We’re Here from the Government to Hurt You (the Toymakers)

by Doug Bandow on January 30, 2009

in Economy, Politics as Usual, Regulation

That old line about “we’re here from the government to help you” always garners a laugh.  But small toymakers are crying.  Investigative columnist Timothy Carney looks at how the big toymakers are using new regulations to their benefit:

Thousands of self-employed businessmen, artists, and boutique owners who make or deal in hand-crafted children’s toys, clothes, or furniture could be out of work next month. A 2008 federal law, with the salutary-sounding name “Consumer Products Safety Improvement Act,” could drive these craftsmen out of business.

Big toymakers, who helped write the bill, are ready for the regulations that will go into effect Feb. 10, while smaller toymakers look likely to suffer. It’s another example of how Washington, when it regulates an industry, often helps the biggest businesses in that industry while crushing the smaller guys.

This toy story begins in the summer of 2007 when toy-making goliath Mattel was thrice forced to recall products made in China after discovering dangerous levels of lead. That fall, as Congress took up the bill reauthorizing the Consumer Products Safety Commission, consumer groups pushed for stricter safety standards on toys and other children’s products.

In September 2007, Sen. Mark Pryor, D-Ark., introduced a bill in response to the lead-in-toys scare. The bill became law in August 2008, making it illegal to sell children’s products—toys, furniture, clothes, et cetera—that have not undergone third-party testing for hazardous materials.

The bill also declared that any children’s product was a “banned hazardous substance” if any portion of it had a lead content greater than 600 parts per million. Also all manufacturers of children’s products—big or small—are required by the law to create registries of every product they sell and put unique tracking numbers or marks on each product.

This third-party testing portion of the bill goes into effect Feb. 10, which has small toymakers up in arms. The Handmade Toy Alliance is one of many groups mobilizing to keep the CPSC from destroying artisan toymaking.

Large manufacturers who mass produce toys or children’s furniture will face some added costs from the bill, but these are costs they can bear—especially because the costs will be industry wide thus passed onto consumers.

Indeed, many of the bigger manufacturers have already implemented testing procedures to comply with the federal requirements. Their smaller competitors, however, will suffer under the burden.

Ah, yes.  The government is here to help us–well, at least some of us, if we have big lobbying operations!

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