CPSIA

In Case You Missed it: Lone Voice of Reason at CPSC

by Angela Logomasini on January 4, 2010

in Environment, Nanny State, Precaution & Risk

In 2008, Congress passed Consumer Product Safety Improvement Act of 2008 (CPSIA), which regulates lead and certain chemicals in toys. Never mind the fact that the trace levels are too low to pose a health risk, this draconian law is putting small businesses out of commission and forcing charities to toss old books, toys, and other items.

Small businesses and others who have been fighting this crazy law since its inception, have been given a hand by one of the CPSC’s commissioners who recently published an excellent piece in the Wall Street Journal on why Congress needs to step up to the plate and fix the mess created by this act. Commissioner Ann Northup also calls colleagues at the CPSC to the plate for making things worse than necessary:

“For the past several months, American businesses have been caught in the middle of a classic standoff between the federal commissioners in the majority, who argue that the statute ties their hands, and members of Congress, who claim they wrote flexibility into the law and blame the commission for any harsh consequences. Although the commission steadfastly refused to reach out to Congress to seek clarifications to the law, Congress has now reached out to us—asking the agency last week for a list of recommendations to amend the statute.

Thankfully the commission responded, in part, by agreeing to extend the stay on testing and certification for lead content. This window gives Congress time to consider such common-sense changes …”

CPSC commissions now can stop passing the buck. Let’s see if more than one commissioner is willing to do the right thing.

Image credit: Steve Webel’s photostream on flickr.

Banning Bake Sales

by Angela Logomasini on October 21, 2009 · 1 comment

in Health and Illness, Precaution & Risk, Regulation

The American Enterprise Institute held a panel discussion yesterday on food safety. They discussed congressional proposals aimed at addressing contaminants in our food, such as pathogens like Salmonella and E. Coli. Panelists actually agreed on a few things … well, actually, they agreed on what they don’t know.

First, no one could answer the question as to whether legislation would significantly reduce risks, nor could anyone determine where the real risks lie. And no one could provide an adequate justification for increased government action because food safety has not declined in recent years—it is more likely improving.

Nonetheless, David W. K. Acheson of Leavitt Partners (a former FDA official) and the Consumer Federation of America’s Carol Tucker Foreman strongly supported increased federal action simply because they “believed” it would work. Walter Olson of the Manhattan Institute and Overlawyered.com noted some serious, potential pitfalls, such as reduced competition, destruction of small businesses, and the expansion of crazy regulations on bake sales and other food-related activities. He used the disaster created by the Consumer Protect Safety Improvement Act (CPSIA) as an example.

Michelle Worosz professor from Auburn University argued that we need more information before regulating. Worosz is correct about holding off. However, we can’t simply wait for better information because we will never have it.

By definition, public officials are too far away from process to make reasonable one-size-fits-all decisions about myriad, varied, ever-changing, and situation-specific problems. As F.A. Hayek pointed out, it is a fatal conceit to believe otherwise. Only the multitude of individuals in a dynamic market process–which holds each accountable–produces desired results. Regulators, on the other hand, simply second-guess all those private decisions. They might have good or bad motivations—but it doesn’t matter. They simply don’t have the information they need, nor can they design a one-sized fits all rule that will address all problems.

Despite claims to the contrary, private parties are also more accountable. They must live with the consequences of their own choices, and businesses in particular must address the impacts they have on others. After all, no one profits from making their customers sick. Businesses are held liable in courts or suffer substantial losses of market share where problems, or the perception of problems, exist. They act more quickly than government, and their solutions are more precise.

In contrast, regulators can pass misguided rules based largely on political tides rather than good information. They often do more harm than good and are expensive, yet few people trace the problems back to government. Then regulators go back to Congress for bigger budgets to fix the problems they created. They don’t lose their jobs or go out of business when they make fatal mistakes. This is, as Olsen points out, pretty much what’s happening with the CPSIA law.

Indeed, the disciplines of the marketplace explain why our food supply is amazingly safe and getting better considering all the opportunities for contamination from farmyard to table. And no government regulator will do any better in correcting problems as they emerge. In fact, this is why we don’t have the government growing and distributing our food. If we did, we probably would all starve!

Photo attribution: Rachel Kramer Bussel’s photostream, on Flickr.

