Saturday, August 02, 2008

Keith Fimian's Ideas Are Bad for Consumers and Business

Keith Fimian, the millionaire newcomer to politics, running for Congress from the 11th CD, is conducting the standard conservative Republican campaign based on anti-tax and anti-regulatory rhetoric. But if ever there was a bad time to be against government regulation of business, this summer would be it. In fact, this just illustrates how much Fimian is an ivory tower politican who is out of touch with the concerns of real people in his district.

According to a July 9, 2008 article in The Chronicle,
Fimian also has deep concerns about the economy. “It’s a wonderful economic model, but it’s also very fragile. Overtaxing and over-regulating business runs the risk of ruining the opportunities for the next generation. It’s essential, he said, that government remain friendly to small business. It’s the main source of all new jobs in America. In fact, since 1990, 88 percent of the new jobs in the country came from businesses employing 500 or fewer workers.”
He’s not entirely wrong, of course. Small business is a major source of new jobs and a healthy small business sector is absolutely essential to the success of the American economy. But Fimian is dead wrong about over-regulation being a problem today. Indeed, the real problem for both business and consumers is not enough regulation of vital consumer goods and the food supply.

In today’s Washington Post, there’s an article about young moms worried about a chemical used in children’s plastic toys.
Samantha Rosenberg eyed the toy plastic cellphone that her 9-month-old daughter has chewed so much, the color is fading. She wondered if the shiny plaything, and others that fill her home, are endangering Addison's health.

Congress this week approved a ban on a family of chemicals widely used in soft plastic toys and other baby products. Health advocates say the compounds, known as phthalates, have been linked to kidney and liver cancer and to reproductive disorders in fetuses and infants, especially boys.

Toymakers and the chemical industry ran an expensive lobbying campaign trying to block the legislation, arguing that phthalates have been used commercially since the 1950s, that they are safe and that the ban is an overreaction.

Rosenberg and other consumers are not sure what to think.
This article goes on to report that the U.S. is one of the last industrial nations to ban phthalates. They’ve been banned in Europe since 1999. Parents also are worried about BPA, a chemical used in baby bottles.

Adding to the rising concern over the safety of our products, we’ve just gone through a Salmonella outbreak, costing the tomato industry millions of dollars in ruined crops, sickening thousands of people around the U.S. and destroying consumers’ faith in the entire agricultural industry, which has just barely recovered from the food borne illness scare affecting spinach a few years ago. Add to this the recent concern over pet foods imported from China, which caused death to family pets. Chinese imports were also linked to harmful ingredients in toothpaste, toys and other products. Americans are asking why their government can’t protect them, not how can we eliminate pesky regulation from businesses.

The truth is the Republican siren song that we need less government and more tax cuts has led to decreasing resources for the agencies set up to protect American consumers, including the Food and Drug Administration (FDA), the Center for Disease Control (CDC), and the U.S Department of Agriculture's (USDA) inspection programs. Less and less money has gone to putting agents in the field to conduct inspections at farms and food processing plants. And there’s less money for and fewer inspectors at the CDC to track down the source of food borne illness once it’s started. That means it is harder to get to the source of the illness and protect people, which is exactly what happened with the Salmonella outbreak, which began in April, and is still making people ill.

For weeks, the CDC thought it was caused by tomatoes. Restaurants and supermarkets took tomatoes off their menus and shelves. Tomatoes rotted in warehouses and farmers ploughed under their fields, killing their crops. Suppliers and farmers lost millions of dollars on ruined tomato crops only to later discover that tomatoes weren’t even the cause of the illness. Meanwhile the real culprits, imported JalapeƱo and Serrano peppers continued to make their way through the U.S food supply, sickening even more people.

Just a few years ago, a similar food scare involving spinach cost the California agricultural industry millions of dollars and the spinach industry still hasn’t regained the trust of consumers. It continues to suffer from declining sales. Obviously, an unsafe food supply and dangerous manufactured goods harm not just consumers but businesses. It’s imperative for industry to regain the trust of buyers.

Yet political newcomer Keith Fimian is offering proof that he is a tone deaf ideologue. Less government regulation is exactly what neither business nor consumers need right now.

What we do need is a public private partnership to ensure that our food supply and our consumer products are safe. It is necessary to restore the public’s confidence in both the business community and the government. People must see that farmers, manufacturers, and the government can work together to ensure the safety of their families.

