Does Anyone Ever Think About The Cost Of Regulating Guns? The NRA Does.

If you listen to the media’s spin on the NRA, the first thing they always tell you is that the success of the gun lobby is due to the amount of cash they spread around.  And while it’s true that they give substantial amounts of money to this candidate and that, and they spent a ton of dough on television ads for he-who’s-name -shall-not-be-mentioned even though he’s soon to become 45th President of the United States, the fact is that the NRA’s real success on the legislative playing field is due not to what is spent, but what is not.

laws             At the Federal level, most of the NRA’s lobbying activity consists of shooting down gun bills promoted by the other side.  And the funny thing about increasing gun regulations, such as expanding background checks to cover private sales, for example, is that someone has to foot the bill.  The gun owner who wants to give a gun to his son or sell it to a neighbor or friend has to pay a gun dealer to do the requisite paperwork and background check; the FBI will have to hire more staff to respond to the increased volume of NICS calls; the ATF will want to increase the number of agents because the dealers whose stores they inspect will have lots more transactions on their books.

Like it or not, most schemes to regulate anything, not just guns, live or die based on the ability of the relevant government agencies to ensure through enforcement that the new regulations are being followed and kept.  When Nixon dropped the speed limit to 55 mph in 1974 it was estimated that gasoline consumption declined by a whole, big 1% because most states ignored the rule and drivers were rarely, if ever ticketed for exceeding the new limit on speed.  But guns are already a highly-regulated industry, so additional regulations would be enforced.

The real political clout of the NRA is felt at the state level because this is where the entire licensing procedure for gun ownership takes place.  Thirteen states require a pre-purchase permit requirement for hand guns, long guns or both which means finding the time and money to process such transactions; carrying a concealed weapon is now legal everywhere but requires some kind of permit in 44 of the 50 states.  Again, the issuing authority for these licenses needs to spend money to get the job done.

Take a look at laws which the NRA is promoting at the state level, again and again such laws would cost nothing at all.  Texas is now the eighth state to allow students to bring concealed guns onto college campuses, a law that might make a college administrator decide to hire some more security, but it won’t be at the taxpayer’s expense.  Back in 2014 Georgia passed a ‘guns everywhere’ law which opened bars, restaurants, churches and just about every other public place to those hardy souls who just can’t walk around without their guns. Did this law require an uptick in the state budget bottom line?  Not one bit.

A recent study from three researchers at the Harvard Business School tracked state legislative responses to mass shootings from 1999 through 2014. What they found was that after a mass shooting, laws that loosened gun restrictions increased in Republican-controlled state governments by 75%, no comparable activity for tightening gun restrictions in states with blue governments was found.  I’m not sure that I entirely buy their research because Connecticut, New York and Maryland all passed restrictive gun laws after Sandy Hook, but all three laws mandated new regulations which could only become effective with enforcement at every turn.

Going forward, Gun-sense Nation will have to tread carefully when it comes to advocating new gun regulations which bear any cost.  Because we are clearly entering a time when ‘tax relief’ and ‘downsizing government’ will be the orders of the day. And since most laws cost money to enforce, this puts Gun-nut Nation in the driver’s seat because they don’t want any gun laws at all.

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Who Wins When Harvard University Goes Up Against Ruger? Neither One.

You know the gun business is a serious business when someone writes about it in the Harvard Business Review.  And thanks to my friend Shaun Dakin, I just finished reading an article about the gun business published in the latest issue of HBR whose author, Robert Dolan, is a member of the Harvard Business School faculty.

Actually, the article is basically an update of a business school case study that Dolan published in 2013 which, although Dolan claims makes him someone who has studied the gun industry “in depth from a management perspective,” is actually an analysis of one company, Ruger, whose CEO, Michael Fifer, happens to hold a Harvard MBA degree.

Dolan’s article argues that gun companies should redefine their business practices to go beyond concerns for the bottom line and move from ‘management’ to ‘leadership’ by taking a more active role in making sure that company products are only used in safe and lawful ways.  Rather than just complying with gun laws, Ruger and other companies should take some of their profits and bring ’smart guns’ to market, expand programs that curtail straw sales and more closely monitor gun dealers who let their guns get into the ‘wrong hands.’

Even though Dolan attempts to validate his approach by invoking the legendary Peter Drucker (as if you can publish a Harvard case study without mentioning Drucker) there’s little here that can’t be found in many other calls for more gun industry responsibility, beginning with President Obama and moving on down. The Clinton Administration tried to get the gun industry to adopt all those ideas in 1998, and what they got for their efforts was a boycott of Smith & Wesson and then a law protecting the industry from class-action torts that was signed by George W. Bush in 2005.

To understand how the gun industry views Dolan’s argument for transitioning from management to leadership, you can find a response just below his comment from none other than Larry Keane, who happens to be the Senior Vice President of the NSSF. Keane begins his response by noting that “there is so much wrong in [Dolan’s] piece that it is hard to know where to begin.”  Actually, Dolan’s case study on Ruger contains more errors than his op-ed (including the extraordinary claims that the value of Ruger stock increased by more than ten times between 2008 and 2013), but Keane wants to make sure that everyone understands the basic idea that either you know the truth about the gun business or you don’t; and if you say anything negative about the gun business, you don’t.

Keane argues that policing the gun industry should be done by the police; i.e., law enforcement agencies like the ATF.  It’s a disingenuous argument at best, a wholesale fabrication at worst.  The Tiahart Amendment that severely curtails the ability of law enforcement to track illegal guns was not, as he claims, based on misrepresentation of gun-trace data by GVP advocates; it was nothing more than a successful effort to hamper government’s effort to regulate the gun industry through stricter enforcement of the distribution chain.

On the other hand, Professor Dolan is engaging in his own brand of wishful thinking by assuming that the gun industry is ready, willing or able to regulate itself.  Detroit didn’t begin installing seatbelts until the Federal Government mandated their use; the money spent by the gun industry to lobby against government regulations is a trifle compared to what the tobacco industry spends to stave off more government rules on cigarette sales.  If Dolan wants to write an interesting case study on the gun business, perhaps he should examine how and why the gun business has kept the regulators under control.

The GVP community rightfully takes umbrage at the degree to which the gun business has insulated itself from government mandates or controls, but the industry is just doing what comes naturally – no business owner wants the government to tell him what to do.