TAX REVIEW, August, 1975 can only reply that regulation, like justice, must be blind. The instances of waste and foolishness on the part of government regulators pale into insignificance when compared to the arbitrary power they can exert. To cite a member of the Consumer Product Safety Commission, "any time that consumer safety is threatened, we're going to go for the company's throat." That this statement is not merely an overblown metaphor can be seen by examining the case of Marlin Toy Products of Horicon, Wisconsin. The firm manufactured primarily two products: Flutter Ball and Birdie Ball. These were plastic toys for children, identical except that one contained a butterfly and the other a bird. The toys originally contained plastic pellets that rattled. This led the Food and Drug Administration in 1972 to place the products on its "banned" list. It was feared that, if the toys cracked, the pellets could be swallowed by a child. In response to the ban, the company recalled the toys and redesigned them to eliminate the pellets. Thus they could be removed from the ban list. Put Out of Business by Mistake The newly-formed Consumer Product Safety Commission in 1973 assumed responsibility in this area. Because of an "editorial error," it put the Marlin products on its new ban list, although there was no longer any reason to ban them. Apparently the Commission incorporated an out-of-date FDA list. The error was called to the Commission's attention, but it replied that it was not about to recall 250,000 lists "just to take one or two toys off." Marlin Toy Products was forced out of the toy business and had to lay off 75 percent of its employees. It is ironic to note that the Commission specializes in ordering companies to recall their products if any defective ones have been produced, but refuses to recall its own product when there is a defect in every single one. A more humorous instance of the CPSC's failure to abide by its own standards involves the toy safety buttons which it intended to distribute in the Fall of 1974 in an effort to make consumers more safety conscious. Only after producing 80,000 buttons did the Commission learn that its product was dangerous to children, because of the lead paint and the possibility of breaking off and swallowing pieces of the button. Unlike the procedures that it expects of the companies it regulates, the Commission presumably ran its tests after rather than before production. Fortunately, it realized its error prior to making public distribution of the buttons. Hence, “only” wastes of resources and tax dollars were involved. In addition, there is good reason to be concerned over the amount of power enjoyed by federal regulatory agencies because they tend to employ a double-standard: one for private businesses, and one for one another. Illustratively, the Environmental Protection Agency mandated catalytic converters for future automobiles. But these converters, designed to lessen pollution, themselves produce harmful amounts of sulphuric acid mists which can irritate the lungs. The converters are now being re-studied quietly. But just think of the governmental and public outrage which would have resulted if a private business firm had taken such action prior to submitting a detailed environmental impact statement. Finally, governmental agencies do not seem hesitant to share their power - in ways which seem anything but judicious. Thus the responsibility for doing the basic research underlying new job safety and health regulations, which was assigned to the National Institute of Occupational Safety and Health (NIOSH) in the Department of Health, Education, and Welfare, was, in early 1974, delegated by NIOSH to the Amalgamated Clothing Workers Union. This means that an official federal study of safety and health hazards in the clothing industry is being conducted by a union employee and paid for by the union. In reporting this strange arrangement, OSHA noted that the union would help to obtain the cooperation of plant managers. But to anyone other than an OSHA functionary, it must be painful to contemplate the reaction of management to an investigation of its premises by its union in behalf of the government! Because of the very substantial costs and other adverse side-effects that they give rise to, society should take a new and hard look at the existing array of government controls over business. A substantial effort should be made to eliminate those controls that generate excessive costs. Rather than blithely continuing to proliferate governmental controls over business, alternative means of achieving important national objectives should be explored and developed, solutions that expand rather than reduce the role of the market. A good beginning might be based on the environmental regulations themselves. In general, the society is supposed to examine the impact on the environment of the various actions that it takes. Would it not be just as appropriate to require each environmental agency to assess the impacts of its actions on the society as a whole and particularly on the economy? Surely a cleaner environment is an impartant national objective. But it is not the only national objective, and certainly society has no stake in selecting the most expensive and most disruptive ways of achieving its environmental goals. Unpopular as it may be, I urge the same balanced attitude for the new regulatory programs, including product safety, job health, equal employment, energy, et al. As in most things in life, the sensible questions are not matters of either/or, but rather of more or less and how. Only in this way can business both help attain the nation's social goals, while continuing to achieve the basic economic function of more efficient production and distribution of goods and services. I received your letter dated February 3 on February 12. My immediate telephone call to the Federal Building in Atlanta was answered by Mr. Godwin, whom I assured that I would have dropped everything to come to Atlanta had the United States mail service been more efficient. Last year I prepared an extensive report regarding a proposal to reduce hospital costs in all hospitals of 100 bed size or smaller. This report was accepted by the Liberty Memorial Hospital Aurthority of Hinesville, Georgia. We have had a moderate amount of correspondence with various officials of the Department of Health, Education and Welfare all of which have been polite but discouraging. The medical staff of Liberty Memorial Hospital, its authority and administrator have recently reviewed this proposal. It is our belief that when implemented, the program will reduce the daily costs to the patients by some 20%. Stated in a different fashion, this savings multiplied by the average daily cost and the occupancy of the Liberty Memorial Hospital and then by the number of days in a year and the number of hospitals of 100 bed size or smaller in the United States produces a figure of $1,029,839,596. This figure represents what we believe would be the annual combined savings in the hospitals of 100 bed size in the United States. Portions of our proposal could be applied to larger hospitals and result in a great savings in those institutions. This savings of a billion dollars annually can be achieved while increasing the quality of medical care rendered in our hospitals. This savings would not be limited to the government sponsored programs. but would proportionately pass on to the private insurance companies and the individuals paying their own hospital bills. These figures and proposals do not take into consideration a decreased expense on the part of the Department of HEW in decreasing many of the expensive functions performed by them. Therefore, the total savings to the sick and suffering in their time of need of hospitalization could amount to over one and one-half billion dollars annually in the small hospitals of America. The Honorable Sam Nunn -2 February 12, 1976 The hospital authority of Liberty Memorial Hospital offered this hospital as an experimental project in proving the feasibility of this proposal. This offer was made to the Department of Health, Education and Welfare as an offer for a study in experimental reimbursement programs. To date this offer has not been accepted. The entire substance of my proposal deals with a practical method of reducing the heavy time consuming burden placed on all of our skilled professionals in the health care field by the Federal bureaucracy encumbent paper work demands. The solutions arises from my experience as a physician in rural Georgia over the last 19 years. I know that it could produce the above results and increase the quality of health care given to all people. I will provide you a This letter has briefly acquainted you with my thesis. I regret that I was unable to accept your invitation to testify before your Subcommittee in Atlanta. My enthusiasm for this program would lead me to Atlanta or Washington to accept future invitations to testify. Senator Nunn, permit me to compliment you on your vote to sustain the veto of HR 8069. The money is not needed. Reorganization that will result in more efficient utilization of the money now appropriated is needed, particularly in the health care field. Thank you for a vote that could have helped balance the budget. Sincerely, Frank T. Robbins, M. D. FTR/psb I'm one constituent you've heard little from and likely will hear little see OSHA No one, I'm sure, has any idea how many man hours by government employees and in offices such as mine, go into this sort of thing, and no doubt the amount of the postal deficit traceable to mailing this trash back and forth would be astounding. I might add to the information in the report, that not only in 1975 but in all of the preceding years we have had no occupational injuries or illnesses surprisingly enough these apparently don't often occur in small law offices!! While I'm taking your time, I would like to say one reason I don't bother you One last word is too late. Hope Congress can do something about this before it |