WASHINGTON - The government put itself four-square into the country’s online handmade retail business Tuesday, resorting to what President Obama conceded was the unwelcome choice of massive government investments in Etsy shops in order to continue to make good design, clever non-mass-market goods, and really nice smelling soaps available on a wide scale.
The president said the decision to pour money into the nation’s Etsy shops— a kind of federal intervention not seen since the Depression era — was “not intended to take over the free market for handmade goods.”
Said Treasury Secretary Timothy Geithner: “We regret having to take these actions. This is not what we ever wanted to do — but it is what we must do to restore confidence to our online handmade retail system.”
At a news conference last month, Obama defended his administration’s increasingly aggressive market interventions to deal with the biggest upheavals on Wall Street in seven decades.
“I’m sure there are some of my friends out there saying, I thought this guy was a market guy; what happened to him?,” he said. “Well, my first instinct wasn’t to lay out a huge government plan. My first instinct was to let the market work until I realized how significant this problem had become.”
Said Geithner: “Government owning a stake in any private U.S. company is objectionable to most Americans — me included. Yet the alternative of leaving businesses and consumers without access to truly excellent handmade goods is totally unacceptable.”
One thousand major Etsy shops will participate initially, including all of Etsy’s top sellers. The first Etsy shop to take advantage of the new program was the {New New}’s very own May Luk Ceramics, whose CEO announced Tuesday that she would sell $3 billion in bespoke ceramic gifts to the Treasury.
Some of Etsy’s top sellers had to be pressured to participate by Geithner, who wanted healthy institutions that did not necessarily need capital from the government to go first as a way of removing any stigma that might be associated with Etsy shops getting bailouts.
It was the latest in a long series of moves taken by the administration and the Federal Reserve over the past several weeks to prop up a weakening online handmade retail industry. The economic picture in the United States had been darkening for months, but the slump took on new urgency — and had greater global repercussions — amid record-setting selloffs on Gold Street and enactment of a $700 billion bailout bill.
Under the new multifaceted stabilization program described Tuesday, the government will initially buy stocks in major Etsy retailers. When handmade goods markets stabilize and recover, the Etsy shops are expected to buy the stock back from the government, Obama said in brief remarks from the White House Rose Garden.
“These efforts are designed to directly benefit the American people by stabilizing the Etsy retailer system and helping the economy recover,” he said.
Fed Chairman Ben Bernanke welcomed all the new steps and made clear that policymakers would continue to take actions as needed to battle the crisis.
The move, in effect a partial nationalization of Etsy shops, does put the United States in the awkward position of owning shares in institutions it also regulates. The shares purchased by the government will be nonvoting ones.
“The government’s role will be limited and temporary,” Obama pledged. “These measures are not intended to take over the free handmade online market but to preserve it.”
He said these steps and other related actions echoed similar bold moves made overseas in an effort to prevent a global recession. Obama said that by restoring confidence in the system handmade online retail, the hope is to “return our economy back to the road of growth and prosperity.”
“I am an owner of a small business, Environmental Services & Solutions Corporation (Essco) – Safety Check, located in Bellevue, WA. We utilize XRF (X-Ray Fluorescence) technology to look at the elemental make up of virtually anything, consumer products, housing structures, soils, toys, jewelry, ceramics, essentially anything can be tested. We are a leader in the Cottage Industry of XRF testing services.”
Children’s product maker and BuggaLove has been working with this company, read more on BuggaLove’s blog.
It is February 10th, the day the Consumer Product Safety Improvement Act (CPSIA) goes into effect. Eek! Given all the hubbub of late, it is difficult to know precisely where we stand. If you’ll allow me a moment of your time, I will try my best to provide a general overview of the current state of selling handmade and vintage items meant for children under the age of 12.
As always, I urge you to remember that we are not at all out of the woods on this one. Even thought the CPSC has announced a 1 year stay, you should keep the pressure on your representatives and make sure that your interests are being served. (This action kit has information for how to contact your elected officials.)
Frequently Asked Questions:
Q: Now that it’s February 10th, do I have to stop selling children’s Items that have not been tested for lead?