It would be nice to say businesses should get together and regulate themselves without government interference. The problem is they’ve supposedly been doing it, and that approach has failed. Right now, the public has to see an outside regulatory apparatus inspecting foods and manufactured goods. Trust will only be built up slowly when citizens see their government acting responsibly and competently, stopping problems before they occur. It will take years of no more safety hazards and outbreaks of food borne illness to rebuild that trust.

And a conservative ideologue calling for fewer inspectors in the field and less money going to protect consumers will not inspire that trust. Therefore, Keith Fimian's ideas are bad for consumers and bad for business.


J. Tyler Ballance said...

Mr. Fimian has run a successful, multi-million dollar business. He has created a sustained business and provided real jobs that have supported a lot of Virginia families.

How many businesses have you successfully built? How many payrolls have you created?

Mr. Fimian does not advocate for the lifting of environmental or consumer product safety laws, as you have inaccurately implied, he has merely stated that if small businesses are going to continue to be a core economic stimulus, then government had better help them along.

Democrats and Republicans do not need to argue this point. Adequate regulation can be imposed, and government can take into account how difficult it is for small business to jump through all of the regulatory hoops and also to insure itself against the myriad lawsuits.

Having the government do much of the compliance work for the small businesses and provide pooled resources for recycling and other environmental programs would help lift the burden from the small business operators and help boost the numbers of nascent businesses here on American soil.

If you ever want a different perspective on running a small business, review former Senator George McGovern's comments about how his eyes were opened regarding the burden of government regulation when he tried to run a small business. He basically reported that, while he was in the Senate, he had no idea what a maze of regulations small businesses were being asked to weave through. His business failed, because he couldn't comply with all of the regulations and reporting requirements.

We have nearly killed our strategic manufacturing base here in America. Both Democrats and Republicans are to blame. Both parties need to roll up their sleeves and craft solutions that will help bring our jobs back from China and to ensure that new businesses can be created and thrive on American soil.

AnonymousIsAWoman said...

Thank you for your comment, Tyler.

However, it is always dangerous to assume that somebody doesn't know something or have any experience just because you disagree with their point of view.

I have not owned a business but my father was a successful small business man who created jobs, payroll, and provided an excellent service to his customers. I worked in his restaurants and learned quite a bit about business from him.

He too complained about the amount of regulation and onerous paperwork. But he also once worked for the USDA as a meat inspector, so nobody knew better than he why a lot of the regulations were necessary.

I am sympathetic to small businesses, which I mentioned in the post. And I do believe that government, through the Small Business Administration, should provide them with assistance. You are absolutely right about that. And we agree that small businesses provide the majority of new jobs in this country. They are a valuable economic resource.

But it is difficult to dispute the fact that the lack of regulation in our food, drug, and manufacturing industries has created real health and safety hazards. And the current housing and mortgage crisis was created by too little, not to much regulation. Even a stalwart of free markets, Treasury Secretary Hank Paulsen, has admitted as much.

Government has a role to play in regulating industry to guarantee the safety and purity of products. But I absolutely agree that it can do it in such a way that a sincere business man or woman who wants to provide a high quality product is not hampered from doing so. It's the few unscrupulous ones, willing to sell adulterated goods, who need to be weeded out. The others should welcome the aid in ensuring that all Americans are protected and have confidence in their products and services.

One other point is that just because Mr. Fimian is a successful businessman does not ensure that he would be a good congressman.

The truth is running a business successfully and running a government successfully require two different skill sets. It is common to think they are transferable skills, but they are apples and oranges. I would prefer to see somebody with a Masters in Public Administration (MPA) rather than an MBA in charge of a government program.

The reason is that government, at all levels, requires a much different level of oversight - governments are using taxpayers' money and must account to the public for it. Governments are not in the business of selling goods and services, bringing in revenue and creating profit. Governments are there to deliver services in an efficient manner and to use their resources (taxes) responsibly.

The benchmarks for success are different. The requirements are different, and the purposes are different. An MBA could certainly learn to manage a government entity effectively, just as an MPA could learn to be a successful businessman. But first both would have to recognize the differences between the two and act accordingly.

Mr. Fimian, who is a self described conservative may be a successful business man. But he has no experience in government. He also is out of step with a more liberal district in many ways. His views on the economy and the role of government are only two examples.

It is fair game to point out that residents of the 11th CD just are not anti-government, no new taxes conservatives. In fact, lots of them are federal employees not business people.