Regulators Crush Another Small Business

Tuesday, August 9th, 2011

You might keep this story handy the next time you hear someone complain about how “industry” is to blame for our food being over-processed, filled with preservatives, and loaded up with various other additives.

A few years ago, Kris Swanberg, having been laid-off from her job as a Chicago Public School teacher, remembered she received an ice cream maker as a wedding gift. TheChicago mom fished it out of her kitchen cabinet and eventually started a new career.

Today Swanberg’s Nice Cream — on offer at local Whole Foods and farmers markets — is considered a star of Chicago’s rich and beloved artisanal ice cream scene, one that could be shut down entirely by state rules, she recently learned.

She says that a couple of weeks ago a representative from the Illinois Department of Public Health came to Logan Square Kitchen and informed her she’d have to shut down if she did not get something called  “a dairy license.”

Swanberg and others in her field had operated for years now without ever hearing of such a thing and, indeed, they say, the City’s Department of Business Affairs and Consumer Protection, to whom they applied for business licenses, never informed them they would need one to operate.

Apparently, they do. And in order to keep operating they’ll need to “work out of their own space,” have their ice cream tested once a month for bacteria levels, change all packaging and labels to meet state standards, and purchase a $40,000 pasteurizer.

More:

Swanberg says that the IDPH officer who visited told her that her ice cream probably wouldn’t pass the bacteria tests if she continued to use fresh strawberries. Instead the officer suggested she use “strawberry syrup,” Swanberg said.

IDPH spokesperson Melanie Arnold said that it isn’t illegal to use real strawberries but that IDPH “does not encourage it simply because when you try and clean a strawberry to make sure it doesn’t have any bacteria, it kind of deteriorates.”

The department’s Dairy Equipment Specialist, Don Wilding, said that other ice cream producers use irradiated strawberries. He says look good but he can’t vouch for the taste.

Swanberg could continue to work without a license, Wilding said, if she used a premade ice cream mix that is usually formulated with stabilizers and other additives — the kind of thing typically used at Dairy Queens, Wilding noted.

Still, Swanberg feels that using strawberry syrup and a premade soft serve mix might not attract the same customers who buy her product made from fresh organic cream blended with local and often organic produce like basil and strawberries she picks herself.

The department could not confirm the $40,000 price tag on a pasteurizing machine. But it did confirm that, even if she uses pasteurized milk and boils all of her ingredients together, she would then need to pasteurize it in this special machine again.

I guess it could have been worse. They could have sent the SWAT team.

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115 Responses to “Regulators Crush Another Small Business”

  1. #1 |  Kid Handsome | 

    Is there any merit to living in Illinois at all? What a horrible state.

  2. #2 |  Jim Collins | 

    At least it’s not California.

  3. #3 |  Difster | 

    So is this a case of some larger ice cream maker not liking the competition and insisting that someone go after this woman or is it just another over zealous bureaucrat that can’t keep his nose out of other people’s business?

    Most laws seem pretty useless these days. When are people just going to start ignoring them completely to the point that enforcement is impossible?

    With unemployment as high as it is, I don’t see why people aren’t taking to the streets to sell various trinkets, fruits, etc. the way they do in Mexico where there’s really no such thing as extended welfare benefits. I’m not saying the US should emulate Mexico in other ways but people should start taking responsibility for themselves regardless of what the law says.

    Maybe this woman should get her self a mobile unit that she can move around and change the name of her product to Liberty Ice Cream.

  4. #4 |  Andrew | 

    You certainly could say that industry had a hand (how large a hand I don’t know) in our food being over-processed, filled with preservatives, and loaded up with various other additives. After all, they usually support laws such as these to stifle competition do they not? What’s that saying? The biggest enemies of capitalism are capitalists or something like that.

  5. #5 |  James | 

    Really, Balko?

    This isn’t a child running a lemonade stand. This is an adult trying to run a business. Until we live in a utopia of deregulated food production techniques, with the excitement of unpredictable bacteria levels in frozen dairy products, I guess would-be retail food producers are going to have to file the necessary paperwork and go through the trouble of producing safe and predictable products.

    My goodness. The world really is in shambles if any random person cannot sell from national chain grocery stores whatever it is that she made in her kitchen at home. Oh, the oppression!

  6. #6 |  Radley Balko | 

    James —

    Whole Foods was willing to stake its reputation on selling Nice Cream, its customers were willing to buy it, and there hadn’t been a single complaint or reported illness.

    But okay. Fine. You want everything sold in any store to pass be loaded with government-mandated preservatives, and for every food supplier to meet pages and pages of food safety regulations. Just remember that next time you complain about how various industries are controlled by just a few huge companies. They’re the ones who can afford to comply.

    Regulations like these make it nearly impossible for smaller, newer companies to even get off the ground, much less compete.

  7. #7 |  Dave Krueger | 

    I had minor surgery yesterday and my doctor told me it would be best to soak the gauze packing in sterile saline before inserting it into the open wound. It turns out that sterile saline requires a prescription.

    Rather than calling the doctor (and being passed from operator to operator before finally getting connected to voice mail) my daughter sent me a link that tells how to make it from salt and baking soda when you’re, you know, camping and don’t have any civilization nearby to make your life easier.

    Anyone care to take a guess as to why the medical industry or government (whoever is responsible) would find a benefit in discouraging the use of Sterile saline)? I’ve looked on the web, but there doesn’t seem to be an answer. Maybe for the same reason some states don’t sell sterile needles without a prescription. You know, to punish people for doing shit they disapprove of. Maybe saline is used to clean bullet wounds and they want to discourage bullet wounds…

    I can get it from Amazon for $8 a liter.

  8. #8 |  Nancy Lebovitz | 

    http://foodfreedom.wordpress.com/2011/08/08/a-national-response-to-two-fda-armed-raids-on-rawesome/

    Argues that the FDA bases “food safety” on following expensive procedures rather than checking for evidence of contamination. This runs parallel to Radley’s argument that anti-drunk driving laws don’t focus on actual bad driving.

  9. #9 |  DarkEFang | 

    Testing for bacterial levels isn’t the problem. Forcing the business owner to buy bullshit licenses and expensive and unnecessary equipment is.

    Nowhere in the article does it say that the ice cream failed any kind of test for bacteria. The desk jockey causing the problem speculated that her ice cream wouldn’t pass the test if she used fresh strawberries. Basically, the IDPH is creating an artificial barrier to entry for small ice cream manufacturers.

    I recall reading a very similar article a few months back in regards to someone making specialty yogurts in a California farmer’s market. A licensing board told her that she had to purchase a pasteurizer as well, even though she was making the yogurt from milk that was already pasteurized.

  10. #10 |  Marty | 

    James- I’m gonna step out on a limb here and guess that you’ve never owned a business and had to file the ‘necessary’ paperwork…

  11. #11 |  Nick Carter | 

    We have similar issues in Indiana when it comes to healthy meats. The law has a very narrow definition of “livestock” which doesn’t include anything exotic like rabbit, emu, goat, etc. Nevertheless, the retail laws state that any meat (regardless of whether it’s defined as livestock) must be inspected. So, the state doesn’t supply inspectors, but the meat has to be inspected. Smart!

  12. #12 |  Ken | 

    I wouldn’t dismiss this as not having any industry involvement. Burdensome regulations create a substantial entry barriers that actually end up benefiting agribusiness. After all, I’ve never heard Kraft calling for a repeal of mandatory pasteurization.

  13. #13 |  Radley Balko | 

    I wouldn’t dismiss this as not having any industry involvement. Burdensome regulations create a substantial entry barriers that actually end up benefiting agribusiness.

    Completely valid point. Didn’t mean to imply otherwise.

  14. #14 |  Steve Verdon | 

    At least it’s not California.

    Funny, because here in California we say, “Hey, at least we aren’t Illinois…or Florida for that matter. We are moving up!”

  15. #15 |  capn_amurka | 

    If I didn’t strongly suspect that the regulatory standards being cited against this small ice cream manufacturer were written, at least in a large part, by large ice cream manufacturers or in close consultation therewith, I would probably be more inclined to accept this story as important evidence of the negative impact of regulators on industry.

    As it is, I think there is plenty of evidence that large industry groups pressure their regulators to accept their business practices as the only correct business practices.

    This, sadly, turns what could otherwise be useful regulation into what is little more than a mechanism to stifle competition by introducing barriers to entry into the relevant market and

  16. #16 |  Woog | 

    Yet another entry in the long list of examples of government being the cause of most all problems.