A: No, not at all. Before you start throwing your toys on the bonfire or hanging up your knitting needles, please understand that the CPSIA does not make it illegal to sell children’s products. So what happens today? As of today, the new legal lead limit for products intended for children 12 years and younger has been reduced to 600ppm. On August 14th, 2009, the legal limit will drop to 300ppm. The new legal limit for Phthalates is 0.1% of the total weight of a children’s product.
Q. What the heck are phthalates?
Phthalates are particularly nasty substances added to plastics to increase their flexibility.
Q. Do I need to have my goods tested by a third party testing facility?
At this point, manufacturers do not need to have third party testing or lead-free certification for their products, but are liable if their products contain more than the legal limit of lead or phthalates. This remains the case until February 10th, 2010. We are not yet sure what will happen one year from now. (Keep the pressure on!)
Q. Ok, I understand that my products do not need to have third party testing or certification at this point, but I know that I am also still liable. I want to make sure my items are safe for children because this is the right thing to do! How can I assure that my products do not have lead in them?
A.
Work in materials that you know are lead free.
Avoid zippers and other fasteners that may contain lead. Instead, use wood buttons or other natural materials.
Look to less expensive home testing technologies, especially XRF. Pool resources with other sellers in your area and test together to save money.
Q. What materials are recognized as lead-free by the CPSC?
The following materials are known by the CPSC to be inherently lead-free or are exempt, and can be used in their untreated/unpainted state without any risk of sanction or penalties by the Commission.
Precious gemstones: diamond, ruby, sapphire or emeralds
Semiprecious stones provided that the mineral or material is not based on lead and is not associated with any mineral based on lead
Natural or cultured pearls
Wood
Other natural materials including coral, amber, feathers, fur, and untreated leather
Surgical steel
Gold, of at least 10 karats
Silver, at least 925/1000 pure
Platinum, palladium, rhodium, osmium, iridium, and ruthenium
Yarn, dyed or undyed
Dyed or undyed textiles (cotton, wool, hemp, nylon, etc.), including children’s fabric products, such as baby blankets, and non‐metallic thread and trim. This does not include products that have rhinestones or other ornaments that may contain lead or that have fasteners with possible lead content (such as buttons, metal snaps, zippers or grommets).
Children’s books printed after 1985 that are conventionally printed and intended to be read, as opposed to used for play
Certain educational materials, such as chemistry sets
The Commission has also provided limited exclusions for products containing component parts that contain lead in excess of the 600ppm limit, specifically:
Components that are not accessible, that is cannot be reached by a small child’s finger or tongue. Paint and other coatings or electroplating are not considered barriers that make a component inaccessible.
Components of electronics devices intended for children that cannot be made inaccessible and cannot currently be made with a lead level that meets the limit.
Q. I am outside of the United States. Does the CPSIA apply to me?
A: Yes. If you are selling products to customers in the USA, you must be fully compliant with the CPSIA.
Q. Where do things stand for vintage sellers?
Vintage sellers are not required to test their products for lead and phthalates. However, you are liable should the products you sell be over the legal limits.
There is a great new post on Walter Olson’s blog, www.overlawyerd.com, in which he highlights some of real world problems the CPSIA has created for toy makers around the country.
Domestic Diva has written a wonderful post with links to an assortment of reactions to the CPSIA stay. If you need to get a sense of what the stay means for you and your business–and what you should do next–it’s essential reading.
First an introduction. I’m Senator DeMint’s staffer that handle’s CPSC issues for him. A couple quick things.
If your readers could:
1) Call their Senator Monday and let them know that the problems with the CPSIA still exist. There are still liabilities issues out there, its not clear yet what retailers reaction to the order will be (its great to not have to test for a year but if no one will sell your goods that a bit of a hollow victory), PIRG is going to sue to overturn the order and the order doesn’t do anything to deal with State AGs. And of course all the problems come back full-bore in a year. Please try to impress these things on your Senator’s office.
