Flutterby™! : National Bankruptcy Day 2008-12-10 16:45:38.86226+00

National Bankruptcy Day

2008-12-10 16:45:38.86226+00 by Dan Lyke 6 comments

My Dad has, a couple of times, pointed out that if we have organizations that are "too big to fail", that we have to bail out, perhaps we need to revamp the economic and legal system so that such entities can't be created. I've long thought that the primary way organizations get that way is by leveraging government intervention to build an unfair playing field. Here's an example: National Bankruptcy Day refers to February 10^th 2009, when the CPSC's CPSIA rules go into effect, causing a huge testing fee to be necessary to sell toys and garments in the United States. Needless to say, this has a bunch of crafters, small toy manufacturers, home dyers and weavers, and the like, very concerned.

If we'd simply kept the ability to show up on the doors of those who put lead paint in the pacifiers with pitchforks and torches, by keeping such things local, we wouldn't be slanting this dramatically in favor of the big manufacturers who can afford to spread that few thousand bucks to test for bad things in products from unknown sources, we'd be able to go down to the workshop of our weavers and toymakers and see what they're using.

More at the Handmade Toy Alliance.

It's a problem anytime you write your rules down. I can't imagine home dyers or craft toymakers even appear on the radar of the garment or toy industries, but they get caught in the undertow. Now, if we wrote anti-lead paint testing rules that stated they only apply to toys made by heathens, we might catch the Chinese but not Grandpa Hjalmer's Home Made Whirligigs inc. But it wouldn't look good.

I think your dad is onto something. I nominate Fannie and Freddie to be the first to be 'revamped'. It's a textbook case of self-dealing and corruption.

We traveled in Transylvania a couple of years ago, and saw the effects of Romania's eagerness to get in to the EU. Much of Transylvania, and particularly the Homorod Valley, is populated in small nearly self sufficient hamlets, that support small farmers, who sell within the hamlet and on market days in the larger, unpronounceable cities like Székelyudvarhely. These people live simple, human, uncluttered lives. But -- to be admitted to the EU, these small farmers have to have, for example, dairy buildings with three separate entrances - workers, visitors and inspectors - each with its own shower and changing room, and myriad other requirements that will simply force the small guy out. What the communists couldn't do in 40 years - make the small guy a serf on a large plantation - capitalism is doing practically overnight. The free market is free if you own it.

capitalism is doing practically overnight. The free market is free if you own it.

Weren't those building regulations created by the EU governments? If so, isn't it the absence of free markets that's causing the problem?

What I think I'm seeing is that we put restrictions on the market in order to enforce standards which allow the producers to have less of a relationship with the consumers, thereby enabling economies of scale, and reducing the products to commodities, but then we balk at the side-effects.

Basically, we ask for an economy of scale in enforcement of standards, and we get an economy of scale in quality of product.

The commodification/junkification/Wal-Mart-ification of everything... Wasn't this Ford's grand plan? Unfortunately it's a more successful formula than the dot-com method: lose money on every transaction but make it up later in volume!

I've puzzled over some of the benefits of economies of scale. The computer on my desk wouldn't be 1/1000th as powerful if Intel couldn't make the chips so damned cheap in the quantities sold. Of couse, I'd have a much better operating system ;)

Look at the environmental impact of buying at a nearby grocery that might ship a tomato from the other side of the planet utilizing economies of scale versus buying a tomato from the farmer's market that's 10 miles away...