Consumer product database: Why the hysteria?

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March 8 2011 8:28 PM

Who's Afraid of the CPSC?

The hysteria over a new government database for consumer complaints.

Inez Tenenbaum. Click image to expand.
Inez Tenenbaum, chairman of the U.S. Consumer Product Safety Commission

On March 11, the Consumer Product Safety Commission will go live (at SaferProducts.gov) with a new public database for consumer complaints. Many pro-business conservatives claim this will be a dark day for free enterprise. Their beef demonstrates that there is no government action too mild for Tea Partiers and corporate lobbyists to turn into an ideological duel.

Republican CPSC Commissioner (and former Kentucky * Rep.) Anne Northup complained in November that the database "wastes taxpayer money, confuses and misleads consumers, raises prices, kills jobs, and damages the reputations of safe and responsible manufacturers." Testifying last month before the House Subcommittee on Commerce, Manufacturing, and Trade, Wayne Morris, a vice president for the Association of Home Appliance Manufacturers, complained, "It is wrong for the federal government to allow companies and their brands to be unfairly characterized, even slandered." The National Association of Manufacturers said the database's "credibility" and "usefulness to consumers" is "severely damaged." In response to such criticism (and possibly also in response to Koch Industries, which showered an improbable $79,500 on his campaign), Rep. Mike Pompeo, R-Kansas, a Tea Party freshman, sponsored an amendment zeroing out funding for the database that cleared the House, 234-187. The CPSC database, Pompeo said, "will drive jobs overseas."

The Democratic-controlled Senate has other ideas, you won't be surprised to learn, and anyway, the money to get the database up and running (a big $3 million) has already been appropriated. "We've already spent the money," CPSC Chairman Inez Tenenbaum told me. The database is in soft-launch mode and will go live in a matter of days.

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Perhaps you're struggling to remember what the Consumer Product Safety Commission has been up to during the past decade. Short answer: Not much. Created in 1972, CPSC has always been one of the tinier federal agencies. It's got about 500 employees, a severely constricted regulatory authority, and an itty-bitty budget of about $118 million. Apart from some routine actions concerning cribs and other infant and toddler doodads, the last even moderately notable stand anyone can remember CSPC taking was back in 1988, when it banned lawn darts. Tenenbaum mentioned it in a speech she gave just this week to the state attorneys general. Babies banging their heads against too-widely-spaced slats in long-ago-recalled cribs have grown into adults, and CPSC is still talking about those lawn darts!

CPSC limped through the Dubya years as best it could. In 2007 Bush actually tried to install a lobbyist for the National Association of Manufacturers as chairman; the lobbyist withdrew after he was questioned about a $150,000 NAM severance package. Later that year, China was found to have exported to the U.S. a lot of toys with lead in them. Consumers Union declared it "the year of the recall" (most of them not by CPSC), and the following year Congress bestirred itself to pass the Consumer Product Safety Improvement Act, which, among other things, created the public database. The bill cleared both the House and Senate by an overwhelming majority—three nays in the Senate and one in the House. President George W. Bush signed it into law.

Why wasn't the public database controversial in 2008? Because it wasn't that big a deal. For starters, it didn't create new regulatory authority; it merely created a place for consumers to bitch about faulty products. It wasn't even the first such database created by the government. The National Highway Traffic Safety Administration already had one at SaferCar.gov. It's pretty good! I entered my 2004 Honda Odyssey and learned that a lot of owners have transmission trouble. So far so good for me. (Knock wood.) Like the complainers you encounter on Amazon, NHTSA's don't always get straight to the point, and some of the beefs seem pretty trivial. But the automobile industry has suffered no death of a thousand cuts—not from that, anyway.

Opponents of the database point out that cars kill a lot more people than toasters, and that's certainly true. But the CPSC database will be much more filtered than NHTSA's. Consumers who go to the CPSC site will have to identify themselves to the agency (on the public database itself they'll be anonymous), and before a complaint gets posted, CPSC will shoot it over to the manufacturer, which will get 10 days to respond before the complaint goes live. If the manufacturer does respond, its comments will go live on the database simultaneously with the complaint. If it turns out the complaint misidentified the manufacturer, CPSC will yank it. Opponents are apoplectic that CPSC's final rule will allow lawyers and consumer advocates in addition to consumers to file complaints to the database. But if businesses are allowed to post, why not advocates? Tenenbaum points out that it's illegal to submit a false statement to the federal government. Anyone who does so risks getting prosecuted, and I'm sure manufacturers won't be shy about identifying violators. That should minimize Wiki-style mischief. During the database's "soft launch," a sort of trial run in which people are filing complaints but the complaints aren't yet being shown to the public, CPSC has received about 900 postings. The agency has shown these to manufacturers. In only four instances did the manufacturers so much as claim that they'd found inaccuracies.

Another refrain from opponents is that tort lawyers will troll the site endlessly to generate new lawsuits or provide fresh evidence to existing ones. That complaint is cancelled out by another one—that the CPSC site isn't needed, because there are already plenty of private-sector sites online where consumers can sound off about faulty products. If there are already plenty of existing sites, aren't lawyers already trolling those?

I asked Rep. Pompeo (by e-mail) whether he'd support the database if CPSC kicked out the lawyers and consumer advocates. Their inclusion has been his main complaint, and Northup's. Pompeo replied that he would not. "These changes would not prevent false data from being included on a government website," he (or a staff aide pretending to be him) e-mailed back. "I firmly believe that a consumer 'database'—the word database in this case is actually a misnomer—carrying the government's imprimatur must only include data that is accurate." That's a standard Congress itself can't meet. Pompeo (or "Pompeo") also pronounced himself "skeptical" that setting up the database cost only $3 million. Has he eyeballed the wee size of the agency's total budget lately?

When I asked Pompeo whether Koch Industries, which lobbied against the database's inclusion in the 2008 bill, had lobbied him on the matter, "he" said (in a statement his press secretary told me to attribute to her): "As a matter of policy, Congressman Pompeo does not discuss with reporters his private conversations with constituents and others with whom he meets." (Pompeo's chief of staff is a onetime Koch employee. For a thorough summary of the Koch-Pompeo connection, click here.)

It isn't clear to me that—apart from their grand ideological ambition to reduce the regulatory state to rubble—the Koch brothers have any financial reason to care about the CPSC database. Koch Industries doesn't make a lot of consumer products; it's more of a raw-materials company. One of the ironies in Pompeo and others screaming bloody murder that the database will kill jobs is that most of the appliances likely to get dinged in the database won't even be American products. Right now four out of five of CPSC's recalled products are imports. That isn't because the Chinese don't know how to build stuff as solidly as we Americans can. It's because—well, stop and think about how many appliances you own that aren't imports. Even the ones with American brand names are typically manufactured overseas. The United States still manufactures plenty of goods, but among the four largest manufacturing industries that account for 44 percent of U.S. manufacturing GDP, only one—computers—is consistently regulated by CPSC (and a lot of those computers are assembled abroad). The other three U.S. manufacturing colossi are (processed) food, chemicals, and fabricated metal products. (To read a bittersweet blog listing consumer products still made in the U.S.A., click here.)

I phoned the Chamber of Commerce to ask whose jobs would be lost even if its worst nightmares about CPSC's new database proved true. Nobody got back to me.