New Law Cripples Small and Independent Children’s Toy and Clothing Makers

Thursday, February 12th, 2009

Longtime reader Bronwyn Ramey told me months about the Consumer Product Safety Improvement Act, a honking bit of reactionary, poorly-thought out regulation that threatens to put all but the large toy and children’s clothing makers out of business. I’ve meant to do something on it since, but because it’s not part of my regular beat, I haven’t had the time to bone up on the issue as much as I’d need to in order to write about it intelligently.

Unfortunately, with just a few exceptions, no one else has been writing about it, either.  Which means too few people knew about the law before it took effect yesterday (it passed the House almost unanimously—only Ron Paul voted against it).  One exception is legal blogger Walter Olson, who has owned this story for weeks. Check out his Forbes piece for a good overview, then browse his website to see just how sweeping and far-reaching the legislation really is.

The gist is that the new regs impose debilitating new testing requirements on anyone who makes, markets, or sells toys to to children. The bill is a hysteria-filled reaction to last year’s China lead scare, and its reach is really pretty incredible. Thrift stores, libraries, independent toymakers, people who hand-make toys and clothes to sell online, and on down the line are all going to be affected. It’s going to put thousands of people out of business.  Just what the economy needs.

As is the case with most new regulations, the one group that won’t have any problem complying will be the giant toy companies—the very companies responsible for the lead scare that inspired the legislation in the first place. In fact, as the D.C. Examiner’s Tim Carney points out, the toy industry giants bulked up their presence in Washington in order to support the new regulations:

Mattel—whose leaded toys kicked off this whole scare—beefed up its lobbying effort when the legislation appeared. The company’s lobbying budget, which had been steady at $120,000 per year from 2002 through 2006 ballooned to $540,000 in 2007 and $650,000 in 2008—a 442% increase from two years earlier.

In late August 2007, Mattel, the largest toymaker in the world, hired a new lobbying firm, Johnson, Madigan, Peck, Boland & Stewart, to lobby on the bill. One of their lobbyists on this issue was Sheila Murphy, recently the legislative director for Sen. Amy Klobuchar, a Democratic member of the Commerce Committee’s Consumer Affairs subcommittee. Klobuchar became a cosponsor of the bill in late September 2007.

Hasbro, the world’s No. 2 toymaker, had never had a Washington lobbyist, according to federal lobbying filings, before October 2007, when the company hired the Duberstein Group, headed by Ken Dubertstein, the former White House Chief of Staff under Ronald Reagan. Since then, Hasbro has spent $500,000 on lobbying.

But these industry giants weren’t resisting regulation—they were embracing it. Carter Keithley, president of the Toy Industry Association—of whom Mattel is the biggest member—told this columnist “we were early proponents of adopting mandatory laws to require toy testing.”

Supporters of a massive regulatory state are often the same people who lament the ubiquity of big corporate chains—what you might call the Gap-ification of America. I’ve written a bit about this before, but what they don’t seem to realize is that not only are big corporations more likely than smaller businesses to be able to afford to comply with new regulations, they’re well aware of this fact, and so they’re often the ones pushing the regulations behind the scenes.

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52 Responses to “New Law Cripples Small and Independent Children’s Toy and Clothing Makers”

  1. #1 |  Backhanded surprises « Blunt Object | 

    […] regulatory capture in market regulation are surprised.  Consider for example the pro-crotchfruit Consumer Product Safety Improvement Act, rushed into legislation as a kneejerk reaction to teh ebil chemicalz found in children’s […]

  2. #2 |  LetEmEatLead | 

    Y’know, kids, somewhere in this century the U.S. government got turned around. It’s their job to work for you. … And don’t get nervous — the only bad break you could get is if the President turns out to be a Kenyan, or a commie.

    With our luck he’ll probably be both.

    Governments are simple. I never met one who didn’t understand a slap-down in an election, or a slug from a 45.

    [with apologies to “Play It Again, Sam”]