CPSIA – TIA’s Toy Safety Certification Program Quietly Dies

TIA Members, please sit down before reading on.

Over the past three years, the Toy Industry Association famously invested millions of dollars in members’ dues in something called the “Toy Safety Certification Program” (TSCP). When I say “millions”, I mean it. On October 14, 2009, TIA outside counsel Rick Locker referred to “$2 million of technology” available to the industry via the TSCP website. He was referring to the cost of the program to date, roughly. The program began in August 2007 – that’s about $1 million per year.

The TSCP recently died a natural death, mercifully. See Carter Keithley’s September 7th release on this topic. I figure the program cost NO LESS THAN $3 million of TIA members’ money, perhaps more, with NO return on investment. A TOTAL loss. Ouch. Don’t expect any heads to roll.

The TSCP was a terrible idea from the get-go. For one thing, the TSCP was a business and the TIA should have NEVER tried to go into business in competition with its members, if only for the reason that real businesses beat dilettantes every time. I believe the business plan for the TSCP was fantastic, if it existed at all in any formal sense. No rational business person would have EVER made such a reckless investment but then again, it wasn’t their money. . . so the bet apparently seemed “reasonable” to the decision-makers.

The basic concept underlying this massive bet with other people’s money was that if the TSCP cracked down on its own members harshly enough, the CPSC might back off and let the industry police itself. The horrific historical analogs must not have occurred to anyone, nor their tragic ends.

The idea of the TSCP was flawed in several critical respects. First of all, the issues that spawned the CPSC had little to do with the standards – the problem was compliance. A program like the TSCP would hardly snare those who were indifferent to compliance – it was VOLUNTARY. Second, the theory required that the TIA be so harsh that the CPSC would let the TIA take over. Of course, this made the TSCP a rather unappetizing vehicle for most of us. And it was VOLUNTARY. We never considered participating.

Worst of all, the TSCP grossly favored the mass market companies in the toy industry. This could not have been a shock to anyone as the authors of the program were largely mass market toy people. I documented this in my October 18, 2009 blogpost entitled “The TIA Just Wants to HELP You!“. The program was going to kill all but a few of us, but that didn’t stop the TIA.

What ultimately stopped the TIA was a lack of business. Apparently, we weren’t alone in disregarding the multi-million dollar investment of our industry organization. Rumor has it that certain large companies committed to using the program but then backed away when it became clear that no one was joining them in this fun. No one likes a competitive disadvantage, apparently. Who’da thunk it?

And the legacy of the TSCP? The TSCP did such a great job of outlining a horrific testing scheme that the CPSC used critical elements of it as a starting place for their “15 Month Rule”. You can trace the harshness of the TSCP through to the pending rule on testing frequency and “reasonable” testing programs. Yes, the TIA provided this leadership – after all, if it’s good enough for the TIA, how could the industry complain?

How, indeed. Pass the barf bag, please.

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CPSIA – TIA’s Toy Safety Certification Program Quietly Dies

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

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CPSIA – Dear President Obama

CPSIA – My Comment Letter on 100 ppmLead Standard

774 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 36 days left until Election Day.

My comment letter submitted today on the proposed 100 ppm lead standard due to be inflicted on August 14, 2011:

September 27, 2010

Todd A. Stevenson
Director, Office of the Secretary
Room 502
U.S. Consumer Product Safety Commission
4330 East West Highway
Bethesda, Maryland 20814

Agency: Consumer Product Safety Commission (CPSC)

Re: Docket No. CPSC–2010-0080 Children’s Products Containing Lead; Technological Feasibility of 100 ppm for Lead Content

Dear Mr. Stevenson:

I am hereby submitting comments in response to the Solicitation of Comments on Children’s Products Containing Lead; Technological Feasibility of 100 ppm for Lead Content (Docket No. CPSC–2010–0080) published in the Federal Register on July 27, 2010 (the “Proposed Rule”).

