CPSIA – If The CPSC Goes Out, Do You Think They’ll Come Back???

With the Federal government about to shut down, one wonders – could we possibly live without the CPSC for a few days? I, for one, would very much like to find out. But what about the CHILDREN, you say. It’s a horrifying thought. After all, with annual expenditures of north of $100 million per hyear and in recent times an obsession with children, the CPSC has managed to uncover one death allegedly tied to lead (swallowing a jewelry bangle) and three injuries tied to lead-in-paint over an 11-year period from 1999 – 2010. That’s what you get for regulatory expense of more than $1 billion – four alleged injuries. Value for the dollar . . . . In the last couple years, though, the federal government in its infinite wisdom has chosen to pass all regulatory cost increases on to YOU. Yes, in a new innovation making rising taxes obsolete, Congress raised YOUR costs by billions each year when it inflicted the CPSIA on America. I have previously presented an analysis based on Congressional testimony that estimates those costs at more than $5.6 billion each year. And I think that’s low. I know you’re probably not a statistician, but what are the odds that lowering the ten-year results from four alleged injuries to zero alleged injuries would be considered statistically significant? I believe the answer is zero or very very low. $5.6 billion a year doesn’t buy much, does it? The scale of the threat was explored in a revealing moment yesterday when the infamous Rachel Weintraub of the Consumer Federation of America was asked by four different members of Congress for names or lists of victims of lead-in-substrate. She couldn’t name any. Dana Best had no chance to answer such questions, because she bolted before questioning. I rather doubt the members were much in the mood to accept an answer of “jillions” anyway. I haven’t had a chance to review the tape yet, but I understand Ms. Weintraub assured Congress in response to these queries that lead is a “silent” harm-doer. Rachel says there;s no way to tell . . . so I guess the implication is that we should assume millions of kids have been harmed. Possibly bazillions. Who knows?! Has anyone considered the possibility that the injured children that only Ms. Weintraub and Dr. Best can see are IMAGINARY? Consider this argument: Rachel and Dana and their ilk have had three years to find a victim, any victim, at any time since Hector had pups. They have failed in this endeavor. Maybe Rachel and Dana didn’t try, maybe they don’t care. After all, they probably thinks they’re right and who are we to challenge either of them. No response required. . . .. But IF Rachel’s right, why don’t the numbers yield up MANY victims? It really shouldn;t be hard to find injured kids – which makes the failure to do so all the more galling. There are lots of children in the regulated age group – more than 50 million. That population is constantly changing because kids “age out”. So if you look over a decade, say, you might be talking about 75+ million. What do these kids do? What all kids do. They play, they breathe, they eat, they ride ATVs, they lick bicycles, they suck on the ink end of pens, they consume fistfuls of rhinestones, the usual. Some of them oddly do extreme things. You are looking at a BIG population. Over a decade, that’s HUNDREDS OF TRILLIONS of product interactions, some of them excessive. And yet there are no known victims. Hmmm. Perhaps this is a pretty low probability event. And not worth $5.6 billion a year in excess costs. So when the CPSC goes out, will anyone notice? That;s a good question. It may be an experiment worth running. And if the world doesn’t come to an end without them, perhaps Congress might find something new to cut when life gets back to normal. There’s no safe level of fear mongering, guys. Your Friend, The “Lead Doser”

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CPSIA – If The CPSC Goes Out, Do You Think They’ll Come Back???

CPSIA – If The CPSC Goes Out, Do You Think They’ll Come Back???