Scientist Who Saved a Billion Lives Dies; Congress Blocks Reform of Law Based on Junk Science

by Hans Bader on September 14, 2009 · 1 comment

in Agriculture, Deregulate to Stimulate, International, Legal, Nanny State, Personal Liberty, Politics as Usual, Precaution & Risk, Sanctimony

Norman Borlaug, the scientist who saved a billion lives by fathering the Green Revolution, died Saturday at the age of 95. His work in developing new crops to feed the world’s hungry in places like India earned him a Nobel Peace Prize, a Presidential Medal of Freedom, and a Congressional Gold Medal, even though his work was seldom mentioned by the press. Ronald Bailey notes that Borlaug “saved more human lives than any other” person in history.

Borlaug was attacked by some on the extreme left, such as a writer in The Nation magazine, because he was a staunch defender of new agricultural technologies and genetic engineering to feed the Earth’s burgeoning population.

Speaking of wars on science: a new toy “safety” law, the CPSIA, that is based on junk science, has wiped out countless small toy companies, while giving a special “exemption” to an “industry giant” that imported tainted Chinese toys, and doing nothing to make children safer.

This perverse new law has resulted in tens of thousands of harmless children’s books being removed from the shelves and thrown in the trash (the illustrations in children’s books sometimes had tiny trace quantities of lead, too small to harm any children, who don’t eat books).  It also resulted in thousands of trunkloads of harmless children’s clothing and toys being trashed, and bankrupted many second-hand clothing stores for poor kids.

In the Wall Street Journal today, legal commentator Walter Olson describes some of the havoc the new law has created. The Obama administration has turned a deaf ear to pleas for reform by critics of the new law, perhaps because a key provision of the CPSIA “was added by then-Sen. Barack Obama.” All but 3 Congressmen voted in favor of this foolish law, but some in Congress now regret their votes to pass it.  Most Republicans, and a tiny handful of Democrats, now want to change the law to make it less burdensome and discriminatory, but to no avail.  Congressional leaders like Henry Waxman (D-Calif.) are refusing to make any changes to this perverse law.

Trojan Horse “Food Safety” Law

by Hans Bader on April 9, 2009 · 1 comment

in Agriculture, Deregulate to Stimulate, Economy, Employment, Legal, Natural Resources, Personal Liberty, Precaution & Risk, Regulation

A misguided bill, the Food Safety Modernization Act of 2009, may shut down farmer’s markets and “drive out of business local farmers and artisanal, small-scale producers of berries, herbs, cheese, and countless other wares, even when there is in fact nothing unsafe in their methods of production,” warns Walter Olson at Overlawyered.

Ignorance about the law’s broad reach (and how it will be construed by the courts) has thwarted opposition to the bill, which will likely pass Congress. For example, a newspaper claims the bill “doesn’t regulate home gardens.” The newspaper probably assumed that was true because the bill, like most federal laws, only purports to reach activities that affect “interstate commerce.” To an uninformed layperson or journalist, that “sounds as if it might not reach local and mom-and-pop operators at all.” (The bill’s sponsor, Rep. Rosa DeLauro, has sought to forestall opposition to her bill by falsely claiming that that “the Constitution’s commerce clause prevents the federal government from regulating commerce that doesn’t cross state lines.”)

But lawyers familiar with our capricious legal system know better. The Supreme Court ruled in Wickard v. Filburn (1942) that even home gardens (in that case, a farmer’s growing wheat for his own consumption) are subject to federal laws that regulate interstate commerce. Economists and scholars have criticized this decision, but it continues to be cited and followed in Supreme Court rulings, such as those applying federal anti-drug laws to consumption of even home-grown medical marijuana. Indeed, many court decisions allow Congress to define as “interstate commerce” even non-commercial conduct that doesn’t cross state lines — something directly at odds with Rep. DeLauro’s claims.

Moreover, DeLauro’s own bill has a sweepingly broad jurisdictional provision that creates a presumption that home gardens do affect interstate commerce. Section 406 of the bill reads as follows: “PRESUMPTION. In any action to enforce the requirements of the food safety law, the connection with interstate commerce required for jurisdiction shall be presumed to exist.”

