CPSIA – Obama Doesn’t Get It . . . .

In response to the release of yet more terrible jobless claims numbers this AM, President Obama renewed his call to lower taxes on small business and to ease the small business credit crunch. The legislation, which promises to lower certain taxes on small business and to increase federal funding of loans to small businesses through various means, is “stuck” in Congress. Mr. Obama blamed the Republicans for “blocking” the bill: “‘There will be plenty of time between now and November to play politics,’ Obama said. ‘Let’s put aside the partisanship for a while and work together.’”

I think this is rich, personally. We run a small business and I know what it feels like to be a small business in the Obama-cized children’s product market. We are facing skyrocketing costs nicely matched with soft revenues and mounting taxes (funded by the company, too). Cost increases include $300K in new medical plan expenses to accommodate the terms of the Obamacare initiative, plus astronomical all-in costs for increased safety testing under the new CPSIA rules and related manias. The increased testing has yet to reveal any useful information of identify any health threat that constitutes a human safety risk – so all that money is wasted.

These costs have a common link – they are both a result of increasing regulation. I know, I know, Mr. Obama has lectured us that we really need all these new regulations. Well, I don’t agree, but in any event, we see these regulations as major impediments in our business. These high costs affect our cash flow and our business outlook – to the bad. Do the Democrats think we maintain our sunny disposition when we face a shaky market lacking confidence (soft revenues), higher costs (a lot higher) and mounting cash needs from higher taxes and other federal regulatory expenses? This is rather a recipe for managers who want to hide until the storm passes. Who will spend money on new investment now? While we are not cutting our product development efforts, we haven’t bought new equipment, fixtures or additional office/warehouse space in several years now. And we have no plans to do so. Welcome to the Dems’ economy. No wonder new jobless claims are over 500,000 in the last month.

In the case of the CPSIA, the Dems are only too happy to whack us with heavy regulations, all justified by imaginary benefits. The imaginary benefits of the new CPSIA regulations are as invisible as the imaginary problems they are designed to solve. The absence of data on effectiveness is matched by the absence of data suggesting that there was a problem in the first place – the “know nothing’s” jacked up your costs and destabilized your business to no purpose. Now Mr. Obama wants to fix it all with another handout. Throwing money at the problem is new style. And after that handout is parcelled out, the Dems will proceed to raise taxes on higher income individuals (read, small business owners, particularly S Corp owners) to attempt to staunch the hemorrhaging Federal deficit, and then express “shock” at the sluggish economy. No doubt the next step will have to be more handouts and perhaps Cap-and-Trade to raise more costs. What a great cycle. . . .

Is there another way? Well, as for small businesses in the children’s product market, I would note that the voluminous new CSPIA rules (two feet high and growing) impose massive costs on industry (to comply) AND on government (to enforce). I think of the stupid health official bent on enforcing his food handler’s license rule against the little girl in Portland operating a lemonade stand – many of the new CPSIA rules are pointless from a safety standpoint and cost big money to administer as well as to comply with. If the Dems seriously want to stimulate the economy and add jobs, here’s an efficient way to do it for NO out-of-pocket cost – DROP your boundless regulations and go back to something more modest and manageable. This also means that the Obamite idea that life is better with lots more government needs to be shelved. I submit the recent rules on testing frequency and “reasonable” testing programs as evidence that inviting bureaucrats to become involved in operating businesses brings nothing but trouble, inefficiency and devastation. There must be a better way.

Hey, I figured out some time ago that I am talking to myself here. The CPSC certainly doesn’t care or understand what I am talking about (or else they might have done something about it perhaps 300 blogposts ago). The Democrats in Congress likewise are deaf and disinterested. I cannot name a single Democrat, NOT ONE SINGLE DEMOCRAT, who will stand up in front of their peers and demand significant amendment or revocation of the CPSIA. The Dems are in lockstep agreement – no light shines in if your head is in the sand, after all.

You can’t work with people like this.

I urge you (URGE YOU) to select the CPSIA perpetrator of your choosing and WORK to knock them out of Congress in this election cycle. Remember – they are trying to put YOU out of business. You need to return the favor.

Return the favor . . . this is my theme song until polls close on November 2. Then the party begins.

Read more here:
CPSIA – Obama Doesn’t Get It . . . .

CPSIA – USA Today Highlights Damage Inflicted by CSPIA

Lead testing can be costly for mom and pop toy shops

Read more here:
CPSIA – USA Today Highlights Damage Inflicted by CSPIA

CPSIA – CPSIA Casualty of the Week for April 9

The Alliance for Children’s Product Safety’s “CPSIA Casualty of the Week” highlights how the Consumer Product Safety Improvement Act (CPSIA) is disrupting the U.S. marketplace in order to draw attention to the problems faced by small businesses, public institutions, consumers and others trying to comply with senseless and often contradictory provisions of the law. These provisions do nothing to improve product safety, but are driving small businesses out of the market.

Congress and the CPSC need to address the problems with CPSIA implementation to help small businesses by restoring “common sense” to our nation’s product safety laws.

