The Protection Consumers Dodt Want

...Senator Gaylord Nelson’s Small Business Committee held hearings for which planeloads of angry businessmen descended on Washington, all testifying that complying with the law would cost them enormous legal and clerical fees, in a few cases higher than their companies’ annual contributions to their pension plans...

...In October l973, the Consumer Product Safety Commission banned certain brands of spray adhesives because of a researcher’s work that concluded that the spray@w, hen used by pregnant women, drould cause birth defects in their unborn children...

...The banning of hazardous substances is provoking increasing skepticism among consumers...

...Seven months later, the Commission lifted the ban...

...The Issue of Interfering It’s clear that a large part of the problem is that consumers define their problems differently from the conSumer advocates...

...Some of the Nader-inspired laws have created problems because they were designed with big corporations in mind and had unanticipated effects on medium-sized and small businesses...

...30 Now banks and businesses seeking to meet the law’s requirements send out lengthy and confusing statements to consumers, who are more puzzled than ever about exactly how much interest they are paying...

...of the elderly talking about aspirin bottles and parents about Tris...

...The Labor Department finally responded with shorter, simplified forms for small businesses, and private consulting firms sprang up to help the smaller companies bring their pension plans into conformance at prices lower than lawyers would charge...

...Negligible expense” is not a term associated with that profession’s work, and since business is not a charitable activity, it does not “absorb” substantial new costs but passes them along to consumers...

...From the standpoint of the legal enthusiast who is convinced there is no human problem the adversary System can’t solve, these laws offer the wondrous opportunity for government, business, and consumer to have the full extent of each and every right and responsibility defined in court...

...Of course, no one has questioned the advisability of banning extremely toxic chemicals, but there are a large number of substances that fall somewhere between safe and unsafe because acceptable levels of exposure cannot be precisely determined...

...Public reaction to the saccharin ban has been fully explored in the press, and there are other less well-known cases that illustrate the various facets of this ’problem...

...The proposed Consumer Protection Agency would add a new dimension to this legal round robin because it would be permitted to sue all other government agencies...

...To bring the fiasco full circle,’a federal judge enjoined the Consumer Prqfluct Safety Commission from enforcing its ban on Tris because it didn’t follow its own regulations in issuihg the ban...

...The original idea for a Truth in Lending Act was simply to require a creditor to disclose the true annual rate of interest he was charging...

...or the house paint that peels after three months...

...and all the other word-of-mouth about the failings of consumer laws-it all adds up to a disillusionment that’s quite widespread...

...Or is it something more specific...

...Also, Ralph Nader and other consumer advocates who played major roles in designing consumer legislation have always focused prjmarily on safety...

...Also, other laws designed by the Nader groups to protect workers were passed-for instance, the Occupational Safety and Health Act and the Employee Retirement Income Security Act, which reformed private pension plans...

...For instance, consumers tend instinctively to resent intrusions even if they’re for their own good-seatbelts that had to be buckled in order for cars to start were extremely unpopular...

...The law provided that aspirin could be sold for use by the old and handicapped in bottles without safety caps, as long as it was labeled “This package for households without young children...

...The Flammable Fabrics Act has left an incredible imbroglio in its wake...

...Businesses must also hire lawyers to represent them at government hearings on ever-changing d e s and regulations and to interpret the flood of new rules that pour out of Washington...

...President Carter led the bill’s supporters in blaming the delays on the lobbying of powerful special interests, and some editorialists have followed suit...

...Senator William F’roxmire, chairman of the Senate Banking Committee, which is currently studying the problems of the Truth in Lending Act, has announced his intention to try to strip down the law so that all a creditor is required to send out is a statement with the true credit charge on it-and nothing more...

...No figures are available to show how many of these accidents were caused by carelessness...

...The magazine Mother Jones has, for example, just revealed that Ford was knowlingly producing Pintos with gas tanks that, if the car were hit from the rear, had an excellent chance of incinerating the cars’ occupants...

...Some groups have been working to have smoke detectors made mandatory, and several local ordinances requiring them have been passed...

...To them, consumer problems are the new electric frying pan that fails to work after only two uses...

...this is not just another case of members of Congress dancing to any tune played by the U. S. Chamber of Commerce...

...The Wall Street Jaurnal, Business Week, and other business organs have long warned editorially that the laws are actually hurting consumers instead of helping them because the expense of meeting their myriad regulations is added on to the prices consuqers pay...

...In 1972 the Consumer Product Safety Commission, in the course of carrying out the Flammable Fabrics Act, required that all CMdren2s sleepwear under size 6-X be treated with a flame-retardant chemical (sizes 7 throw& 14 were added in 1975...

...As this was going on, it was learned that since the bill’s passage, four times as many companies as usual had terminated their pension plans because they could not afford the legal fees and clerical personnel necessary to assure compliance...