With the Federal government about to shut down, one wonders – could we possibly live without the CPSC for a few days? I, for one, would very much like to find out. But what about the CHILDREN, you say. It’s a horrifying thought. After all, with annual expenditures of north of $100 million per hyear and in recent times an obsession with children, the CPSC has managed to uncover one death allegedly tied to lead (swallowing a jewelry bangle) and three injuries tied to lead-in-paint over an 11-year period from 1999 – 2010. That’s what you get for regulatory expense of more than $1 billion – four alleged injuries. Value for the dollar . . . . In the last couple years, though, the federal government in its infinite wisdom has chosen to pass all regulatory cost increases on to YOU. Yes, in a new innovation making rising taxes obsolete, Congress raised YOUR costs by billions each year when it inflicted the CPSIA on America. I have previously presented an analysis based on Congressional testimony that estimates those costs at more than $5.6 billion each year. And I think that’s low. I know you’re probably not a statistician, but what are the odds that lowering the ten-year results from four alleged injuries to zero alleged injuries would be considered statistically significant? I believe the answer is zero or very very low. $5.6 billion a year doesn’t buy much, does it? The scale of the threat was explored in a revealing moment yesterday when the infamous Rachel Weintraub of the Consumer Federation of America was asked by four different members of Congress for names or lists of victims of lead-in-substrate. She couldn’t name any. Dana Best had no chance to answer such questions, because she bolted before questioning. I rather doubt the members were much in the mood to accept an answer of “jillions” anyway. I haven’t had a chance to review the tape yet, but I understand Ms. Weintraub assured Congress in response to these queries that lead is a “silent” harm-doer. Rachel says there;s no way to tell . . . so I guess the implication is that we should assume millions of kids have been harmed. Possibly bazillions. Who knows?! Has anyone considered the possibility that the injured children that only Ms. Weintraub and Dr. Best can see are IMAGINARY? Consider this argument: Rachel and Dana and their ilk have had three years to find a victim, any victim, at any time since Hector had pups. They have failed in this endeavor. Maybe Rachel and Dana didn’t try, maybe they don’t care. After all, they probably thinks they’re right and who are we to challenge either of them. No response required. . . .. But IF Rachel’s right, why don’t the numbers yield up MANY victims? It really shouldn;t be hard to find injured kids – which makes the failure to do so all the more galling. There are lots of children in the regulated age group – more than 50 million. That population is constantly changing because kids “age out”. So if you look over a decade, say, you might be talking about 75+ million. What do these kids do? What all kids do. They play, they breathe, they eat, they ride ATVs, they lick bicycles, they suck on the ink end of pens, they consume fistfuls of rhinestones, the usual. Some of them oddly do extreme things. You are looking at a BIG population. Over a decade, that’s HUNDREDS OF TRILLIONS of product interactions, some of them excessive. And yet there are no known victims. Hmmm. Perhaps this is a pretty low probability event. And not worth $5.6 billion a year in excess costs. So when the CPSC goes out, will anyone notice? That;s a good question. It may be an experiment worth running. And if the world doesn’t come to an end without them, perhaps Congress might find something new to cut when life gets back to normal. There’s no safe level of fear mongering, guys. Your Friend, The “Lead Doser”

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CPSIA – If The CPSC Goes Out, Do You Think They’ll Come Back???

CPSIA – The Great Set-Up

For those who had better things to do than wade through my comment letters last week, I want to highlight a few points.

The two CPSC rulemakings up for comment on August 3rd were on component testing and on the so-called “15 Month Rule”. Both are very important rules and both have been long discussed. The “15 Month Rule” relates to testing frequency and defines a “reasonable testing program”. The long controversy over these rules relates to their acknowledged potential to be TERMINAL to small businesses. This was the principal reason that Inez Tenenbaum delayed issuing these rules on time in November 2009 as required by law (they can vary from law when it suits their purposes, please note). She called a two-day workshop for December 2009 for the purpose of gathering the feedback of stakeholders. I was asked to appear as a panelist, as were two of my colleagues. These sessions were taped (they were able to hear all the feedback and digest it).