  17. #17 |  Woog | 

    “I wouldn’t dismiss this as not having any industry involvement. Burdensome regulations create a substantial entry barriers that actually end up benefiting agribusiness.”

    Certainly true, but without the government meddling in the first place by using force to impose such regulations, this would also be a non-issue.

  18. #18 |  2nd of 3 | 

    “Whole Foods was willing to stake its reputation on selling Nice Cream, its customers were willing to buy it, and there hadn’t been a single complaint or reported illness.”

    That’s nice, but are customers informed that this product comes from an unlicensed producer, using non-pasteurized ingredients? Is it clearly labeled? Was Whole Foods doing any testing? What are the liability issues for the producer versus Whole Foods when someone does get food poisoning? When I reach for a product on a store shelf, I’m assuming it meets minimum safety standards. Still, ff libertarians want to option to get products that don’t necessarily meet those standards, hey I can meet you halfway on that. Let’s make it legal to produce and sell, and you eat this ice cream til your stomach’s content. However, I want a big @ss yellow-and-black warning sticker on it, and preferably have it separated from the rest of the ice cream.

  19. #19 |  Andrew | 

    “Is there any merit to living in Illinois at all? What a horrible state.”

    As a lifelong resident of the Chicago area I have to say that we do get good services for our tax dollars {rolls eyes}. Seriously, though, the food is great, there’s a ton to do and the jobs are plentiful. That’s what keeps me here. The gov’t at all levels is mostly a joke. But, at least we get to send our governors to jail. Now, if we could only find a way to send more politicians to jail…

  20. #20 |  jb | 

    They sell this ice cream at my local grocery store. It’s f*ing delicious. My wife is usually a hardcore statist liberal, but when I show her this article she may just be converted.

  21. #21 |  James | 

    It is not that I don’t understand the frustration with seemingly unnecessary hoop-jumping.

    Obviously, I am the outsider here, and that’s fine with me. I read The Agitator because RB makes me consider viewpoints that wouldn’t normally occur to me (because I’m a pinko commie librul). And he is certainly the best aggregator of law enforcement misconduct around. But enough knob-polishing.

    We make doctors get licenses and perform services to established standards. We make plumbers get licenses and perform services to established standards. We make teachers get licenses and perform services to established standards (and, yes yes, I know, overpay them gratuitously).

    There may be innumerable compelling reasons to do away with the license requirements and standardized expectation of service provision. At the moment, however, we (through our elected officials, and, yes, through our purchasing power in the marketplace) have collectively decided, it seems, that the benefits of potentially anecdotally stifling regulations outweigh the costs of subjecting the population to universally unpredictable products.

    I am sure that this ice cream maker was producing a delicious and safe product. Similarly, I’m sure that there are unlicensed plumbers out there that can safely replace the soil pipe in my house. Regrettably, I guess, both of these folks are subject to the same regulatory requirements that their potential competitors are.

    There are certainly reasonable discussions to be had regarding the outcomes of these various regulations, but what size bureaucracy do you imagine would be needed in order to assess every potential business proposition anecdotally?

  22. #22 |  Radley Balko | 

    Let’s make it legal to produce and sell, and you eat this ice cream til your stomach’s content. However, I want a big @ss yellow-and-black warning sticker on it, and preferably have it separated from the rest of the ice cream.

    Honestly? I’d be fine with that. Would also be fine with letting restaurants operate without going through the regulatory BS if they provide notice. When I lived in Alexandria, I ate a number of wonderful underground Salvadoran restaurants that were operated out of living rooms. (They were underground b/c the people who operated them were undocumented immigrants.) Never got sick. And damn were they good. And inexpensive.

  23. #23 |  Zeb | 

    #18, did you miss the part where even if she uses pasteurized ingredients, and boils them all before freezing (boiling happens at a considerably higher temperature than pasteurization), she would still need a very expensive pasteurization machine. The problem isn’t that she doesn’t think she needs to meet minimum safety standards. THe problem is that the rules are stupidly inflexible and are not set up to accommodate small startups in the industry. Which is why the food industry is dominated by large corporations.

  24. #24 |  Zargon | 

    #18

    Still, ff libertarians want to option to get products that don’t necessarily meet those standards, hey I can meet you halfway on that. Let’s make it legal to produce and sell, and you eat this ice cream til your stomach’s content. However, I want a big @ss yellow-and-black warning sticker on it, and preferably have it separated from the rest of the ice cream.

    Still, if you want the option to get products chock full of preservatives and other additives, hey I can meet you halfway on that. Let’s make it legal to produce and sell, and you eat this ice cream till your stomach’s content. However, I want a big @ss yellow-and-black warning sticker on it, and preferably have it separated from the rest of the ice cream.

  25. #25 |  Radley Balko | 

    . . . but what size bureaucracy do you imagine would be needed in order to assess every potential business proposition anecdotally?

    I doubt it could be done. Which is why I'd rather leave that kind of thing to private entities, whose reputation would rest on the integrity of their seal of approval.

    Most food companies/restaurants have a pretty strong incentive to not poison their customers. Yes, it still happens. But I don't believe I've ever read about a single government agency firing someone for poor oversight in response.

  26. #26 |  James | 

    Zeb –

    Lobbyists heavily influence most industry regs, don’t they?

    Think closed-door energy meetings with major private sector players during the Bush administration’s tenure. HCR deeply involved insurers. Bank regulations? Who does the treasury employ? Goldman Sachs managers.

    I think your chicken and egg are in the wrong places. It seems likely to me that the food industry has helped write the laws that keep out competition.

    I’m more than willing to be wrong about this…

  27. #27 |  Tde | 

    “You might keep this story handy the next time you hear someone complain about how “industry” is to blame for our food being over-processed, filled with preservatives, and loaded up with various other additives”

    I see, so McDonalds was selling wholesome organic locally sourced grass fed beef until the damn gubmit came along …

  28. #28 |  Highway | 

    James, Zeb is making the same point you are, as far as I can read it (barriers to entry are equal parts established businesses wanting protection from newcomers and government wanting to interfere). As far as the ‘chicken or egg’ argument, regulatory capture starts with government having the power to regulate. If there is a successful business or industry, it’s going to have funding. What it does what that funding depends on what is best for it. If the government has the power to regulate, then it’s in industry’s best interest to capture that regulatory power and use it against their competition. If government doesn’t have that power, then there isn’t the regulatory power to use. That’s why anti-lobbying and campaign finance reform measures will never work to ‘clean up politics’. Successful business by definition will have resources to use to influence government.

  29. #29 |  MattF | 

    A small business is required to meet food safety regulation? The horror!

  30. #30 |  BoscoH | 

    @James #21: I’d just suggest that regulation could be guided by science and results rather than custom. A realistic assessment of risk, rather than expensive equipment requirements.

    Take the strawberries… How is it OK for all of us who eat our fruits and vegetables to eat them fresh after a run through some water, but not OK for said same fruits to end up in smaller quantities per serving in ice cream without being raped or irradiated? And why wouldn’t the guy with the power to enforce the state’s rules have any idea what irradiation would do to the strawberries? I mean, I googled for it and found out that it’s being done and actually has positive effects.

    At the margins, where Swanberg is playing, you’re not safer because of these rules and their enforcement. You have less choice and less chance of being delighted.

  31. #31 |  Difster | 

    James,

    Any particular example of bureaucratic oppression is no big deal. But look the bigger picture at the totality of that oppression.

    That being said, micromanaging ice cream and most other foods is just stupid because it does little to increase actual food safety and it raises consumer prices.

  32. #32 |  James | 

    Radley –

    Fine. But you are suggesting complete overhaul of the industry.

    The outcomes under the current laws and regulations are pretty reliable, aren’t they?

    Philosophically, I understand and like your approach. But is there any reason for me to believe that the food safety outcomes under your proposal would be better than they are under the current laws and regulations? Can you project the short- or long-term health consequences of your proposal manifest in the real world? Or am I missing the point? Do you think that food safety is a big enough concern to even bother asking these questions? Is an individual’s right to do whatever they want to of greater concern?

    How do your answers to these questions hold up when applied to other industries?

