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  • The Impact of Regulatory Overkill

    Posted by David Foster on February 10th, 2009 (All posts by )

    This is so depressing that I barely have the heart to write this post.

    Back in December, I posted about the Consumer Product Safety Improvement Act, which was passed with the intent of protecting children from harmful substances in clothing, toys, and other products. This legislation, as I said at that time, was apparently drafted without proper attention to the practical issues involved with compliance, and it appeared likely to devastate the businesses of many companies–especially small ones–and to greatly reduce product diversity.

    In early January, Trying to Grok reported that this legislation will likely have a very constraining influence on homecrafters.

    It now seems that the legislation requires, or at least is being interpreted to require, the removal from trade of children’s books which were printed prior to 1985. According to a comment at one thread on this subject:

    I just came back from my local thrift store with tears in my eyes! I watched as boxes and boxes of children’s books were thrown into the garbage! Today was the deadline and I just can’t believe it! Every book they had on the shelves prior to 1985 was destroyed! I managed to grab a 1967 edition of “The Outsiders” from the top of the box, but so many!

    Please read the links, especially the last one. This comes via Shop Floor.

     

    13 Responses to “The Impact of Regulatory Overkill”

    1. Lexington Green Says:

      “… was apparently drafted without proper attention to the practical issues involved with compliance, and it appeared likely to devastate the businesses of many companies–especially small ones–and to greatly reduce product diversity.”

      Lawyers write these things. They write them for clients. They submit regulations for approval that will serve their client’s interests. I used to work with guys who handled food and drug regulation. They were there to gain competitive advantages for their clients. They were doing nothing illegal or technically unethical. They did everything within the rules.

      I would bet that there is nothing inadvertent here. The purpose of the regulation is probably to destroy competition from smaller businesses. Large businesses are players in the regulation game. They use it increase profits and to reduce competition. Small companies that offer product diversity that can be destroyed by regulation are going to be destroyed by regulation, if their larger competitors can manage to make that happen. Regulation is not like lightning coming from the sky. It is itself an arena of competition, where self-interest is served and money is made.

    2. David Foster Says:

      Lex, as a general matter I agree that regulation is often a competitive battleground and that it usually acts to benefit the large, the incumbent, and the well-connected. In this particular case, though, I doubt that business lobbying pro-regulation played a major role. It’s not obvious that there are any major players who would see a big win in the destruction of a small manufacturer of science kits or in the trashing of old children’s books. The driving force behind this particular legislation was surely a certain belief set–that almost-absolute safety/security is attainable, that it is the highest value, that it can be obtained through top-down regulation, and that it is worth an extreme sacrifice of individual freedom. The legislation was surely also influenced by the increasing disconnect between the political classes and the people who make and sell things.

      As the most recent ShopFloor post on this issue observes, it would have been nice if we had had reporters who would have pointed out the impacts of this legislation back when it was being considered.

    3. Carter Wood Says:

      Lex, David links to Shopfloor.org, the blog of the National Association of Manufacturers, which represents manufacturers of all sizes, including the large businesses you take a shot at. The NAM leads a coalition targeted at the CPSIA’s many excesses; the coalition petitioned the CPSC for a stay in the implementation of the lead standards that are now causing so much problem for the home-based businesses and book dealers.

      So in this case, you’re just not right. David’s response is on the mark. Thx, cw

    4. david foster Says:

      Thanks for stopping by, Carter. I do think regulation usually tends to have a disparate impact on smaller businesses and on industries which are too fragmented to organize effective lobbying…yes, NAM often helps to protect these busineses from regulatory excesses, but large businesses and more concentrated industries can also conduct their own powerful lobbying activities. Had the CPSIA represented a major threat to the business of Target or of GM or of GE, it would almost certainly would have gotten a lot more attention before it was passed.

      Politicians often speak about “protecting good manufacturing jobs”..in this case, as in many others, they are *destroying* good manufacturing jobs, whether intentionally or not. It’s been suggested recently that most Congresspeople need remedial education in finance: they are probably even more in need of remedial education in the make-and-sell part of the economy. How many Congresspeople know what a SKU is, or what a bill of materials might be? Precious few, I would imagine.

    5. sol vason Says:

      My congresswoman suggests:
      Instead of destroying the books, why not simply take scissors and cut out the pictures? The pictures have colors the might have lead in them if a child ate the pictures.

      Children don’t need pictures in their books. They’ve got TV.

    6. Lexington Green Says:

      “…in this case, you’re just not right.”

      It happens.

      I have seen the scenario I described enough times to assume it is the default explanation.

    7. david foster Says:

      Sol…”Children don’t need pictures in their books. They’ve got TV”…indeed, we seem headed for a society in which children will not be encouraged or permitted to do anything that does not involve a video screen.

    8. onparkstreet Says:

      Oh no! I love, love, love used books, old books, new books, any books. Ugh.

      I haven’t printed out the PDF for the new stimulus healthcare stuff, and I plan to do that this weekend, but it’s gonna be depressing and regulatory, isn’t it?

    9. Jim Bennett Says:

      Well, this will have the effect of destroying all the childrens’ books that portray two-parent intact families as normative. I’m sure some parties will find that an added bonus.

    10. Sgt. Mom Says:

      You know, this bit of legislation is so cack-handed, so widely destructive, so badly-thought-out, I am honest-to-g-d really torn. Is it incompetent law-making, or is it malicious, in that it would very conveniently destroy so many small manufacturing enterprises, so many tiny home businesses and designers, and as Jim points out – destroy children’s books which depict two-parent and intact families as the normal thing, not to mention making a clean sweep of children’s books published before 1984? That is just about every classic children’s book that my parents bought for me, and my brothers and sister, every book that I inherited from my mother, and a good chunk of the ones that I bought for my daughter.
      The image of boxes of children’s books being tossed into a furnace, or onto a bonfire is not a good mental image.

    11. Lexington Green Says:

      I have to say, this does not sound like a mistake to me. Too many connected players benefit from it. But, incompetence is usually a better explanation than malice, I know.

    12. Carter Wood Says:

      David, Lex — I don’t dispute the existence of rent-seeking and fence-building and that the interests of large manufacturers do diverge from small manufacturers at times. But in this case, business has been largely united on the issue, and there are really no hidden agenda I can see on the sides of the critics of the law.

      I doubt the advocates really thought through the consequences, dismissing the prospects of harm to small toymakers or thrift stores as just more propaganda from business. They were riding the public reaction to lead-toys-from-China — a real problem — magnified by the media and partisans during an election year. The goal was punishing big business and helping the trial lawyers. Who among the “consumer activists” even thinks of a home-based business?

      On the other hand, Naderites are probably pleased by the loss of dirt bikes for kids.

      Public Citizen, by the way, continues to attack the motives of those who would fix the law.

    13. Valerie Jacobsen Says:

      This is being set up as Business vs. the Dear Little Children when in fact it’s Government vs. the Dear Little Children.

      My husband and I own a business that stands to be heavily damaged by CPSIA, and our business supports our children, who range in age from 18 to 2 years old. As far as I know, the central government is totally oblivious of the facts that businesses are run by parents and grandparents and that businesses employ parents and grandparents.

      It’s true that the loss of pre-1985 books would mean a loss of examples of traditional family relationship, but that is only the beginning of this tragedy. Many older books, particularly books written before 1960, are outstanding resources for bringing up young patriots. Those oldd books are filled with accounts of faith, courage and patriotism like you’ll not see printed today.