Small toymakers pay for big toymakers' sins

I'm glad to see that this issue is finally getting mainstream attention, but some of us were actually trying to raise the alarm back when this bill was being debated, only to get shouted down as business-loving libertarians who hated children. Nobody would listen. And all the consumer groups were fully on board. (I finally cancelled my subscription to Consumer Reports over the Consumer Union's unequivocal and near-rabid support of the legislation.)

Rod, you write, "You can't really blame the government for trying to do something to protect the public from the dangers of lead paint-coated toys from China." And on one level, I suppose you're correct. But an another, this hints at the magnitude of the problems we face. The attitude back in the spring was that "Something must be done." And the reasoning was "This is something, so this must be done." And since this "something" was being for the children, there was no standing in its way.

Depending on the day, I'm a crunchy-con-leaning libertarian or libertarian-leaning crunchy con, and this bill illustrate why, despite my crunchy con leanings, I'm very skeptical of calls for government action to bring about crunchy con ideals. The way our political system is currently set up, legislation like this will always favor the large producer and the incumbent corporations. It is inevitable. There is little - or no - chance that when "something" needs to be done that it will be done rationally and in such a way as to target the companies (or government agencies) that are most responsible for creating the crisis in the first place.

You see, Mattel may have imported lead-bearing products from China, but Mattel has the clout to fight for a provision in the bill to allow large-cap toy companies to do their own in-house safety testing (I'm not making this up!). In any event, Mattel has the economies of scale to pay for this testing, when their smaller competitors do not, and they can save even more money doing it in-house. It's a win-win from Mattel's perspective: They cause the crisis, which allows them to jump on the bandwagon for legislation that will permit them to continue to import freely from China while putting the screws on artisan toy makers in this country, further pushing parents to the crap Mattel wants them to buy.

And this is another example of why journalism sucks. The consequences of this crisis were entirely predictable to anyone who's even remotely familiar with public choice theory, and the consequences of this legislation were visible to anyone who has even a basic understanding of economies of scale and the costs of running a small business. Unfortunately, the clever kids at CJS are too busy composing raps about their own superior sense of ethics to actually spend time mastering a body of knowledge that might actually allow them to do something than respond in pavlovian fashion to anecdotes about how this needs to be done for the children. (The best reporting you could get anywhere other than Reason and a few other economically oriented blogs was, "Some say this could raise costs for small producers." Some say? That's as good as you can do? Can't you bother to investigate the claim? Or are you permanently handicapped by the fact that the only thing you learned in J-School was how to sneer at people who actually produce something for a living?)

Mark my words: If that abomination of a food-safety bill passes, it's going to do the exact same thing. I can guarantee you that Kraft and Nestle and Philip Morris, and ADM really don't care - and deep down probably want the thing to pass. They can handle the costs, even though it's largely their demand for an industrialized agriculture that's creating the problems the bill is supposed to respond to. But you can kiss your neighborhood farmer's market goodbye. Nothing will put the damper on a nascent developing local food culture in this country more quickly than that legislation.

But at least it's for the children. Find what solace you can in that.

"This is a classic example of small producers who do things right having to pay for the sins of the megaproducers who only care about cheapness."

actually this is a classic example of the Congress rushing through with a "solution" to protect the chirren. Where was the press? Shouldn't the press have been investigating the consequences of this legislation or were they part of the pack howling for the legislation?

and if you think this legislation is bad, then consider what may occur under "healthcare reform"

Mr. Dreher, @ 10:34 AM, writes:

"But this is a classic example of small producers who do things right having to pay for the sins of the megaproducers who only care about cheapness. Small farmers and food artisans suffer from the same bureaucratic, one-size-fits-all mentality, in which trying to address serious health problems caused by mass production has a potentially catastrophic effect on small producers who aren't causing problems in the first place."

What makes anyone think that this came about as a result of "the sins of the megaproducers" ? Far more likely this was the deliberate and desired result of lobbying by those same "megaproducers" in an effort to slip smaller potential rivals the commercial equivalent of the shiv.

Your servant,

Lord Karth

Simon @ 1:40 PM, writes:

"No one benefits from costly government regulations more than big business, which gains a competitive advantage over small businesses that can't afford compliance. It also prevents new businesses from entering the marketplace.

So the government imposes draconian regulations to stop the influx of cheap, unsafe Chinese toys. And the economic beneficiaries of those regulations are the importers of cheap, unsafe Chinese toys."

"YOUR State/Corporate Alliance...paying attention to YOU, every day !"

Your servant,

Lord Karth

Cecelia,

There's really nothing conspiracy-theoretical about it: There's a small but growing sentiment in some quarters of the left (see here for example: http://www.prospect.org/csnc/blogs/ezraklein_archive?month=12&year=2005&base_name=against_small_business) that sees small business as a hindrance to their political goals. You see, they're just too independent to be herded along and too expensive - because there are so many of them - to regulate. Small-business owners are only too happy to tell the gummint to go f--- itself, whereas large business owners can be encouraged to comply by both the threat of negative media exposure and the promise that regulation will make it more difficult for new competitors to enter the market or smaller competitors to compete as effectively.

