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.]

Flashback – Hydration and Littering

Almost three years ago I wrote the following about how the incessant advice about hydration was mostly bogus, promoted by the bottled water industry and misinformed social media users. This week I ran across this Guardian article, “The truth about hydration” that reinforces everything I wrote back then. In the middle of a hot summer with TV meteorologists parroting the same reminders, it’s a good time to review.

[“The federal government announced Wednesday it will eliminate a policy that allowed national parks like the Grand Canyon to ban the sale of bottled water in an effort to curb litter.”  Fox News explains that the rules were set up in 2011 because empty bottles scattered throughout some of the parks had become a major problem.  One problem was the emphasis on bottled water.  They did not ban the sale of other beverages, such as sugary soft drinks that are typically made of sturdier plastic.  The policy was obviously not completely thought through in the first place, setting them up as an easy target for objections.

Those objections did come and the National Park Service officials changed their minds.  But instead of just admitting they were wrong or banning the rest of the soft drinks, they said they wanted to "expand hydration options for recreationalists, hikers, and other visitors to national parks."  Falling back on the idea of hydration they tried to make it sound like a health-related decision.  There are a couple of questionable aspects to this.

Later in the article is one sentence that probably gets more toward the truth:  “ The bottled water and beverage industry have previously lobbied aggressively to keep bottled water at U.S. national parks.”  As in most cases, follow the money.

But what is all this about hydration?  This is one of those urban myths that people just won’t drop.  I even heard someone talking about pre-hydration the other day, comparing drinking lots of water (or sports drink) to applying sunscreen before you go out.

More and more experts are coming forward with contrary, more balanced advice.  Here is an example.  “Drink when you're thirsty. Stop drinking when your thirst is quenched. Obey that one rule and there is no risk of dehydration,” says Dr. Stanley Goldfarb, a University of Pennsylvania kidney specialist.

Later on in that hydration article is a statement that shouldn’t surprise anyone: “Much research on human hydration [is] funded in part by bottled water industry.”

  

Another study found “no connection between hydration and the performance of athletes.”  It reiterates the sound, moderate advice to drink when thirsty.  There is no need to go overboard or walk through life tethered to a water bottle.

The final point is about bottled water itself.  I have elaborated on this subject in the past.  With a few rare exceptions or in emergency situations, bottled water is typically no purer than tap water and sells at a hundred times the price.  From time to time the bottled water companies are taken to task by some government agency for questionable practices or claims.  Some merely use tap water from another location.  Most recently a lawsuit cites Poland Spring Water for deceiving customers by “bottling common groundwater that doesn’t meet the U.S. Food and Drug Administration's definition of spring water.” 

Lately I’ve noticed in some airports an absence of the usual drinking fountains outside restrooms.  The only option is to buy the bottles from the vendors.  Again, follow the money.

Yes, it is important to have water with you when hiking in a national park (or anywhere).  It is smart (critical thinking) to buy a water bottle or canteen for the occasion and fill it at the tap or refill it at a drinking fountain. It is responsible not to throw bottles or any kind of litter around the trails or campgrounds. It shows perspective to understand that it’s unnecessary to pre-hydrate or take other extraordinary actions.  Drink when you are thirsty; it’s as simple as that.  So many of these problems can be easily solved by right behavior rather than by government regulations.]

Memorial Day

On the last Monday in May we celebrate Memorial Day. It’s traditionally considered the beginning of summer, a long weekend marked by cookouts, parades and political speeches – although probably less so this year.

Like most holidays, the meaning behind the celebration has been watered down considerably. The Old Farmers Almanac puts it well: “We spend time remembering those who lost their lives and could not come home, reflecting on their service and why we have the luxury and freedom that we enjoy today.” Most if not all those political speeches will also call on spectators to remember those who made the ultimate sacrifice to defend our freedoms.

Yes, there will be much mention of freedom, but I have written many times in the past about the inexorable link between freedom and responsibility, most recently in a Flashback entry about two months ago.

Freedom is something that can be so easily frittered away. When children act irresponsibly, good parents impose restrictions, time outs or groundings. Others, though, may dismiss it as a phase they are going through. As their behavior leads to bigger problems, parents find themselves in a position of constantly having to bail their children out of trouble, because they have never learned responsibility. 

When they become adults, the government or advocates take over, often in the form of new regulations and restrictions. The problem is that, in order to keep the irresponsible from hurting themselves or others, those new regulations apply to everyone. To keep some citizens from making bad decisions, our elected leaders take away our ability to decide for ourselves. 

Because of a few irresponsible people, police have the legal right to set up sobriety checkpoints on highways waylaying everyone, without permission or a warrant.