    To me, this is the trouble with libertarianism. Yes, there are many things wrong in government. But comparing policy proposals against an ideal leads to policies that always seem crappy (“I wanted my perfect solution. This is not it. Thus, it’s crap”). Comparing against the current reality allows for an incremental approach (“is this better or worse than it was”). I agree that even incrementalism can go to far, and perhaps we should be more willing to repeal/replace unsuccessful incremental policy changes, but the tendency to burn everything down when one’s philosophical values are encroached upon doesn’t seem particularly helpful.

  33. #33 |  cryingAces | 

    “Which is why I’d rather leave that kind of thing to private entities, whose reputation would rest on the integrity of their seal of approval.”

    Yea, like those darned private rating agency’s that rated all of those toxic mortgage assets as “investment grade” back in 2008. It’s good to know that S&P’s reputation went down the toilet after that. Pshew!

  34. #34 |  Dave Krueger | 

    I think someone is confused about the difference between the purported reason for licenses and the real reason for licenses. And the real reason has zero to do with protecting the public in any way shape or form.

  35. #35 |  Scooby | 

    James,

    You sure are reactionary for a pinko commie.

  36. #36 |  James | 

    BoscoH –

    Yes, strawberry washing when you do it is different than when someone selling things made out of them does. You know this. You are allowed to risk your own health by washing strawberries however you like (or, gasp!, not washing them at all). A producer of spoon-ready ice cream has a responsibility (ethically and reputationally) to minimize health risks to their consumers. (This is not, in and of itself, a defense of the current system. It is merely a reminder of the function that a regulatory agency is trying to accomplish.)

    I do generally agree that that these things seem unnecessarily draconian. But Radley’s private regulatory firms will have to have standards that need complying with too. The fact that the regulations come from the government, which has a need to fund itself and, thus, charge fees, I recognize, is less onerous to me than a private firm, which has a clear mandated profit motive, imposing regulations.

  37. #37 |  James | 

    Dave Krueger –

    That is an utterly vacuous statement.

    That suggests that you honestly believe that the entire point of regulations is a desire of government to commit economic violence against anyone who wants to start a business.

    Please clarify. What are the “real reason[s]” for regulations which you claim have “zero to do with protecting the public in any way shape or form”?

    Alternatively, I would be happy to point you a manufacturer of the finest tinfoil hats.

  38. #38 |  JS | 

    How did people eat before government warning labels?

  39. #39 |  ClubMedSux | 

    I guess those of you who can’t fathom the notion of a private certification program have never heard of Underwriters Laboratories?

    And to the Jameses of the world, even if you want to trust the government to undertake such tasks, what exactly is your objection to allowing people to knowingly purchase products that don’t comport to government standards at their own risk?

  40. #40 |  JS | 

    James “Please clarify. What are the “real reason[s]” for regulations which you claim have “zero to do with protecting the public in any way shape or form”?”

    Dave can answer that way better than I can but I’d like to offer an opinion.

    The real reasons for regulations are

    1. To serve as justification for the regualting agency or bureacracy that regulated it.
    2. To provide revenue through licenses and fees.
    3. To reaffirm government bureacrats control over people’s lives.

  41. #41 |  Invisible Finger | 

    Is it clearly labeled? … When I reach for a product on a store shelf, I’m assuming it meets minimum safety standards.

    You want labeling laws so that you can NOT read the damn things.

    I NEVER buy a product and wonder to myself, “I am so glad the state this was manufactured in has so much licensing.” I buy a product and assume the manufacturer doesn’t want to kill me. Maybe that’s foolish too, but it’s a lot less foolish than assuming a lazy bureaucrat will look out for me.

  42. #42 |  Jen | 

    A producer of spoon-ready ice cream has a responsibility (ethically and reputationally) to minimize health risks to their consumers.

    And producers of fruit and vegetables do not? Why not require all produce to be decontaminated and packaged aseptically? We’ve had more illness and death from contaminated produce lately than ice cream, if I remember correctly.

    Perhaps it’s that the produce industry doesn’t want those requirements, whereas other large food producers do? I just have a hard time with your argument that this woman should be held to this standard when the strawberry growers are not. (And no, I am not arguing that the growers should be.) What is the difference, and why?

  43. #43 |  nospam | 

    “The outcomes under the current laws and regulations are pretty reliable, aren’t they?”

    Oh yes, quite reliable. You can rely on the bureaucrats enforcing them to fail to prevent Jack In The Box from killing kids, fail to stop ecoli tainted produce from being sold, fail to shut down a taco bell over run with rats ( http://www.youtube.com/watch?v=su0U37w2tws ) and still get people to defend their existence. Oh, and now they also have SWAT teams at their beck and call with sub-machine guns to raid Amish farmers. Very reliable.

  44. #44 |  nospam | 

    #33 “Yea, like those darned private rating agency’s that rated all of those toxic mortgage assets as “investment grade” back in 2008. It’s good to know that S&P’s reputation went down the toilet after that. Pshew!”

    And a damned good thing that the SEC, FBI and numerous other well armed agencies under not one, but TWO administrations have rushed right in, closed them down and threw their boards of directors in jail for the criminal looting they aided in. Oh…wait….

  45. #45 |  celticdragonchick | 

    Certainly true, but without the government meddling in the first place by using force to impose such regulations, this would also be a non-issue.

    The government started using force of law to deal with conteminated food around the time that poorly canned meat products purchased from private vendors became one of the top causes of death and illness.

    Also, look up “Teddy Roosevelt” and “muckrackers” in his investigations of the meat packing industry, including cases of human remains (from workers who literaly fell into processors) that were included in products sold to the public.

    Public health became a big deal in the late 19th century, especially with the possibility of mass casualty disease events in crowded cities, and public officials could actually requisition Federal troops to enforce sanitation standards.

  46. #46 |  celticdragonchick | 

    Note: My first paragraph above is supposed to refer to the purchase of canned meat products by the US Army during the Spanish American War. I deleted that by accident.

  47. #47 |  Dave Krueger | 

    #37 James

    Dave Krueger –

    That is an utterly vacuous statement.

    That suggests that you honestly believe that the entire point of regulations is a desire of government to commit economic violence against anyone who wants to start a business.

    I think everyone in government is totally convinced they are the true savior of the people and, therefore, what they do must, by definition, be for the benefit of the people. But to answer your question, the act of committing economic violence does not need to be preceded by any evil intent. Ignorance by itself is more than sufficient.

    Licensing is a favor granted to the incumbents in a business to keep out newcomers who threaten to compete. Regulations are almost always established with the cooperation of those already in the business. No, businesses don’t go to government officials blatantly saying “Hey, we got a really cool way to fuck everyone we don’t like and make it look like we’re helping consumers and we’d be willing to pump big bucks into your campaign fund if you would introduce and promote our plan”. No, they don’t say that, but that’s precisely what happens.

    If you want a lawmaker to support legislation you give him the arguments he needs to make it sound like he’s doing everyone a favor. He’ll thank you for it. These laws have nothing to do with protecting the public. Do you actually think there are grass root movements clamoring for the government to shut down unlicensed florists? Or ice cream manufacturers who don’t follow some set of goofy rules? Get real.

    Government sells favors. That’s their job description. If you think otherwise, you haven’t been paying attention.

  48. #48 |  TDOM | 

    Being a chef, I am faced with both sides of this argument. The last thing in the world I want to do is make someone sick. Health Dept. rules are there in order to prevent foodborn illness. On the other hand, they can be extremely burdensome. Living up to them can be quite costly and cost is the major barrier faced by any restaurant or food provider. So what do you do? You find a way around it.

    In this case it makes no sense that she would need the machine even if she used pasturized products and boiled all the ingredients together because the process of pasturization is to heat the products to 165F degrees and hold it at that temp for 15 seconds. Boiling would heat it above that point and be highly likely to curdle the milk or cream.

    Her use of fresh strawberries is likely a bad idea anyways. Almost all fruits and vegetable need to be fully or par cooked before being frozen. Cooking them into preserves or jam prior to blending them into the cream would be far superior. It would also pasturize them in the process. Whether they are pasturized seperately or together shouldn’t make a difference.

    There probably isn’t any reason why the folks who issued her business license would know about the need for a dairy license. Most likely they are issued by difference agencies. A business license is issued for the purpose of tax collection. It lets the gov know who’s supposed to be filing a tax return. The dairy license is likely issued by the Health Dept. for the pupose of knowing who to inspect. It’s pretty stupid to obtain one for a home-based business as it allows the gov to enter your home during normal business hours and to inspect your entire household for cleanliness. It is much better to rent time in a professional kitchen that already has a license. The same may be said for a pasturization machine. find someone who’s got one and pay them to let you use it. These alternatives may increase cost, but people who shop at Whole Foods are used to paying more. Food4Less it ain’t.

