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The GOP and CPSIA

Thursday, March 5, 2009  |  posted by Hugh Hewitt

The Wall Street Journal has a detailed piece on the insanity of the Consumer Products Safety Improvement Act in today’s paper. (For background, listen to my interview 10 days ago with Snell & Wilmer CPSIA expert Gary Wolensky.) The key graphs from the WSJ:

“We have millions of dollars worth of merchandise sitting in 30 40-foot-long trailers waiting to be hauled out to a landfill somewhere,” says Michael Klein, president of Constructive Playthings Inc., a closely held Missouri toy maker. The banned products include beach balls, inflatable toy guitars and blow-up palm trees.

Local outposts of Goodwill Industries International are also “filling up trailers with the stuff,” says Jim Gibbons, chief executive of the charitable group, which collects and distributes used clothes. The law affects clothing because lead is sometimes used in buttons, zippers, rhinestones and other embellishments.

Goodwill’s Mr. Gibbons says its stores may have to destroy $170 million in merchandise. The Salvation Army say it will have $100 million in lost sales and disposal costs related to used goods.

The trade groups and charities have been lobbying for an exemption to enable them to sell the problem goods, saying the danger to consumers is minimal, but so far they have failed to get much congressional attention.

The Toy Industry Association estimates that more than $600 million in toys made illegal by the law are sitting in manufacturers’ warehouses or have already been shipped to retailers. A trade group for small apparel makers in New York called the Coalition for Safe and Affordable Childrenswear says its members have a $500 million problem. And the California Fashion Association, which represents many Western clothes makers, puts their troubled inventories at $200 million.

Read the whole thing.

I have been arguing for two weeks that Congressional Republicans should seize on the CPSIA and its unintended consequences as a teaching tool for the public on the inability of the Democratic Congress to get even easy laws right without triggering huge damage to private business. CPSIA exhibits every bad aspect of Democratic legislation, from the easy moralizing of its sponsors to terrible draftsmanship, but the bottom line is it is costing hundreds of millions in wasted product and who knows how many jobs in the middle of a tough recession.

A joint press conference between Senate and House GOP leaders outlining the devastation and demanding quick action to reform the law combined with a connect-the-dots follow-up to card check and health care “reform,” would set the stage for repeated arguments this spring, summer and fall that begin: “Remember the CPSIA fiasco where Congress ended up outlawing a billion dollars in perfectly acceptable toys and shuttering hundreds of businesses, well this legislation makes that fiasco look like a model of efficiency.” The GOP needs to make the incompetence of the Congress and Administration on the economy the key issue going forward, and CPSIA is proof that Democratic promises of “reform” are at best empty and actually quite destructive of real economic growth.

I continue to avoid e-mails during vacation week, so if you have questions on CPSIA, write lawyer Wolensky, who has just returned from a trip to D.C. to lobby lawmakers on fixing this fiasco. He can be reached at gwolensky@swlaw.com.

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The Rush To Rush Judgment

Wednesday, March 4, 2009  |  posted by Hugh Hewitt

Judging from my e-mail, my guest host Jim Geraghty had David Frum on yesterday talking about Rush and the GOP. Not sure what was said, but it angered Rush fans. David’s a talented writer and pundit, but of he wants to “reform” the GOP by deeply reducing the influence of many key constituencies within the GOP, including evangelicals, Catholics, and Mormons who believe the life and marriage issues matter, so of course he isn’t going to be a big fan of Rush. In any event, David criticizing Rush reminds me of the old saying about pebbles and battleships.

Today the Washington Post runs a Perry Bacon piece on Rush for which I was interviewed early last week, and which I referenced in my post on Rush from this weekend. I am not quoted in the article, so all the brilliant things I said about Rush even before the CPAC speech are not there to be read. But as I insisted –my standard policy for MSMers wanting to interview me– that the interview be taped for broadcast after the story ran, Duane will play it in the course of today’s show, which will again be guest hosted by Jim G. A transcript will be posted here later. Judge for yourself if Bacon’s piece might have ben improved by including any of my pro-Rush commentary.

Bottom line: Rush is one of the two greatest communicators in America, along with Oprah. He effectively raised the spirits of the base last weekend in a way no Republican had since last November. The party would be in much worse shape without him, and the Dems know that and are using this moment to try and brand him a burden on the party so as to diminish his effectiveness. Only the easily confused will fail to understand that every effective spokesman for conservative principles is necessary, and that Rush is the most effective spokesman the right has right now. He is not a “leader” of the party in the way that John Boehner and Mitch McConnell are –designated to negotiate on behalf of their elected colleagues on when and how to work with the new Administration.

But he is one of the major voices of the loyal opposition. Long may he prosper.

