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 email@example.com.