I’ll take a doll, some jacks and a dose of lead poisoning, please

In the wake of the most recent recall of toys from China due to lead paint, we find that the administration has been fighting the regulation of lead in imports.  According to McClatchy,

Consumer advocates say the Bush administration has hindered regulation on two fronts. It stalled efforts to press for greater inspections of imported children’s products, and it altered the focus of the Consumer Product Safety Commission, moving it from aggressive protection of consumers to a more manufacturer-friendly approach.

The basic approach has been that the “market” will ensure that the products people want (and are willing to pay for) are available.  This implies that we have lead in children’s toys because people won’t spend money on higher quality toys.

I certainly don’t believe that markets are panaceas, but it is foolish to deny that they have the potential to adequately capture information regarding supply and demand.   In fact, some of the work that I’m doing right now involves the use of markets to capture information.

However, there are a few key factors in ensuring effective markets.  One of the most important is information.  A market can only be efficient if the participants are making informed decisions.

So, here’s my proposal.  Allow importers to bring in as many lead painted toys as they want.  The only requirement is that the amount of lead as compared to a recommended amount be printed in large print on the box.  The penalty for making false statements is for the manufacturer to be barred from the country and the importer’s/reseller’s CEO to be jailed for 5 years.  Ensure that themarket participants have adequate information and, like the disappearing trans fats in processed foods, you’ll see lead paint go away.

Okay, removing my tongue from my cheek, I do think that there needs to be limits/regulations on lead paint in toys.  But expecting a miraculous market to solve all of the problems, in absence of adequate information is just silly.

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