BTW: I am not in any way upset that Perry Bacon didn’t use any of my analysis for his piece. Events have overtaken our conversation, so it is less relevant than when it occurred.

I do note, however, that using David Frum as a source elevates David far beyond his influence in the party or among conservatives. Given that the vast majority of center-right influencers would speak highly of Rush’s talent and principles, sound journalism would have had Bacon using one of us as opposed to Congressman Kingston to balance Frum.

A final note before going back to vacation mode: Kindle 2.0 is wonderful, an extraordinary device for many reasons, and the perfect antidote to any gloominess about American inventiveness and future productivity.

President Obama: Listen To Your Inner Market

Monday, March 2, 2009  |  posted by Hugh Hewitt

Another weekend of digesting bad economic news and radical policy proposals and the market sells off again, setting a new bottom for the financial crisis. Would somebody in the White House please read Amity Shlaes’ The Forgotten Man, and perhaps leave it in the Oval Office for POTUS to find? Investors aren’t coming back into the market until they are assured of the rules under which the economy will be governed. The early promise of competence in the Summers and Geithner appointments has completely evaporated, and absent some rapid moves that demonstrate a coherent economic strategy, it won’t be recoverable. The new president’s unnerving demands for sweeping changes to all programs immediately has capital on the sidelines, and it won’t be coming back unless and until the new Administration sets its priorities and its parameters, and abandons its worst ideas such as reducing the deductability of charitable contributions and mortgage interest. The president’s rhetoric is driving uncertainty and fear, violating every rule of presidential leadership in a recession. The DOW is down nearly 3000 points since President Obama’s election. American business and the people who buy equity in it aren’t buying the Obama program. Democrats can tell themselves they won’t be blamed for this come 2010, but they already own this economy as a result of the porkulus, the president’s budget message, and the failure to have developed a plan for the banks in the nearly four months since the president won in November.

I am off the radio this week, and Geraghty the Indispensable fills in for me today, tomorrow and Wednesday, Mark Larson on Thursday and Duane in hours two and three on Friday after the playing of the next installment of my interview with Thomas P.M. Barnett on his new book Great Powers, recorded last week.

Blogging is on the vacation schedule –intermittent.

The Congress Should Fix CPSIA Now

Sunday, March 1, 2009  |  posted by Hugh Hewitt

Last week I interviewed Gary Wolensky of Snell & Wilmer about the devastating effects of the the 2008 Consumer Products Safety Improvements Act (“CPSIA”) on his clients in the manufacturing and retail industries. Hundreds of millions of dollars of perfectly good inventory has been recalled because of the Act’s draconian standards and timelines. Some industries have been crippled, and others badly damaged. The interview with Wolensky is here.

Now the Boston Globe has noticed the impacts of CPSIA on another of the sectors Wolensky and I discussed –resellers like thrift stores:

A federal law designed to protect children from lead products has caused several Massachusetts thrift stores to stop selling kids’ clothing, shutting off an important shopping alternative for families struggling in this recession.

The Consumer Product Safety Improvement Act, which took effect Feb. 10, prohibits all shops from selling children’s products that contain too much lead or potentially harmful chemicals. Congress passed the law in response to a series of recalls of toys and jewelry that had high lead content and were linked to several child deaths and illnesses. But the legislation applies to all children’s products, including clothes, which could contain lead in metal zippers, buttons, or painted fabrics.

The sweeping nature of the law has been devastating for many resale shops nationwide, such as those run by Morgan Memorial Goodwill Industries. Unlike traditional merchants, thrift stores do not deal directly with manufacturers, which can provide proof that products meet safety standards. The regulation also applies retroactively to goods already in stores, and many thrift stores do not have funds to conduct the tests themselves.

In recent weeks, Goodwill pulled all children’s merchandise from its nine stores in the state. Thrift chain Second Time Around eliminated kids’ clothing from several of its 16 shops. St Vincent de Paul is currently removing children’s clothing with metal zippers, buttons, and painted fabrics from its processing center, which sends out merchandise to its six stores in Massachusetts.

Read the whole thing. The article is right to note that “[t]he fallout from the law is especially damaging for consumers who have increasingly visited thrift stores during the tough economic times,” but it should have spent more ink on the impact to the bottom line of the charitable enterprizes that run the second-hand stores and to the employees of places like Goodwill. The article did not even mention the vast damage the law is doing to other industries like the ATV business and sporting goods, or the legion of plaintiffs’ lawyers who are empowered by the law to bring suits against non-compliers.

I am traveling the next two days but will continue to try and answer e-mails about the law, but suggest that if you have questions you e-mail Wolensky at gwolensky@swlaw.com.

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