The Congress That Stole Christmas

Well, not quite, but this isn’t good. After last year’s problems with lead paint in children’s toys, Congress passed new laws to regulate the industry.

Without changes to strict new safety rules…mom-and-pop toy makers and retailers could be forced to conduct testing and labeling they can’t afford, even if they use materials as benign as unfinished wood, organic cotton and beeswax.

…

U.S. Rep. Bobby Rush, D-Ill., lead sponsor of the legislation, says toy makers should not worry. Rush points out that the law already exempts products and materials that do not threaten public safety or health.

That’s a great theory, but as usual, Congress punted and left the details to a regulatory agency:

Determining what materials fall under that exemption falls to the [Consumer Product Safety Commission], however, which has yet to issue specific guidelines. With a Feb. 10 deadline for complying with the law, small toy makers say they have no choice but to act as if its rules apply to them or risk facing fines of $100,000 per violation.

This is a great example of why us libertarians don’t like government interference in the market: Even in an area like product safety where we’re willing to tolerate a fair amount of government intrusion, it’s hard for one central planner to get the details right.

It’s worse than mere ignorance, however, there’s also the problem of regulatory capture, where a regulatory agency—or Congress itself—begins to enforce the agenda of the major players in the industry it’s supposed to be regulating.

One European toy maker has already announced it will stop its exports to the U.S. because of the law’s costs and uncertainties. Selecta Spielzeug, a German company, said earlier this month that it will stop shipping its wooden push toys, games and other products to 1,200 U.S. stores after Dec. 31.

Apparently, this new toy safety law is hurting foreign and independant toymakers, both of which will now provide less competition for major domestic toy manufacturers. How did that happen? Did it have anything to do with the $850,000 worth of lobbying by just Mattel and Hasbro during the last election cycle?