Monday, October 15, 2012

What do you mean we don't need regulations?

I'd like to say this surprises me but that would be a lie. I've watched as this has become the new business paradigm. All a quite simple somewhat unethical model for raising profits to new heights. That is if you don't get caught in the consequences. It all started out easy enough. Some time back in the 1930s a whole bunch of people were sickened by tainted foods. Our government thought it prudent to establish some oversight into the process. It was a start but as years passed it never kept up with an expanding population or the shift to factory farming we now have today. Even back then there was no abundance of inspectors and the methods used back then and even today were and are little more than visual inspections followed by that blue stamp of approval. Unless the FDA was planning on developing inspectors with microscopic vision then little has changed.

Somewhere along the line things did change but not for the better. Producers gained more and more power in congress and prevented the natural progression of tighter rules and more inspections. And today we have the end results of almost no standards and little oversight. The producers to their discredit started using third party inspectors who are accountable to no one other than their paying clients. Of course they'll give you the results you want when you're the boss. We have seen the latest results of this system by the many recalls of late. But that's just the tip of the iceberg in this story. It doesn't expose some other not too settling facts lurking in the background like the fact that much of our produce now comes from foreign countries who's sanitary standards are less than ours. And in some countries no inspections are required at all.

Here's the rest of the story

But there's a touch of irony in reading this story. You will note that it was written by a writer from or for Bloomberg News. That would be the same Bloomberg running NYC who only likes government interference when it comes to deciding how much soda you can drink at one time. Can't think of a good analogy for this but "being hoisted by ones own petard" comes to mind. But we have seen this MO in so many industries of late. Shuffling off responsibilities to a third party then claiming deniability when things go wrong does not solve the problem. Here's a few interesting facts you may or may not have known. The airlines send their aircraft to south america for inspections and major repairs. Even the baggage handlers were outsourced in America to a British company that hires minimum wage workers. Truckers that move loads from our docks barley make enough to maintain their rigs. Again outsourcing to east African immigrants kept the companies costs low but at a cost of safety to the public. In the case of the meat processing plants it's a matter of lax and inconsistent regulations coupled with an uneducated and overworked labor force. The inspection process itself is understaffed and underfunded. And you can figure out who is responsible for that. It's happening in every industry from food to health care. Profits come before all else. For the latest meat contamination problem in Canada it was caused by slow reporting spotty testing and a work force made up of Somali immigrants working at an insane pace to keep up with demand. The plant processed some 4000 head of cattle per day.

What's needed is balanced regulations, more inspectors and a trained workforce not afraid to correct mistakes and safety issues. What management fails to realize is that it's cheaper in the long run to work in a safe manner both for the workers and the public. What good are profits when the public loses faith in your product?


Roger Owen Green said...

the reason regulations came up, no business people seem to want to say, is that self-regulation failed. in banking, in safety of food and contraptions, you name it.

BBC said...

I guess we need regulation because shit happens. You wouldn't think that folks making and selling us food would want to harm us, that's a good way to lose customers. But they do seem to want to cover things up when something goes wrong so I guess you need an agency that can step in and get things right again.

BBC said...

When it comes to the safe and proper ways of handling food I'm sometimes my worst enemy.

Randal Graves said...

Don't be such wimps. We all just need to build up a tolerance to salmonella. If you croak, then you weren't tough enough for the fast-paced modern future.

Demeur said...

If Harvard Business and most of the others taught business ethics instead of the Ayn Rand philosophy, self regulation might have a chance.

Making that home brew in those dirty old coke bottles again are you Billy?

Sorry Randal I haven't finished mutating enough to fend off all those deadly bugs.

The Blog Fodder said...

I too fail to understand why a food producing company would do anything to risk harming its reputation. I remember the head of Quality control at Monford's in Colorado (several names since)said that he had a far greater incentive to keep all contamination under control than any inspector. but I do know that killing cattle is a mug's game. The margins are extremely low and plants lose money as often as they make it. Hence the push to increase capacity, cut wages etc. They are truly caught in the middle. The chains set the prices for meat and supply sets the prices for live cattle. But food safety regs are there for the plant's own protection, not just the consumers. yet they don't seem to catch on.

Tom Harper said...

I started to read that Seattle Times article yesterday, but it was so grim I didn't bother to finish it.

S.W. Anderson said...

The Pure Food and Drug and Meat Inspection acts passed on the same day in 1906. Poultry was added in 1926, although regular inspections of cut up, packaged poultry wasn't required until the 1950's. That's when egg inspections were required, although New York State had been inspecting eggs and dairy products for for some time.

Cutting back on food inspections of all kinds is false economy of the worst kind. More than 1,500 people a year die of food-borne illness in the U.S. Most of those deaths are preventable, although more than a few of them are caused by lack of proper storage, handling and food preparation in the home -- problems out of reach of inspectors.

Reputation hasn't always been that important to some businessmen. Reckless, greedy, scofflaw food processors, meat packers and so on in the years prior to the Pure Food and Drug and Meat Inspection acts would "sell out" if their tainted products sickened and killed a bunch of people, and caused a scandal. For instance, the company owner might sell out to his uncle Fudd for an undisclosed amount (say, $1). Fudd, the new board chairman, in turn would make the previous owner president of the renamed company, buy new labels for the cans, and continue operating in the same dirty workplace with the same untrained workers following the same unsanitary practices as before.

Conservatives then, as now, fought federal regulation. Their concept was to let the market decide. If Acme canned vegetables sickened and killed lots of people, word would get around and stores would no longer carry Acme products, and people would no longer buy them. Acme Canning Co. would soon be out of business. Voila! Perfect free market solution, except that innocent people had to get sick and die to make it work. But did it work?

Not well, as my example above makes clear. Without federal regulation, inspection and enforcement, bad operators would just change name and label and, voila, it's business as usual.

Demeur said...

Oh it still goes on to some extent. You may have forgotten that Jack in the Box changed it's name to Monterey Jacks after several poisonings. Then it changed back to Jack in the Box and still people were sickened. To date I will not set foot in one after their last go round because they said they cleaned up their act and they didn't. I was sickened twice from their food.