John Stossel on the Broken Window Fallacy

From a couple years ago, but vividly illustrated:

And the Broken Window Fallacy in a more classical sense, with the glazier and the baker, and the forgotten tailor explained how Henry Hazlitt explained it.

LA Gov. Jindal Looking at Eliminating Income Taxes

From the Office of the Governor of Louisiana:

BATON ROUGE – At a joint meeting of the House Ways & Means Committee and the Senate Revenue & Fiscal Affairs Committee, Governor Bobby Jindal unveiled his administration’s proposal to eliminate income taxes and stressed that the proposal will lead to more job opportunities for Louisianians. Following months of meetings with legislators and stakeholders across the state, Governor Jindal presented a plan that eliminates income taxes in a revenue neutral manner by eliminating over 200 tax loopholes and broadening the state sales tax base.

The Governor stressed that the tax reform proposal will make Louisiana the best place in the country to create jobs. Governor Jindal said, “Over the past five years, we have overhauled our ethics laws, revamped workforce development programs, eliminated burdensome business taxes and passed landmark reforms to help give every child in Louisiana the opportunity to get a great education.

“Everything we have done since entering office is about making Louisiana the best place in the world to find a job and raise a family. Our state is now at the top of many rankings for the best business climates in the country and we are competing for and winning major economic development projects. But we need to do more to stay competitive. States with no income taxes are outperforming other states in terms of economic growth and population growth

“Over the last ten years, more than 60 percent of the three million new jobs in American were created by the nine states without an income tax. Every year for the past 40 years, states without an income tax had faster growth than states with the highest income taxes.  Economic growth in the nine states without income taxes was 50 percent faster than in the nine states with the highest top income tax rates.  Over the past decade, states without income taxes have seen nearly 60 percent higher population growth than the national average.”

Texas is one of those states with no income tax that has had a huge amount of job growth.  It’s been doing so well economically that a gubernatorial candidate a few years back was willing to suggest eliminating property taxes as well.

More recently, North Dakota has been looking at eliminating property taxes as well.

Elimination of taxes opens up avenues for job creation and wealth creation.

Concerning the matter of property taxes, you can never own your home if the state taxes you on it.  Then you merely lease your home, because even if you don’t owe the bank, if you don’t pay the government, the government will take it away.

Elimination of income taxes, like Louisiana is looking at, means you at least own the fruits of your own labor.  And that’s a step in the right direction, leading to greater economic abilities for everyone.

Ultimately, the increase in commerce means an increase in income via smaller taxation rates via an economy of scale.  It’s good for the citizen and for their government.

US Debt Visualized

Via Jawa Report:

Can You Debunk Something That’s Already Been Debunked?

HotAir (among other places) links today to a NRO piece about DHS ammo purchases.

Last year, the Social Security Administration put out a procurement request for 174,000 rounds of “.357 Sig 125 grain bonded jacketed hollow point pistol ammunition,” prompting a few on the Internet to work themselves up into something of a frenzy. “It’s not outlandish,” claimed Paul Joseph Wilson, one of a team of professional paranoiacs on the Infowars website, “to suggest that the Social Security Administration is purchasing the bullets as part of preparations for civil unrest.” “Something strange is going on,” harmonized Breitbart’s William Bigelow. Even Mark Levin was concerned. “I know why the government’s arming up,” he deduced. “It’s not because there’s going to be an insurrection; it’s because our society is unraveling.”

The Social Security Administration’s purchase was by no means an anomaly. A year earlier, the unlikely pair of the Department of Agriculture (320,000 rounds) and the National Weather Service (46,000 rounds) had both put out tenders for ammunition. And slightly less odd, but still staggering, were the FBI’s professed intention to purchase up to 100 million “hollow point” rounds and the Department of Homeland Security’s concurrent request for 450 million rounds. The Department of Education got in on the weapons-supplying spree, too, purchasing “27 Remington Brand Model 870 police 12-gauge shotguns.”

Gee, it’s almost like this question was asked & answered almost a year ago.  And then half a year ago, when the Social Security Administration story came up, it was asked & answered again.

And it was even answered by Social Security directly:

As we said in a recent post, our office has criminal investigators, or special agents, who are responsible for investigating violations of the laws that govern SSA’s programs. Currently, about 295 special agents and supervisory special agents work in 66 offices across the United States.  These investigators have full law enforcement authority, including executing search warrants and making arrests.

