Forcing the Rest to China
China is out to get the US manufacturing base if you take seriously what the talking heads have been chattering about for the last decade. In fact, there is good reason why the manufacturing sector in this country has been moving onto Chinese shores; they have a freer labor market then the United States. It is a sad fact, but the regulatory conditions in this country have made the US economy redder then China’s.
To put yet another red feather in the collective hat, our wise keepers in the US senate have handed down a doosey. Ladies and gentlemen let me introduce to you the The Consumer Product Safety Improvement Act (CPSIA). This little piece of legislation was passed last year after a batch of lead paint tainted toys manufactured in China scared a bunch of whiney parents. It practically sets up a ‘toy police’ bureaucracy to ensure no toy or article of clothing sold in the US will go out to market before it goes through the hand of a government official. The new regulations specify that all toys, clothing, or jewelry marketed towards children 12 and under have to go through chemical testing to ensure that they do not contain any lead paint or phthalates. A test would have to be done for each model of toy a company sells. Each test can run as high as $5000 a piece. Not only that, items manufactured before the February 10th starting date of the regulation will from here on out be considered hazardous material unfit to be sold.
The implications of this law are so far reaching it’s really hard to find a place to start criticizing this ugly piece of legislation. First, just to show how absurd all of this is let me give you a personal example how this regulation will affect my own family. My elderly grandmother makes tiny stuffed teddy bears in her spare time and sells them at craft fairs all over her local area. Under this new regulation she would have to pay to get her knitted animals tested for lead paint in order to sell them. If she doesn’t do this, a toy inspector could confiscate all her merchandise, levy fines against her, and even thrown her in jail. There are literally thousands of locally produced, small scale toy manufacturers in this country that will be falling under the same scrutiny and could be closing their doors when this regulation makes landfall. Another loser in under this regulation is the consignment and second hand shops nationwide. With the crazy notion that all items untested before the Feb 10th will become hazardous material, all clothing and toys manufactured before this date that have been donated to shops such as Good Will may have to be completely thrown out to conform with the new rules (if they’re considered hazardous material these stores may have to pay a disposal fee as well).
So at the end of the day who is gaining and who is missing out? Well to find the winners lets follow the money. Well there are four major winners from my perspective. First winner is government chosen third party laboratories that will be performing all these mandatory tests. They will see a huge influx of people being forced to use their services, which I’m sure they will be terribly upset about. Others benefitting from these new regulations are the large scale toy manufacturers. The reason they benefit is because they are the only businesses who can afford the new lead testing without any significant hit to their bottom line. Mattel may have to raise the price of each Barbie doll by 5 cents to make up the new cost of compliance, where as a locally made wooden block set may have to go up $50 to cover this new expense. Basically, the US government is wiping out a huge percentage of the competition that these big manufacturers are faced with, and they see this regulation as a way to boost their market share. The third winner would be the federal government. Doing as all governments do, it is growing, becoming more restrictive and tyrannical with its dictates. It has added a new bureaucracy, fresh with new bureaucrats, with absurd government wages, benefits and pension programs, all of which the people have to pay for. It has butt itself into the free market yet again, limiting people’s unlimited right to contract as guaranteed in article 1 section 10 of the US Constitution.
The fourth winner is by far the most ironic of them all because these regulations were meant as a way to restrict them in the first place. And that of course would be the Chinese toy and clothing manufacturers that are shipping to the US. Because entire local toy and clothing manufacturers may be put out of business, it leaves consumers with little choice but to buy anything but Chinese manufactured goods. With all the new rules and regulations why in the world would any major toy manufacturer want to be in the US anyway? It is a considerably less expensive to pack up and move operations to China where the regulations are less onerous, and the labor is cheaper. So if you are one of those people who miss seeing “made in the USA” on the tags of products you buy, you better get over that quickly. Manufacturing is leaving the US like rats from a sinking ship because it is too costly to do business in the US any longer.
The US economy was built on the back of small businesses and local manufacturers that were free to do business on their terms for more than a hundred years. But with thousands of pages added each year to the federal registry, it would take a person a lifetime just to read all the new rules, let alone follow them. The federal government is running the economy into the ground because of all the micromanaging of business they are trying to accomplish. If you have read any economics reports in the last 6 months then you know that this country in a recession, and very well could be entering depression status if things don’t pick up. What this country needs is less regulation on businesses, more freedom, and more personal responsibility. Forcing people to choose between jail and bankruptcy puts them into a precarious situation that will cause all manner of unintended consequences for everyone.
If you want the poor to be unable to cloth their children, then cheer on the regulations. If you want community toy stores to close their doors, then urge the feds to pile on more restrictions. If you want more and more jobs and opportunities to go to China, then make sure to tell the federal government to keep up the good work. I don’t think there is any going back at this point; this regulation is going to go forward, and another industry will be shipped overseas.
No related articles.
Author: renniks (15 Articles)
This website uses IntenseDebate comments, but they are not currently loaded because either your browser doesn't support JavaScript, or they didn't load fast enough.
Leave a Reply
Additional comments powered by BackType