Thursday, March 5, 2009

Congress mindlessly doing more damage to business

A liberal congress supported by a socialist president is trying to improve the economy by hurting businesses and business people. If you think that is going to work, I have a one way ticket to North Korea for you.

Much of the damage being done is on purpose - at least they understand what a tax increase is, for example. But substantial damage is also occurring because of generalized blundering around, like a bull in a trillion dollar china shop. Such is the case with the so-called "Consumer Products Safety Improvement Act."

Thousands of small toy makers are being put out of business, a billion dollars of toy inventory is going into the dumpster, the cost of toys is going to rise, and the variety and availability of toys is going to decline because of ridiculous testing rules which don't even allow the sale of existing stocks which have not been shown to cause any harm.

One small business owner, Kimberly Owen, who started a children's clothing business called Moonfly Kids Inc. about two years ago in Las Vegas, says about $4,000 of useless inventory -- clothes and storybooks -- sits in her garage. Her small-boutique customers canceled orders because she couldn't produce certificates showing the books and clothes had been tested by an independent laboratory, she says. She recently closed Moonfly and returned to her previous job as a real-estate agent.

Small manufacturers say they can't afford testing, which can cost up to $2,000 per production batch even if the entire batch is only 20 items.

Even books are affected. A comment from an author says,

"I wrote a little book about kayaking in the area where I live (Paddling the Waters of Vashon Island.) It sells a few hundred copies in a good year. Last week I got a letter from my distributor demanding test results showing that my book contains no pthalates or other prohibited substances. The cost of such testing would be much more than any profit on my remaining inventory. So the rest of the books go into the land fill. I guess that's life in a socialist worker's paradise. Thanks, Nancy!"

Charitable organizations are also being hurt as their supplies have to be dumped.

Local outposts of Goodwill Industries International are "filling up trailers with the stuff," says Jim Gibbons, chief executive of the charitable group, which collects and distributes used clothes. The law affects clothing because lead is sometimes used in buttons, zippers, rhinestones and other embellishments.

Goodwill's Mr. Gibbons says its stores may have to destroy $170 million in merchandise. The Salvation Army say it will have $100 million in lost sales and disposal costs related to used goods.

This is not the first, second, or third example of government's destructive efforts - it's only one of a long, long list extending into the future.

The china shop bull is mindlessly smashing things left and right, but while its brain isn't working, its mouth is going non-stop telling us it's doing all this "for the children." One hopes the children won't mind growing up poorer as their parents are put out of work.

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