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CPSIA and Health Care “Reform”

Wednesday, February 25, 2009  |  posted by Hugh Hewitt

This week I have been trying to educate my audience on the disaster that is the Consumer Products Safety Improvement Act which went into effect on February 10. (Here is the podcast of an hour I devoted to it on Monday with Snell & Wilmer lawyer Gary Wolensky, an expert on the statute.)

After last night’s speech by President Obama I am convinced it is crucial that the fiasco of CPSIA be explained again and again to the country for the simple reason that if Congress is so absolutely incompetent in a relatively simple statutory undertaking so that it quite recklessly crushes hundreds if not thousands of small businesses and costs hundreds of millions of total losses to thousands of manufacturers, then imagine what Congress will do with a complicated system such as health care.

Further, if Congress refuses to act quickly to fix obvious train-wrecks it has caused like the CPSIA, we have to assume it will not act to fix the many mistakes it will make when it radically changes the rules of health care. “Once done, impossible to make undone,” is the operational reality of the Congress as special interests move in to protect turf (even as plaintiffs’ bar will fight any attempt to fix CPSIA which will be a volcano of cases for them.)

I discussed CPSIA with both Mark Steyn and E.J. Dionne today, and while mark was aware of the law’s absurdity and costs, E.J. was not yet read up on it. Conservatives should push CPSIA as exhibit one in what we will get out of any massive “reform” this Congress launches in any area. There is a competence gap between ambition and execution that guarantees massive fiascos if President Obama gets his freight train of laws, and CPSIA is proof of that.

Transcripts of the interviews with Steyn and Dionne will be posted here later.

If you have a CPSIA horror story –like the pen manufacturer who called the show today to discuss how his entire back-to-school season orders are suddenly imperiled– send it to me at hugh@hughhewitt.com.

UPDATE: An e-mail:

Hugh- Help!

You are the only rational voice still discussing the draconian Consumer Products Safety Improvements Act and I’m hoping you can elaborate re: revocation/amendment to this ridiculous Act.

I am a franchisee of a quick service hamburger chain sitting on $30,000 in obsolete inventory as a result of this act due to the phthalate content of our kids meal toys, which by the way had been deemed safe for years but have suddenly (first week of Feb 2009) and with no notice been determined to immediately be hazardous and non saleable. It’s a terrible blow to discard this inventory as I struggle to pay my bills in the middle of this recession. My publically traded franchisor wants me to surrender my inventory to our distributor for immediate destruction. I’m desperately holding on to my inventory (though no longer distributing it) in the hopes that the Act is revoked or suspended to give retailers a chance to work the existing plastics out of their inventories and avoid serious losses.

You allude to an “appropriations bill” moving through Congress that can address/resolve? Can you elaborate on its progress/timing? Can you identify any politicians who may be behind an effort to modify/delay/revoke this act? I’m hoping resolution comes quickly as I can’t hang on to my inventory indefinitely without raising the ire of my franchisor…

Thank you and keep up the good fight!

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Fixing CPSIA, Now

Wednesday, February 25, 2009  |  posted by Hugh Hewitt

Yesterday marked the first day that plaintiffs’ attorneys could file suits against anyone selling goods covered by the Consumer Products Safety Improvements Act –basically anything intended for use by children. This draconian law continues to sweep across the retail world and to cause economic damage that is deep and enduring. The impact on all-terrain vehicles, for example, was clearly not foreseen by Congress but the strict liabilities of the Act have forced the withdrawal of tens of millions of dollars of product from the market and a resulting devastation on the industry.

Listening to the president last night promise recovery, it occurred to me that the appropriations bill now moving through the Congress is a vehicle for CPSIA reform. At a minimum it ought to include a rider that delays the effective date of CPSIA for another year. Alternatively, it could provide funding to replace the suddenly worthless inventory covered by the Act and an exemption for the resale market. (Thrift shops and other charitable resellers have been particularly hard hit by CPSIA given their very low profit margins and their inability to afford pricey compliance lawyers.)

The recession has already slammed many retailers. Allowing CPSIA to continue its rollout, now accompanied by legions of plaintiffs’ lawyers, is the equivalent of the old medical practice of bleeding the ill. Congress can fix this, and should.

The Speech

Tuesday, February 24, 2009  |  posted by Hugh Hewitt

Nicely delivered, and it remains inspiring to see an African-American conduct the rituals of the presidency. The First Lady was also full of obvious cheer, and her embrace of the young girl from South Carolina after the president referenced her touching letter was the best moment of the night.

I liked the pledge to increase the size of the Army and the Marine Corps, the pay of all military and benefits for veterans, and hope that isn’t accomplished by taking a 280 ship Navy to 250, etc.

The trouble with the speech, of course, is that what the president promises to do simply cannot be done, because the costs are so staggeringly high that the economy cannot bear all or even most of them absent the sort of renewed economic growth that soaring tax rates will snuff out.

The problem with President Obama’s agenda is that it is built on serial fantasies, fantasies which ignore the real benefits of things such as nuclear power and oil exploration. The president’s talk was well phrased and beautifully delivered, and deeply disconnected from the realities of economic growth.

Congressional Democrats have the numbers to push through many of the things the president wants, but each concrete proposal will travel the same course as the porkulus traveled –from high flown rhetoric to disappointing legislative language to off-putting low and deceptive politics. The president’s negative ratings soared in one month, and that’s a trend that will continue because the American people continue to view government with suspicion and to resent the vast waste of tax dollars they have already seen on a scale never before witnessed in D.C.

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