CPSIA Casualty of the Week for April 9, 2010

CPSIA EXPELS EDUCATIONAL PRODUCTS FROM SCHOOL

The approximately 1,500 businesses that comprise the National School Supply and Equipment Association (NSSEA) are dedicated to providing educational supplies, equipment and instructional materials to schools, parents, and teachers. This small industry serves a vitally important market – American schools – providing specialized products that form the backbone of the American educational system. Without the support of this small business-dominated industry, the needs of many American children would be left unmet, including children with disabilities and special learning needs.

The Consumer Product Safety Improvement Act (CPSIA) has had a negative effect on nearly every NSSEA member company, says a recent NSSEA survey of manufacturers/suppliers and dealers.

According to the findings, 64% of surveyed NSSEA suppliers, and almost half of the dealers (46%), have been negatively affected by CPSIA regulations. About 47% of dealers surveyed have removed items from inventory, and 40% of manufacturers have either removed items or discontinued production. Almost 80% have incurred additional testing costs. Unfortunately, all this expense and disruption has served no purpose – the CPSIA has imposed economic turmoil on an industry that has a great safety record. Recalled educational products have been responsible for a total of three reported injuries in the last ten years, one from an overheating battery compartment and two relating to a defective hinge on a changing table.

A NSSEA manufacturer wrote, “We have been forced to discontinue safe products because the testing costs have not justified keeping them in the line. This has had a very negative impact on our bottom line by destroying very good and safe product. Teachers who have been using these products for decades will not have access to them anymore. Going forward, we will not be able to develop niche products that are specific to education because the testing costs will not justify anything with low sales.”

“From delayed orders to confusion regarding the requirements, members have been left with eroding margin, increased labeling and testing expenses, and a decrease of education products available to the marketplace,” wrote NSSEA Vice President Adrienne Dayton in a recent association newsletter.

Read more here:
CPSIA – CPSIA Casualty of the Week for April 9

CPSIA – More New Standards to Help Put The Fork Into Small Business

Perhaps you are aware that the Retail Industry Leaders Association (RILA) and British Retail Consortium (BRC) are working on new “Global Standards for Consumer Goods“. RILA presented this new construct to the CPSC on October 5 and were warmly greeted for their efforts. According to the Product Safety Letter: “Tenenbaum termed the effort ‘encouraging’ and urged the group to include details in upcoming comments on CPSIA-related reasonable testing programs. She said it is good that the release of the RILA program and the pending comment period (slated to open in November) are likely to coincide. ‘The timing could not be better,’ she told the visitors. She also noted the power of retailers to push standards: ‘The way that you all could fan out in China would really facilitate the process exponentially.’ Adler said, ‘What I heard is terrific. You’re all ferocious competitors and will remain so. But you’re not going to compete on safety.’ Also pointing to the power of retailers to impose standards, he called regulators and retailer allies.

A quick glance at these standards makes clear that they are a death sentence to small businesses. The practical impact of the rules will be to bifurcate the market for importers and factories – suppliers to mass market and suppliers to the rest. You won’t be able to be in the mass market camp without complying with these standards. There won’t be any halfway point – it will be like a pregnancy test, you comply or you don’t (pregnant or not pregnant). Of course, this also means that you must incur a HUGE cost to sell even one product into the mass market. This barrier to entry will make the mass market off-limits to small fry. Goodbye American Dream?

I find it interesting that the CPSC jumped at the chance to support these standards. Where did the standards come from? The mass market, of course. RILA is a mass market enterprise, designed to represent the interests of a few large (LARGE) retailers. Ditto for the BRC. Notably, when the CPSIA was in gestation in 2007/8, the folks behind the law reached out to the likes of Wal-Mart to ask about the feasibility of their brilliant safety innovations. By several reports (to me directly), Wal-Mart and their ilk expressed little concern about their ability to comply. Case closed. Ahem, what about the rest of us? Congress overlooked that little detail, figuring that what Wal-Mart can do, the rest of us can do, too.

Have we learned NOTHING in the last 18 months? Please don’t make me answer that one.

A quick glance at the standards reveals that they are really only suitable for mega-businesses, particularly those that have committed to ISO 9001 and the like. This group does NOT include EVERYONE. The sections on Risk Management and Management (check out 3.8 Traceability – yeah, FULL traceability is required) are particularly out of reach for small businesses. Some of the new standards have already been addressed by initiatives in recent years to address “Code of Conduct” issues, like ICTI-CARE, and will probably be okay (within limits). But the RILA/BRC standards go much, much further. The cost implications of these standards for small business are breathtaking.

If a “damn the consequences, don’t bother me with the details” rush to implement these new standards takes hold, there will be little reason left to try to be a small business in America. After all, standards like the RILA/BRC global standards are a classic glass ceiling to growth. I hope somebody takes note of the impact of these awful standards on small business, the largest creator of jobs in America. Small business needs an advocate, and these days, it’s hard to identify anyone in Congress that gives a darn. If no one will rise to the occasion, I guess we can always open up a sandwich shop. That’s about the only option that will be left for small business. Making products, besides sandwiches, has become a very unrewarding pastime.

Read more here:
CPSIA – More New Standards to Help Put The Fork Into Small Business