Because of a few irresponsible people, encouraged by members of the legal profession who profit from it, try to shift the blame for their poor choices, every purchase requires warnings that add to the cost. We sign hold-harmless agreements and must carry extra insurance to guard against such reprisals.

How many states and counties have arbitrary laws about sales of liquor, fireworks, sugary soft drinks, and trans fats? If one busybody neighbor gets concerned, you can be arrested for letting your children walk a couple of blocks to the park alone.

This has become only more pronounced during the pandemic. Many governors impose arbitrary restrictions, in some cases enforced by threats of police involvement or other penalties. Even those who choose to make prudent decisions on their own are caught up in the hysteria. Some citizens feel obligated to shout at, threaten or report neighbors.

In one case, a salon owner in Texas “was ordered to spend a week in jail after she continued to operate her business despite restrictions put in place.” She was not free to operate her business, despite having brave employees and customers willing to participate.

Michigan residents were forbidden from buying seeds and garden supplies. It’s springtime! At least one mayor threatened to shut off utilities to maverick businesses. Meanwhile those who have been terrorized by the news media’s black-and-white portrayal of the situation, support the virtual house arrest, cower behind closed doors, fearful of dying themselves and accusing those who want to go back to work of being selfish and callous about the lives of others.

How long will some of the coronavirus restrictions stay in place? Will governors and mayors assume a new sense of marshal law-like powers to be called upon in any future situations that can be defined as emergencies? Will the how-many-deaths-is-it-worth crowd dominate, as we  permanently lose more freedom while politicians continue to vow to “fight for your rights” by passing more regulations?

The last line of the first verse of our National Anthem asked the question, “… does that star-spangled banner yet wave o’er the land of the free and the home of the brave?” Francis Scott Key was asking whether the flag was still there. It is, but a better question would be: how much longer  can it honestly be considered "the land of the free and the home of the brave"? The founders chose liberty over safety, and that is presumably what all those people fought and died for. Today we seem to passively accept the opposite.

Flashback - Discrimination

[Here is a posting from June 2011. The original title was Age Discrimination, but the idea is broader.]

Recent news articles presented the fact that the older unemployed are finding it harder to reenter the workforce. In one television interview a man told the reporter that one company directly admitted to him that he had all the qualifications and experience and if he were 20 years younger, the job would be his. This is not only illegal, but a distinct failure in the dimension of critical thinking. It’s illogical and probably a disservice to the owners and customers of the company.

Consider that until recently it was not unusual for a company to have a turnover rate in the area of 20% - much higher in some cases, slightly lower in others depending on the work.  [Today (2019) it might be higher than that considering the number of job openings available to any disgruntled worker.]

At 20% turnover the company is losing it’s entire workforce, on average, every 5 years.  Even a person 55, who expects to retire no earlier than 62, would have a longer than average tenure.  In any economy it's likely that a 55-year-old would remain a loyal employee for those seven or more years until retirement with a company willing to give him or her a chance.

Furthermore some studies have shown that older workers spend more time on the job, with fewer sick days, no lost time due to maternity leave, fewer interruptions with calls from the daycare or school, etc.  Add in the mentoring potential, and arguments in favor of age discrimination become even weaker.  (Here are links to just a couple of articles supporting this position.) Furthermore, older employees have not grown up with all the technology. Those who are successful have shown that they can learn and adapt on the fly.

A company that ignores these realities exhibits behavior based on unwritten policies, past practices and gut feelings. That is both irrational and not in their own best interests – a failure in the dimension of critical thinking.

Reflect on this:  how many other laws are in place, including all other aspects of illegal discrimination, that would be unnecessary if company executives made sound (critical thinking) decisions instead of letting their prejudices short-circuit their brains?  And how many tax dollars could be saved on the development and enforcement of those laws and regulations if people just acted sensibly?

Hydration and Littering

 “The federal government announced Wednesday it will eliminate a policy that allowed national parks like the Grand Canyon to ban the sale of bottled water in an effort to curb litter.”  Fox News explains that the rules were set up in 2011 because empty bottles scattered throughout some of the parks had become a major problem.  One problem was the emphasis on bottled water.  They did not ban the sale of other beverages, such as sugary soft drinks that are typically made of sturdier plastic.  The policy was obviously not completely thought through in the first place, setting them up as an easy target for objections.

Those objections did come and the National Park Service officials changed their minds.  But instead of just admitting they were wrong or banning the rest of the soft drinks, they said they wanted to "expand hydration options for recreationalists, hikers, and other visitors to national parks."  Falling back on the idea of hydration they tried to make it sound like a health-related decision.  There are a couple of questionable aspects to this.

