Wow.

Sunday, August 30th, 2009

So remember the CPSIA, the onerous new regulation that requires anyone who makes or sells children’s products to pay for expensive lead testing?

Last February I linked to a piece by Tim Carney explaining how the big toy companies had ratcheted up their lobbying efforts in favor of the bill. Carney wrote:

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.

I replied:

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.

I’m pretty cynical about this city. As it turns out, in this case I was wrong. But I only because I wasn’t nearly cynical enough. From the A.P.:

Toy-makers, clothing manufacturers and other companies selling products for young children are submitting samples to independent laboratories for safety tests. But the nation’s largest toy maker, Mattel, isn’t being required to do the same.

The Consumer Product Safety Commission recently, and quietly, granted Mattel’s request to use its own labs for testing that is required under a law Congress passed last summer in the wake of a rash of recalls of toys contaminated by lead. Six of those toys were produced by Fisher-Price.

The new law sets strict limits for lead, lead paint and chemicals known as phthalates. It mandates third-party testing for companies, big and small, making products geared for children 12 and under.

“It’s really ironic that the company that was a principal source of the problem” is now getting favorable treatment from the government, said Michael Green, executive director of the Center for Environmental Health in Oakland, Calif.

Mattel is getting a competitive advantage, Green said, because smaller companies must pay independent labs to do the tests. Testing costs can run from several hundred dollars to many thousands, depending on the test and the toy or product…

CPSC issued no press release about the 3-0 vote in Mattel’s favor, and information on the vote was not posted on the commission’s Web site section pertaining to the CPSIA law.

So while small companies and independent toy makers are getting socked with costly testing requirements, the big toy company whose screw-ups were responsible for the law, who then lobbied for the law, and who then hired a top Hil staffer away to help with its lobbying efforts, was then able to get itself an exemption from the part of the law that’s going to be most expensive for all of its competitors. And the regulatory agency that granted the exception kept it all quiet.

Even by Washington standards, this is just nauseating.

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51 Responses to “Wow.”

  1. #1 |  Matt | 

    Ugh I was wondering if you had caught wind of this..

  2. #2 |  skunky | 

    Great takedown of faux libertarians at Daily Kos:
    http://www.dailykos.com/storyonly/2009/8/30/773243/-Top-10-Signs-You-Might-Not-Be-A-Libertarian

  3. #3 |  Steamed McQueen | 

    It’s really ironic that the company that was a principal source of the problem” is now getting favorable treatment from the government

    No, it’s not ironic at all. It’s business as usual. One rule for me, another for thee and all that.

    But keep making the old liberal vs. conservative argument… as if there is any difference. While everyone is distracted with the finger pointing, stuff like this just rolls on through.

  4. #4 |  Marty | 

    I wonder how man newly-wealthy bureaucrats there are with this deal… wow.

  5. #5 |  Late August Links: Unintended Consequences, Multitasking, Government, Stimulus Madness, and More | 

    [...] angry letters to Congresspersons and such, but this might be worth an exception. Furthermore, see this post regulatory processes at their worst regarding the legislation in question. It’s hard not to admire Mattel’s Machiavellian [...]

  6. #6 |  Mike H | 

    And I’ll bet the “private lab” Mattel is allowed to use consists of a small office with one staffer holding a rubber* stamp.

    *product may contain trace elements of lead

  7. #7 |  Cynical in CA | 

    “I’m pretty cynical about this city. As it turns out, in this case I was wrong. But I only because I wasn’t nearly cynical enough.”

    I have a suggestion for you Radley: call yourself Cynical in VA.

    Har-dee-har.

  8. #8 |  nicole | 

    Part of me wants to see this as positive, because progressives were making such a fuss about the unfairness of the CPSIA even before, and how it would hurt small toy makers and sellers of used children’s books and (apparently, now) people having yard sales. So this should be a great example of regulatory capture to really infuriate them.

    But I know by now that no matter how many instances of bad legislation statists become aware of, they never realize it’s a pattern…

  9. #9 |  Dave Krueger | 

    Today’s corporations don’t deserve capitalism and many probably couldn’t even survive in a market that is truly free. Sometimes I almost wish the socialists would take over just to teach those corrupt corporate assholes a lesson.

  10. #10 |  Aresen | 

    I am definitely going to file this one for the next time someone tells me that regulation is necessary to protect consumers from big corporations or to ensure the markets operate fairly.