Our investigators are similar to your State or local police officers. They use traditional investigative techniques, and they are armed when on official duty.

Media reports expressed concerns over the type of ammunition ordered. In fact, this type of ammunition is standard issue for many law enforcement agencies. OIG’s special agents use this ammunition during their mandatory quarterly firearms qualifications and other training sessions, to ensure agent and public safety. Additionally, the ammunition our agents use is the same type used at the Federal Law Enforcement Training Center.

If one were inclined to tin foil hattery, it’d be more interesting to ask why NRO is doing a story on something that’s a year old.

-

A solid point is made in HotAir’s comments:

We have been getting plenty of e-mail about purchases and contracts for ammunition by government agencies, which seem to have prompted a run on ammunition by private consumers and the shortages that these runs usually entail.

State ammunition acquisitions didn’t prompt a run on ammunition, by the People.

Dictators who would disarm the People prompted those runs.

This was, first and foremost, about firearms, not bullets.

OhEssYouCowboys on March 5, 2013 at 3:31 PM

Government contracts have next to nothing to do with runs on ammo.  Runs on ammo come after runs on guns, because guns need ammo.  Not rocket science.  I’d be surprised anyone emailing them would think that (I’d doubt Ed does, though the sentence could be taken that way), but I guess they’re agitated about something from a year ago, so who knows?

From the NRO piece, a bit of reassurance that isn’t reassuring, because while the ammo orders aren’t sinister, other things are:

Whatever the federal government has become, it is not yet plotting violence against the people.

Tell that to these guys:

–

Update: Since HotAir linked back to us, here’s a repost of the original from April 2012.  Now, mind you that entire post was written before the Sandy Hook murders and before the current maniacal leftist push for gun control that’s spurred on purchasing at the cyclic rate; plus there’s another year’s worth of inflation, metals prices fluctuations, and new costs of doing business that manufacturers are now faced with.  All of those factors are going to change prices even further.

Why DHS Ordered 450 Million Rounds of .40 S&W from ATK

I’ve seen this story reported several times, and have been asked about it by friends.

The first place I saw the story was on Sipsey Street Irregulars, and here, then here, here, Alex Jones got in on it here, the Blaze got in on it, and so on.

I posted why over at Sipsey Street, I’ve explained to people I know, but since it keeps coming up, I’ll repost it here (and hopefully the explanation will make it to the top of search engine results so people can stop freaking out about it – and freak out about the things that need to be freaked out about – like the F&F coverup, the implications of the commerce clause being expanded to make you buy a product, etc.).

Quoting myself:

To give some idea as to how the big numbers make sense, a USBP trainee goes through about 2000 rounds before leaving the academy during training, practice quals, and basic proficiency. A class is 50 students, so that’s over 100,000 rounds per class, not counting remedials, which may bump the number up to 110,000 rounds or so.

In 2007-2012, the academy was graduating some 100+ classes per year, resulting in easily 10,000,000 rounds per year just to new agent training.

A USBP agent goes through quarterly firearms qualification, which is a 72 round course, usually with some additional training tossed in, so about 400 rounds per year minimum that they will fire in the course of training.

Ammo issue is usually 150-300 rounds per quarter (depending on stations’ budgets and ammo availability), so each agent will get 600-1200 rounds per year issued to them, of which they might only use 400 for official training – the rest is proficiency ammo for them on their time, or sometimes for proficiency fire after quals if there’s more training scheduled.

Take let’s say 25,000 agents times around 1000 rounds per year and you get some 25,000,000 rounds per year. That’s not including firearms instructors (who go through ammo at the cyclic) or Bortac/Borstar and SRT or whatever they’re calling it these days.

Spread this out over a potential 5 year contract to supply up to 450,000,000 rounds to DHS, and 125,000,000 could easily go to USBP alone, if not closer to 150-200M.

Add in the potential for what the academy was burning through in the last 5 years of the hiring pushes and you’re looking at over half that 450M going to USBP. Hiring for USBP is down, but ATK has to plan for it anyway.

Add in other branches of DHS, US Marshals, FBI, US Customs, etc., almost all of whom use the .40 S&W as their primary round, and you end up with a very plausible, normal number to base a contract off of.

US Marshal service just had a hiring push for 5000 applicants – if they take even 1000 of those, with training similar to USBP, that puts them in the 2 million round mark, if over 5 years, 10 million round mark just for new hires. Add in quarterly qualifications, and you’re looking at millions upon millions more rounds.

