Regulate First, Think Never?

Twitter can be very useful. Walter Olson of sent out a tweet this morning about an Amazon list of toys that will be affected by the Consumer Product Safety Improvement Act of 2008, which comes into effect February 10. This new law aims to protect children from the harmful effect of lead in toys, but does so, as usual, in an expensive and ham-fisted way that ignores unintended consequences. Intrigued, I researched further and found a classic tale of regulatory incompetence, but also an excellent example of resistance by the little guy (or often more gal, in this case).

The law, as written, appears to require makers of any new toys to be sold after February 10 to have a third party certify that they meet the lead restrictions. This will be ruinously expensive for small toymakers, especially those of traditional, hand-made wooden toys. No wonder that these manufacturers have taken to calling February 10 National Bankruptcy Day. They have, however, been very effective in using the blogosphere, specifically the “mommy blogs” to draw attention to the cause and have managed to make quick reform of the CPSIA the number six policy to be presented to the new President as voted on by users of Investigative journalism by BusinessWeek has confirmed that the small businesses have reason to be afraid, as there has been no clarification from the CPSC that their fears are unjustified (a “debunking” at Snopes applies only to used toys, which will indeed not require testing, but their resale may still break the law).

This is an excellent example of how consumers and manufacturers, self-organizing, can alert people to the terrible consequences of well-meaning but ill-thought out regulation, and of how the regulatory burden can severely affect small businesses especially. The campaigners have a twitter stream at #CPSIA, which is full of useful links.

More from Forbes here, but note that some of the campaigners believe the exemptions cited are worthless.