  11. #11 |  whappan? | 

    Skunky:
    “Great takedown of faux libertarians at Daily Kos:
    http://www.dailykos.com/storyonly/2009/8/30/773243/-Top-10-Signs-You-Might-Not-Be-A-Libertarian

    Read the comments. Sadly, many of the posters seem to think that ACTUAL libertarians hold these positions. It’s truly pathetic.

  12. #12 |  Justin | 

    I don’t know if I’m a “progressive” but I definitely voted for Obama and Kerry, would’ve voted for Clinton if I was the right age, etc. And let me say that from the first day I heard about CPSIA’s consequences, I’ve been upset. I was bothered by the impact on small toy producers, but throwing away old books was the kicker for me.

    You’re right that the Mattel exemption will raise red flags for even more progressives, but I’d like to think that most progressives would see the destruction of books or the harm to local producers as serious issues.

  13. #13 |  Cynical in CA | 

    All in all not a bad discussion over at Kos, whappan. The commentor VA Classical Liberal argues quite well on behalf of libertarians.

  14. #14 |  Cynical in AL | 

    Textbook example of regulatory capture.

    I admit it, I have a book problem, but I also have to believe that most of the folks out there, even the non-bibliophiles among us, would shudder to see perfectly good clothes, toys and (heaven forfend!) books being tossed like unwanted thoughts down the memory hole.

    Second-hand sellers, barterers and enthusiasts of all stripes should refuse to comply with this absurd law. I’d love to see massive fines and mass arrests for folks selling Raggedy Ann Dolls, Buck Rogers books or erector sets. Perhaps that would cause folks to sit up and realize how creeping bureaucracy is slowly working its way into every nook and cranny of life and like The Blob (whose books are no doubt on the banned list) absorbing and destroying whatever free thought or choice we thought was too petty for the nannies to notice. Eh, probably not.

    End of rant:)

  15. #15 |  Backhanded surprises « Blunt Object | 

    [...] Wow. (The Agitator) Toy-makers, clothing manufacturers and other companies selling products for young children are submitting samples to independent laboratories for safety tests. But the nation’s largest toy maker, Mattel, isn’t being required to do the same. [...]

  16. #16 |  freedomfan | 

    The problem (politically) that I see here is that so few of the people who should be outraged by this (e.g. those who think of themselves as progressives) are going to actually understand the lesson.

    They won’t see that legislation like this (and the ensuing bureaucratic apparatus) is always doomed to be dominated by those with the most to gain or lose from it. They won’t understand that the actual harm caused by lead and phthalates in those toys was very low and that public outcry would have caused the manufacturers to react by tightening standards on their own to avoid losing sales. Despite the fact that this happens nearly every single time regulators “crack down” on companies (see the FDA’s much-ballyhooed-but-entirely-bogus regulatory “victory” over big tobacco as a recent example), the deeper lesson about this sort of legislation never seems to sink in. Most will still assume that further regulation is the answer, somehow trusting that the politicians’ proclaimed self-righteousness and good intentions will ensure that the right laws get written, this time.

    After eight years of being nauseated by the conservative failure to understand that more government isn’t the solution to problems, I am back to being nauseated by the left failing to understand the same thing. I feel like I did a year ago when I argued with someone who was cheering a California proposal to impose higher taxes on oil companies because prices were too high on gas. I just wanted to bang my head against the wall.

  17. #17 |  John Markley | 

    Justin,

    “You’re right that the Mattel exemption will raise red flags for even more progressives, but I’d like to think that most progressives would see the destruction of books or the harm to local producers as serious issues.”

    You’re right that most progressives would be dismayed by this sort of senseless waste and corporate power-grabbing. The problem is that they rarely understand that this sort of thing is deep-rooted in the nature of the interventionist system itself. So while they will sometimes attack some of the particular outcomes of interventionism, like the more egregious examples of corporate welfare, they continue to support and even strengthen the institutions that make these things possible and so put ever-stronger weapons in the hands of the same wealthy special interests they regard as predatory.

  18. #18 |  Rhayader | 

    @John Markley #17: Yeah, frustrating right? It’s like a doctor diagnosing lung cancer and then recommending a pack of Camels every day.

  19. #19 |  Bronwyn | 

    *FUMING*

    No, seriously. I am so pissed off now I can’t type coherently.

    Just. @#%@&(*@)#(*!(*%@()#*!!!!!!