    As for Whole Foods being willing to risk their reputation on this woman and her product, that’s their business. They’re apparently being sued after people got sick from raw milk products they sold in a couple of states. they’re playing it off as a coporate decision to stop selling the products, but its more that their insurance carrier won’t cover them if they continue.

    There are good reasons for having regulations, but they must be applied with some common sense. It sounds like in this case they’re not. But before pasturization, people died from drinking contaminated milk. Regulations in and of themselves aren’t bad. It’s the way they are used and the people who use them that turn them against us.

    TDOM

  49. #49 |  awp | 

    #33 | cryingAces | August 9th, 2011 at 5:42 pm
    ““Which is why I’d rather leave that kind of thing to private entities, whose reputation would rest on the integrity of their seal of approval.”

    Yea, like those darned private rating agency’s that rated all of those toxic mortgage assets as “investment grade” back in 2008. It’s good to know that S&P’s reputation went down the toilet after that. Pshew!”

    The government requires certain types of business entities to hold certain levels of superior rated debt. So that “we” can “trust” the ratings, the govt. then requires that the ratings come from certain authorized ratings companies, like say S&P.

    Often when people are doing something stupid, like say giving a damn about what S&P says, there are generally three possible reasons.

    1 the people are stupid
    2 you don’t really understand what they are doing
    3 THE STUPIDITY IS REQUIRED BY THE GOVT.

    http://en.wikipedia.org/wiki/Credit_rating_agency
    http://en.wikipedia.org/wiki/Bond_credit_rating#Credit_rating_agencies

  50. #50 |  John C. Randolph | 

    James, you snotty little boot-licker. Yes, god damn it, it is oppressive when onerous regulations protect big businesses from competition from people cooking whatever they want in their own goddamned kitchens.

    -jcr

  51. #51 |  Juice | 

    underground Salvadoran restaurants … And damn were they good. And inexpensive.

    I don’t know about any underground ones, but damn the one next to our new place has totally kickass food and is dirt cheap. I can get full on 3 papusas and they’re $1.25 each. I can get this huge pork sandwich (that is more awesome than its description) for $5.50 and it’s a total meal.

  52. #52 |  John C. Randolph | 

    We make plumbers get licenses and perform services to established standards.

    As it happens, I’m far more qualified than any plumber I’ve ever met to perform home plumbing repairs. I’ve built high vacuum equipment, and I can make pipe connections that remain impervious to helium exfiltration. But despite my superior skills, I am barred from offering my services as a plumber to my neighbors on terms mutually agreeable to us, because asswipes like you want to support the rent-seekers.

    -jcr

  53. #53 |  John C. Randolph | 

    those darned private rating agency’s that rated all of those toxic mortgage assets as “investment grade” back in 2008.

    Those agencies lied about the quality of mortgage securities because their very existence depends on a government license, and the government didn’t want anyone upsetting the Fannie & Freddie gravy train. If we had a free market for ratings agencies, they’d have to compete on the accuracy of their ratings.

    -jcr

  54. #54 |  James | 

    Jeez. I knew I was wading into treacherous waters, but I don’t think I have the capacity or time to withstand this siege. But I’ll throw myself against the pikes one last time.

    My point is merely that this particular story is not a particularly compelling argument against government regulatory authority.

    Dave –

    I would love to change the relationship between industry and regulators. But why do you think that this is specifically a government problem? Is there a compelling reason to think that, if the regulatory authority were transplanted to the private sector, that the cronyism would desist?

    Regarding grassroots movements against unregulated straw men, you are arguing a negative here. It is precisely because we are all afforded the luxury of not having to perform more than a superficial inspection of our retail goods and services that there are no grassroots protests against unlicensed florists and ice cream manufacturers. We all understand that a business has gone through the (again, admittedly potentially draconian) process of qualifying to run their business.

    As celticdragonchick mentioned above, the FDA, in fact, grew out of a grassroots movement in response to shady sales practices.

    And, again, this doesn’t actually mean anything: “Government sells favors. That’s their job description. If you think otherwise, you haven’t been paying attention.” This is just canned rhetoric. I know you think I’m an idiot because I disagree with you, but using tropes like this don’t advance either of our arguments. I’m trying not to use crude broadsides against “The Private Sector”, because, as you know, these phrases are only placeholders for more nuanced thoughts that we use for expediency with like-minded people. Please extend to me the same respect.

    nospam –

    Citation of anecdotal regulatory failure does not add up to an argument against regulation. It merely makes the undeniable, if glaringly obvious, point that regulatory authorities are not perfect. The same could be said for any private enterprise.

    I doubt RB would argue that because police misconduct exists that we should do away entirely with law enforcement.

    Jen –

    Fresh produce is almost universally labled “wash before eating”. I am quite sure I have never seen prepared food packaged similarly. There are different standards for ready-to-eat products than there are for raw/unrefined/fresh products. We all know that. Because we all know that, no serious person is confused about this dichotomy.

    OK.
    That’s it for me. I have dinner to cook. Heh. This has been fun. I’ll be back. Thanks for the hospitality.

  55. #55 |  James | 

    John C. Randolph –

    Don’t be a dick.

    Do you really think I just trying to carry government water? I am very interested in alternative ideas. But scan through. There are very few actual suggestions about how to make it better. I would willingly entertain a more developed concept regarding a private regulatory market. But just putting those three words together is insufficient.

    “Bootlicker” is, however, at least slightly more amusing an epithet than “asswipe”.

  56. #56 |  zendingo | 

    Is there a compelling reason to think that, if the regulatory authority were transplanted to the private sector, that the cronyism would desist?
    not really, but at least the private sector can’t send S.W.A.T. teams to kill your dogs for selling unlicensed milk.

  57. #57 |  Leon Wolfeson | 

    Stifling Bureaucracy. Right.

    http://www.doingbusiness.org/rankings

    Where does the US do badly? Oh yes, your absolutely amazingly arcane and stifling tax system, and to some degree construction. Not general business regulations.

    (If you fixed the tax system, you’d easily catapult to #3, when #1 and #2 are city-states which are near-impossible to emulate on a larger scale, for that matter…)

  58. #58 |  nospam | 

    # 54: “Citation of anecdotal regulatory failure does not add up to an argument against regulation.”

    It’s anecdotal that government inspected, approved and licensed Jack In The Box killed people with their FDA inspected meat?
    http://www.ou.edu/deptcomm/dodjcc/groups/02C2/Jack%20in%20the%20Box.htm

    It’s anecdotal that government inspected, approved and licensed was contaminated with e coli?
    http://www.newsinferno.com/archive/e-coli-tainted-lettuce-came-from-california/

    It’s anecdotal that health bureaucrats going after amish farmers with SWAT teams?
    http://www.crossroad.to/articles2/08/swat-team.htm

    No, it’s not anecdotal….it’s documented.

    When was the last time Underwriter’s Labs or Consumer Reports leveled an MP-5 at someone’s head?

  59. #59 |  Leon Wolfeson | 

    Oh, and personally I’m for food labelling. This does mean, note, standardised labels. Let people eat what they want, but let people find ingredients, nutritional information, allergy warnings and health indicators (i.e. “contains unpasteurised ingredients”)

    I’m with @33 and @44 as well. Although apparently Italy has actually taken action now.

  60. #60 |  derfel cadarn | 

    Do you have to be a complete asshole to get into government or is it something they inject into you after you get there? The fact that assholeism is so ubiquitous in that arena that it cannot just be happenstance.

  61. #61 |  Ego is a Wonderful Thing | Maspik Teruzim | 

    [...] you may have missed: the second meeting of Jackie Nava and Ana Maria Torres. – An ice cream story: regulation and its effect on a small business. Decent discussion in the comments, too. Eco World Content From Across The Internet. Featured [...]

  62. #62 |  C.A. | 

    There is a simple solution to this. People who want to run artisanal food companies that don’t use recognized processes to reduce bacteria should be able to do so, as long as they label the food something along the lines of “this food is produced in a facility that does not pasteurize its products”. Then the customer can be free to choose whether or not to buy it, aware of what he’s getting into.

    I, for one, would buy it in a heartbeat if it’s good.

