Campus shootings have galvanized the nation in a debate about whether gun regulation, even eradication, should be taken up by Congress or Executive action. As the Umpqua Community College shooting reinforced these insistent calls for added legislation, President Obama proclaimed that “prayers and thoughts are not enough“. Yet, the current administration will not engage the matter and Obama’s track record shows why: President Obama’s policy machine creates markets and never destroys them.
Remember when people thought Obamacare would ruin the healthcare insurance industry? Thus far, the opposite has been true. The market model has exploded privatization and the growth rate of healthcare spending is expected to finish at 6.8%, a modest gain after the entire industry complied with the various provisions. This is certainly not an anomaly or a haphazard accident. In fact, while predictions by IBISWorld lower the margin rates for the industry by 5% over the next 5 years, for-profit healthcare companies are likely to increase revenue by 3% each year for the same five-year period, finishing the decade at $85262 billion. Both of these effects are results of compliance measures within the ACA.
In a similar vein, the legalization of gay marriage hasn’t hurt the economy either. The Supreme Court’s landmark decision upholding LGBT rights and allowing gay marriage created new markets for both retail and insurance. Same-sex couples are signing up for registries and shopping for insurance, activities which were not feasible in many states before the Supreme Court’s decision. Legalizing gay marriage was another simple move to expand the economic base within segments of the U.S. economy.
We all recall Cash for Clunkers, right? Americans may have ridiculed the policy and its simplistic-sounding title, but this policy instrument propped up the auto industry in its time of dire need. Analysis performed by the Brookings Institute dismissed the program’s benefits for the long-term but acknowledged that the Cars Rebate Allowance System (CARS) program led to a 14 percent increase in auto sales for July 2009 and a 28 percent increase during August 2009, the terminal month for the rebate program. As a second goal, CARS was meant to direct people to more fuel-efficient automobiles; this required a new supply of these types of vehicles. In order to accomplish this supply turnover, many car dealers brought in the newer vehicles by scrapping the less fuel-efficient cars, thus reducing their taxable inventories.
The Obama Administration’s Avoidance of Gun Control
Obama might not be touching gun control measures not because he is afraid of the NRA and its mammoth influence. He might not propose legislation not because he is unsure of the Constitutionality of such measures; the Commander in Chief knows the applications of our legal compact, and he is, after all, a Constitutional lawyer. It doesn’t even come down to the avoidance of hotbed issues being a natural result of partisan election cycles and keeping control of the White House. The evidence above supports Obama’s quest to engage critical and controversial issues this year than run from them, much to the delight of supporters. The President needs to offset jobs lost from outsourcing and the best way to do that is to maintain the industries that are thriving and create new markets altogether.
The current US market for guns is booming, which good news for the economy overall. Gun manufacturing has doubled from its 2010 level of 5.65 million new guns made to 10.3 million in 2013, the latest for which there are industry reports. The Washington Times notes that even with more challenging gun laws, fears of personal security have led to a record number of purchases and background checks, including California where the state processed an unprecedented 200,000 applications. However, stricter federally-guided background checks would ultimately frustrate the sales process, leaving some people to look to a black market for quicker access. If legislation went further and tried limiting supply, the ripple effect would likely lead to lost revenue as a result of the emergence of an underground market for weapons.
Despite Umpqua, despite Virginia Tech, despite Columbine and despite the many other unrecognized shootings across the country, a solution that comes across the desk in the Oval Office may just have to stay in the drawer until the next administration. Instead of regulating guns, the President will choose to protect the market because regulating firearms would do more harm than good to the guns market and to the economy as a whole.
Image source: The Federalist