450 million rounds is a good forecast number for the 5 year period (1 + 4 extension).

Hope that clears this up a bit.

One other thing to look at is the same thing effecting reloaders – materials prices keep going up.  Copper keeps going up, which increases the costs of ammo.

Anybody who’s been shooting for a few years has seen what’s happened.

The ammo types there are different types of .223 and 5.56mm, and amounts are per 1000 rounds.  To compare to today, a mere 5 1/2 years after wards, the XM193 is $9.79 for 20 rounds.   That’d be $489.  To make the chart Al-Gorean:

If you order 450 million rounds at today’s prices, you don’t end up paying tomorrow’s prices.  Given the rate of increase in ammo prices, due to monetary inflation and metals prices and shipping costs due to fuel prices, buying now for tomorrow makes more sense.

Or, as milsurpers have said for a long time about ammo: “Buy it cheap and stack it deep.”  It makes economic sense to buy against increases, it makes good sense to buy the amount you’re going to use in the future.  450 million rounds is not unreasonable.  It just seems odd at first until you crunch the numbers.

I’d be more worried about prospective ATF head Andrew Travers’ past work with the anti-gun Joyce Foundation.

—-

As a final note, for those who’ve gotten this far – having read the repost and all – and who wonder why they’re buying JHP rounds and not FMJ for training, I believe the answer is a combination of contracts, bean counters and lawyers.  If you’re a contractor and you can convince an agency to always “train how it fights” – which isn’t a bad thing, it may be more expensive for the government, but you may make better margins.  With the organizations I’m familiar with, ammo allocated for federal training of new agents is allocated to the agent – if the agent drops, the company gets the ammo back, the govt. doesn’t get a refund.  Instructors may be able to use that student’s allocation for other students, so sometimes it’s not wasted, either.

If you standardize your purchases, it’s less to keep account of – in inventory, purchasing, allocations, acquisitions, and in usage.

Were you to issue training ammo that accidentally got taken to the field and proved insufficient to stop a bad guy who then injures or kills the agent, the savings on using FMJ or other training ammo might not be worth the wrongful death lawsuit for failing to equip the agent properly.  So it’s also an expensive CYA.  If you spend an extra $5 million on ammo but prevent a $10 million lawsuit, it’s economically worth it.

It also goes to economy of scale.  Buy it cheap, stack it deep.

Magpul and Colorado’s Gun Bans

For those unfamiliar with the gun world, Magpul is a Colorado-based company that in the last decade or so has taken the firearms world by storm.  They manufacture polymer parts mostly for AR-type rifles, from buttstocks to handguards to pistol grips to selector switches to any little gizmo that could be an advantage for anyone who shoots.

Their bread and butter is the Pmag, a polymer magazine that’s become highly favored in citizen, law enforcement and military circles because it doesn’t dent and take damage the way traditional aluminum or steel magazines do.  Before Sandy Hook, you could buy Pmags for anywhere between $10-20, depending where you were shopping and what exact model you wanted.  The magazines are normally 30-round magazines, but they also come in 20s, and depending on other specific models, other sizes as well.  In general, though, a standard Pmag is a standard capacity AR magazine that runs at 30 rounds.

And now Colorado is pushing to ban them.

Formed in Colorado in 1999 by a former Marine, the successful Colorado company Magpul Industries employees over 200 people and offers over 500 polymer products.

But it’s one of their products that has garnered national attention, and controversy.

It’s the 30-round rifle magazine designed for the AR-15 and the military M4 and M16 rifles.

Famously or infamously known as the high capacity magazine.

It accounts for almost half of all sales at Magpul. “It’s the standard that’s used in our military as well as allied militaries. With state, federal and local law enforcement as well as hunters, recreational shooters, competitors and responsible citizens all over the united states,” says Duane Liptak, director of Magpul Dynamics in Erie, Colorado.

Magpul calls it the standard capacity magazine.

Colorado lawmakers want to call it illegal if House Bill 1224 passes and becomes law.

Gun banning Democrats pushed for the ban on sale, import, use, possession, manufacture, etc., in HB 1224.  The text of the Colorado bill can be found here.

