This is the Kato Daily Podcast for Friday, September 28th, 2007.

I'm Caleb Brown.

With tainted toys, dog food and other products from China receiving great attention,

what's the best response here?

The Cato Institute's Jim Dorn says fixing that problem requires China to implement

transparency, the rule of law, and reforms of liability associated

with poor quality.

He says the impulse by some domestic firms toward government intervention on behalf of

product quality, however however might simply be

protectionism in disguise. Well obviously consumers want to protect their

children they want to protect themselves against tainted products, in particular food and

toys and toothpaste and even pet food. So it's up to, you know, you can have the

liability on the consumers in effect and say consumers beware

like it used to be or you can put the thrust of the liability on the companies.

And in today's global economy, especially US producers, are liable if they make mistakes

under tort law in the United States.

And they can easily go bankrupt if they make a major even sometimes a minor mistake that may

snowball. So consumers want to have a transparent system that they know the

quality of the products and right now I think that's what scares and the

uncertainty with respect to these imports when we have these global supply

chains. China has responded fairly severely to some of the problems with products that have come over

here in the past.

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