So here’s a few things you should know:

a. Component testing will not be useful except for the largest companies and for those rare situations when everything falls neatly into place. The rules as written are too complex, too demanding (full traceability of all components is REQUIRED, which is delusional and completely unnecessary for such simple, innocuous products) and far too risky. The liability risk associated with these very challenging rules will scare off all but the most foolhardy or ignorant companies.

b. Component testing relies on a fantastic assumption, namely that component tests (if desired) will even be available. Why don’t we assume they will be available for every paint and for every plastic pellet on the planet? Does that solve the problem? I dare say not. There are many convenient examples of likely missing test reports – think of aluminum foil in a science kit, for instance. If you are missing only a few component certificates, any benefit from the rule is lost.

c. The “15 Month Rule” was apparently NOT CHANGED from the draft discussed in December 2009. In other words, despite the agency’s “misgivings” about the rule way back then, and even after two days of comments by more than 200 stakeholders, the agency ended up in the same problematic place – and put the rule out for comment now. Of course, they filled in some holes (see below). In my opinion, this means either that the “feedback” process was a complete sham (the agency gave the appearance of “listening” but did as it pleased anyhow) or else that the agency lacks the temerity to tell Congress that the CPSIA is simply screwed up. Having ducked that punch, the CPSC instead opted to put you and me out of business.

If they were unable or unwilling to listen in the last nine months, I have absolutely no confidence they will listen this time. That bodes badly for me and for you. Consider the following . . . .

d. Using the numbers from the CPSC’s rulemaking, I derived that the agency wants me to spend $10,000 per item per year in testing costs (all-in). We have 1,500 items. Do the math – that’s $15 million per year in testing. This is for a company with ONE RECALL OF 130 PIECES TO ITS NAME IN 26 YEARS. This is also the rule regulating a “risk” that killed ONE CHILD and MAY HAVE INJURED THREE CHILDREN . . . in 11 years. [You can review the math in my comment letter. It's their numbers, not mine.] Do you think this might be a touch excessive? No matter, that’s our problem to resolve.

I can’t get this $15 million number out of my head. Do you realize that this rule could become the law shortly? Hey, HTA members, do you get it yet? All that nuzzling up to the CPSC, all their tears over your plight – this rule shuts your doors. If they push forward on this rule (as I anticipate), we will all face a very daunting choice – do we close our doors, sell our companies, go into another business or, breath deep, knowingly break the law by ignoring this rule? Is this a surprise to anyone? This has to be the world’s stupidest rule – and we are left with the ultimate Hobson’s Choice. Thanks CPSC.

Let’s not forget that Bob Adler spoke in stern tones last February when he said he would not vote to extend the stay on the testing and certification rules again. In the absence of further Commission action, the testing stay lapses on February 11, 2011. This rulemaking is intended to put the agency in position to let the stay expire. The next step would be enforcement of this new rule. Ms. Tenenbaum has publicly announced that 2011 will be all about enforcement – you have been warned, the pogroms are coming.

Do you get it . . . yet? IF the agency cannot wrap up this rulemaking in time, it will need to extend the stay. Arguably, that problem is on its doorstep right now. Even they understand that businesses need time to plan, and without final rules, no planning or preparation can take place. IF they cannot get this done in time (soon), they will have to extend the stay AGAIN. This would be incredibly damning of the agency, as it would be an apparent concession that the awful CPSIA cannot be implemented, perhaps ever. Of course, that only confirms what you and I have known for a long time – the law can’t be fixed by this agency and is fatally flawed. In the absence of dynamic Congressional action, we’re all toast (this is old news).

I urge you to take this battle to the political arena. The CPSC and the Dem-controlled Congress have shown that they just won’t listen. They don’t care about our problems. I say that if they are intent in putting us out of business, all of our productive businesses making contributions to our community and our markets every day, then it’s time to return the favor. We need to put THEM out of business first.

Time’s a-wastin’.

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CPSIA – The Great Set-Up

GUEST BLOG: Etienne Veber – Learning the CPSIA Civics Lesson…the Hard Way

Five years ago, I joined Learning Resources eager to leverage my previous experiences for the benefit of a small business that makes a positive and lasting impact on our society. Little did I know then that this decision (one of the best in my life) would totally change my view of our government.