Lori Robertson of FactCheck.org, who is not a lawyer (she has a B.A. in advertising), claims the bill doesn’t apply to “that tomato plant in your backyard.” As a lawyer, I am skeptical of this claim. (I co-represented the prevailing defendant in the last successful constitutional challenge to federal regulation under the interstate commerce clause, United States v. Morrison (2000) — one of only two cases since the 1930s where the Supreme Court limited, rather than rubberstamped, regulation in the name of “interstate commerce”). And it appears that that the proposed law CAN apply to that tomato plant in your backyard (or Michelle Obama’s garden), since Congress’s power under the Commerce Clause is almost unlimited in the eyes of the courts.

This so-called “food safety” bill may actually make food less safe. Federal regulation often backfires or reduces competition. A classic example is the 2007 child-safety law, the CPSIA, which was based on junk science. It shut down countless thrift stores and entire industries, resulting in children’s books being thrown out and pulled from library shelves by the thousands. It harmed poor people and special-needs kids. It rendered many ordinary bicycles illegal and made motorcycles more dangerous to children.

My wife, who immigrated from France, already finds it difficult or impossible to obtain many of the food items she likes from her native country (like raw-milk cheeses). This law will make it even worse. As Olson notes, “Many informal makers of ethnically or culturally distinctive food items will go off-books or simply fall by the wayside, overwhelmed by the reporting and batch-tracking paperwork. Many foreign producers who ship in less-than-mass quantities will give up on the U.S. market rather than try to comply with challenging standards that differ drastically from those imposed by European markets or their own countries of origin, which in turn will mean that many interesting and safe specialty foods will simply no longer be available for purchase, at least legally.”

Baptist-Bootlegger Alliance on Tobacco

by Hans Bader on April 8, 2009

in Economy, Healthcare, Legal, Personal Liberty, Politics as Usual, Precaution & Risk, Regulation

In today’s Washington Examiner, Tim Carney has an excellent column on how the bill to place tobacco under FDA regulation would reduce competition in the tobacco industry and enrich the biggest company — Philip Morris — at the expense of consumers and competitors alike. Although the bill is supported by leading anti-smoking groups (which indirectly receive money from Big Tobacco through the $246 billion Master Settlement Agreement), the bill’s “most important ally” is “Philip Morris, the largest cigarette maker in the world.” As Carney notes,

“There’s a metaphor popularized by economist Bruce Yandle that is useful in explaining efforts to regulate anything from energy to toy safety. Call it the Tale of the Baptist and the Bootlegger.

“Picture a small-town Southern politician after Prohibition’s repeal. Call him Jones. Jones’ campaign needs both cash and a winning issue. The state’s most prolific bootlegger comes and offers Jones both. ‘I can bankroll your entire campaign. You just need to outlaw alcohol in the county. If you close down the bars and clear the liquor out of the corner stores, the men will all have to come to me for their fix.’

“Jones, with newly heavy pockets, walks down to the Lady’s Temperance Hall and declares, ‘Ladies, I’m running to end the scourge of alcohol in this town, and I’m asking for your support.’ At his campaign kickoff the next week, Jones has the entire Temperance Union and the local preacher onstage endorsing him, and of course, he’s got the pipeline of alcohol cash from the rumrunner who will get even richer when the county goes dry again.

“Philip Morris is the ‘bootlegger’ today — the undisputed giant of the industry. The company controls more than half of the U.S. cigarette market. . .Parent company Altria has hired three new lobbying firms so far this year, bringing its army to 19 different lobbying firms plus a powerful in-house shop. . .

“Philip Morris stands to benefit from this regulation in many ways. First, all regulation adds to overhead, and thus falls more heavily on smaller firms. Second, restrictions on advertising help Philip Morris’ Marlboro, a brand everyone already knows, by keeping lesser-known brands in the shadows. (Existing restrictions on advertising have already helped Philip Morris in this regard, with an added benefit spelled out in Altria’s annual report: ‘Marketing and selling expenses were lower, reflecting regulatory restrictions on advertising and promotion activities. … ‘) Finally, if the bill passes and the FDA gets added control over the industry, Philip Morris, more than any of its competitors, will have access to those bureaucrats and agency heads making the decisions.”

We wrote earlier about how FDA regulation might actually undermine public health by making it harder to market to smokers other tobacco products, like snus, that are not as lethal as cigarettes.

