A variety of news worth mentioning:
CPSC: The CPSC released a Stay of Enforcement of Testing and Certification Requirements; (pdf) dated January 30, 2009. A cursory examination shows they get it. As debated previously regarding the question of which definitions were likely to define a “small business”, they’re using the SBA’s. In the case of children’s wear apparel producers, this encompasses 99% of businesses. Also see the CPSC press release explaining the matter. Another legal source is The Smart Mama. Further updates are forthcoming.
Legislative: Senator Jim DeMint (R-SC) has announced he’s sponsoring legislation to amend the CPSIA. The bare bones of the plan are on his site; I’ll publish or link to final version once permitted to do so. Minimally, we extend a great deal of gratitude to Mr. DeMint and his legislative aides for crafting a proposal with the input of manufacturers. It is gratifying to be heard.
Retail: Anecdotal response from retailers has been mixed. Or rather, I should say one-sided. Retailers are concerned their liability has increased. All I’ve spoken to have said they intend to enforce existing CPSIA mandates on their vendors, requiring GCCs as previously stipulated.
Unresolved: Furthermore, extensive legal questions remain unresolved. There is little doubt special interest groups who promulgated this law’s passage will let yesterday’s stay of enforcement go unchallenged. Speaking of special interest groups, The National Association of Manufacturers (NAM) filed filed an emergency stay of effective date (pdf) on January 28th with 77 signatory associations.
Note: I will be going to Washington DC Monday February 2, through Wednesday February 4th. More news upon my return.
This fight is far from over.
Thanks to a tip from Mark Riffey (via Jennifer Taggert), the tubes are awash with the news of a seven minute interview of Julie Vallese, former (effective today) spokesperson of the Consumer Protection Safety Commission with KBAL TV in Baltimore. Most people seem to be upset by it but I found it hilarious, reminiscent of Sister Mary Ignatius explains it all for you. Between insulting mommy bloggers (moi?), back pedaling and outright obfuscation, the video made for an evening of levity and intellectually ribald entertainment. That was sorely needed considering the recent strategies of special interest groups who are responsible for passage of this law in the first place. Anyway, Mark’s link to the video inspired me to find the transcript of the interview so I could examine the content more closely. Luckily enough, I found one! Well, maybe not the actual transcript but what appears below is a fairly accurate facsimile (minor edits are mine):
The missile knows where it is at all times. It knows this because it knows where it isn’t. By subtracting where it is from where it isn’t (or where it isn’t from where it is) it obtains a difference or deviation. The guidance system uses deviations to generate corrective commands to drive the missile from the position where it is, to the position where it isn’t. The missile arrives at the position where it wasn’t, consequently the position where it was, is now the position where it isn’t. In the event that the position where it is now, is not the same position where it originally wasn’t, the system has acquired a variation, the variation being the difference between where the missile is and where the missile wasn’t. Moreover, the missile must now know where it was also. The “thought process” of the missile is as follows: Because a variation has modified some of the information which the missile had obtained, it is not sure where it is. However, it is sure where it isn’t and it knows where it was. It now subtracts where it should be from where it wasn’t (or vice versa) and by differentiating this from the algebraic difference between where it shouldn’t be and where it was, it is able to obtain the difference between it’s deviation and it’s variation, this difference being called the Error.
In the end, is CPSIA is the missile and Julie is the Error? Ah, that could explain why she’s the former CPSC spokesperson.
Welcome to visitors from the Wall Street Journal!
Following is a summary analysis of the interim results from the Economic Impact Study collected between 31 Dec 2008 and 10 Jan 2009 which measured the responses of manufacturers, component suppliers and retailers. The cut to the chase summary shows over 70 million dollars worth of inventory must be destroyed on February 10, 2009 (National Bankruptcy Day) and of those enterprises that expect to survive the fall-out (61% will not), over 40 million dollars in lost product sales are anticipated.
The “average” respondent of this survey shares the following characteristics:
80% of their products are children’s goods. They expect to lose their business (61%). If a retailer, they can’t get testing services due to accessibility, logistics or finances (71%). They will have to close their business (34%) and destroy product (28%). If they have any full-time employees, they have 5, and if any part-time employees, they have 3. On average, they spend $112,843 on wages and salaries and $13,366 on contractor services annually. If they are going to destroy goods, they expect to destroy about $7000 worth. Most of them think (51%) it would take over a year to sell off inventory, especially in the current climate. Most of them (66%) think this is the last nail in the coffin, they won’t survive.
Most retailers (66%) think that only 0-30% of their vendors know about the law. Most retailers (64%) report that 0-30% of their vendors think they are exempt. Most manufacturers (66%) think that only 0-30% of their retailers know about the law. Most respondents (56%) believe that 0-30% of their competitors are informed about the law. They also believe (45%) that 0-30% of their competitors intend to continue with business as usual and hope for change or think they won’t get caught.
So something like 0.65 x $71.708M = $46.6 M in lost wages, .65 x $8.824M = $5.6M in lost contracting business, and .65 x $63,242M = $41.1M in lost product sales per year, and about $72.4 M worth of goods that need to be destroyed in the next few weeks.
I will forward more in depth results upon request. Also available is a survey of testing costs which are dramatically costlier than special interest groups claim.
I just know you’re going to be jolly jolly jolly to read the latest unintended consequence of CPSIA (Consumer Product Safety Improvement Act). Truly, the CPSIA is a gift from Congress that keeps on giving; I’m giddy just telling you about it. Just when I think it can’t get any better, Congress comes through with another knock out punch -this time, it’s cultural genocide against Native Americans! Yes! I can see you nodding, it just gets better and better. Enough preamble, here’s Janet Littlecrow who wrote me to explain how the CPSIA is the equivalent of cultural genocide:
The new law will cut our business in half, because there is no way that we can afford to test one-of-a-kind outfits. We’ll be totally knocked out of the kids dance clothing business, except for Canadian orders. It’s the death of our dreams too, cultural genocide for us.
These recently completed and sold outfits will be illegal for us to sell next month, so we’re trying to finish and sell all of our children’s inventory by Feb 10. The loss of children’s business will probably bankrupt us. Business is way down, except that people have been ordering dance clothes for their children and grandchildren. Dance regalia isn’t a necessity per se, but it’s almost a necessity among many families for their children. I’ve been working at this business for six years, and can’t even go back to my computer career again.
It’s cultural genocide for us too. We won’t be able to support our native cultures by getting children dancing in the powwow arena. We won’t be able to make dance outfits for any more children’s Native American dance troupes, or foundations, or Indian student groups or school Johnson-Omalley programs. We won’t be able to dress younger girls who are school princesses either, we’ll have to check ages of customers. It’s a major blow for us, and I can’t see any way around it. It’s probably the death of our business. It’s certainly the death of our dreams. We can’t dress children for our culture any more. The government wins another round of forced assimilation.
Littlecrow Trading Post LLC
PO Box 243
Red Rock, OK 74651
See Janet’s web page on the CPSIA and cultural genocide for more information. You can also consider contacting Native America Calling to interest them in the cause. I haven’t heard back from them yet.
I’m not above begging. Please take this survey I created in an attempt to measure the impact of the CPSIA (Consumer Product Safety Improvement Act) on small businesses like yours. It is industry neutral meaning it works for any industry so please pass the link around on line. Obviously, the goal is to attempt to measure the effects of the law on businesses which thus far, the CPSC (Consumer Product Safety Commission) has implied would be negligible. Right. If you’re a larger concern, the AAFA created a survey that may be more appropriate but there’s no reason you couldn’t do both.