'The Greatest Gun Salesman in America' and the Law of Unintended Consequences

Oh law of unintended consequences! How often you rear your ironic head!

In 2008, Candidate Obama, a Democrat (strike one and two in the minds of many gun owners) spoke out against assault weapons (swing and a miss!). By doing so, he set into motion a process which has made it increasingly difficult for him to do anything about the very weapons he thinks should be eliminated. However his actions have, happily for amateur economists like you and I, provided a great example of the law of unintended consequences.

How is this? In the run up to, and in the immediate aftermath of, Obama's election, gun sales in America rose dramatically as gun owners fearful of potential restrictions under a combination of Democrat-controlled legislative and executive branches stocked up on arms. In practice the Obama administration has not focused much on increasing gun control since. However a divided slate of Republican hopefuls with no clear front-runner (apologies to Mitt, but things are still a bit tight for him) and rising approval ratings for the incumbent have combined to put gun owners back on red alert. Presumably their analysis is that, despite not doing so thus far, an Obama victory in 2012 would allow him to run roughshod over the Second Amendment.

However, gun owners should be able to rest easy as the Second Amendment, heavy arms and all, appears to be safe for now. Why? Look no further than the old adage about politics and bedfellows; it actually behooves gun owners to have Obama poll well. As noted, as the odds that Obama will win re-election rise, gun sales rise in lockstep. And the more sales increase, the more gun manufacturers profit. They more they profit, the more money can be spent on gun-rights lobbyists, and indeed, even potentially President Obama's re-election.

This, of course, tidies up the introduction to this piece...Candidate Obama speaking out against assault weapons all the way back in 2008 has actually made it more difficult for him to do anything about them now, or in the future. In economic terms, his political stance created a classic example of unintended consequences, albeit in a roundabout fashion.

Some amateur economists out there might have also spotted a perverse incentive effect for Obama supporters with strong gun control leanings, as voting for their candidate could actually work against their interests. This would be particularly galling for many if the 'look the other way' policy were a direct back-scratching response to manufacturers' help this fall, but we can leave that post for another day...

In the end, what lesson can be learned from this domino effect-type analysis? Well, any economist-cum-gun owners out there might consider the idea of free-riding on the public good being created by those who have been in panic-buy mode. In other words, if you already have the gun you want, it will probably be protected via the fear buy/profit/lobby process noted above, and you don't have to do anything extra to protect your rights. Then again, some people might just be buying because they like new toys. In which case, spend away! After all, and if nothing else, those on both sides of the gun rights debate should at least be able to agree that our GDP could use the bump...


  1. Anonymous9/3/12 16:42

    Doesn't this also imply that would-be gun owners should wait to buy until a pro-gun President takes office? If the rise in gun sales is a hoarding response to a perceived threat of future scarcity, then gun demand (and prices) should tumble in a Republican administration.

  2. Hi,

    Thanks for reading. I haven't checked on the elasticity of guns recently, but there may be something to your point.

    I would think that retail prices might be moving a bit at large distributers like Bass Pro, WalMart, etc. to reflect increased demand. Certainly they are less likely to be holding blow-out type sales at the present (if they are, it is of course a sign that they are not being nimble enough in reacting to market conditions).

    However, I think that there is an even better example of this inherent in secondary markets like pawn shops, gun shows and used gun shops. I wouldn't be surprised if prices in those environments, especially in red states, were rising rapidly to meet demand.

    Presumably, if a GOPer wins, those prices would come down as well...meaning that a careful gun buyer could wait and cherry pick good opportunities on the drop in addition to not jumping in now while prices are high.

    Thanks for pointing out a nice supply and demand lesson among all the other econ 101 angles in the story!


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