    I’m continuing with my civil disobedience. Mailing off 3 custom aprons today, and I have a pile of new bibs and aprons ready to go to The Makery on Bardstown.

    Will one of you lawyerly agitatorites defend me when I’m arrested?

  20. #20 |  Jim Collins | 

    There is a very simple way around this. All it takes is a tag or stamp that says “Not intended for use by those under 18 years of age.”

  21. #21 |  Bronwyn | 

    No, Jim, you can’t get around it so simply.

    Believe me, crafters have combed through the law and asked questions of the CPSC and debated and consulted attorneys.

    I can’t sell an item that looks and functions as a baby bib and label it “This is not a baby bib” and get around the law.

  22. #22 |  Rhayader | 

    There is a very simple way around this. All it takes is a tag or stamp that says “Not intended for use by those under 18 years of age.”

    Hah yeah, sorta like “this water pipe is intended for use with tobacco only”.

  23. #23 |  Mattocracy | 

    This pretty much ruined my Monday. And yet, there are still so many people out there that will maintain that corporatism equals capitalsim.

    Refering to the dailykos link above, I think distinguishing between the two is a good litmus test for libertarians as well.

  24. #24 |  J sub D | 

    The “progressive” response –

    We just need more and betterer regulations drafted by “the right people”. Perhaps toy, chidren’s clothing and beginner books czars are in order.

    It is not as if the disproportionate impact on smallbusinesses wasn’t loudly and clearly pointed out to every corporate fellating politician on the hill. They knew what the impact on small businesses and charities would be. They knew that the lead scare was at best a tempest in a teapot that consumer choice was already well on the way to solving.

    Any politician who claims to have supported this “for the children” should be in stocks in the town square.

  25. #25 |  Matt D | 

    Eh.

    Libertarians bring up regulatory capture as if it was the end of the discussion. But as I’ve said before, the fact that a process will be corrupted is only one factor among many when choosing whether to pursue it. Obviously what happened in this case isn’t ideal, but it also isn’t dispositive evidence against the need for enhanced product safety requirements.

    Frankly, the libertarian response to this sort of thing is always predictable, and always ridiculous. If I criticize China for producing shitty, dangerous products, there’s always a libertarian to defend the companies doing business there. If I criticize lobbyists and corporate money for corrupting our political process, there’s always a libertarian to defend them too. And of course, the libertarian view is that we don’t need regulation because market pressure will somehow prevent these sort of things from happening again, when clearly it didn’t in the first place. But of course, I know the libertarian will tell find some shred of government intervention to pin the whole thing on, too.

  26. #26 |  billy-jay | 

    Market pressure doesn’t prevent fraud from happening. It punishes it when it does.

  27. #27 |  Paging Kevin Carson § Unqualified Offerings | 

    [...] Radley Balko. Posted by Thoreau @ 12:44 pm, Filed under: Main Comments (0) « « John Q. Adams was [...]

  28. #28 |  MDGuy | 

    #25 | Matt D | August 31st, 2009 at 11:38 am

    If I criticize lobbyists and corporate money for corrupting our political process, there’s always a libertarian to defend them too.

    This entire post is critical of lobbyists and their corrupting influence on the political process. You seem to be the one defending the status quo. You’ve also illustrated John Markley’s point from above perfectly:

    #17 | John Markley | August 31st, 2009 at 2:38 am

    So while they will sometimes attack some of the particular outcomes of interventionism, like the more egregious examples of corporate welfare, they continue to support and even strengthen the institutions that make these things possible and so put ever-stronger weapons in the hands of the same wealthy special interests they regard as predatory.

  29. #29 |  Highway | 

    #26 | billy-jay | August 31st, 2009 at 11:47 am

    Market pressure doesn’t prevent fraud from happening. It punishes it when it does.

    I think this needs to be taken farther. *Nothing* prevents fraud from happening. Not the market, not the government, not anything. So when fraud happens, we need a way to identify it and to punish it. But when the fraudsters are in bed with the government – the entity that has taken it upon itself to identify and punish fraud and crowded out any other mechanisms for same – the chances of us ‘little people’ having any say in it are between slim and none.

  30. #30 |  Matt D | 

    This entire post is critical of lobbyists and their corrupting influence on the political process.

