise - you are starving your company of investment dollars as you spend at constant levels. You have simply shifted your spending from productive uses favoring growth to unproductive uses that will not create growth. Presumably, those of you with children have discussed the merits of eating fruits and vegetables versus eating potato chips. It's no different for a business and how it consumes dollars. We will never grow up to be big and strong if Mother Government restricts our financial diet this way.
Sean's right. I don't envy you . . . or me. This makes me very pessimistic about the future.
I hope you are mad as hell and won't take it anymore. In 23 days, you will get to vote. DO IT!
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