Later in the article is one sentence that probably gets more toward the truth:  “ The bottled water and beverage industry have previously lobbied aggressively to keep bottled water at U.S. national parks.”  As in most cases, follow the money.

But what is all this about hydration?  This is one of those urban myths that people just won’t drop.  I even heard someone talking about pre-hydration the other day, comparing drinking lots of water (or sports drink) to applying sunscreen before you go out.

More and more experts are coming forward with contrary, more balanced advice.  Here is an example.  “Drink when you're thirsty. Stop drinking when your thirst is quenched. Obey that one rule and there is no risk of dehydration,” says Dr. Stanley Goldfarb, a University of Pennsylvania kidney specialist.

Later on in that hydration article is a statement that shouldn’t surprise anyone: “Much research on human hydration [is] funded in part by bottled water industry.”

  

Another study found “no connection between hydration and the performance of athletes.”  It reiterates the sound, moderate advice to drink when thirsty.  There is no need to go overboard or walk through life tethered to a water bottle.

The final point is about bottled water itself.  I have elaborated on this subject in the past.  With a few rare exceptions or in emergency situations, bottled water is typically no purer than tap water and sells at a hundred times the price.  From time to time the bottled water companies are taken to task by some government agency for questionable practices or claims.  Some merely use tap water from another location.  Most recently a lawsuit cites Poland Spring Water for deceiving customers by “bottling common groundwater that doesn’t meet the U.S. Food and Drug Administration's definition of spring water.” 

Lately I’ve noticed in some airports an absence of the usual drinking fountains outside restrooms.  The only option is to buy the bottles from the vendors.  Again, follow the money.

Yes, it is important to have water with you when hiking in a national park (or anywhere).  It is smart (critical thinking) to buy a water bottle or canteen for the occasion and fill it at the tap or refill it at a drinking fountain.  It is responsible not to throw bottles or any kind of litter around the trails or campgrounds.  It shows perspective to understand that it’s unnecessary to pre-hydrate or take other extraordinary actions.  Drink when you are thirsty; it’s as simple as that.  So many of these problems can be easily solved by right behavior rather than by government regulations.

Diversity

What is diversity?  Do people who say things like, “You can just look around the room and tell there is no diversity” know what they are talking about?  Can they really tell by people’s outward appearances that they have all had the same set of experiences, the same psychological preferences and the same motivations?  To base diversity solely on what people look like naked seems to be a bit simplistic, but alas, that’s what it boils down to when the lawmakers get involved.

Companies are criticized for not meeting that particular definition of diversity and urged, sometimes forced, to change their standards.  These things are easy to measure, and progress, or lack thereof, is obvious to all.  As a result, they resort to highly visible remedies like diversity training, which has been going on now for decades.  But does it work?

According to a Harvard Business Review article from March 2012, the answer is, no!  The article is based on a study published in the American Sociological Review that looked at 829 companies over the period 1972 to 2002 to discover if diversity training resulted in a more diverse management team.  It showed that diversity training had “no positive effects in the average workplace” despite spending millions of dollars on material, consultants and employee time.  “Attitudes — and the diversity of the organizations — remained the same.”  Furthermore, the research showed: “In firms where training is mandatory or emphasizes the threat of lawsuits, training actually has negative effects on management diversity.”

The author is not surprised, explaining his belief that “Anybody who has ever been scolded is familiar with the tendency to rebel against the scolding” and that “When people divide into categories to illustrate the idea of diversity, it reinforces the idea of the categories.”  By emphasizing the categories, he believes it undermines the efforts to get people to treat people with respect for their abilities rather than as merely members of a category, a category not necessarily in line with these legal definitions and that regardless may arouse resentment based on real or perceived special treatment.  Whatever the real underlying reason, it is unlikely that companies will discontinue this apparent waste of time and money since it is one of the few things they can point to when challenged in court.

Like school testing, the motivation for lawmakers to step in is usually the failure of current practices to meet objectives.  When they do, the result is more cost and more chaos than if organizations or industries had solved the problem independently. 

It should be the responsibility of companies to hire and promote workers and managers based on their ability to do the job rather than what the workers look like or how comfortable the hiring managers are.  They too easily forget that business is not about making the boss happy; it’s about making the customer happy – and that happy, competent, well-trained workers (not managers feeling comfortable or avoiding awkward confrontations) are the surest way to make that happen.  They like to complain about EEOC, Affirmative Action, OSHA, minimum wage and all the rest of the regulations and requirements to keep employees safe and respected, but these are burdensome (governmental) consequences of not taking their responsibility seriously enough!

