The politics of guns and money
A week after the mass shooting of 20 schoolchildren and six adults in Connecticut, the politics of gun control has never been more prominent in American life. One of the most telling responses to the horror at Sandy Hook has been the precipitous loss of investor confidence in the private equity and hedge fund group Cerberus Capital Management. In recent years, Cerberus had acquired several leading gun manufacturers in the United States, overseeing them through an entity known as the Freedom Group. This previously lucrative investment quickly soured in the wake of the school shootings.
Writing in Slate magazine, Eliot Spitzer, the former governor of New York, warned: “Cerberus’ investors are indirect owners of Bushmaster, the company that made the weapon that brought evil to Newtown, Conn. It is time to determine pension fund by pension fund who has invested in Cerberus and bring pressure on those investors either to get out of Cerberus or have Cerberus change the way it runs the gun industry.”
Within days of Spitzer’s article, Cerberus found itself facing investment losses of nearly half a billion dollars. It lost no time in announcing its decision to get rid of its stake in the Freedom Group. Other gun manufacturers faced similar losses with shares in the iconic Smith & Wesson Holding Corp. losing nearly 10 per cent of their value in less than a week.
The National Rifle Association also trimmed its sails to suit the new mood, remaining judiciously quiet for most of the week before stating its willingness to “offer meaningful contributions to help make sure this never happens again.” The NRA’s carefully vague statement hides the tenacity with which it has opposed every practical measure of this kind in the past. Even before the Connecticut shootings, a survey by a respected Republican pollster showed that a large majority of the group’s 4.3 million members approve of commonsense restrictions such as requiring owners to report lost or stolen guns to the police, criminal background checks on potential buyers, and a ban on sales to people who appear on a terrorist watch list. Even so, the NRA has opposed each of these measures and will likely do its best to make sure that they are not enacted.
While it is difficult to establish accurately how many guns there are in America – the NRA estimates that 60-65 million Americans own a firearm, roughly half of which are handguns – there is no doubt that steadily rising gun ownership has made it largely impractical for Congress to restrict access to or even regulate the sales of guns that have no legitimate use in a civilian context. Writing about a 1988 school shooting in the Atlantic Shores Christian School, in Virginia Beach, Virginia, Erik Larson describes the Cobray M-11/9 gun used by the 16-year-old shooter, Nicholas Elliot as one that “by any reasonable standard should never have become a mass consumer product.” Yet Elliott was able to get the gun through a federally licensed dealer. Larson notes: “This dealer was a ‘good’ dealer, yet sold numerous weapons to traffickers and killers, raising a fundamental question of whether the costs imposed on the rest of us even by supposedly honest dealers are simply too high for society to bear.”
In most other countries the answer would be a simple Yes, but America’s fascination with guns has proved itself immune to similar shocks in the past. One indicator of its tolerance for gun violence is the fact sheet on daily and yearly gun violence produced by the Brady Campaign to Prevent Gun Violence, which points out that in a given year: “Almost 100,000 people in America are shot in murders, assaults, suicides, accidents, or by police intervention.” In 2007, guns murdered 17 people in Finland, 35 in Australia, 39 in England and Wales, 60 in Spain, 194 in Germany, 200 in Canada. In the United States the figure was 9,484.
If this latest outrage doesn’t produce enough political momentum for serious gun regulation, there can be no doubt that further mass shootings will take place in the immediate future. The Brady Campaign website notes, for example, that there have already been “more than 70 mass shootings since the January 8, 2011, massacre in Tucson, Arizona.” But even if the thorny political issues that have retarded previous attempts at gun control fail, the fate of Cerberus and other gun-friendly investors shows that the American public is learning how to use market forces to send messages that their Congress and President have proved incapable of delivering. That is one of the few hopeful signs in a week that was overshadowed by the unspeakable horror in Newtown.