Federal regulation often backfires. A classic example is the 2007 child-safety law, the CPSIA, which was based on junk science. It shut down countless thrift stores and entire industries, resulting in children’s books being thrown out and pulled from library shelves by the thousands. It harmed poor people and special-needs kids. It rendered many ordinary bicycles illegal and made motorcycles more dangerous to children.

But it is now being used by Congress as a blueprint for a misguided law, the Food Safety Modernization Act of 2009, that would put small food producers and farmers’ markets out of business in the name of food safety.

Speaking of Baptists and bootleggers, a large coalition of religious leaders who know nothing about how regulation works in the real world have endorsed FDA tobacco regulation. Most of them are from liberal religious denominations, like the Unitarian Universalists and Religious Action Center of Reform Judaism, but the signatories also include Dr. Richard Land of the Southern Baptist Convention.

I wrote earlier about the Religious Left, including its claims that Sarah Palin is not really a woman (because she’s a Republican), that Ronald Reagan was “Pontius Pilate,” and its rants about the “Taliban-like American male,” who should “shut up for a milennium.” The Religious Left also believes that God hates secret ballots in the workplace, and falsely accused former Interior Secretary James Watt of publicly stating that all trees should be cut down in light of the imminent return of Jesus Christ.

An Explosion of Litigation

by Hans Bader on March 13, 2009 · 1 comment

in Bailout Watch, Economy, Employment, Healthcare, Labor, Legal, Politics as Usual, Precaution & Risk, Privacy, Regulation, Stimulus to Nowhere

Already burdened by $8 trillion in new federal spending commitments and the likelihood of higher taxes to pay for bailouts, pork, and welfare, the economy now faces an additional threat: an explosion of litigation.

Even liberal Washington Post columnist Michael Kinsley can’t stand the Supreme Court’s liberal 6-to-3 ruling in Wyeth v. Levine, which let a patient sue an innocent drug maker for an injury caused by a physician’s assistant who disregarded repeated warnings by the drug maker. (The ruling indirectly “will cost lives“). As Kinsley notes,

“Diana Levine, a professional guitarist, showed up at the hospital for the second time in one day complaining of . . . hours-long spasms of ‘retching’ and ‘vomiting.’ She was injected with an anti-nausea drug called Phenergan. The label on Phenergan says six times, in different ways, some of them in boldface capital letters, that if Phenergan gets into the arteries, the result can be disastrous. Nevertheless, a physician’s assistant used the wrong method of injection, and Levine’s arm turned gangrenous and ultimately had to be amputated.”

“The drug company Wyeth has sold Phenergan, with Food and Drug Administration approval, since 1955. The official question in Wyeth v. Levine, decided last week by the Supreme Court (the quotes above are from Justice Samuel Alito’s dissent), was whether that federal government approval “pre-empts” a Vermont jury ruling in favor of Levine. The court said no. A more interesting question is: How did we end up with such a crazy system for making important decisions? . . .”

“What happened to Diana Levine is a tragedy and a scandal. But what did Wyeth do wrong? Is there any way the company could have stayed out of trouble? It’s unlikely. Phenergan has been legal for half a century. (If you Google the word “Phenergan,” the results include pages containing an ad for Phenergan online.) So if you can’t get them for the product itself, you nail them for a “failure to warn.” The basic fiction at the heart of the whole system of regulation by lawsuits is that people read and act on warning labels. But the FDA approved Wyeth’s original warning label and every change since. “Not good enough,” said a Vermont jury, and, incredibly, a majority of the Supreme Court agreed.”

The arbitrary litigation fueled by this decision will cost lives over the long run by discouraging medical innovation, notes Gordon Crovitz in the Wall Street Journal. Jim Copland and Paul Howard call the counterproductive Wyeth decision “a ‘cure’ worse than gangrene.”

Ted Frank calls the Wyeth decision the most anti-business decision in more than 40 years. Yet, amazingly, the liberal New York Times, which wants even more lawsuits, accused the Supreme Court of “reflexive deference to corporations“!!!

Greg Conko observes that the jury’s decision was baseless and undermined the FDA’s labeling process. “The physician’s assistant injected Phenergan into Ms. Levine’s artery, in direct contravention of six label warnings against arterial injection. More or sterner warnings against arterial injection would not have prevented Ms. Levine’s injury.” “FDA made a regulatory decision that the benefits of IV injection outweighed the risks, and the agency permitted the product to be labeled accordingly. . . letting a Vermont jury penalize Wyeth for not ruling out IV injection on Phenergan’s label is tantamount to letting a group of laymen over-rule FDA’s expert opinion regarding safety.” Yale Law School’s Peter Schuck similarly criticizes the Supreme Court’s decision.

