Today, I’m treading the scholarly sidewalks of Cambridge, Mass., speaking to students and faculty in the Regulatory Policy Program at Harvard’s Kennedy School of Government. It’s exciting for me to get a chance to engage with some of the best and the brightest in the field of regulatory policy. My topic: Based on CPSC’s experience, do multi-member commissions give a better bang for the regulatory buck than a single administrator if that administrator uses smart regulatory tools like cost-benefit analysis and rule review? What do you think? Read the Kennedy School’s story
Archive for November, 2012
Is the American economy ready to face an onslaught of new regulations? Here at the CPSC, we’ve been regulating non-stop for quite some time now. And although we’ve heard a message from the White House that we need to be careful about how we regulate—minimizing the negative effects on consumers and small businesses—we haven’t really listened to this message. And now that the Commission is down to a two-to-one partisan split, are we going to ramp up regulating even more? As Richard Rahn explains here, if our small agency can and will continue to crank out costly regulations, imagine what the big ones will do.
Few images in life are more innocently adorable than a toddler scampering about in the buff, enjoying life at its simplest and freest. The good news from the CPSC is that you might be seeing that image a lot more. The bad news is that parents might not have much choice in the matter. (A bit of overstatement I will admit, but the principle holds. See below.)
As I mentioned last week, at least some apparel manufacturers are opting to exit the children’s market rather than brave our labyrinthine minefield of children’s product rules. These requirements, which are arcane to trained lawyers and incomprehensible to most other people, have also forced micro-businesses focused on children’s clothing to cut back or to shut down completely. Thanks to our staff, we knew this sort of thing was coming, and with little if any benefit, but my colleagues decided to forge ahead anyway.
No one should be surprised when business slows or even stops under a regime in which a company must send out even the safest product for round after round of testing, destroying stacks of samples in the process, to make sure each product complies with rules that may have no real bearing on safety, then fell entire electronic forests to document the process. After all this a company must still live with the risk that our own post hoc judgment is the final arbiter of whether you tested enough.
The entrepreneurial spirit will keep some business owners searching for a solution. We’ve heard of some small businesses that are banding into buying cooperatives to spread the cost of testing. While it is encouraging that the fierce perseverance of American entrepreneurs will seek to overcome the challenges we throw at them, we should not forget that every dollar these companies spend trying to meet our demands is a dollar they can’t spend on any other part of their business, including research to improve product safety. This is a solution to a problem we caused with our testing rule that, in many respects, was its own solution in search of a problem. We required far more than was necessary to ensure compliance with our safety rules, and we left it to the businesses we regulate to figure out how to make it work.
We’ve already missed several opportunities to fix this. We paid lip service (if even that) to the President’s suggestion that we look in our universe of rules for ones we could stand to lose, and we were too modest in our congressionally-mandated examination of our testing rule, the 300-pound gorilla in our regulations. I hope we’ll heed the cries from the market before they turn to silence and kids’ clothes racks—and kids themselves—are bare.