Flashback – Consumer Protection Gone Crazy

Back in 2011 I explained how new legislation regarding credit cards led to the companies increasing fees and interest rates. More recently, about a year ago, I once again emphasized how well intentioned consumer protection laws often have unintended consequences. Here is that entry from August 23 of last year.

[Last time I wrote about a lawmaker introducing a bill to protect Americans from Internet addiction, a condition that has no formal definition or diagnosis. Whenever a problem or “epidemic” arises, someone in power decides that there is a government solution to change the conditions or behavior. (Even when the government was the source of the problem.)

People are not trusted to solve their own problems, often because they don't. In the end everyone loses some freedom because of the bad decisions of a few. It takes critical thinking to identify the root of the problem and personal responsibility to own the solution instead of passing it off to a higher power.

This dynamic was reinforced a few days ago when a package arrived from one of those catalogs that frequently appear in the mailbox. In the package was a gift pen, similar to those used by various companies as promotional items. It was an ordinary retractable ballpoint similar to those from a dentist’s office or a job fair but with one difference. It came in a plastic sleeve with the words, “WARNING: Cancer and Reproductive Harm” followed by a web address.

The address led to the California Proposition 65 page. “The California Office of Environmental Health Hazard Assessment is establishing this website to provide the public with information on chemicals, products and locations often associated with Proposition 65 warnings.  These warnings inform Californians about their exposures to chemicals that cause cancer, birth defects or other reproductive harm.” 

Notice that the above statement reads, “cause cancer” not “may cause cancer,” implying that they have studies to definitively prove a direct causal link. Since the list includes over 900 chemicals, that is a doubtful assertion. Looking at one random example: “The International Agency for Research on Cancer (IARC) lists coconut oil diethanolamine condensate (cocamide DEA) as an IARC Group 2B carcinogen, which identifies this chemical as possibly carcinogenic to humans."[Emphasis added] Apparently it only takes possibly to make the list. 

The full list includes a large number of arcane-sounding chemicals, e.g., Amikacin Sulfate and Zalcitabine, but it also includes alcoholic beverages, aspirin, tobacco smoke, nicotine and oral contraceptives.  

How helpful is this? Is tobacco smoke or nicotine a surprise? Why do Californians need the information and not everyone else? Coffee contains acrylamide, which is on the list, so last year a judge decided, "coffee sellers in the state should have to post cancer warnings.” But in “2016, the cancer agency of the World Health Organization moved coffee off its ‘possible carcinogen’ list.”

This isn’t science; it’s judges and lawmakers deciding what should or should not be on a list. It’s “The Boy Who Cried Wolf” gone crazy. People don’t have time to be careful about 900 chemicals and all the products they go into. I have no idea which part of the promotional pen I should worry about or how it might hurt me. Tanning beds and sunlight are not on the list only because they are not chemicals. The situation is so bad that my seven-year-old granddaughter upon returning from a vacation in San Diego commented about how silly it was seeing all the warning signs everywhere coffee was sold.

Not only is this not helpful, it adds cost. The extra warning labels and signs cost money. It is costly to reformulate products to avoid having to post warnings, or worse, to avoid the threat from lawyers, “some of whose businesses are built entirely on filing Proposition 65 lawsuits” on behalf of “straw man plaintiffs." The cost of these nuisance consequences comes back on all of us. (Economic understanding reminds us there is no magic money tree to make up the difference. It all gets passed along to the end consumer.)

Does the list ever shrink or become reasonable, or do we get to the point where everything needs a progressively more meaningless label? I’m sure many people thought this was a great idea back in 1986 not realizing that they may be creating a monster.]