  63. #63 |  SamK | 

    James-

    Welcome to the pinko commie club at TheAgitator! I feel kind of left out some days :).

    You’re contributing nicely, please don’t be sidetracked by the occasional rude comment. I find that they are few, far between, and generally easy to ignore. I’d suggest that, actually…ignoring them. Dave’s also usually very insightful even when opposing you, so give him a chance (he’s been a bit under the weather).

    I like regulations of ice cream and bacteria in my mass-produced foods. Love it in fact. I do think this is business at work as well, not just regulations.

  64. #64 |  SamK | 

    Oh, and I think she’ll be fine once she gets the hang of things. This includes figuring out appropriate ways to follow rules, like not needing a pasteurizer, etc. Could screw her up in the meantime, but I am rather fond of my food producers being well educated about food safety.

  65. #65 |  Dave Krueger | 

    James, there is one insurmountable difference between the public and private sector.

    The government makes the rules that everyone else has to follow under penalty of law. No private sector has that authority and therefore cannot offer such powerful favors to its supporters.

  66. #66 |  Dave Krueger | 

    #60 derfel cadarn

    Do you have to be a complete asshole to get into government or is it something they inject into you after you get there?

    Assholes are everywhere, not just in government. But, unlike in private industry, assholes in government hold a monopoly which means you and everyone else have nowhere else to go. You have to play by their rules and that means you have purchase favors, their only product, at their doorstep.

    What makes our lives so miserable is that we haven’t learned to rationalize it all and convince ourselves how wonderful it is. In other words, we’re fighting it and we’re doomed to lose because we are far outnumbered by those who ignorantly cling to the blind faith that government will magically transform itself into the answer rather than continuing to be the problem.

  67. #67 |  Dan | 

    The worst bout of food poisoning I ever had was from eating my wife’s (now of 40 years) pork chops. Damn near killed both of us. Just say’in.

  68. #68 |  johnl | 

    The irradiated berries sound like a good workaround.

  69. #69 |  John C. Randolph | 

    Do you really think I just trying to carry government water?

    If the shoe fits, wear it. Just don’t bitch about big corporations when you’re advocating the policies that protect them from competition.

    -jcr

  70. #70 |  John C. Randolph | 

    I would willingly entertain a more developed concept regarding a private regulatory market.

    “Underwriters’ Laboratories”. Google it, you moron.

    -jcr

  71. #71 |  John C. Randolph | 

    I know you think I’m an idiot because I disagree with you,

    You have that reversed. You disagree with her because you’re an idiot.

    -jcr

  72. #72 |  Dave | 

    I guarantee none of the assholes criticizing this post ever wash their strawberries. They’d rather sue the producer after the fact when they get cancer.

  73. #73 |  Kevin Carson | 

    I always wondered why so much supermarket ice cream with a flavor named after “berries” was mostly goopy high fructose corn syrup rather than actual fruit.

    In a way, it really is “industry” behind this. Such regulations sure as hell benefit the big players in the plastic food industry, by raising the cost of entering the market and competing with them. More importantly, they raise the cost of competing in terms of quality astronomically. So it becomes a lot more expensive to use fresh strawberries and high quality fresh dairy products, compared to using strawberry syrup and prefab ice cream mixes? Guess who that benefits? The incumbents who’d rather make mediocre crap with strawberry syrup and prefab ice cream mixes.

    As is the case with most regulations, the effect of this one is to cartelize an industry in the hands of a few oligopoly players selling a mediocre, dumbed down product, with little in the way of price or quality competition. The regulations couldn’t work better if they’d been written by the incumbent producers. In fact they may have been. I’d certainly guess it was one of the incumbents who turned her in to Public Health.

  74. #74 |  AnonymousAnarchist | 

    I like regulations of ice cream and bacteria in my mass-produced foods. Love it in fact.

    Liking (or loving) regulations of ice cream and using force to prevent two people from trading on mutually agreed upon terms are separate things that are not mutually exclusive. There is nothing wrong with the former while there is no legitimate defense for the latter (condoning violence against innocent individuals) even if you claim it’s for their own protection.

    I do think this is business at work as well, not just regulations.

    No shit. Regardless of the marketing, most government regulation is pro-plutocracy (big-business/big-government aka the corporate state). It was true during the “Progressive” era and it’s true today. The only problems related to “deregulation” are caused when the state grants special privileges to banks, corporations, etc. (usually in the form of regulation) and then, later on, removes restrictions on how they can use those privileges. But again, that’s really a problem of state-granted privileges.

    I would willingly entertain a more developed concept regarding a private regulatory market.

    “Underwriters’ Laboratories”. Google it, you moron.

    How about eBay? I’ve never once been ripped-off and I don’t know the identity of the sellers or the regulators. I only know their reputations.

  75. #75 |  Josh J | 

    John C. Randolph, you are a discourteous dickhead. Do us all a favor and shut the fuck up.

    James, I second SamK’s advice to ignore the pathetic asshattery of people like John C. Randolph. Save your time for what is turning out to be an interesting discussion with the rest of us.

  76. #76 |  DeeG | 

    No doubt someone who is a competitor sicced the state on her — I live in Illinois, and the government (state and local) is very, very happy to take in anonymous administrative complaints against businesses, and send lots of administrators around to investigate, while you, as the object of their investigation, have no right to know who has levied the charges against you, no right to seek an injunction to call them off, etc. The state can ALWAYS find something wrong with any business, and fines for not having your paperwork in order under most IL regs is $500 a day and up — death to a small business that gets caught up in it. Amy Madigan is very careful to ensure that her attorneys invesgitate Illinois businesses, instead of anyone in the Illinois political class (her father is the Dem speaker of the house, and is just as corrupt as Blago).

    The problem is that the state fails to phrase their regulations as, “you business owner will take reasonable steps to ensure food safety,” which a business owner could then rebut by showing that no-one has gotten sick, bacterial levels are at levels that haven’t caused illness, or creative means, etc. And I’d be fine with stating that non-processed foods have an “artisanal” sticker on them as a warning of added caution, or “we haven’t been inspected to comply to IL food standards,” etc. But if certain equipment is involved, then yeah, that is likely a sign of regulatory rent-seeking, not genuine health/safety concerns.

    True “anecdote”: my father’s small business in Illinois was being crushed by environmental regulations. He figured out an innovative way to recycle everything, so he wasn’t creating any pollution. He should be applauded, right? No waste system? Wrong. The bureaucratic wrangling got even worse, because the bureaucrats, notwithstanding their constant inspections, a U.S. patent, and many, many patient and not-so-patient explanations for how the system worked by my father, refused to believe that the system worked, because “everyone in this industry pollutes,” and even threw one of his customers up against a police car because they thought he was a front man to illegally buy “waste” for illegal dumping. They demanded paperwork showing his “waste disposal” records, and fined him $10,000 for not producing them. Of course, he couldn’t produce such records because he hadn’t disposed anything, because he’d recycled everything. It was like trying to explain 3-dimensional space to a square. Small-minded people who RELISHED throwing their weight around, while snottily proclaiming, “I’m just doing my job!”

    Dad shut the business down in 2009, fired his 7 employees, and is now living the life of a government dependent on Social Security.

    Another IL company I am aware of in the food processing business actually created a product that they sold at a major loss, because it was cheaper to make this product and sell it for next-to-nothing than it was to toss the stuff because the IL and EPA regulations would have otherwise classified this material as “hazardous waste.” (FYI, technically, if you vomit up a vitamin and flush the result, or bury a penny in the backyard you’ve contributed to the release of “hazardous waste” into the environment under CERCLA and EPA regs as they are interpreted by the courts). The stuff wasn’t harmful, but combining “hazardous waste” with food preparation would have required all sorts of clean rooms, wall barriers, inspections, testing, etc. Absolutely bloody stupid to spend money making something worthless, but that’s government for ya…

  77. #77 |  DocHoliday916 | 

    Upon further review…the inspector having checked records for donations to local and state Democratic Party and Democratic incumbents, the political officer err I mean the inspector found out that Ms. Swanberg had not made any donations…it’s the Chicago Way folks.