    Bullshit. This post isn’t critical of lobbyists at all. It practically reveres them as a force of nature. Can’t have regulation, you know, because look what the lobbyists will do to it. Meanwhile, of course, libertarians also oppose most measures we might take to limit lobbyist influence.

  31. #31 |  Matt D | 

    I think this needs to be taken farther. *Nothing* prevents fraud from happening. Not the market, not the government, not anything. So when fraud happens, we need a way to identify it and to punish it.

    Bullshit to that too. Libertarians have asserted time and time again that fear of punishment (i.e. lost business and reputation) will keep businesses in line. That, of course, did not happen here.

    Likewise, the typical libertarian free market solution to product safety is to remove regulation and assume that consumers will demand certification by independent labs. So, basically, you’ve got your panties in a wad over what you claim is a burdensome and onerous testing and certification process that you nevertheless assure us companies would voluntarily submit to absent a mandate.

    But when the fraudsters are in bed with the government – the entity that has taken it upon itself to identify and punish fraud and crowded out any other mechanisms for same – the chances of us ‘little people’ having any say in it are between slim and none.

    Okay. So, care to explain what mechanisms you would employ in this case that you are no longer able to employ due to this regulation? Is somebody preventing you from, say, suing? Or are you being forced to buy Mattel’s toys?

  32. #32 |  Rhayader | 

    This post isn’t critical of lobbyists at all. It practically reveres them as a force of nature.

    The post is critical of the self-stroking relationship between big business and big government, and points out that lobbying plays a major role in this dynamic. While one might consider this a tangential (rather than direct) criticism, it is certainly not an example of reverence.

  33. #33 |  Rhayader | 

    So, care to explain what mechanisms you would employ in this case that you are no longer able to employ due to this regulation?

    Well, the general idea is that without onerous regulatory requirements, small businesses have a much lower barrier to entry (and to survival). The result is more consumer choice. The result of more consumer choice is tighter competition. The result of tighter competition is an asymptotic approach toward the product a consumer desires the most.

    So if, say, a guarantee that a product won’t kill a consumer’s child constitutes a significant portion of that consumer desire — which, one would hope, it might — decreasing regulatory barriers results, ultimately, in safer products.

  34. #34 |  Cynical in AL | 

    Rhayader’s hit the nail on the head. The key word is “asymptotic” meaning roughly–“continually approaching a particular point.” Matt D seems to expect that perfection is achievable, that we can somehow get rid of risk. The choice is not between absolute safety and selling bags of glass to children. The choice is between a world where manufacturers bear most of the risk for unsafe products and a world where they can palm that responsibility off on regulatory agencies, which bear no responsibility to anyone. The world can be a safer place, but it will never be completely free from the kinds of harm that some folks believe can be regulated away.

  35. #35 |  Rhayader | 

    The choice is not between absolute safety and selling bags of glass to children.

    Haha, those old Akroyd skits were awesome. What the hell happened to SNL, anyway?? Anything good came out before I could even stay up that late.

  36. #36 |  Leah | 

    Bronwyn, more power to you. My problem with fighting The Man on this one is the same issue I would potentially have with fighting unfair tickets, etc. Having young kids means that I’m not willing to stand up for my convictions if it means my bottle-disliking 6 month old is going to have to go hungry while I’m jumping through law-enforcement hoops.

  37. #37 |  The Prodigal Son . . . Re-visited. « Oh, My! | 

    [...] The Prodigal Son . . . Re-visited. By jbiii (In part inspired by Balko.) [...]

  38. #38 |  Matt D | 

    Matt D seems to expect that perfection is achievable, that we can somehow get rid of risk. The choice is not between absolute safety and selling bags of glass to children.

    Well, no shit. I guess it’s good that I never argued any such thing.

    The choice is between a world where manufacturers bear most of the risk for unsafe products and a world where they can palm that responsibility off on regulatory agencies, which bear no responsibility to anyone.

    Oh please.

    In the first place, risk is quite different from responsibility in this situation. A risk is something that a company would be taking when selling potentially harmful products that could open them up to a lawsuit or loss of consumer confidence in their brand. A responsibility would be their obligation to ensure that they don’t actually sell such products. It’s obvious from the fact that we’re even having this discussion that many companies will happily assume the risk while ducking the responsibility, and just hope it works out in the end.

    Indeed, this entire thread and, quite frankly, libertarian ideology in general, is about how terrible it is that the government would require companies to take responsibility. You all hope that risk aversion will compel them to responsibility, but clearly that hasn’t happened.

