Congress has recently passed a law that will destroy a lot of small businesses and will prevent thrift stores from selling products for children.

If someone you know volunteers at a thrift store or crochets baby hats for the crafts site Etsy or favors handmade wooden toys as a baby shower gift, you've probably been hearing the alarms about the Consumer Product Safety Improvement Act (CPSIA).

Hailed almost universally on its passage last year--it passed the Senate 89 to three and the House by 424 to one, with Ron Paul the lone dissenter--CPSIA is now shaping up as a calamity for businesses and an epic failure of regulation, threatening to wipe out tens of thousands of small makers of children's items from coast to coast, and taking a particular toll on the handcrafted and creative, the small-production-run and sideline at-home business, not to mention struggling retailers. How could this have happened?

Congress passed CPSIA in a frenzy of self-congratulation following last year's overblown panic over Chinese toys with lead paint. Washington's consumer and environmentalist lobbies used the occasion to tack on some other long-sought legislative goals, including a ban on phthalates used to soften plastic.

The law's provisions were billed as stringent, something applauded by high-minded commentators as a way to force the Mattels and Fisher-Prices of the world to keep more careful watch on the supply chains of their Chinese factories.

The first thing to note is that we're not just talking about toys here. With few exceptions, the law covers all products intended primarily for children under 12. That includes clothing, fabric and textile goods of all kinds: hats, shoes, diapers, hair bands, sports pennants, Scouting patches, local school-logo gear and so on.

And paper goods: books, flash cards, board games, baseball cards, kits for home schoolers, party supplies and the like. And sporting equipment, outdoor gear, bikes, backpacks and telescopes. And furnishings for kids' rooms.
Comment On This Story

And videogame cartridges and audio books. And specialized assistive and therapeutic gear used by disabled and autistic kids.

Again with relatively few exceptions, makers of these goods can't rely only on materials known to be unproblematic (natural dyed yarn, local wood) or that come from reputable local suppliers, or even ones that are certified organic.

Instead they must put a sample item from each lot of goods through testing after complete assembly, and the testing must be applied to each component. For a given hand-knitted sweater, for example, one might have to pay not just, say, $150 for the first test, but added-on charges for each component beyond the first: a button or snap, yarn of a second color, a care label, maybe a ribbon or stitching--with each color of stitching thread having to be tested separately.

Suddenly the bill is more like $1,000--and that's just to test the one style and size. The same sweater in a larger size, or with a different button or clasp, would need a new round of tests--not just on the button or clasp, but on the whole garment. The maker of a kids' telescope (with no suspected problems) was quoted a $24,000 testing estimate, on a product with only $32,000 in annual sales.

Could it get worse? Yes, it could. Contrary to some reports, thrift and secondhand stores are not exempt from the law. Although (unlike creators of new goods) they aren't obliged to test the items they stock, they are exposed to liability and fines if any goods on their shelves (or a component button, bolt, binding, etc.) are found to test above the (very low) thresholds being phased in.

Nor does it get them off the hook to say an older product's noncompliance with the new standards wasn't something they knew or should have known about (let alone to say anyone was harmed; the whole controversy from start to finish has gone on with precious little showing of real-world harm to American kids from most of the goods being banned).

H/T Instapundit

Cross Posted at Power and Control