Wednesday, May 31, 2017

The Trump Affect


“A well regulated Militia, being necessary of a free State, the right of the people to keep and bear arms, shall not be infringed.” This could be one of the most controversial sentences ever formed in the history of the human language. It is easily recognized as the beloved, and utterly loathed, 2nd Amendment. Many have read it, some understand it, and many think they do. The combinations of interpretations are virtually endless, and short of abortion of religion there are new things that spark more contention between people. It is the foundation of so many political campaigns, both nationally recognized and clandestine efforts.

The founding fathers drafted the Constitution and Bill of Rights out of a desire to avoid the tyranny imposed on the colonies by England. It is safe to assume they felt the need to protect the right to keep firearms was important, as it is number 2 on the list. Essentially, it states the government cannot be better armed than the public. That may sound like a far out postulation, but not so much when you think it through. A well-regulated militia is necessary for a free state’s people to defend themselves. If the people cannot be armed in a reasonable manner then they cannot form a militia to protect themselves from enemies, foreign and domestic.

Here’s where I need to throw in a disclaimer. This is my theory on the 2nd Amendment. I’m no lawyer, social analyst, rights activist, or know-it-all who would jam my opinion down someone’s throat. The sad part is this part of American law is so complex by itself, and even more so when intertwined with other laws and amendments, that few people can actually make accurate sense of it. The so-called “common-sense gun laws” are seldom anywhere near common-sense because it’s simply not that simple. Further, the topic is so easy to misrepresent based on an individual’s own social and political ideals. I’m not a fan of involving Skinflint Outdoors in political matters. Yet here again is one of those dreaded moments when my own political views will bleed through, so please read with caution and do your own homework. Now, with my disclaimer done, let us proceed.

 A well-functioning government is charged with serving its citizenry, not the other way around. This is the guiding principal our American government was built on, or at least we all like to hope. Sadly, there’s a ton of evidence that the administration promising change has forgotten that little point. As a result of this administrative oversight we have seen threats on a number of occasions where firearms have been targeted. Then we see the far left and far right advocates start barking about gun laws in America. The funny thing is few of them really know what they are even advocating for.

The far right advocates think they are protecting the right to wear a Glock on their hip while the far left think they are working to keep guns off the streets. The far right feels there should be no limits on firearms in America, while the far left thinks people should only be allowed to own muskets since that was all there was when the 2nd Amendment was written. Neither side takes the time to read and realize the firearms are simply the tools specified to protect the people. The 2nd Amendment wasn’t drafted to protect guns, it was meant to protect freedom. We, as American citizens, have the right to organize, outfit, and implement resistance to an oppressive or threatening element on our soil.

 Depending on the school of thought you subscribe to, the 2nd Amendment doesn’t give an individual the express right to have a gun. In a nut-shell, it can be argued the founding fathers considered the right to have a gun a moot point, as everybody had one and it was a basic right. They were more concerned with providing a means for the citizenry to defend themselves from an oppressive government or to assist in the event of a foreign invasion. So, by that standard, it is fair to say every time you hear a politician, like Obama or Clinton, talking about modifications to the 2nd Amendment you are actually hearing them say they want to strip your rights to resist oppression. It’s little more than a clandestine effort to secure control of people so they have no choice but to bend to the will of the masters.

Thank God, there has been a shift in power with the recent election. Whether you like Trump or hate him, the pendulum has swung in the other direction. With the defeat of Hillary Clinton we can hear a collective sigh of relief from the gun owners of America. We went from a fear-driving movement threatening a targeted group of the population to seeing hope for the future. The history we have lived in the past 4 to 8 years has left some with a bitter taste in their mouths. People have felt threatened and have responded to that fear by buying more guns than ever before. Now that fear has abided to a degree and we can see a definite shift in the gun market.