    Secondly, with the exception of potentially eliminating competitors which libertarian theory insists would be driven out of the market by consumer demand anyway, how are the businesses palming off responsibility? From where I sit, it doesn’t look like they were taking responsibility in the first place, and I don’t see what’s forcing consumers to continue purchasing their products or preventing them from suing in the event those products are defective anyway.

    Moreover, you’re overstating the effects of regulatory capture in general. The fact is, the major players in the market will always have an advantage. Mattel is huge and can therefore afford the recall and the $2.3 million fine and the lawsuits and, if it comes down to it, to rebrand and hope nobody notices.

  39. #39 |  billy-jay | 

    Matt D,

    Are you stupid? Do you think that’s what happened here? The government has required Mattel to take responsibility?

    And you’ve just missed the goddamn problem, too. Of course Mattel is huge and can afford the regulatory burden. That’s why they’re for it. It decreases competition by forcing out the smaller companies.

  40. #40 |  Matt D | 

    Are you stupid? Do you think that’s what happened here? The government has required Mattel to take responsibility?

    I was making a general point. In any case, yes, I do think that Mattel has been forced to take more responsibility for this than they otherwise would have. For one thing, they were fined a couple million dollars under the authority of the existing regulatory regime, which, had libertarians their way, would not exist. Likewise, they are still being forced to comply with a more rigorous testing process. It’s unfortunate that they were able to get an exception to do testing in-house, however.

    And you’ve just missed the goddamn problem, too. Of course Mattel is huge and can afford the regulatory burden. That’s why they’re for it. It decreases competition by forcing out the smaller companies.

    No, I understand the problem perfectly. My point was that Mattel can afford all manner of burdens, regulatory and otherwise, and will enjoy an advantage because of that, regulated or not. As I stated, large corporations can afford the costs of regulations, but absent regulations they can also afford the costs of settling lawsuits, buying good publicity and squashing bad, blanketing the country with advertising, strong-arming retailers into pricing and stocking agreements, co-opting consumer watchdogs and attorny generals, rebranding and relaunching their product lines, buying controlling stakes in supposedly independent testing labs through shell corporations, etc. They will always have an advantage in any market, so pointing out that they may have an advantage in a regulated market isn’t particularly meaningful.

  41. #41 |  Matt D | 

    So if, say, a guarantee that a product won’t kill a consumer’s child constitutes a significant portion of that consumer desire — which, one would hope, it might — decreasing regulatory barriers results, ultimately, in safer products.

    You’re assuming the consumer is sophisticated enough to accurately assess the safety of the products involved.

  42. #42 |  Matt D | 

    The post is critical of the self-stroking relationship between big business and big government, and points out that lobbying plays a major role in this dynamic. While one might consider this a tangential (rather than direct) criticism, it is certainly not an example of reverence.

    Sure it is. The libertarian argument here is that lobbyists corrupt regulation, and therefore we should get rid of regulation. Libertarians have no problem with lobbyists. Indeed, libertarians oppose just about every effort I’m aware of to limit the influence of big business on government.

  43. #43 |  Matt D | 

    Of course Mattel is huge and can afford the regulatory burden. That’s why they’re for it. It decreases competition by forcing out the smaller companies.

    Also, bullshit to that. They’re for it because they’re savvy enough to know how the wind is blowing and want to ensure that they get a hand in crafting the regulation. Absent consumer demand for regulation, they would not be pushing for it, as evidenced by the fact that they weren’t pushing for it before this incident came along with all its attendant citizen outrage.

  44. #44 |  Cynical in AL | 

    Matt D,

    How did you escape? If the average consumer isn’t smart enough to overcome the wiles of the greedy corporate conspirators, how did you become so enlightened?

    Your task, btw, is to prove that the regulatory system, replete with all of the gaming, lobbying, and capture and the attendant costs of such (costs which decrease safety because businesses are focused on meeting reg requirements rather than safety itself and/or are putting their smaller competitors out of business by lobbying for more expensive regs) makes us safer than we would be if there were no public agencies and consumers had to use their own brains to determine what is safe enough for their family or themselves to use. They will do this based on past experience, recommendations (amateur and professional), private testing companies (like Underwriters Labs, Consumer Reports, Trust-e, etc.)–you know the means by which everyone makes most decisions. Yes, some people will still use fraud and attempt to slip one by unwary consumers and, yes, some people will be injured and even die, but that happens now with all the precious safeguards of bureaucracy in place. Why is the FDA, which has made horrible mistakes that killed people in approving drugs and has killed many more people by keeping other drugs off the market, any better than you or I at deciding what is best for other people?

