Cautious Optimism: Stay of enforcement

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.

Survey Results: Economic Impact Study

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.

CPSIA vs Science Round 3; Congress wins by a KO!

The easy winner in round three of Congress versus science, Congress wins by a knock out! Yeah Congress! Boo Science!

To: judith.bailey@mail.house.gov, Christian.Fjeld@mail.house.gov, brian.mccullough@mail.house.gov, shannon.weinberg@mail.house.gov, william.carty@mail.house.gov, nnord@cpsc.gov, jmartyak@cpsc.gov, MToro@cpsc.gov, tmoore@cpsc.gov, Cathy.hurwit@mail.house.gov

Judy and Christian,

I thought you would be interested to know that I was informed today that one of the leading U.S. suppliers of science educational materials has suspended sales of all light bulbs (principally microscope light bulbs) owing to the little dot of solder found on the bottom. Apparently this little dot of solder makes those bulbs just too dangerous to sell into schools, despite the fact that no microscope bulb has ever harmed anyone from exposure to its little dot of solder. To my knowledge, there is no available substitute on the market for this ten cent item. This is EXACTLY what I predicted in my CPSC presentation on November 6. As my email from Friday indicated, it is no longer economic to sell telescopes either. Can someone explain to me what Congress had in mind with this law? Has Congress decided to delegate scientific pursuits to the Germans, Japanese or Chinese so Americans can be “safer”? Or is Congress hoping we will all move back into caves to adopt a “safer” lifestyle?

I still have kids in school. Your law makes illegal or uneconomic those implements they need for an adequate education. I can’t escape the reach of the CPSIA by sending my children to private school – the ridiculous strictures of the CPSIA follows them everywhere in this country. Will I have to send them to boarding school in another country so they can look through a microscope or a telescope? What’s Congress’ master plan?

Richard Woldenberg
Chairman
Learning Resources, Inc.

Astronomy is boring anyway, who needs it?

Now we can thank Congress for eliminating the drudgery of astronomy curriculum. Yeah! No More Telescopes!

To: Judith.bailey@mail.house.gov, Christian.fjeld@mail.house.gov
Cc: nnord@cpsc.gov, jmartyak@cpsc.gov, tmoore@cpsc.gov, jmullan@cpsc.gov, Brian_hendricks@hutchison.senate.gov, david@commerce.senate.gov, Shannon.weinberg@mail.house.gov, Brian.mccullough@mail.house.gov, Cathy.hurwit@mail.house.gov, “Larry Lynn” <LLynn>, MToro@cpsc.gov, william.carty@mail.house.gov, patrick.magnuson@mail.house.gov

Subject: No More Telescopes – Congress Wants You To Squint Instead

I am writing to follow up on the below email on the cost of testing under the CPSIA. The attached document is a quote we received to test ONE telescope product under the CPSIA. The cost of the testing is a mere $24,050 for this single item. The average annual sales of this item are approximately $32,000 over the past two years. Needless to say, we cannot afford to spend $24,050 to test this (or any) item. I presume that Congress intended this result and wants us to stop selling telescopes to keep everyone safe. I guess kids can see the planets by squinting from now on. Thanks, Congress!

This absurd result is increasingly common under the destructive and poorly-conceived CPSIA. It is not surprising to me that a law born out of anger and written in a spirit of retribution has created market chaos and many unintended consequences. In my prior correspondence, I have set out many dangerous and unacceptable effects that are wreaking havoc among law-abiding companies. Good corporate citizenship is no help when facing a law which markets itself as “pro-safety” but cripples companies with unbearable financial burdens and pointlessly complex compliance requirements that redirect safety investments into bureaucracy. The CPSIA is simply an invitation by the Federal Government for all children’s products companies to find something else to do.

My letters to you are of public record. We are posting them on the Internet for all to see and read. These letters have put you on notice of many problems the CPSIA is creating. When the damage takes place, there will be no way for legislators to disclaim responsibility. I don’t want to see the destruction happen, which is why I keep writing you. It is unnecessary and will have lasting effects if not arrested now. I call on you and on Congress to act promptly to convene hearings on the effects of the CPSIA on commerce and markets, and to take immediate steps to partner with industry and the CPSC to rebuild a truly effective CPSIA to address real (not imaginary) children’s products safety issues. A stripped down, but focused, CPSIA could add a great deal of safety value without weakening companies, markets and the economy. A vindictive CPSIA salted with bitter distrust and enmity toward industry will simply gut markets and weaken the regulators’ ability to patrol markets for real safety issues. The choice is obvious – I urge Congress to choose the right path for our country.