You have requested feedback and additional information on several topics relating to the prospect of a new lower 100 ppm lead-in-substrate standard. I will attempt to respond to your specific queries at the end of this letter. I find that the questions you have articulated are basically irrelevant to our company’s situation. Your questions seem to presume that the standard will be implemented. If you take the step of implementing the new standard, you will be inflicting needless and extension damage to our company with absolutely no corresponding benefit to consumers or the general public. This is terrible and irresponsible public policy. The new standard is not based on science but rather phobia and fear of the unknown. Our business will suffer for no purpose. The jobs lost will at your hand.

I want to comment on process. The agency appears to be in a race to complete its CPSIA rulemakings before year end, damn the consequences. According to www.regulations.gov, the CPSC received 73 comment letters on the Proposed Interpretative Rule for “Children’s Product” (CPSC-2010-0029 due June 21, 2010). Nevertheless, as has been widely reported, the agency ignored or glossed over the vast majority of those comments (including all of mine) and pronounced the draft rule to be “final” with virtually no changes. This flagrant disregard of public comments turned the CPSC’s rulemaking process into a sham if not an outright breach of law. I believe the agency intends to pass through rulemaking this year to avoid the embarrassment of further extending the CPSIA testing stay due to expire on February 10, 2011. The incentive to give short shrift to our comments grows daily.

I have lost faith in the sincerity of the agency’s interest in public comments after two years of being completely ignored. To judge by the agency’s disregard of my numerous comment letters, I must add little to your deliberations – in which case I do not understand why you ask me to waste hours on letters like this. After all, if you have no interest in my views, why not let me spend my time on other more productive activities? Unfortunately, I have also learned that any silence by stakeholders will be interpreted as “approval” by the powers-that-be. Thus, we are left with no option but to write these letters. With those thoughts in mind, I hereby submit my comments on the 100 ppm lead standard, fully anticipating that I will be ignored yet again.

I am aware that the agency contends that it is “compelled” to implement this new standard without regard to economics. The extremely rigid legislative language governing the implementation of the 100 ppm standard is thus portrayed as insurmountable. Is the agency truly powerless to resist? I might take that position more seriously if the agency was equally committed to following the law in other aspects of its daily affairs. However, the CPSC exhibits no such self-restraint. CPSC recalls initiated in flagrant disregard for the “substantial product hazard” standard in Section 15 of the CPSA demonstrates that the agency can invent legal flexibility wherever it wants. For instance, the CPSC pressed for a recall of McDonald’s Shrek glasses (signifying that the glasses were a “substantial product hazard”) despite this June 4th acknowledgement by the agency’s Director of Public Affairs in a tweet: “Scott_Wolfson: Note to reporters: the recalled McDonald’s glasses are not toxic.” Safe glasses do not constitute a “substantial product hazard” by any definition – yet the agency proceeded anyhow.

So when does the law actually matter, precisely? If safe drinking glasses may be labeled a “substantial product hazard”, then I guess anything goes. I find it worrisome to be regulated by a federal agency which does not abide by a disciplined interpretation of law but instead caters to prevailing political whims. If the law means nothing, then the agency should not presume to assert its inability to resist this provision. I think that’s just too convenient to be believable.

My comments on the proposed 100 ppm standard are informed by my view that the agency can do as it pleases. I have not restricted myself by the fiction that economics don’t matter.

The problems with the 100 ppm Lead Standard:

a. The new standard will have NO impact on human health. There is simply no evidence of injuries from lead at levels between 100 ppm and 300 ppm in substrate. It is notable that no other federal agency (NIH, CDC, EPA, FDA, etc.) has identified lead-in-substrate as a human health hazard. Without evidence of injuries at these barely measurable lead levels, the new standard cannot be justified economically or otherwise. It is worth noting that if the “cost” of lead-in-substrate levels of 100-300 ppm cannot be measured, the “benefit” of the new standard will be equally elusive. Given the known costs of this initiative, the new standard fails any conceivable cost-benefit analysis.

