Dangerous consumer products just can’t seem to stay out of the news lately. The newest revelations are on drywall imported from China. Time reports the horrifying story of a 67-year-old dance teacher named Danie Beck whose two-story townhouse was lined with Chinese drywall. Beck smelled horrific odors shortly after moving in, and then began experiencing dizzy spells, insomnia, and sore joints. Eventually, she discovered the source of her misery: the drywall had somehow ended up with high levels of sulfur in the gypsum used to make it. The levels were so high that she and her homebuilder believe they corroded the coils on Beck’s air conditioning system, short circuited her electric wiring, and discolored her wood furniture. Can you imagine?
The Time story says that before 2005, very little of the drywall used in U.S. construction came from China. But escalating demand during the housing boom provoked home builders to begin importing massive quantities – 550 million pounds of it from China since 2006. That contaminated product ended up in 60,000 homes. Beck has joined thousands of other Floridians in filing a class action suit against the supplier, a company called Knauf Plasterboard Tianjin Ltd. Similar suits were filed in California, Louisiana, and Alabama. Given the apparently unstoppable trend in the United States and Europe of exporting heavy duty manufacturing work to China and other developing countries, we should expect more of these sorts of problems, which unfortunately means that consumers like Danie Beck will be left to serve as canaries in coal mines – paying a high personal price because we have no better detection method in place.
Consider, for example, the equally chilling example of Chinese toys. Eighty percent of the toys sold in the United States are manufactured abroad, the vast majority in China. Mattel, the world’s largest toy company, announced in 2007 that it was recalling some 426,000 die-cast toy cars that were coated with lead paint. The Mattel recall followed a spate of smaller recalls in 2007, the majority of which involved lead paint found in products from baby bibs to children’s jewelry. Reporting by The New York Times discovered that in China, heavily leaded paint costs one-third as much as paint with low or no lead. China is the largest producer of lead in the world and has increased its mining and processing of the toxic metal by 50 percent since 2001. Chinese executives have admitted that their government does not inspect factories and, although a national standard limits lead levels in consumer products, no one enforces it. Chinese and American officials ultimately signed an agreement to ban lead in toys entirely, but it is unclear how the ban will be implemented.
Unfortunately for Beck and the other victims of the drywall scandal, relief will come very slowly. Beck’s home, purchased for $344,000, is now worth $245,000. Unless the lawsuits build considerable pressure on the importer and it has some money, it could take years for the case to make its way through the courts. To its credit, the Florida Attorney General’s office has announced an enterprising criminal investigation of the companies, but to convict, it must prove that they were deceptive when they marketed the product. Simply proving that the companies shipped the noxious stuff over here may not be enough to win their case. And for now, the company is denying any culpability. In any event, a criminal conviction won’t help make the victims in the case whole. They’ll still be stuck with poisonous houses or big bills for drywall replacement, to say nothing of medical costs.
Meanwhile, back at the ranch (or brand new townhouse), one might well ask what happened to the federal government in the midst of all this mess? After all, there is an agency called the Consumer Product Safety Commission that has its mission—you guessed it—making sure that consumer products like drywall and toys are safe. But the most that Time could report about the agency’s role in the crisis is that it is “investigating the complaints.”
For aficionados of the CPSC—and there are a few, this writer included—its “missing in action” status is no surprise. The CPSC estimates that it has jurisdiction over some 15,000 product categories including everything from backyard barbecues and electric drills to swimming pool slides and baby dolls. Or, to look at this vast jurisdiction another way, the CPSC is responsible for ensuring the safety of every consumer product except automobiles, aircraft, boats, drugs, firearms, food, and tobacco. In its heyday in the 1970’s, the CPSC employed nearly 900 full-time employees; in 1976, it had a budget, in today’s dollars, of more than $145 million. But the Reagan Revolution – the anti-regulatory phase of it, to be specific – severely weakened the agency. Today, its resource levels are precipitously lower, coming in at approximately 400 people and $63 million in 2008, with an increase to $80 million in store for the 2009 fiscal year. Meanwhile, the United States population has grown by about a third, leading to a much larger pool of consumer products. When the Chinese toy scandal hit, the CPSC admitted that it was able to field only 15 inspectors nationwide to check on the billions of dollars of imported products brought into the country each year. No wonder it cannot keep up with acute health threats like Chinese drywall.
Congress understands that the problem is overwhelming, and when it overhauled the CPSC last year, increasing its budget by one-third, it made no pretense that the money would pay for an effective inspection presence at the border. Instead, it asked the agency to write a report on the problem so Congress could wring its hands about it another day. It seems unlikely that we will ever be able to inspect our way out of this dilemma, nor does it seem likely that we will ever be able to persuade China to tighten its grip on product safety.
What we can and should do is to pass a law that makes the importer, the supplier, and the retailer criminally liable if they do not take concerted steps to ensure product safety. So, for example, the responsible corporate officers at the corporate importer of the drywall should face prison sentences and hefty fines unless they can prove that they took all reasonable steps, including unannounced and frequent inspections by qualified and independent third parties of the factory floor where the drywall was made. The environmental laws provide ample precedent for this get-tough approach: EPA and the FBI’s criminal investigations have resulted in much safer waste disposal practices. It could be no different with consumer products like drywall.