From Guns.com:

The Colorado House Bill 13-1224 essentially aims to regulate the production, sale and ownership of magazines for a rifle, handgun and shotgun. Here is the exact language of the bill:

The bill prohibits the sale, transfer, or possession of an ammunition feeding device that is capable of accepting, or that can be readily converted to accept, more than 10 rounds of ammunition or more than five shotgun shells (large-capacity magazine). A person may possess a large-capacity magazine if he or she owns the large-capacity magazine on the effective date of the bill and maintains continuous possession of the large-capacity magazine.

A person who sells, transfers, or possesses a large-capacity magazine in violation of the new provision commits a class 2 misdemeanor.

A large-capacity magazine that is manufactured in Colorado on or after the effective date of the bill must include a serial number and the date upon which the large-capacity magazine was manufactured or assembled. The serial number and date must be legibly and conspicuously engraved or cast upon the outer surface of the large-capacity magazine.

The Colorado bureau of investigation may promulgate rules that may require a large-capacity magazine that is manufactured on or after the effective date of the bill to bear identifying information in addition to the serial number and date of assembly.

A person who manufactures a large-capacity magazine in Colorado in violation of the new provision commits a class 2 misdemeanor.

It would seem that this language not only limits the rights of most of us, but really singles out Magpul as a company.  Magpul wouldn’t even be able to make magazines for sale in other states without complying to Colorado’s new restrictions.

Continued from Guns.com:

I’ve tried hard to refrain from editorializing, but here it goes.  Magpul is known for their 30 round magazines.  This is not a “high-capacity” magazine.  It is a standard capacity magazine.  We know this.  Limiting the manufacture of these magazines will do nothing to reduce gun crime. And Magpul knows this.

The legislators drafting these measures do so in spite of the fact that nothing they are proposing will do anything to even marginally improve public safety in Colorado, and in fact, will leave law-abiding Colorado residents less able to defend themselves, strip away rights and property from residents who have done nothing wrong, and send nearly 1000 jobs and millions in tax revenue out of the state.

We like Colorado, we want to continue to operate in Colorado, but most of all, we want Colorado to remain FREE.

Ultimately, that would be nice.  But we’ll see what Colorado does.  The bill’s already passed out of committee 7-4, and if it gets through votes in the senate, with 20 Democrats and 15 Republicans, and in the house, with 37 Democrats and only 28 Republicans, it’s likely to end up made into law.  A law that will functionally destroy Magpul as a business.

Magpul knows this as well, and put this out today:

Government killing a very successful Colorado business…  why does this seem familiar?

Obama’s Failing Ratings and the State of the Union 2013

Via Breitbart, from Gallup:

If it weren’t for Dick Cheney agreeing with Obama on drone strikes, he’d be all in negatives.

Of course, given that even MSN is calling bullshit on Obama’s State of the Union address, maybe it shouldn’t be all that surprising:

• The president claimed that “both parties have worked together to reduce the deficit by more than $2.5 trillion.” But that’s only an estimate of deficit reduction through fiscal year 2022, and it would be lower if the White House used a different starting point.

We haven’t reduced the deficit at all, and we’re still running trillion-dollar deficits.

The “estimate of deficit reduction” is like writing out a diet.  You come up with a plan that says you’re only going to eat 2000 calories a day, you’re going to run 3 miles a day, lift weights for an hour, and do another hour of cardio.  By the end of 2013, you should be ready to run in an iron man triathalon.  Of course, when the day after you write that plan, you eat 4000 calories, waddle 30 yards to the fridge and back in a day, lift only food to your mouth, and do another hour of sleeping to rest from all your eating… you won’t find yourself at the end of the year ready to run an iron man triathanlon.

• Obama touted the growth of 500,000 manufacturing jobs over the past three years, but there has been a net loss of 600,000 manufacturing jobs since he took office. The recent growth also has stalled since July 2012.

That job growth just keeps “unexpectedly” stalling, just like the rest of the economy keeps “unexpectedly” stalling.

To continue with the working out analogy, Obama’s growth of jobs is like adding a half hour of running to your daily workout in the evening… after you take out an hour of running from your daily workout in the morning.  You can say you’re running an extra half hour, because it is a different half hour, but you still have a loss.

• He claimed that “we have doubled the distance our cars will go on a gallon of gas.” Actual mileage is improving, but Obama’s “doubled” claim refers to a desired miles-per-gallon average for model year 2025.