...Then, this spring, when the Consumer Product Safety Commission banned the chemical Tris, which had been used to treat over 40 per cent of childreq’s sleepwear, parents were understandably shocked to learn that they had been paying a higher price in order to expose their children to a cancer-causing agent...

...Now, eight years later, it is clear that something has gone awry-so far awry that the Senate Banking Committee has called the law in for an overhaul...

...The Consumer Product Safety Commission was set up and given broad powers to ban unsafe products from the market...

...Consumer advocates are blithely unconcerned with the issue of interfering in people’s lives, pnd don’t mind the government act@ in loco parentis...

...According to the Small Business Administration, 55 per cent of all jobs in the private sector are in small businesses...

...These businesses pro.duce 48 per cent of our output of goods and services and account for almost 43 per cent of the GNP...

...If there is indeed a declining public confidence in the government’s ability to protect the consumer, it stands to reason that it is in some way connected with the operation of these programs...

...One does not have to be a statistician or an economist to see how this works...

...American businessmen too often confirm the most vulgar Marxist’s view of free enterprise, so the public does need protection against fraud, against products that endanger health, or, as Nader put it, are “unsafe at any speed...

...The consumer laws are heavily weighted toward the use of the legal system...

...There were no representatives of small or medium-sized businesses present at hearings on the legislation, and when the law went into effect a huge outcry arose from these businessmen, who complained they could neither understand nor comply with ERISA...

...OF the unbelievably high price of coffee...

...The bill suffered a severe blow when a recent convention of the Federated American Women’s Clubs passed a resolution opposing the consumer agency...

...For the businessman with a narrow margin of profit, the cumulative expenses of complying with several different government regulatory programs can change ink from black to red...

...And it is these unintended effects, which range from the laughable to the horrendous, that eat away at the confidence of citizens in their government...

...Wronged consumers are also encouraged to go into court-some of the laws provide for the payment of legal fees by either business or the government...

...Spring Mills, one of the country’s largest fabric companies, announced it was ceasing productjon of fabrics for children’s sleepwear because of “unpredictable governmental policies,” a devslqpment expected30 drive up further the prices of children’s pajamas and qighfgowns, at least kempqrarily...

...An examination of how the the consumer laws really work shows why the government’s bear-hug of protection, which was at first so warmly received by all consumers, now seems stifling...

...But this fails to mollify anyone who has had recent experience with lawyers...

...of women recounting how a faulty government decision led them to have abortions...

...Creditors would be required to disclose the true cost of credit, and, congressional sponsors and consumer advocates pointed out, once the true cost of credit was known, consumers would choose to buy from businesses offering the lowest interest rates, thus helping to fight inflation...

...The Washington Monthly/September 1977 make consumers leery of the government’s protection...

...Laws that restrict their personal freedom for what the government has determined to be their owri good are not what they had in mind...

...For instance, the Employee Retirement Income Security Act (ERISA), which reformed private pension plans, is perhaps the most complicated piece of regulatory legislation ever devised -the annual reports required by the law arrive at the Labor Department in packing crates...

...And manufacturers say the device will add an average Qf $60 to the price of a new lawnmower...

...One of the largest costs of government regulatiorf’in the consumer field, legal expenses, is rarely mentioned...

...But every action taken by government, whether it succeeds or fails in achieving its stated purpose, 34 will inevitably produce unintended effects...

...Action was needed...

...There are actually more businessmen working for small businesses than for large corporations...

...Confrontation was avoided...

...Each of these laws, while meeting real needs, pushed government a step closer to the day-to-day lives of businessmen and consumers...

...Granted, Americans suffered 160,000 cut fingers and toes and other injuries while &owing !awns last year, but‘ the Commission admits that the device “might have prevented only about half of those...

...The Poison Prevention Packaging Act, passed in 1970, required, among other things, that aspirin bottles have caps that could not be opened by a child under five years old...

...It was heralded as a great breakthrough...

...Some sense of perspective should be brought to bear on this problem, since there are over 40 million power mowers in this country, most of which are used about once a week in the summer months...

...While a system that assures everyone’s day in court makes uplifting reading in a legal textbook, litigation is an expensive and time-consuming process, usually viewed as a last resort...

...of thousands of businessmen complaining about what consumer laws cost them...

...The way to combat the disillusionment is to attack it at its source, by either accepting limited goals or devising laws that are not maddeningly complicated and whose effects have been well thought out in advance...

...Millians of parents, qready hard-pressed to keep their @owing children in pajamas and nightgowns, watched prices jump by 20 per’ cent overnight . S om e m anufacturers attached labels explaining that the flame-retardant chemicals and the processes necessary to apply them were responsible for the price hike, and stores posted signs to the same effect...

...But by this time, two years after the Act’s passage, more than 10,000 companies had dropped their pension plans and 320,000 workers had lost their pensiops...

...Incensed fabric makers and sleepwear manufacturers have gone to court to try to get the government to make up their losses...

