Archive for January, 2012

End Government by Guesswork

Regulators need good data to make good policy. As President Obama made clear yesterday in his speech to Congress, it’s important to reform regulations that are “unnecessary[] or too costly.” He demanded that federal agencies “eliminate rules that don’t make sense.”

But over the last two and a half years, the Commission hasn’t taken the time to make sensible rules. Instead, we crystal-balled benefits and ignored costs that we refuse to measure. And since our rules came into effect, costs for consumers have gone up needlessly as companies pass their costs on or leave markets entirely. These results are unnecessary and do not benefit consumers. We could have minimized them by performing cost-benefit analyses. Today, Politico posted my op-ed explaining in more detail why cost-benefit analysis makes for smart regulation and why the CPSC needs to get back to competent, sensible regulating. You can read it here.

Start Your New Year Off Right

As you turn your calendars, there are a few things you should be keeping in mind. The Commission’s stay on the enforcement of the Third-Party Testing and Certification Rule is gone as of January 1st. So you should make doubly sure that your manufacturing program is in compliance if you make a children’s product that is subject to a testing rule.

And, if you’re a small-batch manufacturer, you should hurry up and sign up on the Commission’s Small Batch Manufacturers’ Registry here to give yourself peace of mind that you are exempt from certain testing requirements until the Commission takes further action.

Finally, and most importantly, in all of the regulations that the Commission has put out over the past two years, we have not given any serious consideration to the cost imposed on the economy. Congress, after hearing some loud complaints, decided to fix that with H.R. 2715, the law passed last summer that requires the Commission to consider ways to reduce the burden of third-party testing, among other things. The Commission published a series of questions on the issue in October, and we asked you for your ideas on the ways the Commission can reduce costs. We need your ideas by January 23rd. So submit your comments here!

I will be pushing internally to make sure that the staff and the Commission give serious, thoughtful consideration to the ways we can reduce costs, and your ideas in particular. But we can only be successful in reducing costs if we get serious—and perhaps out-of-the-box—ideas from you on how we can best achieve those reductions. So, please, help us ensure product safety in the most rational, cost-effective manner possible; send us your comments!

A Voice of Reason

If you head over to reason.com, you’ll find a column by A. Barton Hinkle that deftly clarifies what the debate is really about when CPSC (or any other agency) is thinking about regulating something. The argument isn’t about whether or not regulations should exist at all or whether our modern lives need any rules. Clearly, they do.

The debate is about where to draw the line. Hinkle writes, “if a . . . rule can prevent 1 million birth defects at a cost of only one dollar, then the regulation merits adoption—and if a regulation would prevent only one birth defect at a cost of $100 trillion, then it does not. In the real world regulations fall within narrower parameters.”

That is where our focus has to be at every Commission meeting. We need to take a regulatory Hippocratic Oath: “Do more good than harm.” Sometimes, that goal will rest on the broad question, to regulate or not to regulate. Most often, however, it will depend on how we choose to regulate and how carefully we draw the lines.

As an example, look at our debate back in July on whether to lower the lead standard for children’s products down to 100 parts-per-million—that is 99.99% lead free. Common sense and the language of the law that required that debate suggested we should look at different kinds of products differently and add a degree of practicality to our decision. Lead in a doorknob and lead in a pacifier are two very different things.

Instead of recognizing that and actually digging into the real problem, we treated the entire universe of children’s products with one heavy hand. We reached for our largest regulatory hammer instead of a scalpel, and we shifted even more costs to businesses when we glibly told them that, if they wanted an exemption, they should come beg us to do the compartmentalized analysis we should have done up front. The result will be more money—and maybe more jobs and companies, too—lost to nothing but process. We could have avoided that result by using our expertise and resources to do the legwork on our own.

I hope we’ll do the hard work in the future, rather than hiding clumsy solutions behind emotional strawmen and cute catchphrases. I hope we’ll listen to the voice of reason.


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