I published a study of CPSC recall data from 1999-2010 in my blog (www.learningresourcesinc.blogspot.com) in May 2010, revealing that only one death has been documented in association with lead in children’s products in the last 11 years, and only three (unverified) lead injuries in the same period. This is substantially fewer childhood fatalities and serious injuries than swimming pools and spas cause in an average day according to CPSC statistics. Given the trillions of daily interactions between children and Children’s Products in the course of a year, these meager 11-year lead injury totals are the statistical equivalent of no injuries. Thus, it will be impossible to prove statistically that any reduction in injuries flows from the change in standard. Troubling? Fear of lead-in-substrate is nothing more than a Congressionally-endorsed fear of cooties.

b. The new standard will substantially raise our product costs. The new standard means we will need to implement much tighter manufacturing tolerances for materials and for our processes. The many extra man-hours needed to implement and maintain these tighter tolerances will be expensive. It is difficult to estimate the cost, but we project a 10-20% increase in cost for finished goods subject to the new standard. Subcontractors who manufacture our goods will charge us for the risk of waste, plus the additional overhead required by the new standard. That is, they will charge us more if they are still willing to remain a vendor of Children’s Products subject to this standard. We are a small business, so many of our factories may feel our short runs are simply not worth the risk. That’s how I would look at it if I were them. Loss of vendors (manufacturing capacity) is yet another cost we would bear under the new standard.

It is worth noting that based on the results of our last two years of testing (thousands of testing line items), we estimate that less than 2% of our testing line items fall between 100 ppm and 300 ppm in lead as of today. The cost of trolling for those few affected components will be excessive and the waste associated with replacing “defective” materials will be a tax on our entire production and fulfillment processes. Not exactly a stimulus program. . . .

c. Our ability to control lead levels is unknown because test result variances are so wide. We have found that testing multiple samples from the same lot can show variances of up to 67% in lead content. It doesn’t take much variance to produce wild percentage swings at such trace lead levels. As an illustration, I have attached hereto a test report on a SINGLE PIECE OF PLASTIC STRING used to fasten a mesh bag. The string was tested in ten places, resulting in lead levels of 239 -275 ppm. In another case, we found three test results of the same yellow plastic substrate varied from 23 -139 ppm. None of this matters from a safety standpoint but from a regulatory standpoint, it’s a crisis in the making.

These small variances potentially endanger our business. How are we supposed to run our business selling inexpensive children’s products burdened by such an inflexible physical standard? The CPSC needs to recognize that substrates in the real world are not pure, consistent and invariable. The tight tolerances in this new standard will likely have us retesting several items a month at considerable expense and strain. [And G-d knows what standard the CPSC will inflict on us to govern retesting.] Each retest would presumably interfere with our ability to deliver on time and would stress our system and our people. Out-of-pocket costs would be high, perhaps over $100,000 per annum for our product portfolio of 1500 items; labor and other frictional costs would no doubt add to this total substantially.

d. It will be impossible to predict which components will fail. As test results tend to vary significantly for components from the same lot, it is difficult to control or predict problems. We have found violative results for many different materials used in our business – there is no pattern. Defects found in certain components might render the entire finished good worthless, potentially greatly increasing our losses. For example, an inexpensive backpack might be found to have a zipper that violates the new standard upon completion of the production run. This could happen even after extensive pre-manufacturing testing because physical goods tend to vary in composition. Perhaps only a tiny percentage of the zippers violate the new standard by a few ppm, but given the cost to repair and rehab the item and the practical inability to identify violative zippers, the entire lot of backpacks might have to be scrapped. There would be an increased incentive to substitute components across entire product lines, not because of any health or safety concern but simply to avoid regulatory compliance risk. Differences in utility would be a secondary consideration to avoidance of CPSC recalls or scrapping finished goods inventory. This situation would not be stable because consumers would not likely accept lower standards for our products just to mollify the CPSC – other seismic market changes could be anticipated.

e. The legal risks implicit in the new standard are simply intolerable. Let me ask you a question: how would you attempt to manage a major risk to your business caused by less than 2% of your activity? What if you had no idea WHICH 2% it was? What could you do? I think you might reevaluate your business model. Most people don’t roll the dice on their family wealth or their regular income. By imposing a standard for lead-in-substrate that is barely above measurable levels, the agency would be imposing EXACTLY this risk on us.