Sincerely,

Richard Woldenberg
Chairman
Learning Resources, Inc.

Congressional hearing canceled!

The Rush hearing (chaired by Bobby Rush, D-IL) we’d been pinning our hopes on to make our case before Congress next Wednesday, has been canceled. Rick Woldenberg (the guy in the youtube videos) says:

I admire the work you are doing, and hope you will stick to it. I was due to testify at the Rush hearings next Wednesday but they were canceled which is an opportunity missed. I think our message is being heard, but there is no conviction to do anything about it -yet. I have some thoughts on further correspondence to move the ball down field, but frankly, time is working against us now. So this is a great time to step up the pressure. Your contacts should keep the pressure on Congress, especially members of the House Energy and Commerce Committee. I will send you many emails with lots of relevant info. I will also add you to my mailing list, so you can see what I am up to.

The wiki entry for the United States House Committee on Energy and Commerce lists all the members of the committee and subcommittees with links to their respective pages. The less useful official US government site is here. Feel free to contact members of the committee, more so if they represent your district.

How everyone can get a CPSIA exemption

Understandably, many people have been asking on Fashion-Incubator and on various forums whether their product is exempt. Some post claims they are not (using unsubstantiated sources) which is a disservice feeding false hopes. Among them, I’ve yet to see a child related product that really is exempt. The climate was no different at the meeting I attended in Washington this week. It’s easy to understand why. We’re all drowning men, clutching at any driftwood that’ll save us. But as one person suggested, this is the wrong strategy.

Everybody is scrambling to find wiggle room using narrow definitions in an attempt to exclude themselves from the law, desperate to save their own skins. It’s understandable, survival and all. But strategically, that is the wrong thing to do. All of us are better served by coming together to define the rules BROADLY to encompass everyone for two reasons.

1. The CPSC doesn’t have the infrastructure to process and rule on the flood of exemption requests. They don’t have the man power to deal with it so if any manage to squeak through, these businesses will be unfairly advantaged over others who may have similar legitimate claims.
2. More of us lose through splintering because assuming the CPSC can come up with a bunch of narrow definitions; it’s not likely to solve but one of a few of our problems; most people will still be hanging out to dry. More stand to lose with narrow definitions than broad ones.

Rather, we are better served by centralizing focus on broad exemptions, not narrow ones. Every man for himself is the wrong strategy to employ when everyone is affected. At this rate, we’re our own worst enemies (divided we fall) because splitting into narrow definitions splinters the whole cause. Let’s say you’re lucky enough to get your exemption that magically covers the gamut of your product line (as if), does that save your colleagues? How much pleasure can you take in surviving when you’re the only one left standing? On Fashion-Incubator, probably less than 30% of the designers make kids stuff but as far as I can tell, they’re all pulling together for their colleagues who are affected.

In summary, I do not want to read any more comments asking if one’s products made from 100% organic fabric (woven by leprechauns) and made via fair-trade (sewn by well paid fairies) using carbon neutral sustainable power (unicorns pulling a water wheel) and are certified to be the singular example of 100% purity by G-d, The Trinity, Mohammad, and Gaia combined [-and you are a nice good person and a widow, single mom, single dad, working family, reformed attorney or recovering engineer (pick one)] are exempt because if you have to ask, they most likely are not. The strategy should be broad enough to cover your neighbor and even the plant down the street, not just yourself. It’s time to pull together. As Rick Woldenberg says, it’s time to ply the pressure on the House Committee on Energy and Commerce.

Here I have posted a tremendous amount of material Rick Woldenberg has sent me with lots of juicy .gov email addresses to harvest!

By the way, this site is really ugly, can anybody lend a hand with design?

Video Testimony

Have you seen Rick Woldenberg’s speech at the CPSC conference on November 6? More interesting than you’d imagine, he brings up additional points regarding subassemblies in kitting, how commodities -sans lot numbers- are proposed to be tested and a whole lot more. While a larger enterprise, he cogently makes the case for even the smallest of producers stating that these regulations will eliminate specialty products sold to the blind and deaf among others. One thing I hadn’t considered; science kits for use in schools will cease to be saleable as currently known, many components of which the sources cannot be traced (consider a commodity like aluminum foil or the common paper clip) can’t be included within them. Considering the current state of science education in the U.S., this cannot be good news.

• Part one
• Part two
• Part three

By the way, Rick Woldenberg is the person credited to have originated the phrase “National Bankruptcy Day” in relation to February 10, 2009.

You can also watch proceedings from the CPSC Public Meeting on Lead from Thursday, November 6, 2008
Videos from the meeting:

• Staff presentations
• Panel presentations
• Question & Answer session