And More Toy Recalls for Mattel

Well, this morning's news is that Mattel is again recalling millions of toys for lead and magnets. I couldn't quite understand the magnet part of the story, but according to a piece in the Wall Street Journal, "Magnet issues surfaced recently in another toy recall. In 2006, the CPSC issued a similar recall for 3.8 million "Magnetix" sets, a toy produced by Rose Art Industries Inc. of Livingston, N.J. The sets consisted of tiny magnets that, if swallowed by an infant, bonded together in the stomach and caused fatal intestinal perforation in at least one instance. The CPSC documented 34 incidents involving the magnets, including one death and four serious injuries. A 20-month-old boy died after he swallowed pieces that twisted his small intestine and created a blockage."

One of the biggest problems with our global economy seems to be that while it has kept prices down (as Ms. Burnett said on Hardball last week) there have been other hidden costs. At the same time as we were off-shoring the production of almost everything we buy in order to save that few pennies at Wal-Mart, there was general gutting the regulatory agencies that protect us. For example, the Bureau of Consumer Protection, which regulates incoming products such as toys, had actual 2002 revenue of $83 million dollars, compared to actual funding of $47 million in 2005 (the last year for which actual figures are available).

Regulators are there to protect us. In an odd fashion, by doing their jobs, they also protected the regulated: Mattel was expecting a $30 million pre-tax income cut this quarter as a result of the earlier recalls. These subsequent recalls are going to add to the sting.