  78. #78 |  SamK | 

    Eh, much like locked doors, I tend to think that *some* regulation is best while minimizing just how much that *some* is. Regulations used by the plutocracy? Of course! Regulations still prevent *most* of the plutocracy from massively exceeding the bounds of health expectations? Yep. Inspectors are bought off, some are just lazy, some are friendly, some are incompetent…and some are wildly effective and driven individuals. Not being sure which you’ll get forces people like Massey energy to at least half-ass compliance with OSHA and environmental regs and the same occurs in the food industry. I’ve worked with and in a number of industries and I find over and over that there is a reasonable effort to meet regulations. This means that you don’t *quite* get it…much like you don’t *quite* drive the speed limit. There are plenty of people who can completely ignore the boundaries we set socially, and many of them are successful and enjoy their immunity (police) but the majority still attempt to conform and it *does* benefit us. As previously discussed, our expectations when purchasing food are based upon the common state provided to us when we go shopping. When someone provides food for purchase that *doesn’t* meet those expectations but in a manner in which we cannot tell the difference (we don’t check labels often, much less scan for contaminants/bacteria etc at the grocery store), we *cannot* make an informed decision and enter into contract. I’m all for letting this gal sell her ice cream, and I’m all for it having a bright tag saying “may not be clean” or some other shit. We used to do something like that with un-pasteurized food when I lived up north…then they stopped selling it, not because it wasn’t popular, but because people got sick and it suddenly stopped being popular (and law suits I’m sure, but the stock boys pulling down the display shrugged and told me “it’s not like anyone’s buying the stuff now”)

    The powerful in our society will always find a way to fuck the little guy. I’ll take getting fucked while having regulations that keep me un-fucked most of the time.

  79. #79 |  2nd of 3 | 

    @24. Okay, I love chemicals myself, so I’m cool with that too. See, we liberals can coexist with you libertarians. Maybe.

  80. #80 |  CrazyBab | 

    “Regulations like these make it nearly impossible for smaller, newer companies to even get off the ground, much less compete.”

    On the other hand regulations like this also protect people from serious foodborne illness which USED to be a big problem in this country – people, especially children, used to get sick and die on a regular basis because of contaminated food. (And no, the free market did NOT do a good job of protecting consumers before these regulations – Individuals often do a very poor job of assessing risk -)

    There needs to be a balance obviously, but pasteurization of dairy products is pretty much a given as a requirement. This requirement has seriously increased the freedom of american people, nothing takes away your freedoms more effectively than premature death or serious illness.

    And why hasn’t the market met the demand for a low cost pasteurizer?

  81. #81 |  Leon Wolfeson | 

    @74 – I gave up on ebay after one too many – bluntly – asshole buyers. I’ve had several dozen incidents of non-payment, people quoting inappropriate (American, mostly, I’m a Brit) laws at me, demanding repayment for stuff *very clearly* stated in the listing… (yes, there’s a crease on the dust jacket, did you read the description? No, Nintendo DS games are NOT region locked, I will not accept a return because the box is a British one…), claiming I’m in breach of regulations on payments only applicable to businesses, not private sellers…

    It was, literally, more of a headache than it was worth. And this is supposed to be some kind of template?

  82. #82 |  Radley Balko | 

    And why hasn’t the market met the demand for a low cost pasteurizer?

    It has. It’s called “heating.” But the state regulators won’t let her do that.

  83. #83 |  James | 

    Underwriters Laboratories does seem to be an interesting model.

    I cannot help noticing that they are an OSHA-approved “nationally recognized testing laboratory”. There appear to be 15 or so of these companies.

    Is this a satisfying outcome for Agitatortots? Is it acceptable to have an public agency in place to vet these private regulatory firms? And, ultimately, doesn’t that ensure that the companies regulated by UL are, in fact, in line with federal standards? More to the point, is there any reason to think that the currently recognized private regulatory companies do not benefit from the same competition-trampling cronyism seems to be of such great concern in the comment section?

    Finally, if we were to remove the OSHA stamp of approval from these private regulators, what reason have we to believe that standards would persist at whatever levels are currently mandated? Would it be preferable to replace OSHA with a private firm as well? And, if so, who maintains the standards of that firm?

    I want to understand what I’m not seeing.

    I keep thinking of the line, “it’s turtles all the way down”. I don’t know why.

  84. #84 |  Cyto | 

    #7 | Dave Krueger |

    I’ve wondered the same things many times about prescription requirements. In my former life in medical research I used to make and sterilize buffered saline solutions on a weekly basis. There’s really no possible way to misuse it unless you connect it to an IV – even then it’s more down to not using an IV correctly than giving saline. But I’m assuming we’re not talking about saline IV bags. You can get sterile PBS (phosphate buffered saline) on the eye care isle without a prescription.

    But you have to have a prescription for all manner of medical devices. Things like crutches and braces can require a prescription. Really weird –

    Citizen: “I’m considering purchasing a piece of plastic molded into a funny shape!”

    State: “Not without permission from properly licensed professionals!”

    Funny, it kinda applies to adult toys too. “No! You can’t mold silicone into that shape! It’s obscene!”

  85. #85 |  Highway | 

    James, if you remove the OSHA stamp, what does it matter. It’s not the OSHA stamp of approval that makes UL a respected name in certification and approval of electrical devices. It’s that they have a good track record in identifying and working to get rid of problems in products. The OSHA stamp isn’t saying that UL is approving items to government regulations. It says that their facilities comply with different regulations for a testing lab. UL develops the standards they apply to products on their own.

    Firms will maintain their own standards. Places like Consumers Union (who publishes Consumer Reports) and UL maintain their reputation by doing consistent rigorous testing. Now, you are free to disagree with Consumer Reports, and there are many people who do, and they might come up with something better. Like TrueDelta, a site run by a person who thinks that Consumer Reports has flawed methodology in their auto reliability rankings, so he made his own ranking system and uses owner data to provide results that he feels are more representative. That’s what a competitive market looks like.

    Sure, some private certification labs would be exposed as providing fluff ratings, maybe like Consumer Guide or JD Power. And that information gets spread around and people learn to not trust those groups. But having government oversight of private firms doesn’t change the fundamental problem with the government oversight. It just shifts it to another level of abstraction.

  86. #86 |  James | 

    Highway –

    From Wikipedia (http://en.wikipedia.org/wiki/Nationally_Recognized_Testing_Laboratories): “A Nationally Recognized Testing Laboratory is a testing facility recognized by OSHA as primarily private sector organizations[sic] that provide product safety testing and certification services to manufacturers. The testing and certification are done, for purposes of the Program, to U.S. consensus-based product safety test standards. These test standards are not developed or issued by OSHA, but are issued by U.S. standards organizations, such as the American National Standards Institute (ANSI). The range of products covered by the Program is limited to those items for which OSHA safety standards require “certification” by an NRTL.”

    In fact, it appears as though nationally recognized testing laboratories exist specifically to make sure that products are up to government specs. True, ANSI, which establishes the criteria, is a non-governmental entity, but it does appear to be the sole agency responsible for establishing safety thresholds for the industries for which it provides standards.

    I suppose I see what the preferred Agitatortot model is, but, reflexive distaste for government aside (as if “government” is single, hulking, coordinated monolith), I don’t particularly see the enormity of the advantage of this system over an equally centralized government regulatory option.

    I am all for outcomes like this. But ultimately these things need centralizing in order for them to make sense. There is a slider, I guess, with full economic freedom on one side, coupled with the potential for wildly different anecdotal outcomes and low predictability, and complete Brazil(movie, not nation)-style bureaucratic homogenizing on the other side, coupled with creativity-stifling but highly predictable outcomes.

    The idea that regulatory oversight has a market-based solution, not just non-governmental but actually incorporating enough firms that would lead to a real regulatory market, seems fanciful to me. Centralization appears to be necessary in order to keep things reasonably simple for both producers and their consumers.

  87. #87 |  plutosdad | 

    James, it’s not just about the testing. Note the government did not say “you have to get tested” they said “besides the testing, you need to implement things a certain way”
    Why does the regulation include all that crap?
    All they need is regular and perhaps surprise testing, HOW the business makes sure their products are safe should not matter, only that they are safe.

  88. #88 |  James | 

    plutosdad –

    I get that.

    I am not advocating for this specific regulatory imposition of this specific pasteurizer. However, I do think that the reliability of a process matters. Measurement error of thermometers matters, for instance, in the same way that measurement tolerance of radar guns matters. It is important that we can test a product anecdotally and know that the reliability of the production process precludes testing every batch of every product.

