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The blogged wandering of Robert W. Anderson

National Bankruptcy Day Averted?

In December, I blogged about National Bankruptcy Day.  That was the term coined for today, February 10th, 2009.  Why?  Because of a piece of very bad – and according to these claimants, illegal – legislation:  the Consumer Product Safety Improvement Act (CPSIA).  A law intended to make our children safe by requiring companies to test all children’s products to prove they are free of lead and phthalates. 

The problem with the law is mainly that the tests are unnecessary in so many cases and the tests themselves are expensive and produce hazardous waste.  Lead in metal toys?  Reasonable to test.  Lead in fabric clothing and linens?  Unreasonable.

A great many businesses are already endangered in this economy, but these extra costs would drive many under.

Good news?

On January 31st, a stay of enforcement was granted (Stay of Enforcement of Testing and Certification Requirements).  This is because the CPSC has recognized that this law is a bad one and that they need to spend the next year providing guidance for a reasonable implementation of the law.

It is clear that the CPSC is attempting to provide clarification to and a reasonable framework around this whole issue.  Further clarification of the current policy was released yesterday.

So, no National Bankruptcy Day?

The answer is mixed.  Much damage has already been done.   The confusion created by this law and the CPSC’s poor handling of it has already hurt many small businesses.  In some cases this is merely the loss of productivity while the founders divert most of their attention to compliance.  In other cases, companies have already chosen to close their doors.

So, today is significant in that the law does go into effect today.  The limits are in place, egregious violators can be punished.  All good, but there has been much collateral damage along the way.

So I’ll say yes, today is still National Bankruptcy Day.  The new, as yet undrafted, policies will go into effect and be enforced on February 10th, 2010 – and they may be just as unreasonable as the current ones.

You can celebrate by giving a giant air-quoted thank you to the politicians and environmentals who rushed this terrible law into being.  I’ll keep my invectives to my self.

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