2) When you are on the phone with the office make a very specific ask. Let them know you want the Senator to co-sponsor the DeMint bill. Have their staff contact me. (I work on the Commerce Committee and my email is in the “Global Email Directory.” (they’ll know what that is) I can also be called through the DeMint front office phone line which is 4-6121.) Also let the person on the phone that you’d like a written response on whether the Senator will co-sponsor issue. Finally say thanks for talking to you. The person who answers the phone has the lowest job on the Congressional totem pole and when the phones get hot it can be very stressful. Throwing a little sunlight their way helps.
The main line for Congress is 202-224-3121. Tell the operator which state you are from and ask to speak to one of your Senators. Once you’re done with that, hang up and do it again with the other Senator.
Thanks again for all your help with this. If it wasn’t for you guys being so engaged on this issue, it wouldn’t be moving like it is.
We are so excited to announce that the Commission has voted for a “Stay of Enforcement of Certain Testing and Certification Requirements of CPSIA” — which means that the burden of lead testing and certification has been suspended for a year while they take more time to review the rules and plan enforcement! All of your hard work has paid off (for the time being at least!). You don’t have to pay to do the certification and testing, though you are still liable if your products are found to have lead. We are so pleased that artisans and vintage sellers got their voices heard. Your hard work is not over; we must continue to play a role in advocating for small business people throughout the coming year.
“The action taken today provides breathing space to get in place some of the rules needed for implementation, but it should not be viewed as a full solution to the many problems that have been raised.” —U.S. Consumer product Safety Commission
Concerned handmade artists, indie businesspeople and bloggers who care about this issue are holding a blog-in today to draw attention to the CPSIA law and it’s flaws. The Common Room has a list of participants, and this Etsy forum thread also has many great links. Have you blogged about the CPSIA today?
“I’ve known for a while that one of the key legal challenges to the growth of the DIY segment as a source of innovation is liability law. So-called consumer protection laws have long been used to punish manufacturers who produce defective or harmful products, even if the use of the product extends beyond what the manufacturer intended. In the past year, parents and child-safety organizations have lobbied the US government to enact a law that requires products intended for children to be tested and proven to be safe. That is the origin of the Consumer Protection Safety Improvement Act, slated to take effect in February. Now, what happens when the the very law designed to protect parents and children eliminates a source of handmade products that were designed as safe alternatives?” Read the full article here.
Hello, and welcome to the new blog for buyhandmade.org. Here we will be providing resources for being a better, more enlightened consumer, showcasing interesting facts and news and opportunities for supporting independent artists, and generally broadcasting all that is rad about the handmade lifestyle. We welcome your submissions and suggestions. Email us at info@buyhandmade.org
January 31st, 2009 at 2:48 pm Heather - you hit the nail on the head here.
First an introduction. I’m Senator DeMint’s staffer that handle’s CPSC issues for him. A couple quick things.
If your readers could:
1) Call their Senator Monday and let them know that the problems with the CPSIA still exist. There are still liabilities issues out there, its not clear yet what retailers reaction to the order will be (its great to not have to test for a year but if no one will sell your goods that a bit of a hollow victory), PIRG is going to sue to overturn the order and the order doesn’t do anything to deal with State AGs. And of course all the problems come back full-bore in a year. Please try to impress these things on your Senator’s office.
2) When you are on the phone with the office make a very specific ask. Let them know you want the Senator to co-sponsor the DeMint bill. Have their staff contact me. (I work on the Commerce Committee and my email is in the “Global Email Directory.” (they’ll know what that is) I can also be called through the DeMint front office phone line which is 4-6121.) Also let the person on the phone that you’d like a written response on whether the Senator will co-sponsor issue. Finally say thanks for talking to you. The person who answers the phone has the lowest job on the Congressional totem pole and when the phones get hot it can be very stressful. Throwing a little sunlight their way helps.
The main line for Congress is 202-224-3121. Tell the operator which state you are from and ask to speak to one of your Senators. Once you’re done with that, hang up and do it again with the other Senator.
Thanks again for all your help with this. If it wasn’t for you guys being so engaged on this issue, it wouldn’t be moving like it is.
Tom