After reading and seeing all this unfold it was a relief for all gun owners to see some light at the end of the proverbial tunnel. It was with high spirits I followed this light to a local gun show to see what I could acquire for my collection. However, when I got to the show I was shocked and horrified at what I found. After hours of walking around the cheapest item I could fine was $200, and that was a pellet gun. My skinflint, so-tight-I-squeak, working class heart sunk to see what seemed to be an increase in gun prices. Sulking, I went home and immediately set out to discover what the hell happened. Here are some interesting points I found to pass along.

Typically, retail prices can vary based on a plethora of factors. Time of year, location, supply and demand, and social atmosphere can all impact how much you will pay. It’s almost impossible to accurately predict what will happen across the board. In the case of the gun market, we have seen an approximate 16% drop in share prices for large gun manufacturers. Likewise, overall sales of guns have dropped after the election. Simply stated, people aren’t as scared anymore. Consumers don’t feel the need to stockpile firearms now that the looming threat that was Hillary Clinton has been mike-dropped off the Presidential stage.

Supply and demand is one element I most commonly heard sighted as the reason behind the fluctuation in gun prices. Wikipedia defines supply and demand as “In microeconomics, supply and demand is an economic model of price determination in a market. It postulates that in a competitive market, the unit price for a particular good, or other traded item such as labor or liquid financial assets, will vary until it settles at a point where the quantity demand (at the current Price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.” Basically, you need 1,000 units and you have 500, so the price goes up. Or, on the other side, you have 1,000 units and need 500, so the price goes down.

What many neglect to mention is the rules of supply and demand can change as they are applied to different specialty markets. Such markets, like the overall gun market, are easily impacted with minimal effort from the political elite.  Still, the results of these efforts are complicated because of the wide variety of configurations of guns. For example, Obama threatens to ban “assault type” weapons, so the manufacturers begin to market cheaper models of these weapons so they can earn revenue from the consumer on a budget. This drives the price of these targeted weapons down. Meanwhile, Obama signs a law limiting imports from Russia, with a clandestine clause covering the import of antique Mosin-Nagant rifles. As a result, the price on these rifles jumps by 250%. At the same time the price of other, similar antique rifles goes down as people are spending all their money on the cheaper semi-automatic rifles.

Sadly, the President who promised change used all the tragedies during his time to push an agenda that did nothing to protect the people. Every time the American people watched a tragedy unfold on the news we grew to expect the ensuing anti-gun propaganda that followed. Every time we saw such speeches there was a general consumer panic, and sales rose. This created a buyers-market. Though there was a higher demand, there was not such a shortage of buyers. Therefore, it wasn’t such a big deal if someone wanted to buy a gun and the dealer wouldn’t offer a good price. There were plenty of dealers making money on the volume of sales that they could offer firearms at a lower price.

The Obama-gun-grabbing-machine also created ripples in the market that catered to people looking for a bargain. As his initiative gained momentum there was an increase over the last several years of companies offering “assault type” weapons at a budget price. This place in the gun market was created specifically for consumers on a tighter budget wanting to stock-pile these weapons. Likewise, this focus on “assault type” weapons meant there was less interest (and hence a lower sticker price) in obsolete military pieces. But, as with so many other things, these trends changed as soon as we had a new President elect.

When a major event happens (like the election) that could influence a market it creates a time to encounter less resistance to price changes. Simply stated, the beginning of 2017 is a good time to raise prices. Here we can see the shift to a sellers-market. While sales are down a higher price can generate more revenue and set a precedent that can be used throughout the rest of the year. Compared to the buyers-market, where there is no shortage of people willing to spend money or volume dealers willing to accommodate the budget of the average consumer, who still battle the hardships of our recent recession. The ebb and flow of the market is ultimately dictated by the entrepreneurs who have the best ability to react to social changes. All the smaller businesses simply have to follow suit in passing the pricing standards on to the consumer.  

We can’t talk about gun purchases without pointing out the obvious variables. New York, New Jersey, Connecticut, and California are sure-fire places that can throw off any theories about anything to do with firearms. There’s seldom any point in looking at these locales and their statistics, but they are relevant as there is always someone who mentions them. What can reasonably be said is not much changes in these areas as the laws are harsh, and that rigid approach makes for a social theater where few things change.

