Is February 10th National Bankruptcy Day?

by on December 12, 2008 at 6:16 am in Economics | Permalink

An ill-timed increase in the regulatory burden is on the way.  Kathleen Fasanella writes:

In the Wall Street Journal, Rick Woldenberg was quoted as describing February 10, 2009 as National Bankruptcy Day because that’s the day when many of us will go out of business due to the implementation of the CPSIA Regulations… Come
February 10th, a lot of people will be hit hard by reality when their
products are returned or their financing is declined.

To recap, this law was passed (424 votes to 1) to protect children from unsafe toys after last year’s widely publicized recalls (by the way, recalls have actually decreased by 46%). What few consumers realize is this legislation affects more than toys.
What few clothing manufacturers realize is this also affects them. Of
the ones who do know, most of them think it only applies to children’s
clothes. Other than apparel the law includes diapers, blankets
(housewares), books, videos, computer and electronic products,
strollers, cribs, car seats, and anything humans come in contact with
in their environment. Our objections are not higher standards for
product safety or even the costs involved per se. The problem is Congress wrote the law and forced the CPSC to implement it before the regulations were written. These regulations are not written by people who are familiar with manufacturing and thus, impose unnecessary burdens.

If I understand this correctly, all sorts of small manufacturers have to vouch that their products do not contain much lead, yet such a claim is not easy to know or verify (does your product have paint?).  You can follow the story at Kathleen’s blog.  Here is video testimony.

As Eric H. points out to me: "It is "I, Pencil" meets "I, illegal paperclip" (yeah, really)."

Jeju December 12, 2008 at 6:58 am

Why not adopt REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) as in the European Union? There was seven years of haggling involved in developing the framework. It seems to be sensible. The U.S. could just jump the waggon. If they do, we would have an effective worldwide standardization. Sounds efficient to me.

For more info on REACH:
http://en.wikipedia.org/wiki/Registration,_Evaluation,_Authorisation_and_Restriction_of_Chemicals

EorrFU December 12, 2008 at 9:37 am

Ummm, the vast majority of electronic products for all ages use lead base solder. If it has a printed circuit board (PCB) it will have lead over the threshold. Is their an exception for internal pieces of electronics?

8 December 12, 2008 at 12:30 pm

Hmmm, I can definitely see some judge awarding seven figures to some moron who says they didn’t know that their kid could get lead poisoning from eating a circuit board.

anon December 12, 2008 at 1:28 pm

What is this, testing of sources doesn’t count? Did congress suddenly choose to believe in spontaneous generation?!

Eric H December 12, 2008 at 6:39 pm

Just to clarify, the thing that I thought was “I, pencil” meets “I, illegal paperclip” was Rick Woldenberg’s presentation, start with #2 (of three parts). Do you know where school science kits come came from?

Anonymous December 16, 2008 at 1:31 am

At least one German toy manufacturer will no longer sell toys in the United States as a direct result of this. Despite complying with strict EU regulations, they claim the cost of CPSIA-mandated testing would force them to raise prices by 50%. [link via Instapundit]

Jeff Stier January 28, 2009 at 2:33 pm

Re: testing- as per my op-ed:

In the name of safety, the law imposes absurd standards and insane testing requirements. These aren’t based on science, but on political hysteria – and they’re a major burden on business. In this recession, they could close down countless companies whose products are perfectly safe.

One example: The law not only requires testing of components of children’s clothing for tiny levels of lead, but also separate testing of each different style of clothes, even if made from the same materials.

What’s worse, the Consumer Product Safety Commission interprets the law to apply to kid’s clothing retroactively. So products already en route to stores – even if they contain no lead – will be illegal to sell after Feb. 10 if they haven’t been tested.

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