    You claim not to be advocating perfection, but by your very arguments, you are claiming that if we just regulate enough, we can achieve near-perfection. I will never understand why intelligent people such as yourself, who understand that a public regulatory system will always be captured and used by big corporations to keep themselves isolated from competition and maintain market share would ever advocate the continuation of that system.

    Public choice theory has proven that bureaucrats are just as self-interested as the rest of us and yet you want to invest them with more and more power, so that their mistakes will cost society more and more in terms of lives lost, wasted energy and money, which is a measure of our time. Why? How many times do they bureaucrats have to fail before you will admit that we can’t perfect the system, that there shouldn’t be a one-size-fits-all system in the first place? The best way to manage is risk is to decentralize decision-making. It goes back to the old adage about all your eggs in a single basket–that’s a terribly risky way to do things as is having one person or agency decide for everyone else.

    End of rant:)

  45. #45 |  Dave Krueger | 

    Hahahahahaha! Yeah, Mattel simply wants to stay on the good side when government selflessly comes riding on its white charger to rescue the American Public from the soulless capitalist greed mongers who are willing to poison our children for a buck.

    Saying “lobbyists corrupt legislation” is way too simplistic. Without lobbyists, a lot of legislation wouldn’t even happen. Legislation is work and work comes at a price which lobbyists are willing to pay. But, you could just as easily turn it around and say that legislation is the means by which Congress extorts money out of industry (lobbyists). The public isn’t even a part of the equation. It’s merely an annoyance.

    Congress is one of the only free markets in America. Favors are bought and sold at will. It’s completely unregulated.

  46. #46 |  Rhayader | 

    Cynical makes a great point about decentralization improving system design. In engineering, a single point of failure should never exist; for a product to fail, several sub-components must independently fail first. Decentralization allows for redundancy and contingencies, while a top-down design approach creates bottlenecks and obvious vulnerabilities.

    Again, to return to the engineering analogy, that doesn’t mean products never fail; planes crash, bridges collapse, Windows freezes, etc. This is true whether Boeing is designing planes, or if the FAA takes it over (*shudder*). But it’s a cost-benefit analysis in the end. Decentralization has proven to give the biggest quality payoff for a given investment.

  47. #47 |  Matt D | 

    How did you escape? If the average consumer isn’t smart enough to overcome the wiles of the greedy corporate conspirators, how did you become so enlightened?

    Obviously I didn’t escape. I’m in the same boat as everyone else.

    Look, if you believe, as you obviously do, that big business will happily manipulate government to its advantage, I don’t see how you could possibly believe they wouldn’t just as happily manipulate you, or the institutions you rely on to assess products, or the standards and science which those institutions employ to make that assessment.

    For every person raising a flag about the safety of a company’s products, that company can fund a bogus research paper or op-ed or entire institute dedicated to proving the opposite, knowing that most consumers lack the specialized knowledge necessary to determine the veracity their claims. Or they can invent some credible-looking but ultimately-meaningless certification on their product (you see this quite frequently, for example, in greenwashing).

    The risk of producing a dangerous product can create both good and bad incentives–it can motivate a company to continually refine their processes to produce the safest product possible, or it can motivate them to make it as difficult as possible for the consumer to understand the danger. Complicating this is the fact that their suppliers are operating under the same dynamic.

    Mattel presumably did not knowingly allow toxic chemicals and elements into their toys. Mattel was, as I understand it, actually a consumer itself in this situation, purchasing services and products from Chinese companies. And Mattel, despite its wealth and teams of scientists and quality analysts, got suckered as a consumer by the deceptive and dangerous practices those companies employed.

  48. #48 |  Rhayader | 

    Those are fair points as far as they go, Matt. There are certainly plenty of examples of companies manipulating information to the detriment of their own customers.

    But I’m still not convinced that the government, of all entities, is the one to entrust here. Instead of manipulation for the sake of corporate profit, we end up with manipulation for the sake of a host of other things — political gain, special interests, state revenue, etc etc. All perpetrated by a centralized governing body which has no oversight itself. Our elected officials are no more benign than whatever group you pull out of whatever swanky board room in the country.

