Tag Archives: Regulation

If Gibson Is Not Safe, Nobody Is

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Last week, Gibson Guitar made the news as armed agents of the Department of Fish and Wildlife raided its factories in Tennessee. The gist of the federal complaint is that Gibson may have violated the laws of Madagascar and India by importing only partially finished guitar components and then further processing the materials with US labor. The ‘may’ qualifier refers to the fact that the multi-year investigation has yielded no charges whatsoever against Gibson. Whatever the specious merits of the government’s investigation, the broader lesson is that federal regulatory authority is so expansive and vague, it enables corrupt bureaucrats to intimidate and punish nearly any honest business that falls under Washington’s crosshairs.

It’s worth mentioning that Gibson is a successful domestic manufacturer that employs hundreds of people that would normally work overseas. Musical instruments are a labor intensive product, and Gibson could easily reduce its costs by moving its operations to Asia. Like a few iconic brands like Harley Davidson, Gibson trades on its reputation for quality by maintaining US operations. To many professional musicians, Gibson is synonymous with guitars, the USA, and quality. While the US is losing its manufacturing base, especially where labor is a dominant component, Gibson has found a way to prosper, and provide employment to Americans.

Rather than thanking Gibson for its entrepreneurial spirit and being an ambassador for the US everywhere guitars are played, the Obama Administration has used a book of dirty tricks to stymie Gibson. Gibson’s factories were raided two years ago, when government agents seized valuable inventory, yet the government never brought charges and refused to explain why it was still keeping Gibson’s property. When Gibson sued the Federal Government for its right to private property, the Obama Administration responded with last week’s new raid. One theory posits that Gibson is being targeted for retribution after it moved its factories from union friendly Michigan to right-to-work Tennessee – just as Boeing is being sued for opening a factory in South Carolina.

The government’s motivation to punish a US manufacturer for using small amounts of rare woods is open only to speculation, but its tactics are textbook. Unlike any other litigant, the government has enormous advantages when it sets it sights on a victim. The government can confiscate any property it wishes without probable cause, as Gibson has learned. Such victims must sue to prove their innocence, which can take years. Meanwhile, the government’s victim may not be able to continue to earn the profits required to defend itself. The government may time its action to inflict the most damage, as it did with Boeing by suing the airplane manufacturer only after it had invested $750mm in a new factory. Worst of all, the government frequently sidesteps or simply ignores court orders to cease its abuses.

The Gibson story is not a unique case of the government’s capricious attitude toward the rights of businesses. There are so many laws and regulations that any company can become entangled in the web of a crafty bureaucrat. The Gibson abuses call for serious regulatory reform, and Shout Bits has a few ideas to start the process:

  1. Congress should pass a law that requires agencies that seize property to either file a complaint against the alleged violator or return the property within 90 days. This is clearly the intent of the Fourth and Fifth Amendments, but somehow the Executive Branch does not read the Constitution honestly.
  2. Pres. Obama should issue an executive order stating that companies, such as Gibson, that have longstanding non-violent histories may not be subject to violent military-style raids. One of the government’s dirty tricks is to raid the offices of mid-level managers with guns drawn, as was the case with Gibson. This tactic is nothing more than violent intimidation designed to coerce disclosure without the trouble of subpoenas or Miranda rights. The US does not need to resort to Stasi tactics to protect rosewood trees.
  3. Congress should pass a law requiring agencies to publish safe harbor standards for its regulations. Even if Gibson is somehow guilty of misusing rare woods, the Government has never stated how Gibson could legally obtain and use these essential materials. As with many regulations, Gibson is forced to guess what procedures might comply with an ever shifting government interpretation of the law. On its face, the lack of known compliance standards is arbitrary and capricious, as that allows bureaucrats to upend decades old practices without warning.

Of course real Washington reform can only come from denying rogue agencies the free-time to concoct novel prosecutorial theories such as Gibson’s reworking of fret-board wood as a violation of Indian law, or Crocs claim that its shoes are anti-microbial as a violation of pesticide laws. A Congressman needs to ask these would-be Napoleons ‘by how much do we need to cut your budget for these abuses to stop?’

Carpentry Nannies II or Gass Bag Exposed

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Mea Culpa from Shout Bits. Yesterday’s Shout Bits’s article on Steve Gass’s invention to improve the safety of table saws left out a very important fact –Mr. Gass has spent big bucks lobbying the Consumer Product Safety Commission bureaucrats to compel his competition to use his technology. It appears that Gass is not content arguing the merits of his invention, he wants to force people to use it or face criminal prosecution.