    Am I mistakenly fetishizing predictability and consistency? Aren’t these particularly important in food products? Is there a way to maximize both freedom of production techniques and predictability of outcomes such that we don’t have to run our own food safety tests on everything we eat?

  89. #89 |  Just Plain Brian | 

    I don’t particularly see the enormity of the advantage of this system over an equally centralized government regulatory option.

    The advantage is simple: Incentives. A private company stakes its reputation on the work it does.

    On the other hand, a government group has no skin in the game. If OSHA fails to prevent a tragedy, not only will OSHA continue to exist, but in all likelihood no one at OSHA will lose their job. They may even be granted more power and a larger budget, to “prevent such a tragedy from happening again”.

  90. #90 |  SamK | 

    Brian- there are also distinct disadvantages to private ratings agencies whose sole income depends on the people who they are rating (see the S&P discussion above). I like decentralization where possible, but one of the other issues to completely free market analysis is the inability to know who to trust. We don’t ‘trust’ the government, but we do have a pretty good idea how far we can throw it by now. Traditionally the government approach is rife with waste (not caring how much it costs to do the job) and graft while the free market approach is rife with greed (doing the worst possible job for the most income) and graft. So long as the job gets done I’m pretty pleased with the end result…like UL, ANSI, API, and similar institutions who tend to have fairly close ties to both government and industry I think the best solutions involve both of our unloved bastard children.

  91. #91 |  James | 

    Fair enough.

    What happens if Underwriters Laboratories approves a product that later fails? Who is their competition in which we are supposed to put our faith? And why would we put faith in their competition if we are not familiar with their work?

    None of this is to suggest that government regulatory practices are ideal. It is just that I’m struggling to see a very compelling alternative that actually produces better outcomes, as opposed to merely satisfying philosophical ideals.

    Again, I ask, isn’t centralization important if we are to maximize the predictability of products (especially products with profound public health implications such as food)? And how do we maximize the freedom of production techniques while maintaining these standards? And, finally, again, am I just asking the wrong questions?

  92. #92 |  AnonymousAnarchist | 

    I gave up on ebay after one too many – bluntly – asshole buyers. I’ve had several dozen incidents of non-payment, people quoting inappropriate (American, mostly, I’m a Brit) laws at me, demanding repayment for stuff *very clearly* stated in the listing…

    While I appreciate you sharing your experience (I’ve heard of similar experiences from others[*]), I don’t understand how it applies. This blog post and its comments are discussing the effects of government regulation of products and the people that sell them. Your example is “asshole buyers”. Are you suggesting we also need government regulation of the people who purchase ice cream? I’m sure there are “assholes” who would order a batch of freshly made ice cream and then not come to pick it up. If that’s not what you’re suggesting then I don’t see how it supports the argument that successful regulation can only be provided by a monopoly that has the authority to coercively enforce those regulations.

    [*] Hopefully, you contributed to the community and rated those assholes accordingly so that others won’t have to deal with them. When I have heard these types of stories before, the person telling them was always dealing with a buyer that was new — did not have an established reputation — or had a shady reputation. If you were dealing with buyers like that then that is not a failure of the reputation system.

    It was, literally, more of a headache than it was worth. And this is supposed to be some kind of template?

    Template? Those arguing for a monopoly provider of regulation are the ones arguing for a template. Wanting regulators to compete in the market for society’s trust is suggesting there be no template at all.

    But, for argument’s sake, let’s say that if the government did not regulate the production and sale of ice cream, tens of thousands of people would get ice cream poisoning and some would even die. How does this justify violence against innocent individuals?

  93. #93 |  AnonymousAnarchist | 

    …there are also distinct disadvantages to private ratings agencies whose sole income depends on the people who they are rating…

    That may be accurate when talking about the current state-guaranteed system of privilege but, if we had freed markets — or, as some say, anarchy — then the income of ratings agencies would depend on how many people relied on their ratings.

    What happens if Underwriters Laboratories approves a product that later fails?

    I’d imagine, if the failure is something that UL should have caught, those harmed by the product would seek compensation. If the damage done was large enough, people might stop trusting UL’s judgement altogether and they’d go out of business. And, if there was a competing regulator/certifier that had correctly pointed out the potential hazard (denying the product their certification), they would probably take UL’s place as the most trusted certifier of safe products.

  94. #94 |  Matt | 

    #93

    That’s way worse then if the government were in charge! When the SEC screwed up with the Fannie and Freddie mess all of the agents sleeping on the job were fired and the SEC was shut down for gross incompetence.

    Oh wait, none of those things happened…

  95. #95 |  James | 

    AA –

    Although what you describe is attractive (even to lefty me), I still don’t really see the possibility of implementing such a regulatory market.

    The short term arrangement, as you admit in your response to eBay tangent guy, means massive uncertainty for the consumer. Is this, again, short of satisfying a philosophical ideal, really a better arrangement? And to clarify, by “better”, I mean maximizing both predictability of production and freedom to innovate.

    This, to me, is a practical issue, not an idealistic one. The imperfection of regulatory agencies, public or private, is to be assumed. How do we make the current system produce better outcomes, not just more idealistically appealing?

  96. #96 |  James | 

    Matt –

    True. But the boards of directors of finance giants weren’t fired after destroying their investors’ portfolios either. Both the public and private sectors are rife with good ol’ boyism and cronyism and downright fraud.

    You have not made a compelling argument in favor of a shift away from government regulatory authority.

  97. #97 |  zendingo | 

    @69 | John C. Randolph |

    well said!!

  98. #98 |  John C. Randolph | 

    ” Do us all a favor and shut the fuck up.”

    I know you leftards hate this, but the fact is that I don’t have to comply with your demand. Try to work it out in therapy.

    -jcr

  99. #99 |  John C. Randolph | 

    “What happens if Underwriters Laboratories approves a product that later fails? ”

    They’d be out of business. They wouldn’t be able to bitch and moan and get more tax money to pay for their incompetence. That is the crucial difference between a private and a public regulator.

    Compare the UL to a typical government regulator, like the SEC. Do you imagine that anyone at the SEC got canned, or even demoted for their incompetence in the Enron case?

    -jcr

  100. #100 |  John C. Randolph | 

    “You have not made a compelling argument in favor of a shift away from government regulatory authority.”

    Liberty doesn’t require justification. When you advocate putting a gun to someone’s head, it’s up to YOU to show why it’s necessary.

    -jcr

  101. #101 |  Highway | 

    There doesn’t have to be some centralized authority. What’s the benefit to that? That everyone knows the rules? That the rules get decided by politics? Why is there some inherent benefit to it being the government, and beholden to the political process?

    There are many cases where the government rules aren’t considered stringent enough by outside folks. Consider auto crash test ratings: Insurance Institute for Highway Safety (non-government) or National Highway Traffic Safety Administration (government). IIHS introduces tougher standards before NHTSA does, like frontal offset into a deformable barrier, or even two vehicle crash tests. NHTSA runs a full frontal crash into a solid barrier at a slower speed.

    Neither gives a pass/fail rating, so it’s not a case of all cars meeting some minimum standard. Both give ranked ratings. But IIHS is able to change their testing regimen faster, able to respond to new concerns faster. NHTSA still uses older test protocols because of lobbying efforts to prevent changes to them. IIHS isn’t accused of favoritism, although it’s known they have an agenda. They don’t want to pay out insurance claims. So they want the vehicles to be as safe as possible.

  102. #102 |  James | 

    Highway –

    I am not particularly fond of politics creating regulatory standards. And I do not think there is any inherent benefit in government regulatory control. I am quite willing to accept alternatives.

    My questions about centralization have everything to do with everyone knowing the rules. What I’m struggling with here is that although there have been a few vague but reasonable alternative proposals offered, the impediments to implementation of these alternatives mean overwhelming uncertainty about product quality/safety standards for both producers and consumers. And we keep hearing over and over that “uncertainty” (over regulations and, yes, I know, taxes) is the problem with businesses hiring (or, more specifically, not hiring).

    Another question…

    How do we establish truly competitive regulatory markets? I don’t see how enough competing private regulatory firms can be profitable enough for long enough to be called a real market. And, if there are not enough firms to be a truly competitive market, how do we guard against the very same behaviors that we currently find in government regulatory bodies (fraud/cronyism/etc.), especially with profit motivated firms running the show.

    I don’t trust government either. I just think that its incompetence is a known quantity. But it seems silly to me to suggest that the private sector is inherently more trustworthy.

