The head of the Consumer Product Safety Commission added her two cents to the debate over the inflationary impact of regulation yesterday, and her message was plain: It's a bogus issue.
Susan B. King said that corporate critics -- and, by implication, White House critics -- use a "patently phony" argument when they tie inflation to health, safety and environmental regulation.
King added that another "phony" is the corporate complaint that government-ordered recalls of unsafe products are fanning the fires of inflation.
"We have not been sufficiently emphasizing the benefits of regulation, nor have we even developed an adequate methodolgy for isolating and quantifying these benefits," the CPSC chairman said.
In a separate address yesterday in Pittsburgh, R. David Pittle, another member of the commission, similarly cited what he called "a dangerous trend in regulatory reform" -- namely, "the attack begin mounted on health and safety regulation" as opposed to economic regulation.
King told a luncheon session of Ralph Nader's Public Citizen Forum that the growing pressure on regulators to weigh economic impacts more closely is actually the reverse of what Congress intended.
"We are being forced to make economic decisions, when we are supposed to be deciding on public health and safety. This reverses the intent of Congress in passing these laws," she said.
Why, then, do high-level administration economic spokesmen continue to hammer away at the idea that these regulations are promoting inflation?
"I ask Fred Kahn [the administration's inflation czar] the same thing. He understands the difference between health and safety impacts and economic impacts, and he always drew that distinction," she said.
The problem, Nader chimed in, is that White House economists are "spending too much time" with corporate representatives.
King acknowledged, however, that there is "a very significant and genuine mood in the nation against regulation characterized by red tape and ineffectiveness."
She said that legislative proposals -- including a not-yet-announced White House plan -- for general regulatory reform may get at this problem, but she urged caution.
Regulators aiready are accountable to Congress, the president and the courts, she said, and agency operating reforms may be justified. But, she continued, "Many of today's proposals offer superficial. stop-gap solutions to very complicated problems."
One of those stop-gap ideas in current legislative proposals is a heavy emphasis on cost-benefit analysis to determine to scope of regulation, King said.
She cited studies that found health, safety and environmental regulations to be only a minimal factor in the ultimate cost of a product, suggesting that less regulation might lead to greater public expenses for injuries and environmental cleanup.
"Business calls on us regulators to be reasonable -- and that's really what regulatory reform is all about. It is only fair that we demand the same of them," she said.