We believe we would be exposed to a daily risk of assault by consumer groups and other do-gooders bent on our destruction. This combat would be divorced from considerations of safety – it would be all about regulatory compliance. Our business purpose is not to pay fees to CPSC Bar attorneys, write up Section 15 reports or perform recalls. We do not have the profit margins to finance this kind of wasteful activity and do not have the spare capacity to deal with the regulatory “crisis of the day”. The legal risks of such conflict can quickly get out of control – and insurance is simply not a viable option economically. If we must bear these heightened risks, we will have to revisit our business model.

I hope the agency will not dare the children’s product industry to go belly up just to prove this point.

f. Companies, acting in good faith, are generally INCAPABLE of adopting the new standard as a practical matter. Everything can be made of low lead materials. Zippers can be made of platinum, alphabet blocks can be made of wood, cotton fibers or rhodium. Use of recycled materials can be discontinued (the anti-green movement). Durable and inexpensive materials used for years without incident can be discarded in favor of “purer” materials. All of these things are possible. But they are not practical and they are not economic. If we are to indulge the fantasy of the money-oblivious CPSIA, then whatever we can imagine is possible and money doesn’t matter. This is regrettably unrealistic – businesses exist in the real world and money DOES matter. Thus, companies operating in good faith can’t adopt the new standard if their business model is scrambled.

g. Dealers in our goods can be expected to adopt their own standards to create a regulatory “cushion”. Distributors and retailers have been building their own safe harbors to provide CPSIA protection over the last two years. We have many customers with unique and wildly variant compliance requirements despite the crafting of thousands of pages of rules from the CPSC under the CPSIA. Our dealers can always beat the CPSC in a game of “Can you top this?” If the agency implements a 100 ppm standard, we fully expect a new outbreak of “regulatory compliance exuberance” among retailers. What will happen to us under those circumstances? With a CPSC-fed mania, we will incur yet more costs and bear yet more risks. Our markets will shrink.

h. We believe these rules will so demoralize and de-motivate our staff that we will face high turnover rates among our employees who know all of your rules. Our regulatory compliance team is not on “work release” from jail. Their jobs are not intended as a form of societal punishment. If, however, compliance with the CPSC’s bureaucratic rules becomes too tedious or risky, or the stress of managing a string of crises and a blizzard of conflicting rules becomes overwhelming, our trusted associates will seek less stressful employment elsewhere. They don’t HAVE TO do this for a living. What is the CPSC planning to do to help small businesses who find themselves back at square one after a costly investment of thousands of dollars in specialized training? Is the new CPSC Small Business Ombudsman going to wave a magic wand to make our problems go away? I think we all know the answer – too bad for us.

Here are the answers to your questions:

1. Materials that are consistently under 100 ppm in lead content. You have previously provided a list of such materials for the 300 ppm standard. This list included some useful concessions, such as wood and cotton fibers, but also included useless and irritating examples like gold and platinum, gemstones and various byproducts of nuclear decay. In our experience, the common substrate materials used in educational products have varying (trace) levels of lead. As noted above, we have seen significant variances in lead content in a single string, and in substrates taken from the same lot. I have no confidence that any material we use can be proven to ALWAYS contain than 100 ppm lead.

2. Strategies or Devices to comply with the new 100 ppm standard. The only strategy we could employ is pre-manufacturing testing on materials with substantially increased testing frequency. As noted above, natural variances among many materials prevent us from creating any reliable safe harbor and cost increases from such testing activity (and the cost of scrapping otherwise acceptable raw materials) will greatly shrink our product line. As a consequence, we would likely have to sharply reduce our product line or go out of business – all thanks to the CPSC and our Congress!

3. Consequences of use of compliant materials meeting the needs of the product. We have not spent any resources evaluating the market demand for educational products made of platinum. We do not intend to switch over to osmium or ruthenium for their purported lead-free properties (we find toxicity to be a greater concern). We have not spent our time figuring out if gold is a suitable material for pattern blocks or our Reading Rods. There is no answer to this ridiculous question. As I mentioned above, more than 98% of our test line items complies with the new standard. The materials and components that fail do not fit a pattern. Tests are inconsistent, too.