If you were trying to create what Chesterton called the servile state, which would you rather deal with: a million small business owners or the CEOs of 20 large companies and their million wage-slave employees who are only too happy to be told what to do? CEOs of large companies already realize that this presents them an opportunity - look at the shift among the coastal corporate elites toward the Democrats. It was only a matter of time until liberal activists realized that this presented a unique opportunity: Get corporate backing for their favored regulations in exchange for screwing over the little guys. To paraphrase Kos, small-business owners vote overwhelmingly Republican, so f--- them.

What if Mr. Woods just referred to his products as sculpture, decorations, or novelties? It worked for civil unions.

First step would be to scale back the reach of "interstate commerce" just a little. In the 1930s, broadenING the definition of interstate commerce was essential to get a uniform national minimum wage law, the National Labor Relations Act, etc. But, this is a case in point for not leaving that open ended: this consumer protection act should not apply to items produced for sale by the producer, or within the state where they are produced, by a sole proprietorship, or an employer of five or fewer full time employees equivalents. Components not produce on site should indeed be tested, the components, once, to insure safety. If the business gets big enough to start interstate or foreign sales, on a wholesale scale, then it should prepare for regulation. Remember Odwalla? They started in a kitchen in Santa Cruz, but when they got to be regional in scale, they had a little problem with e coli.

Its not hard to create common sense exceptions while still controlling the big bad flood of imports that are so hard for consumers to check up on. But there has to be some will to do so. Karth for once got it right, that regulations drive the little guys out of business, because the big guys can afford to comply. It is also true that some advocates want EVERYTHING to be in compliance with some regulation. As a one-time union shop steward and some time freelance jack of all trades, who generally votes Democratic for lack of a coherent Republican alternative, I would like to see a lot less prescription that everything which is good for us ought to be legally mandatory.

Jon W,

Your idea is a fine one and would go a long way toward ameliorating the biggest problems with this legislation. But the point that I, Karth, and others are trying to make is this: In our system, as it's currently constituted, the outcome you describe is almost by definition impossible. This is why I've grown increasingly skeptical of regulatory solutions to societal problems: It is currently impossible to enact a bill that will address (and do so effectively) the problem it's supposedly intended to address.

This is a basic insight of public choice theory: Politicians respond rationally to incentives, and when you combine huge popular pressure to do "something" to "save the children" with industry (or labor, for that matter; it really doesn't matter - what matters is an influential and not necessarily large group of highly committed members, preferably with large amounts of cash or media exposure) interest in having the rules crafted favorably to them, you're going to get a b---h of a bill.

To get the outcome you describe as ideal, you would need a group of sufficient clout to vocalize its concerns and to stay on top of the issue. With artisan toy makers, who exactly is this group? Not toy consumers - they're too diffuse in interests and have other priorities. The toy makers themselves don't have the clout to fight against the combined forces of Mattel and the Consumer's Union. And even if shoppers and artisan toy makers do manage to pull it off, they've got to stay consistently vigilant because Mattel and the Consumer's Union have an ever-present voice in Washington that is constantly going to be pushing for favorable legislation, even after the riled up toy shoppers and producers get back to what they do best: living their lives and making toys.

So, yes, your solution is a decent one. But it's not one we're likely to see in our current system.

http://www.americanthinker.com/2009/10/not_going_down_without_a_fight.html

"A law passed in 2008, called CPSIA, takes away my right to hand-create many things for children without third-party laboratory testing. I have been in manufacturing all my life and am appalled. They want most home-made goods, although already proven to be safe, to be tested by February 2010. This is a direct response to Mattel and their China-based lead problem, so now Mom and Pop are going to suffer, while Mattel petitioned Congress and received a stay to keep their "in-house" safety testing. No, this cannot be true! Sure, it may be a pretty blue dress, and cloth is exempt (as if cotton ever had lead in it to begin with), but once a crafter adds a zipper, a snap, and elastic, and wants to sell it for a child under 12, it becomes a potentially lead-infested, phthalic item. She who creates the item automatically becomes a manufacturer, so it must be tested by a lab to assure that it meets the new requirements before it can be sold. I wondered if duct tape was exempt under this new law. Never mind."

Thank you for picking up on this important and crippling issue. I am a mom of 3 young boys, a business owner of the Warm Biscuit Bedding Co. Our online company is over 10 years old and specializes in small, handmade fabric based products as well as in handmade toys and gifts.

This broad stroke legislation that essentially is in effect is a prime example of governments attempt to FIX a problem with a sledge hammer vs fine tuning an issue using education.

So instead of offering a better path, they are spending more, regulating more, in a weak attempt to make us more healthy locally and nationally. And in the long term everyone, BUT those in the government, know that it won't work.

And the saddest piece of this devastating puzzle is that one legislation passes...it is impossible to be reversed. Welcome to the new face of childhood, folks. Not pretty.

This always happens with the good people. They are supposed to pay, loose and feel for something they haven't done. All the sinners enjoy for the sins they do. Because of them good people suffers.But God always keeps the record of everyone who have done good and bad deeds.He always pay the what they deserve.

r4i kort