Shout Bits based its reporting on an NPR episode, which was very remiss in not reporting that Gass had a hand in the scheme to mandate his product. In retrospect, trusting NPR to issue a complete and fair report was foolish. NPR cited another lobbyist also working for this regulation who bashed Gass as a profiteer, and she implied that the premium for Gass’s invention should be 1/10 of what Gass is currently charging. Shout Bits wrongly concluded from NPR’s biased report that Gass was a victim of the government, but in reality he is the main villain of this story.

Evidently Gass cannot compete with his safety invention, so like a long line of businesses he decided to invest in greasing politicians rather than in improving his product or tightening his belt. Presumably Gass has concluded that he will make more money by selling a lot of table saws at a small margin rather than a few at the high price he currently asks. As Shout Bits has pointed out, business and free enterprise are good, but some businesses rely on corruption to make their way.

P.S. Many thanks to ‘American-Ranger’ who pointed out the original error of not exposing Gass as charlatan.

Carpentry Nannies

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This week, NPR reported the Consumers Union (CU) campaign to compel table saw manufacturers to install expensive safety equipment. While the new safety technology is impressive, this is yet another example of do-gooders and bureaucrats colluding to run the lives of people who do not need the government’s help.

A table saw is as its name implies – a flat table with a spinning saw blade sticking up in the middle. While table saws come with shields to cover the spinning blade, most people do not use them. If used improperly, a table saw is indeed a seriously dangerous tool. Still, used correctly, a table saw is completely safe. Perhaps the most famous carpenter, Norm Abram features safety instructions in each of his shows.

Shout Bits’s author knows, from personal experience, many victims of power tool accidents. People with amputated and injured fingers are a potent reminder that power tools can be dangerous. Still, in each of these cases, the victim was not following basic safety rules or was simply intoxicated. Sober workers who are diligent in following safety rules keep their fingers.

Knowing that some people will be careless, Steve Gass invented a new table saw feature which senses flesh as it touches the blade and nearly instantly stops its rotation. Demonstrations show that a worker would only suffer a minor laceration rather than a trip to the ER. Gass sells thousands of his own enhanced saws each year, and any employer would be well advised to spend the extra $1,000 or so his product costs.

Not good enough says CU. Not enough people are choosing to buy Gass’s product, and Gass is charging too much for his technology. CU does not care that Gass owns his idea; every table saw must have his technology, even if some people don’t want it. CU arbitrarily states that the technology should only add $100 to each saw, essentially stealing Gass’s property by capping its value. Further, CU wants to force everyone to buy the enhanced saws, even on $200 light duty models designed for occasional users. Beware weekend carpenters, if CU and the government have any say, your hobby will become much more expensive.

Even if CU gets its way and every table saw costs somewhere between $100 and $1,000 extra for Gass’s safety technology, there is no reason to believe that accidents will decrease. Gass’s technology does not protect from the saw jamming and ‘kicking back’ at the operator, and it does not prevent eye injury. Also, Gass’s technology does not work for miter saws (chop saws) that also have exposed spinning blades. A careless worker will always find a way to injure himself, even if the table saw is made safer.

Also consider CU’s other political campaigns: Prescription for Change, which advocates for a single payer (socialist) health care system in the US; Greener Choices, which pushes consumers to overpay for basic needs in the guise of helping the planet; and Hear Us Now, which wants the government to control internet content by regulating internet service providers products and pricing (net-neutrality). The particular activist working on the table saw issue, Sally Greenberg, is a lawyer for CU and the Alliance for Justice, an anti-corporate socialist think tank. Greenberg and CU may want safer table saws, but the only tools they know are government mandates and socialist confiscation of private property.

So, an entrepreneur invents a way to make work safer. He markets his invention to a variety of customer needs, and anyone is free to adopt his safety innovation. To do-gooders at CU, this is not an improvement, but a problem. The entrepreneur is greedy; his pricing must be regulated. Consumers are too stupid to help themselves; they must be forced to buy the invention. CU and Greenberg, like all socialists, seek to destroy the very entrepreneurial spirit that creates worthy improvements to life, all in the name of protecting adults who neither need nor want a nanny to run their lives.