Is over-regulation killing American industry? From NPR:
In the hottest part of an August Tennessee day last Thursday, Gibson Guitar CEO Henry Juszkiewicz stood out in the full sun for 30 minutes and vented to the press about the events of the day before.
“We had a raid,” he said, “with federal marshals that were armed, that came in, evacuated our factory, shut down production, sent our employees home and confiscated wood.”
The raids at two Nashville facilities and one in Memphis recalled a similar raid in Nashville in November 2009, when agents seized a shipment of ebony from Madagascar. They were enforcing the Lacey Act, a century-old endangered species law that was amended in 2008 to include plants as well as animals. But Juszkiewicz says the government won’t tell him exactly how — or if — his company has violated that law.
That’s right — it doesn’t matter that Gibson is a legendary American company, manufacturing and creating jobs in America. What matters is that an obscure and almost-unenforceable regulation may, or may not have been broached. From the Economist:
Agents barged in and shut down production. They were hunting for ebony and rosewood which the Fish and Wildlife Service (FWS) alleges was imported from India in violation of the Lacey Act, a 1900 law originally designed to protect fauna from poachers. This law has metastasised: it now requires Americans, in essence, to abide by every plant and wildlife regulation set by any country on Earth. Not having heard of an obscure foreign rule is no defence. Violators face fines or even jail. FWS claims the ebony sent from India was mislabelled, and that Indian law forbids the export of unfinished ebony and rosewood. Gibson denies wrongdoing.
Guitarists now worry that every time they cross a state border with their instrument, they will have to carry sheaves of documents proving that every part of it was legally sourced. Edward Grace, the deputy chief of the FWS’s office of law enforcement, says this fear is misplaced: “As a matter of longstanding practice,” he says, “investigators focus not on unknowing end consumers but on knowing actors transacting in larger volumes of product.” But Americans have been jailed for such things as importing lobsters in plastic bags rather than cardboard boxes, in violation of a Honduran rule that Honduras no longer enforces. Small wonder pluckers are nervous.
In reality, the regulation is turning reality on its head. As I’ve stated in detail before, building up manufacturing infrastructure and supply chains is the only way of stopping the phenomenon of Western industrial decline.
Why don’t regulators pick on Walmart, who sell goods manufactured by child slaves in China where little or no employment-related regulation exists? Why don’t they pick on Apple whose manufacturing processes have irreparably damaged the health of some workers, and whose workers at Foxconn have a disturbing trend of committing suicide? Why don’t they pick on Wall Street whose destructive behaviour has resulted in multiple bailouts that have cost the American people — and their descendants — trillions of dollars of debt, and where corruption, fraud, and market-rigging are systemic?
No, it seems regulators would rather pick on a legendary, job-creating American guitar-maker, treasured by musicians around the world. Maybe that’s because Gibson aren’t big enough to bribe Washington the way Wall Street does?
I hope Gibson survives to see an America where regulators go after the systemic abuse and corruption, and not guitar manufacturers.