4. For products that meet the 300 ppm standard but not the 100 ppm standard, provide data on compliance. As noted, we find that we are already 98%+ compliant with the new standard. The components that fail do so unpredictably and inconsistently. Even the same material out of the same lot produces varying test results, as do multiple tests of the same piece of string. We cannot run a business based on junk science intolerance of the world that G-d created. The crazy new 100 ppm lead standard is incompatible with variances found in the physical world.

I want to reiterate that the 100 ppm standard is entirely arbitrary and will save no lives and will preserve no IQ points.

5. Can such items be made compliant through use of other materials? Sure, of course they could. They would be unsalable because the products were rendered too expensive either by the engineering cost or the new materials cost. Is creating products that no one will buy an acceptable solution to this dilemma? Whether by economics (too costly to buy) or re-jiggering of business models (discontinued products), children will be purportedly “safer” because they will lose access to needed products. What a wonderful result! Does the CPSC advocate that American schools teach physical science with photos of magnets, paper clips and rocks? Perhaps we should revert to rote-and-repetition math education rather than modern techniques of hands-on learning. No doubt the CPSC would singlehandedly solve our national education crisis. Bring on pointless material substitutions and let the fun begin.

6. Best practices to be used to always comply with the new standard. I recommend dropping most products and only making items that are CERTAIN to be compliant. This in practical terms may be impossible, and as noted above, is completely uneconomic. Another good practice to discard everything that isn’t virgin material. I know that’s not “green” but we have to be really, really safe, right? Another super idea is to substantially increase our testing, but of course, we cannot afford the current level of testing as it is. That seems somehow unrealistic. Other strict controls on manufacturing seem equally out of reach. There are so many variables to manage to achieve the new standards – we must control the factory environment as though it were a hospital ICU. That’s just not possible at current cost levels. Our factories would have to be “restructured”. I bet the Small Business Ombudsman can coach us on this!!!

Please note: we don’t have to reorganize our factories because we don’t have to stay in the children’s product market. If the CPSC expects us to reorganize our entire way of doing business to accommodate a phobic standard not based on any observable public health problem, we may opt out. Is this really the purpose of the CPSC – to micromanage markets, to restructure the economy, to substitute for market forces? I think not. Please check the CPSA to see why your agency exists. I hope a Republican-controlled Congress will do exactly the same thing in a few weeks’ time.

7. The lowest technologically feasible lead level below 300 ppm in our products. We can achieve anything for a cost. There are no “lowest” levels. Why not specify entirely lead-free? We can make everything out of gold and osmium! Lay in a few gemstones and diamonds, and you will have a sparkling new toy that cannot poison anyone with lead. It may have other problems (choking hazards? Sharp points?) but at least no one will die from lead poisoning. Not that anyone did previously . . . .

8. The date by which our products can meet the 100 ppm standard. In my opinion, the date is NEVER, because we have no practical ability to control quality to the level you require. Even at our current 98%+ compliance with the new standard, it would be extraordinarily disruptive to attempt to be 100% compliant. After a few episodes of being shut down by the CPSC or sued by some lunatic consumer group over nothing, we would exit the market. If you intend to deprive us of the meaning and pleasure of our work to make children’s lives better, we’ll leave the well-being and education of our nation’s children to you. That would be a very sad day for us.

Thank you for considering my views on this important subject. This letter took me all day; I hope you won’t completely ignore it as you have all my other letters.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.
380 North Fairway Drive
Vernon Hills, IL 60061

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CPSIA – My Comment Letter on 100 ppmLead Standard

CPSIA – "Children’s Product" Final Rule Vote Delayed . . . Again

770 days have passed since ANY Democrat in Congress did ANYTHING to help us on the CPSIA. There are only 40 days left until Election Day.

The CPSC Commission pushed back the date to consider this “final” interpretative rule on “Children’s Products” for another week, to September 29th. These delays are unexplained. I guess we can’t be trusted to understand their debate. Too fancy for us? Perhaps too explosive. This Dem-dominated Commission DOES NOT WANT to initiate ANY new rulemaking processes. That makes it imperative to keep the final interpretative rule on “Children’s Products” very similar to the draft form – to avoid another comment period. Thus, they want to go with what they have, damn the consequences, to preserve their plan to be done with rulemaking by February 10, 2011, the date when the testing stay is set to expire.

