USA Today on CPSIA casualties

by Walter Olson on June 21, 2010

The newspaper profiles Randy Hertzler of Lancaster, Pa., whose small family-owned business imports European-made specialty toys and is reeling under the costs of the 2008 enactment. [via CPSC Commissioner Anne Northup]

{ 10 comments }

1 Ron Miller 06.21.10 at 11:05 am

I’m sure it is causing some problems as any regulation does. But can we find somewhere a company making little toys somewhere that is struggling for reasons that have nothing to do with the CPSIA. Or can we bundle every failing business at that doorstep?

2 sasmith 06.21.10 at 11:15 am

i used to make baby and children’s quilts. no more. i make one of a kind quilts by hand.. want to test one? you will destroy it. no very cost efficient. apparently even using tested materials when i’m finished the cpsia thinks i’m dipping them in lead.

3 Doug 06.21.10 at 2:09 pm

Ron, if you have been a regular reader of this blog, you would have read about the onerous costs this regulation cause small business. Does anyone outside of the Beltway believe this stuff needs to be tested for lead after the materials have already been certified as lead free? This regulation is a growing problem we are facing. Do we believe in a heavily regulated society or one that gives less regulation? Are we more safe in heavily regulated society? Does the cost justify the expense in being compliant? Is this law and its spawn, the regulations, really backed up by good peer reviewed science? Just something to think about.

4 Ron Miller 06.21.10 at 3:22 pm

Doug, let’s assume all of this is correct. I’m not taking exception to that here and, honestly, I know 1/100 of what many – most notably here, Walter, knows about the CPSIA. So I’m in no position to argue. All I’m saying is that I think it detracts from the argument when we pretend that every business who blames the CPSIA for all of its problems is really struggling only because of the regulations imposed. You never know what really happened when a business fails but rarely do you hear, “Hey, demand for our product just went down the tubes” or “We stopped focusing on quality and started cutting corners.” Everyone blames everyone. This has been going since we were in caves. I’m fine with that. But I just think there are better arguments elsewhere than these unverified reports from businesses who blame the CPSIA for its woes.

5 D 06.21.10 at 4:49 pm

There are many reasons any particular business fails, but CPSIA is the Mack truck that broke the camel’s back.
Offhandedly, I would expect Hertzler to know what his business expenses are – how much for materials, advertizing, …, testing. When the income greatly exceeded expenses then the CPSIA expense dropped on top… that poor camel.

Call me cynical, but I don’t believe for a minute that “Congress and the CPSC are still struggling to reduce its burden…” They are too busy plowing over other camels. The CPSIA is having exactly the effect they intended. Every Admiral that I have seen who wants to remake a fleet after his own image starts by eliminating variety. Individuality cannot be controlled en masse; it’s too complex. Eliminate the options so the fleet of automatons will respond in lockstep.

6 Doug 06.22.10 at 9:47 am

Well of course there could be other problems small business are struggling with. But, if you make small batches of product, such as toys or clothing, and you have to destroy one of the items for testing, by necessity it will raise the prices of the remaining units so that you could recoup the lose. It doesn’t really take a rocket scientist to see that those people who were doing this to make some money on the side will decide its not worth the time or money to do this. This law and its regulations are a wealth destroyer and in fact take money out of the pockets of the little guy and into the commercial giants. Its takes away choice and individuality.

7 Jack Wilson 06.22.10 at 9:51 am

Remind me one more time how the CPSC has escaped constitutional scrutiny?

8 John 06.22.10 at 11:36 am

@Ron,

Yes, of course businesses face all sorts of headwinds. Lousy economy, rising costs, tougher competition, all sorts of things.

Like the weather, complaining about these problems isn’t going to change change anything. CPSIA is different because it could easily be amended to provide enormous relief to the regulated, fix many of the law’s the unintended consequences and allow the CPSC to focus on real safety issues. Pity that no one is up to the task.

9 Tim Saylor 06.25.10 at 9:27 am

Doug, you made a good point about lost merchandise, but let’s focus on the testing costs themselves. I used to work for a toy yesying laboratory (one of the biggest in the world) and now work for a manufacturer of toys and children’s products. I oversee quality, safety and regulatory compliance and oversee the testing of not only finished products, but batches of components. To test one product with “plasticized materials” and surface coatings, including the mechanical and flammability requirements in the Code of Federal regulations is in excess of $2,000 USD when tested at a US based laboratory. There is some relief if you test that same product in China or Hong Kong, but you have added freight and perhaps extended turn around time. For Ron, this is the burden; mandatory testing. This makes sense for things being imported into the US, but for small crafters and US based businesses…not so much. It comes down to what defines something as safe. Lead bioavailability is something very important to this discussion and has yet to be significantly discussed; see my blog posting on this specific subject. CPSIA in many ways is a joke, but the concept was a good one; the problem however is that many of the requirements were not based on scientific proof! The lead in paint maximums were sufficient for 30+ years, then Mattel’s suppliers screwed up and violated….I am still waiting for someone to explain why that warranted a drastic reduction in the limits…knee jerk reaction; thats why.

10 Tim Saylor 06.25.10 at 4:16 pm

I also wanted to add that the recent 60 minutes piece discussing the “hazards” associated with phthalates. I thought before the airing that as always, the media was going to hammer our industry, but it was actually the opposite. The M.D. from Rochester NY, who issued the research data to Congress, which eventually lead to the California legislation and the inclusion of phthalates limits in CPSIA looked a bit foolish. Lesley Stahl interviewed a European researcher, who performed a similar study of the effects of phthalates on the offspring of pregnant rats and found that the pattern was consistent with the M.D. in Rochester, but stepped it up and performed the same study on monkeys, found absolutely no harmful effects on their offspring. She questioned the Rochester doctor about her proof, but all she could offer was anecdotal information (the old adage “good enough for government work” popped in my head). There have never been concrete findings that show phthalates cause harm to humans; yet, because the EU also passed unsupported legislation and California’s arm was twisted by some city councilwoman, our elected officials decide to follow suit? That is the problem with how legislation like this passes through Congress. If you rely on legislators to issue a bill to a committee and then no official hearings take place to determine if the proposal is appropriate, you end up with CPSIA. This is especially true when those same legislators are members of the same approving committee (chums/ buddies) and don’t know a phthalate from a tree trunk. The great divide between the parties, which has extended to the CPSC is equally concerning. The commission’s responsibility is to protect consumers from unreasonable harm and it has become a party platform campaign over there. The Dem’s (I’m a registered Dem myself) are nuts and think that the commission should follow the legislation exactly as written and when they outnumber the GOP commissioner’s 3 to 2, the toy and children’s products are going to pay a heavy price. I could go on and on, if I already haven’t, but this is something that was simply unjustified and we are left to just deal with it, while Waxman and his cronies pat themselves on the back.

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