    Finally, and I ask this honestly, do the Agitatortots think that regulatory standards are actually any use at all? If not, perhaps that explains my confusion. (I know, JCR, my confusion is a product of my corrupted and warped mind, dominated by thoughts of control and thought-crime prosecution.)

  103. #103 |  crazybab | 

    “It has. It’s called “heating.” But the state regulators won’t let her do that.”

    Um no – Pasteurizing involves heating milk products to a specific narrow range of temperatures for a specific period and then cooling the mixture quickly- all in a sterile environment.

    The temperature & time is enough to kill most harmful bacteria but not enough to cause the ingredients to “cook”- start the chemical changes associated with heat.

    Its very difficult to do on the stove top – and because cooking will wreck the product a stove top operation is likely to err on the side of under pasteurizing the product.

    That said I don’t have a problem with this operation running without a pasteurizer, so long as it is clearly labelled as such and the business has insurance to cover all the harm contaminated product might cause in any realistic scenario. Of course that requirement would probably be much more onerous than buying a pasteurizer.

  104. #104 |  crazybab | 

    Years ago odwalla used to sell unpasteurized product in California. When that product killed a little girl they saw the light and realized pasteurization was cheaper than the liability.

  105. #105 |  damaged justice | 

    I believe pasteurization causes more problems than it solves, and eat accordingly. If you believe otherwise, knock yourself out.

  106. #106 |  Brandon | 

    James and Samk, here are your objective, centralized, selfless protectors of the consumer’s interest:

    http://www.foxnews.com/health/2011/08/10/government-knew-about-bacteria-in-turkey/

    That is how it actually works in the real world. And what did the USDA have at stake here? Nothing. For them, business continues as usual, and they might get a budget increase to ensure something like this “never happens again.”

  107. #107 |  James | 

    Again though, Brandon, to what extent does this differ from finance firm executives getting massive bonuses (let alone keeping their jobs) after plunging the country into financial crisis through greed and fraud and cronyism? Is it even as bad?

    I am still not arguing in favor of government regulatory authority. I just don’t see it as being inherently worse than a private sector equivalent. And I still think there are massive risks in introducing a profit motive into safety/health regulation.

    At the moment, it is crystal clear who is to blame for issues such as the one you raise above. A private regulatory market, however that might be manifest, seems like it would be far more difficult to assess with clarity. Do you disagree?

    I completely understand and agree that there are many cases of ineptitude and abuse in governmental regulatory agencies. To suggest that this is how they always works is, of course, utterly ridiculous. Analogously, Balko is not advocating the abolition of all law enforcement despite countless cases of gross ineptitude and abuse. He advocates for accountability and prosecution of those who permit and incubate the abhorrent behaviors. (If I have this wrong, RB, please correct me.) I don’t particularly think he would like the analogy, but I think it’s fitting. Pubic safety is at stake in both cases. This seems important to me.

  108. #108 |  Highway | 

    James, I still think you’re worrying about it from the wrong direction. People want to get information about what they do. Most people don’t like being uninformed, at least about the stuff they have to pay for and use (people’s idiocy about government notwithstanding). Wherever there are two competing products, there are people asking which is better.

    I also think you’re a little hung up on rules. What are the rules supposed to be? Isn’t that up to the manufacturer of the product and the user? If a manufacturer makes something that people think is worth using, they use it. If it’s not worth using, they don’t. As I and many people have said: companies don’t want to hurt their users. They may make a calculation that some additional safety margin is not cost effective, but this isn’t because they want dead customers, it’s because their computation doesn’t work out that way. Sometimes it’s a losing bet in the short term, or sometimes in the long term with loss of confidence in the company.

    The competitive part is just a description of the possibility. If one company is filling the need, then why does there need to be competition (and how is this different from that one ‘company’ being the government)? It’s when the incumbent is *not* filling the need when you need the possibility for competition. Maybe the incumbent is too expensive, or uses old theory or testing, or even is too rigorous for reality. Then there’s the opportunity for other companies to fill in that perceived need.

  109. #109 |  crazybab | 

    “”That is how it actually works in the real world. And what did the USDA have at stake here? Nothing. For them, business continues as usual, and they might get a budget increase to ensure something like this “never happens again.”””

    Look again at your own article:

    “Food-safety specialists said the delay reflected a gap in federal rules that don’t treat salmonella as a poisonous contaminant, even if inspectors find antibiotic-resistant forms such as the Heidelberg strain implicated in the latest outbreak.”

    The problem is that we have regulatory capture by the private sector of the regulators – don’t you think it would be worse if the regulators were private?

    What we need to do is get the money out of politics. I’ve come to believe that public financing – for all its flaws – is better than any alternative.

  110. #110 |  Radley Balko | 

    The problem is that we have regulatory capture by the private sector of the regulators – don’t you think it would be worse if the regulators were private?

    No, it wouldn’t. Because as soon as this happened, the private company would be exposed and lose credibility. And/or be sued. You can’t switch to another FDA or USDA. You can’t sue the FDA or USDA.

    What we need to do is get the money out of politics.

    FDA and USDA officials and inspectors aren’t elected. At the very top, they’re appointed and approved by the Senate. But most of the agency is filled with career public servants. If there’s money exchanging hands that is influencing decisions, it’s already happening illegally. There is a revolving door problem. But I don’t know how you solve that unless you’re going to bar people from working in the private sector once they’ve held a public service job, or vice versa. And I doubt a law like that would be upheld.

  111. #111 |  James | 

    Highway –

    Personally, I like to do intensive (obsessive?) research about most things I buy, but I think you are wrong about people’s desire to get information about things they purchase. I think the opposite is true. I think most people assume that, if a product/service is available, it is safe, and, very generally speaking, the lowest cost option is preferred. We can debate whether they’re lazy idiots, but think of the crazy plastic crap that parents buy their kids. When it turns out to be painted with lead or mercury, everyone loses their shit. We have, as a society, decided that it is not worth the social cost to allow people to purchase (usually unknowingly), or companies to sell, products that are demonstrably unsafe/unhealthy. This allows people a baseline for comparison. If I know that everything on the shelf in front of me has exceeded some safety/health floor, I can spend what time I choose to invest figuring out which product I prefer without worrying that I am ignorant of some safety/health issue. It turns everything into apples. This is why I keep prating on about centralization of standards, too.

    Regarding rules, I think we may be getting somewhere here. To some extent, I guess I agree that the rules should be set by producers and consumers. However, aren’t government regulatory agencies formed because “The Public” (as if we are some monolith) desires consistent and predictable outcomes? They represent, to some degree, a collective, “We refuse to allow product safety to be a bargaining chip.” It is entirely possible, of course, because government has near-monopolistic regulatory control, that everyone is just being lazy and assuming that the gov’t is doing a good job (or good enough or whatever). Do we really think, though, that by making things less predictable or consistent, that everyone will assume the role of self-regulators somehow?

    Finally, regarding market competitiveness, my question still stands. Why, if a single private regulatory agency is indistinguishable, in theory anyway, as you suggest, from a single government regulatory agency, why should we prefer it necessarily? You might not trust government, but I certainly don’t trust profit-driven private enterprise when there is no competition. This is why I appear to be hung up on the regulatory marketplace. If we are looking for market-driven outcomes, well, isn’t a market a prerequisite?

    I still am not seeing a reasonable alternative to the current system that doesn’t require complete overhaul of the entire consumer-producer relationship.

  112. #112 |  mad libertarian guy | 

    The internetz took a collective shit and made a collective whine when fucking Netflix changed their pricing scheme. Do you not think that contaminated ice cream which is not an isolated incident wouldn’t get the same.

    I’m my own goddamn regulator. If you need the state to tell you that some particular food is okay, you’re doing it wrong.

  113. #113 |  Boyd Durkin | 

    I’d love a job like the FDA and USDA have (or building code inspectors). Bossing people around, showing up with guns if I want, charging people fines or throwing them in jail, badges (!)…and no accountability. If I fail, you get to fuck off.

  114. #114 |  Boyd Durkin | 

    I still am not seeing a reasonable alternative to the current system that doesn’t require complete overhaul of the entire consumer-producer relationship.

    I also don’t see how I’m supposed to lose weight without eating better and exercising.

  115. #115 |  George Arndt | 

    Big meat producers are allowed by the governmetn to inject thier animals with large amounts anti-biotics with is creating super-bugs. Sounds a bit more dangerous than strawberrys!

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