    I’m obviously not coming up with much in the way of suggestions here — probably because, as many have noted, there is no solution that will guarantee consumer safety. It seems to me though that heavy-handed government regulation is the greater of two evils, not the lesser. At the very least, it results in just as many product safety loopholes at a much greater cost.

  49. #49 |  Cynical in AL | 

    Some consumers do lack that level of sophistication, but, Matt D, you have some how been able to see through to the fact that not all products live up to their claims and some are even dangerous. I am aware of this as well and suspect that more folks than you know are quite savvy when it comes to advertisers and corporate spin machines trying to snooker them. The small percentage of folks who may be duped by such methods is small indeed and for those who are taken in, we can rely on the media and private watchdog groups to alert us of the danger in the first place and the tort system to provide punishments and remedies (however imperfect) after the fact. Some of those watchdogs and some media outlets may indeed be coopted, but when you have a multitude of different individuals and groups with incentives to discover the truth, it will inevitably come out. Corporations can’t buy up everything and in our age of citizen journalism, they certainoly can’t silence everyone. This conversation is testimony to that.

    I still submit that it is better to have a thousand different information/certification sources than one agency or individual invested with the power to decide whether something is safe. That way, we’ll know when one particular source is suspect and learn to avoid that source as I have learned to do with the FDA, etc. I think you’re looking for a static solution in a dynamic world. there’s just no way that you can look at one particular entity and assume that it will always look out for your best interests. Bureaucrats, again, are subject to the same flaws and foibles as we are, only when they make mistakes, it affects a much larger percentage of folks than when an individual or even a corporation does.

    Further, I’d suggest that big business and the regulatory state exist in symbiosis–without one, the other would cease to exist. Without a large government with the power to regulate every aspect of our lives and guarantee a corporation 1) existence; 2) lower competition through erecting barriers to entry like onerous startup regulations or exclusive territories and 3) the ability to continue to game the system as long as your buddies remain in power, it is doubtful that any firm would be able to grow as large as an ADM or Royal Dutch Petroleum and maintain that position for any number of years. In other words, without gov’t to prop them up, those interested in harming consumers through low-quality dangerous products would soon go out of business through poor reputation and/or expensive lawsuits. Again, some people might be harmed or even die in the process, but the centralized regulatory process has proved worse at keeping us safe and is more expensive that a privately-managed (and therefore dispersed) system of monitoring and managing risk.

    As the saying goes, hard cases make bad law. To protect the small percentage of folks who may be duped by saddling everyone with higher costs not only makes everyone pay for the gullibility of a few, but makes all of us less safe as it centralizes risk management to a few folks who we both admit are being coopted by big corporations.

    If you believe that the average consumer is an unwitting dupe of the corporate spin machine, I ask again, how you or anyone has escaped. And, I would suggest that if you think that more than a very small percentage of folks are hapless victims of corporate chicanery, you may be falsely assuming that other are more susceptible to manipulation than yourself, which is a variant of the third person effect hypothesis: http://en.wikipedia.org/wiki/Third-person_effect. It’s easy to believe that even if you’re hip to the truth, most everyone else is getting the wool pulled over their eyes, but that just isn’t so.

    And, i’m spent:)

  50. #50 |  Miscellaneous Links « Brad Taylor’s Blog | 

    [...] Radley Balko points out that Mattel have taken their rent-seeking to the next level. I don’t approve, but can only admire their absolute mastery of the dark political arts. [...]

  51. #51 |  Mike Renzulli | 

    From the AP article you cite:

    “While Congress mandated the third-party testing, the commission in January said it would delay enforcement for a year of some of the testing requirements for phthalates and lead content — though many companies are doing the tests anyway.”

    This and Mattel’s so-called “exemption” are indications the CPSIA may not be willing to enforce the lead ban after all. Either because they can’t afford to or they know the law itself can be challenged because of the CPSIA’s exemption.

    If Mattel is forced to comply with the ban despite using its own facilties, I guarantee you this law will not stay on the books for long nor will it last should the agency begin to enforce the lead ban one year from today.

    The CPSIA is setting itself up for a lawsuit one of which, I am sure, the Institute for Justice would certainly pounce upon.

    I know if I was an IJ attorney I would be sharpening the blades of my swords awaiting a client harmed by the lead paint ban’s effects to walk through my door to slice and dice this lead paint ban.

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