The specific dealer can also play a big part in the prices of firearms. I knew of a less-than-scrupulous dealer who would often buy wholesale firearms and price the living crap out of them. His philosophy was he had enough money to sit on the investment. Sure, they may not be worth what he was asking at the time, but they would be someday. This approach allowed this “gentleman” to increase his profit margins, at an albeit slower pace. While his approach to making money can be applauded, he is the embodiment of what any scale of firearm investor would want to avoid. Be wary of such a business person as they are masters of reading the market. The more money someone like this makes the less money your investment is worth.

So, who determines the price of guns? Was it Obama? Did Hillary Clinton have something to do with it? Is Donald Trump going to change the prices? Who sets the trends? The questions are limitless and difficult to answer. When I followed the afore mentioned ray of light I was certain the market would be more hospitable to the folks on a budget. But, the more I searched for answers the more confused I became. Only after hours of mind-numbing reading did I come to the realization that the answer was not so easy as I had hoped. I have to throw out another disclaimer to let you know this is just another theory. I invite anyone who has a vested interest in the firearms market to do their own research and make their own determination about what is the best move for reaching your goals.

To start from the top, it’s not the President. Carter, Reagan, Bush, Clinton, Bush, Obama, and now Trump are the Presidents I have seen in my lifetime. After doing some research I firmly believe none of them have impacted (despite their best efforts) the price of guns in America. I make this statement based on the fact there is nothing going on in American society that would allow the American President to unilaterally stop the sale, ownership, use, trade, or possession of firearms. They can get up to the podium and talk about taking guns (more on this later) but they can’t take guns away.

It’s not the legislature either. They can draft, rewrite, read, review, forget, loose, and manipulate the laws that regulate guns. However, they cannot entirely go against the power of the 2nd Amendment. That fact alone is why residents of New York, New Jersey, Connecticut, and California are able to own any guns at all. The legislature can write laws to regulate firearms, but they just don’t have the clout to take them. The laws written and signed may have an impact on the prices we pay at the counter, but those prices ultimately ebb and flow, rise and fall, sink and swim according to other factors (more on this later too).

The manufacturers have some part in influencing the price of firearms, but not all firearms. Basically, the big gun producers don’t have much control over the price of what is already out there. They develop new and improved products and set prices on those products according to industry standards. They’re not far different from the automotive industry. They set the price of the new stuff and the used will follow suit for a time. But, once a piece becomes old enough there is little influence from the producer. At that point it either becomes a classic firearm or pawn shop fodder.

You would think it’s the dealers that influence the prices of guns, but you’d be surprised to be wrong about that one. The dealers, gun shop owners, pawn shop owners, and private collectors are simply a collective of people who are reacting to what is going on around them. Nothing more, and nothing less. Presidents, mass shootings, recessions, new laws, and time of the year are all just details these people have to consider when making their own business transactions. It doesn’t matter if they’re honest or not, they don’t set the sticker prices at the end of the day.

As far as I was able to tell, the consumer is the one who sets the price on the guns in America. Face it, someone selling something wants as much as they can get. If a person is willing to overpay, then others will follow suit. When people overpay in mass then the standard is set. When people refuse to overpay, or be undercompensated for that matter, the prices will adjust accordingly. When the climate is right the consumers flock to make purchases in mass. The dealers, manufacturers, and legislatures leap into action as a result. If any one of the 3 can keep the consumer blinded to the reality then the market can be controlled, but that still means the actual prices are controlled by the consumer.

A calm market means people will be less likely to act on impulse. So when a President standing at his podium doesn’t do anything to divide the people, and a legislature doesn’t try to push “common-sense” gun laws there is a calm among consumers. This change in the consumer causes the other bodies on the food-chain to switch up their approach, causing prices to change. At the end of it all, we the people have the power to control our destiny. It’s up to us to make sure we aren’t taken advantage of by anyone else.

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