Don’t expect any help from Congress. Incredibly, it is moving to abolish what little limits there currently are on state court lawsuits that undermine federal drug-labeling requirements. The day after the Wyeth decision, trial lawyer allies like Rep. Henry Waxman (D-Cal.) proposed legislation to completely abolish any preemption of such lawsuits, even in the exceedingly narrow circumstances where the Supreme Court admits preemption is appropriate.

Drug and device lawyers explain the Wyeth decision as being partly the judiciary’s reaction to the 2008 election, when liberal politicians friendly to lawsuits, and hostile to (often mythical) “deregulation,” made big gains. As the humorist Finley Peter Dunne noted a century ago, the Supreme Court reads election returns.

Workplace lawsuits also will rise. A costly comparable-worth bill backed by the Administration, the Paycheck Fairness Act, passed the House earlier this year on a largely party-line vote. And a law that largely eliminates the statute of limitations in pay-discrimination cases, the Lilly Ledbetter Fair Pay Act, was signed by Obama in January. Obama made false claims about the Supreme Court decision the Ledbetter law overturned (and the facts of that case), and broke campaign promises he made by signing it into law without the opportunity for public comment.

Obama also backs the so-called Civil Rights Restoration Act, which would radically rewrite federal discrimination law in several ways, such as scrapping limits on punitive damages (and allowing them in situations never before permitted by any federal court), and making schools liable for many more instances of “peer harassment” by students (increasing the pressure on colleges to adopt speech codes).

Other “radical employment law changes will create lots of work for attorneys,” according to the National Law Journal.

The economy-shrinking stimulus package Obama signed also contains multiple provisions creating new grounds for lawsuits. It contains increased damages and state attorney-general rights to sue under the burdensome and expensive HIPAA law, which contributed to the Virginia Tech shootings, has impeded public safety, and causes billions of dollars in losses due to pointless red tape. The stimulus package also contains vague and expansive whistleblower provisions allowing suits over actual or perceived wrongdoing.

The Administration also shows no interest in tempering the excesses of a law Obama supported, the Consumer Product Safety Improvements Act, which has shut down thrift stores and entire industries, and gives state attorney generals and their trial lawyer allies broad new powers to bring lawsuits over toys, clothes, and books, resulting in children’s books being thrown out and pulled from library shelves by the thousands.

Regulate First, Think Never?

by Iain Murray on January 15, 2009 · 6 comments

in Environment, Nanny State, Politics as Usual, Precaution & Risk, Regulation

Twitter can be very useful. Walter Olson of Overlawyered.com sent out a tweet this morning about an Amazon list of toys that will be affected by the Consumer Product Safety Improvement Act of 2008, which comes into effect February 10. This new law aims to protect children from the harmful effect of lead in toys, but does so, as usual, in an expensive and ham-fisted way that ignores unintended consequences. Intrigued, I researched further and found a classic tale of regulatory incompetence, but also an excellent example of resistance by the little guy (or often more gal, in this case).

The law, as written, appears to require makers of any new toys to be sold after February 10 to have a third party certify that they meet the lead restrictions. This will be ruinously expensive for small toymakers, especially those of traditional, hand-made wooden toys. No wonder that these manufacturers have taken to calling February 10 National Bankruptcy Day. They have, however, been very effective in using the blogosphere, specifically the “mommy blogs” to draw attention to the cause and have managed to make quick reform of the CPSIA the number six policy to be presented to the new President as voted on by users of Change.org. Investigative journalism by BusinessWeek has confirmed that the small businesses have reason to be afraid, as there has been no clarification from the CPSC that their fears are unjustified (a “debunking” at Snopes applies only to used toys, which will indeed not require testing, but their resale may still break the law).

This is an excellent example of how consumers and manufacturers, self-organizing, can alert people to the terrible consequences of well-meaning but ill-thought out regulation, and of how the regulatory burden can severely affect small businesses especially. The campaigners have a twitter stream at #CPSIA, which is full of useful links.

More from Forbes here, but note that some of the campaigners believe the exemptions cited are worthless.