Decoding Nutrition Facts

Every food package has a table of nutrition facts.  The government has talked about making this information larger, easier to see and read.  But which of these facts is most important?  Is it the number of calories, the amount of fat, the amount of sodium, the vitamin content, or something else?  I contend that the most important number by far is at the top of the label, serving size or servings per container.

One reason that this is very important is that it makes sense of the rest of the numbers.  As an interesting example take a single frozen 16 oz. Marie Callender’s Creamy Mushroom Chicken Pot Pie.  It proudly shows on the front of the box only 430 calories, 10% saturated fat, 600mg sodium, and 4g sugars.  Except that the saturated fat may be a little high, this looks like a pretty healthy meal.  (The small print on the front of the box right above this display of good diet news says:  PER 1 CUP SERVING.)  The first clue should be the 16oz size.  That may seem a little much, but it is chicken and vegetables and crust, and it's only a single pie.

The detail on the back, under the “Nutrition Facts,” states “Serving Size 1 Cup (200g)” and “Servings Per Container about 2” – about 2!  In fact there are 456 grams in 16oz – that information can also be found on the front of the package – so servings per container is a little more than 2 and a quarter.  The effect of this new information is astounding!  The package really contains more like 980 calories, plus almost 115% of daily recommended saturated fat, almost 1370mg of sodium and more than double the sugar.  It’s still only one pie.  Someone might reasonably expect to eat it in one sitting rather than eat half now and reheat the other half tomorrow or split it with someone else.  Cutting a pot pit in half is not the easiest thing to do – it’s semi-liquid inside.  Who would think of doing this?  If you don’t though, all the promises on the front of the package are pretty hollow.  Marie Callender didn’t lie; but without exercising a little more than ordinary care, it’s very easy to be fooled and eat way too much while believing you are eating responsibly.

This is not an isolated case.  Every food package has this information, and it must be all put together to get the entire picture.  Another example where the honest representation can be tricky comes from breakfast cereal.  A 23.5oz box of raisin bran and an 18oz box of bran flakes are about the same size and cost about the same.  The raisin bran box says it contains 11 servings, the all bran 18.  How does that work?  They are sold by weight and raisins weigh more than flakes.  As it turns out, the bran flakes box is 60% cheaper per serving and contains only about 30% of the sugar. 

Now some people have as much faith in serving size labels as they do in the MPG window sticker on a new car.  No one drives that way and no one eats that way.  You can believe the numbers or not, but none of the other important information makes any sense without first considering serving size.

Will the government mandating larger “Nutrition Facts” labels lead consumers to make better decisions?  Time will tell.  But they must also become more careful shoppers, on their toes, and using critical thinking to sort through, recognize and wisely apply the information regardless of font size.  

Pain Everywhere!

On Monday ("Pain at the Plug?") I explained that regardless of the good intentions, the EPA’s proposed cap on new power-plant emissions would likely translate into increased electric bills for everyone.  Coal is a dirty source of power, but economic understanding leads to the inevitable conclusion that any future costs related to cleaner emissions will be borne by the electric consumer.

Of course, this might not be the case, the electric industry may choose to build no new coal-fired plants, favoring the cleaner natural gas with a mix of solar and wind power.  These other sources however are not without their own problems and controversies.  Solar energy is not available on cloudy days or at night and, like wind, has a much bigger environmental footprint than traditional power plants.  Wind power also faces mounting bad press in that “almost 600,000 birds are killed by wind farms in America each year, including over 80,000 raptors such as hawks and falcons and eagles” (not to mention hundreds of thousands of bats).  The practice of fracking, used to increase the recovery of natural gas is bringing citizens out in opposition, signing petitions, and just this week, demonstrating in Washington to "demand that the government reopen investigations into fracking-related drinking water pollution in Pennsylvania, Texas and Wyoming.”  It seems good options are hard to find.

Diversification, the investment principle of spreading out money over a number of different instruments so that one bad stock or one bad sector (e.g., bonds) does not ruin future prospects, applies here as well.  Diversification of energy sources protects against unforeseen shortages or disruptions.  If the above three energy types have problems, one of the few remaining alternatives is nuclear, which has zero emissions, but scares people enough to make opposition an easy sell.  Taking all this into consideration, it is quite likely that more of those cleaner, but more expensive coal-powered plants will be built in the future.

Individuals and families are not the only ones who use electricity.  Stores, manufacturers and governments do too.  GM uses it to power their robots.  Wal-Mart uses electricity to light the parking lots and keep the ice cream frozen.  The town uses electricity to heat and cool public buildings and to light the streets at night.  How would airports, restaurants, and printers, even Internet companies, run without electricity?  If the price of electricity goes up, the cost will not be restricted to uses at home.  Everything we buy will be more expensive.

When the time comes to pay for cleaner air, eventually the bill comes to us.