This past week-end my wife and I visited our older son who is currently working as a summer intern for a Member of Congress. We indulged in a personal tour of the Capitol (a pretty amazing working environment if you ask me…). As we went thru the various halls of our legislative branch, we stumbled upon this quote from Louis Brandeis: “The greatest dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding”. Of course, he was not thinking about our current CPSIA situation when he wrote these words in 1928. However, if the combination of good intentions with a lack of understanding is not a main source of many unintended consequences in our laws, I do not know what is.

Our Constitution was built to protect us against these types of situations by encouraging all sorts of meaningful dialogue between various opposing groups, and by establishing good science as the foundation to make sound and nonpartisan decisions. Then, why after so many months – with the overwhelming market evidence, the many companies “going under”, so many jobs lost, so many voices shouting for reasonable adjustments, so many questions still unanswered- why has the myriad of unintended consequences of the ill-fated CPSIA still not been addressed yet?

Sadly, the answer has become all too clear.

The Democratic leadership in Congress has consistently refused to have any meaningful dialogue with the various groups involved in this issue, unless they agree with their point of view. I do not need to remind the regular readers of this blog how long it took to have a proper hearing on the CPSIA! And, what has happened since then? NOTHING, absolutely nothing. Obviously, this lack of action demonstrates beyond the shadow of a doubt that the Democratic leadership in fact does not intend on making any adjustments to the law. It does not matter that the CPSIA does not make our products safer, but simply more expensive, effectively destroying an entire portion of our economy (the small/medium companies who cannot afford all these senseless compliance activities).

What really matters is that the Democratic leadership and other CPSIA-supporters look like they are protecting our children in front of a camera. After all, who can argue against more safety for children products? So, while we are at it, let’s have lots of recalls to make people feel that the situation is really dire and that the terrible cost of this legislation (hundreds of thousands of lost jobs) is a necessary consequence!

However, the absurdity of some of the recent recalls and their numbers have reached such proportions that even consumers are now simply tuning out. Did you not hear growing up that one should not cry “Wolf!” too many times, or risk finding oneself without support when it is really needed? This fast evolving situation is the direct result of the political decision from leading Democrats (Waxman & Co.) to strip the CPSC from any true independence. The Commission has stopped using sound judgment and making decisions strictly based on sound science. By playing along with a populist political agenda, the CPSC leadership is responsible for creating a situation that is out-of-hand. The separation of power between the legislative and executive branches was created for a reason!

So what does this means for me? As the president of our company, I have had to eliminate jobs, terminate projects, stop investments in our future growth, and reduce the number of new products we develop each year. Why? Simply to pay for all the incremental and constantly increasing costs of complying with the CPSIA. With new revisions constantly being added to the law and some retail customers “pouring oil on fire,” we may not be done cutting our workforce and stopping investing in the future!

Our products help children engage and develop an early passion for math or science. I think we can all agree that these are the kinds of children’s products we need right now.

Over the last 25 years we have built one of the most prolific innovation engines in the education market. So, the real “losers”, thanks to the CPSIA and the Democratic leadership, will be our children and with them the future of our society!

Did I mention that all these incremental costly requirements will result in absolutely ZERO incremental benefits in terms of safety for our children? Surely you have seen the compelling and comprehensive set of data that Rick has documented so diligently over the last 18 months in this blog. Did I also mention that for more than 25 years our safety record has been impeccable? This situation is absolutely maddening.

I have now learned a civic lesson that I will not forget for a very long time. I want these “well intended ” leaders out the door! I owe it to my co-workers, the teachers that we serve, and to the children that need our products. I can accept a misguided law, but I cannot accept continued intolerance and ignorance from our leaders.

Being on the frontline of this battle, as the president of a small business, has opened my eyes and I am better off from it. Our country needs jobs, lots of them right now, and it is the small businesses – that this wrongheaded Congressional leadership is working so hard at destroying – that can provide them.