Hope you have taken on board the pending expiration of the testing stay. You need to prepare – sell your business, close it, pile up the money to give to the testing companies or your lawyers, or your other creative plans to deal with it.

All kinds of things spin out of control for the Dems running the shop if they fall further behind in their schedule. The pending loss of their third vote (Moore’s term ends in a few days and he cannot serve beyond the end of the year) means they face stalemate and frustration soon if they aren’t done when he goes. To prevent you the voter from running “their” agency, they need to finish their dirty work NOW.

If things don’t work out as planned, I am sure you are prepared to coach the Dems on how to deal with frustration and stalemate. By now you should be an expert!

The delay in taking this rule to “final” signals a real and profound disagreement within the agency. Somebody’s agenda is going to get dented. So far, they haven’t found a way out of this paper bag.

Based on their track record, whatever they decide, you’ll be the loser. And no one will be the winner, either.

November 2nd can’t come too soon for me.

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CPSIA – "Children’s Product" Final Rule Vote Delayed . . . Again

CPSIA – It’s Election Season – What are You Doing About it?

We have suffered through two years of savage persecution by an unmoved federal government seemingly bent on our destruction. Now this Democratic Congress is coming up for reelection. What are you going to do???

In my case, I am committed to put my money where my mouth is. I am not content with mere grumbling in a blog – I am getting involved in several races and intend to raise money for candidates who will support a sharp revision of the CPSIA and rein in the expansion of our lardy and intrusive federal government. The goal is to take away the House Energy and Commerce Committee gavel from the bullying and anti-business Henry Waxman. He has proven time and again that he and his staff don’t care about our problems nor are they interested in understanding how our problems will become everyone’s problems in due course. In casting our industry overboard for a misguided legislative scheme designed by consumer groups, he picked sides. Now we get to pick sides ourselves.

Last week, we were pleased to host Joel Pollak, Republican candidate in Illinois’ 9th Congressional district (www.pollakforcongress.com) at our company. We had a spirited Q&A session that left everyone impressed with Joel’s intellect and integrity. Joel is a breath of fresh air, especially in the 9th district, lately represented by Jan Schakowsky, Vice Chair of the Subcommittee on Commerce, Trade and Consumer Protection. Ms. Schakowsky is one of the staunchest defenders of the CPSIA and through her actions, has declared herself an enemy of your companies and everything you do. We support Mr. Pollak in his effort to unseat her. More to the point, we are going to do everything in our power to help Mr. Pollak bring his issues to his constituents and put Ms. Schakowsky to the test.

You can do this, too. In your local district or statewide election, your energy and sense of purpose can be a difference-maker. Host a coffee, volunteer some time, ask the candidate to make an appearance. If you are able to raise funds for the campaign, all the better. If you are not happy with the direction of your country or your government, exercise your Constitutional rights and get involved.

We will never take the gavel away from Henry Waxman through worry, frustration or prayer. We are only going to help ourselves by working hard for candidates who understand our issues and will stand up for the free enterprise system. There is a lot at stake here – the future of your company, the jobs you provide your valued associates, the economic well-being of your customers and suppliers and their employees, not to mention the kids, the families and the schools who depend on your products and use them safely every day. All of those people are counting on you to defend them.

Don’t sit still – it’s time to act. The election is only about four months away. Election day could be a real triumph after years of dire straits and frustrations. There’s still time to fix the CPSC and this law – but we all must do our part. A new Congress is a good place to start.

I hope you will use this space with suggestions on how we can all help our chosen candidates. I will publish the best ideas in future blogposts as well as comments to individual blogs.

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CPSIA – It’s Election Season – What are You Doing About it?

CPSIA – Avery-Dennison Volunteers to Collect a CPSIA Tax

When I was the only representative of an operating company to testify before the CPSC Tracking Labels panel on May 12, I warned that the Section 103 requirements would turn Learning Resources into a “tracking labels company”, as opposed to our current role as a developer and marketer of educational materials. I predicted that we would need a full-time label staff, considerable extra expense on labeling and testing and a brand new tracking labels software application

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CPSIA – Avery-Dennison Volunteers to Collect a CPSIA Tax