...What has happened to Marjorie Boyd is a Virginia writer...

...Who is paying for all these lawyers...

...Of course, businesses eventually pass legal and clerical costs on to consumers through higher prices...

...It was in the mid-1960s that Congress discovered the consumer...

...Sometimes the Consumer Products Safety Commission seems to be trvipg tq make consumerism look bad...

...Many congressmen who previously supported the idea of a Consumer Protection Agency were surprised earlier this year to fiid opposition to the bill growing among their constitue nts-congressmen are increasingly hearing from the advisers and friends who serve as political barometers in their districts that people are not so keen on consumer legislation as they once were...

...If he could get such a law through Congress and then find some way to protect it from the regulation-writers, it would be a noble experiment in government...

...And the system heaps confusion upon confusion as each law is loaded down with pages of regulations writteq by bureaucrats who speak a different language from the rest of us...

...But this takes time, during which legal bills must be paid and payrolls met...

...Consumer advocates themselves are sometimes sharply divided over a particular product’s safety...

...sides the annoyances they cause, it is possible that the consumer la% are producing detjpental effects that are not so readily apparent...

...But many people simply do not see safety as the most important consumer problem...

...Government investigators search out violators of the vdrious regulations and when they fiqd one, the accused business can either pay the assigned penalty or challenge it in court...

...This means that when you pause to move a tool or toys out of the way or even to answer a question from a passing neighbor, you have to tug at the inevitably balky cord starter...

...Is it a general unease growing out of an antiWashington mood...

...Doctors across the country were horrified, because on the basis Qf the ban they had advised pregnant women who had used the spray adhesives to undergo abortions...

...And we forget that America is still a land of small and medium-sized businesses...

...Fpr instance, it recently announced plans to require all manufacturers of power lawnmowers to equip each of their machines with a safety device that will automatically shut off the motor every time the mower stops...

...When I asked an expert on inflation at the Brookings Institution if he had done any studies on the cost of the consumer laws or their effect on inflation, I was told curtly, “We don’t do that sort of thing...

...One consumer-protection law that totally backfired involved childrens’ sleepwear...

...The major impetus behind the reform of private pensions was Studebaker’s bankruptcy, which left 8,500 workers without pensions...

...And a group of scientists is warning that the other chemicals used to make fabrics flame retardant are almost gs dangerous as Tris...

...Several senators threatened to try to repeal the law, or at least to exempt small businesses from it...

...As a result of the congressional interest in the consumer, there are now 33 federal agencies and approximately 400 bureaus and sub-agencies operating more than 1,000 consumeroriented programs...

...At the same time, other consumer advocates, including Ralph Nader, are working to have smoke detectors banned because they believe they emit cancer-causing radiation...

...Congress, in its excitement at finding a sizable constituency that posed no political risks, quickly passed Nader-inspired laws with names like the Fair Labeling and Packaging Act, the Truth in Lending Act, the Flammable Fabrics Act, the Poison prevention Packaging Act, the Refrigerator Safety Act, the National Traffic and Motor Vehicle Safety Act, the Federal Caustic Poison Act, and the Hazardous Substances Act...

...Others like it could have a profound effect on the way our government works in the future...

...Now it’s true that most consumer legislation has a point and that some of it is eminently worthwhile...

...The more lengthy and complicated the legislation-and consumer legislation is very lengthy and complicatedthe more unintended effects there are...

...When you ask consumer advocates this question, you hear such soothing phrases as “negligible expense” and “absorbed by business...

...Something Has Gone Awry One of the first consumer laws passed was the Truth in Lending Act of 1968...

...Arthritic Fingers Other consumer laws have had unfortunate side effects that have annoyed or angered various groups of the consumers they were supposed to help...

...or the television set that always seem$ to be in the repair shop...

...This would be in sharp contrast to our present system of writing laws whose goals are understood fully only by their authors...

...But that is a distorted view...

...But as the bill went through Congress other disclosure requirements were added, and when the Act got to the Federal Reserve Board, the bureaucrats there, charged with writing regulations for the new law, quickly added many more requirements, some so complicated as to be unintelligible...

...But retailers cannot always keep on hand a supply of the aspirin without safety caps, so many senior citizens have been forced to try to manipulate the “child-guard” caps with arthritic fingers qs they struggle to get their dosage of aspirin every four hours...

...Polls showed that Ralph Nader was held in the highest public esteem, and his various organizations, staffed with bright young men and women, were producing a multitude of proposals to help consumers...

...0 while the costs of complying with the consumer laws are a nuisance to General Motors and Nabisco, they are a real burden for small businesses --and their employees...

...The cumulative effect of 320,000 workers telling how a program designed to protect pensions wiped theirs out...

...But the cost of the government rggylatory process is a subject that most con sum er advocates, government officials, and liberals would prefer to avoid...