Do not close your eyes. Speak up against this CPSIA absurdity and those responsible for its awful implementation!

Etienne Veber is President/CEO of Learning Resources, Educational Insights & Northpoint Horizons

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GUEST BLOG: Etienne Veber – Learning the CPSIA Civics Lesson…the Hard Way

CPSIA – Latest Developments in Waxman Amendment

In a meeting between various business representatives and the Waxmanis yesterday, the Dems set the parameters for moving forward on the Waxman Amendment.

The Dems have established three “goals” for this amendment. The current draft reflects this “vision”.

1. “Targeted” fixes to the CPSIA
2. A “bipartisan” bill supported by consumer groups, business and Democrats and Republicans alike.
3. Do NOT open up the CPSIA for reconsideration.

As I have previously noted, the Dems constrain the discussion by limiting what may and may not be discussed and then ask their “bipartisan partners” to make the best of it. This makes bipartisan support quite difficult to achieve because when the Dems present their draft, they indicate that all “compromises” have already been incorporated. This also allows the Dems to portray anyone who disagrees as an obstacle. Bring to mind anything . . . like health care?

In this case, the Waxmanis are saying that the bill basically is where they want it to be, and offer that clarifications can be made in the report language to accompany the bill. [Something new to read, more traps for the unwary.] This strategy will lead inevitably to continuing arguements long into the future about things that used to be simple. This legislative strategy also means that many problems will need to be resolved by litigation – which is a VERY anti-small business approach to legislation. Can you afford to take a case clarifying safety law to the Supreme Court? We are all toast if this how our “community leaders” choose to govern.

Let’s think about the situation we find ourselves in. The first circulated draft, according to Waxman staffers, is basically FINAL but clarifications may be made in the report language behind the legislation. Hmmm. That sounds like “take it or leave it”. Why would they take that approach? I doubt this is anything more than a political calculation. They put TWO terms in the bill that many companies really, really want and need, namely the modification of the phthalates ban and prospective application of the terrible 100 ppm lead standard. The message is clear – the rest of the bill, riddled with serious problems and provisions that gut existing CPSC practice and protections, would have to be tolerated to get that relief. It’s pure Machiavellian politics.

The “take it or leave it” approach is backed up with the implied threat that the bill will be rammed through the House Committee on Energy and Commerce on the back of the Dem majority. There is no commitment to a hearing, and besides, Mr. Waxman has a practice of staging hearings in order to control the message.

How “bipartisan”!

The gutting of Section 6(b) and the rejiggering of voluntary recall disclosures is apparently not a reopening of the CPSIA in the view of the Dems. Why? Because they want to make those changes, spurred on by the Consumer Federation of America (Rachel Weintraub) and other consumer groups. Rumorville has it that senior Dem CPSC leaders are also pushing to completely revise these decades-old protections. Push back by the regulated community is being rebuffed, including requests for definitions of terms like “practicable” – why? Because it’s not “appropriate” to put “numbers” into the law – they might change in the future. The other numbers already in the CPSIA apparently do not undercut this argument, according to the Dems. Business risk that stems from that kind of uncertainty is of no apparent interest to the Waxmanis.

Makes you wonder how much they really want to help, doesn’t it? Is this possibly a sham process to enable them to get a second bite at the apple?

The terrible choice being forced on the business community is to accept some really bad provisions and terrible omissions in order to get two needed changes. The dominance of Waxman in this process has turned the children’s product industry into beggars. What a great way to govern . . . .

Under the imperious rule of Henry Waxman, you will get what he wants you to get. I hope you will remember this feeling for years to come. The treatment of the business community here is par for the course for this generation of Democrats. Remember, we are about to get the $1 trillion dollar health care bill WITHOUT A VOTE. They apparently interpret the 2008 national election results as a coronation and are acting accordingly.

I think your views matter. Express them!

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CPSIA – Latest Developments in Waxman Amendment