bookbanner
CHRISTOPHER TAYLOR'S BOOKS

Friday, September 04, 2009

LAWLESS MARKETS

"We only get to be surprised so many times by Big Business turning Big Government to its own advantage."

In spring 2007, Mattel discovered that a huge number of its toys made in China were actually tainted with lead and other dangerous chemicals. At the time the Associated Press reported on the recall:
Mattel announced recalls Tuesday for 9 million more Chinese-made toys, including popular Barbie, Polly Pocket and “Cars” movie items, and warned that more could be ordered off store shelves because of lead paint and tiny magnets that could be swallowed.

The recalls came nearly two weeks after Mattel Inc., the nation’s largest toy-maker, recalled 1.5 million Fisher-Price infant toys worldwide, which were also made in China, because of possible lead-paint hazards for children.
China had already been the source of tainted pet food and other hazards in recent years, likely more due to sloppy oversight, bribes, and greedy manufacturers than any sort of red Chinese plot to poison American children and dogs.

The US Government took swift action with the Democratic Party controlled congress passing the Consumer Product Safety Improvement Act (CPSIA). This act is the one I've posted on before which initially banned all sales of anything produced for children before 2007, even in garage sales, swap meets, and yard sales. It also mandated multi thousand dollar testing for everything produced which children might use regardless if there was any sane or plausible reason lead might in any remotest sense come into contact with it.

Mattel enthusiastically supported the law at the time, testifying before congress that there was a need for such a law, even helping to write the bill. When the CSPIA passed in 2008, leftists praised the bill for protecting the children, such as this New York Times editorial:
For the first time in a generation, Congress has a real chance to dramatically improve the way government protects consumers, particularly children. The Consumer Product Safety Commission reform bill, which now has strong bipartisan support, should move this week through both the House and the Senate. President Bush, whose safety commission has been so tragically inept, should then quickly sign this important bill.
All the key leftist talking points are there: bipartisan support (meaning a few Republicans actually voted for it), hate toward president Bush, "its for the children" and a new restrictive law on business being wonderful and generationally important.

Here's the problem, hidden in the answer to this question: why did Mattel push so hard for this bill? Timothy P. Carney at The Examiner has the answer:
Mattel in 2007 and 2008 lobbied for this provision, and lobbied for the overall bill, prompting the usual cries of "wow, even industry is on board!" Of course, Mattel was already completing its own in-house testing operation as a reaction to the bad publicity and litigation resulting from a handful of recalls of its toys containing unsafe levels of lead.

In light of the company's poor practices, the market and the courts forced Mattel to ramp up testing of its products. Then Mattel lobbied to force the same burdens on every competitor, even the man hand-carving toddler-sized chairs in his backyard workshop.
The truth is, the market actually took care of the problem. Mattel took a big hit in sales and reputation, so they immediately began work on testing their toys. Granted, they should have before, but previously the problem had not arisen. The law was unnecessary: Mattel was already correcting the lack of testing and was intending to test on its own. The market responded by rejecting dangerous toys, Mattel reacted to this by making their toys safer.

Now, Mattel has managed to get an exemption to the independent testing since they already have an in-house system developed before the bill was passed. This process will save them money every year, and meanwhile competitors will be forced to pay for the testing process and thus be less competitive.

The federal government did not have to interfere. Congress did not need to pass a law, nor give the federal government any more power, nor regulate business any more, nor put another heavy burden of cost on these businesses, further damaging their ability to hire and expand and increasing the cost of their products.

Meanwhile, the government now is hunting down swap meets and craigslist sales to deal with people selling perfectly safe toys that happened to be made before the bill passed. Even children's books are included, although recently the law regarding that has been relaxed slightly.

If you want to know more about how the unintended consequences and side effects of the CPSIA is affecting business and private citizens, Overlawyered has been on this for several years now showing every ugly and stupid detail.

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home