The Corporate Average Fuel Economy standards that the government imposes are as fanciful as any other soviet pipe dream.  The party will dictate that it must be so, and when it cannot be produced, oh well – it’s the worker’s fault.  Obama declares that all cars must average 54.5 mpg by 2025.  That’s 12 years from now.  12 years ago, a 2001 Ford Taurus got 19 mpg combined.  Today, a 2013 Ford Taurus gets 23 mpg combined (and that’s ignoring that there was a massive Taurus redesign after some idiot wunderkind at Ford cancelled it).  The 2001 Toyota Camry 4-cylinder got 24 mpg combined.  The 2013 Toyota Camry 4-cylinder gets 28 mpg combined.

Ford and Toyota both make good cars.  The Taurus with a V6 over 12 years was able to be improved by 4 mpg.  The Camry with a 4-cylinder over 12 years was able to be improved by 4 mpg.  The new demands by government are that they go up to 54.5 mpg.  For the Taurus, that’s requiring an increase of 31.5 mpg – more than double.  For the Camry, that’s requiring an increase of 26.5 mpg – almost double.  And remember again, that’s average economy, so for every fun, desirable vehicle like the Ford Raptor, Toyota FJ, Jeep Wrangler, Ford Mustang, Dodge Challenger or any of the light trucks that are made that get in the teens to 20s for mpg, they’ll have to crank out some ridiculous number of vehicles that get above 55 mpg.

Keep in mind this is the Obama government that declared that we need to be running on biofuels that DO NOT EXIST.  They can make mandates, and when the mandates can’t be met, they impose fines, or seize control.  The objective is to fundamentally transform America, and it’s working.  Auto manufacturers will have to either stop making cars people want, or they’ll have to make the ones the government lets them.

And government-made cars suck.

• Obama said the Affordable Care Act “is helping to slow the growth of health care costs.” It may be helping, but the slower growth for health care spending began in 2009, before the law was enacted, and is due at least partly to the down economy.

Obamacare is a trillion-dollar tax hike.  Those taxes will be passed on to consumers.  We’ve already begun to see it, as businesses like Stryker Medical start cutting jobs; and they will be raising costs.  All those taxes have to come from somewhere.  Obamacare is also scheduled to cost every family about $20,000.

There is nothing there that will “slow the growth of health care costs” under Obama policies unless you have a very fanciful vision of the future… just like the 54.5 mpg cars, magic biofuels, increasing jobs, and recovering economy.

Obama and the Minimum Wage

From the NYT:

WASHINGTON — President Obama called on Congress to raise the federal minimum wage to $9 an hour from $7.25 and to automatically adjust it with inflation, a move aimed at increasing the earnings of millions of cooks, janitors, aides to the elderly and other low-wage workers.

And it will do nothing to help anyone looking for a job.

The White House said that the move would have profoundly positive effects for low-income families without unduly burdening businesses or raising the unemployment rate. It cited research showing “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.”

There are always losses as the cost of hiring employees goes up.  Thus employers hire fewer employees, and employees at entry level don’t get the skills they need to get the next rung up on the ladder.

The White House also pointed to companies like Costco, the retail discount chain, and Stride Rite, a children’s shoe seller, that have previously supported increasing the minimum wage as a way to reduce employee turnover and improve workers’ productivity.

As employers, they can increase wages on their own.  This is what Costco did.

As Costco Senior Vice President Jeff Long said recently in support of increasing New York state’s minimum wage, “At Costco, we know good wages are good business. We keep our overhead low while still paying a starting wage of $11 an hour. Our employees are a big reason why our sales per square foot is almost double that of our nearest competitor. Instead of minimizing wages, we know it’s a lot more profitable for the long term to minimize employee turnover and maximize employee productivity and commitment, product value, customer service and company reputation.”

And they’re also a very large business.  Y’know what a raise in the minimum wage does to them?  Nothing.  Y’know what happens to their competitors?  Their competitors have to spend more on employees.  It creates a barrier to entry.  This prevents their competitors from entering the marketplace with the advantages of being able to hire lower-wage workers.  This prevents unskilled workers from getting a stepping-stone job.

This makes life easier for Costco, who get to increase the expenses of their competitors through governmental fiat.  This is crony capitalism for Costco.

It hurts the people it’s supposed to “help”, driving them to unemployment and dependency on the government and right into the hands of political parties that will give them handouts.  The special interests in this case are the big businesses who benefit from destruction of smaller businesses, and the government officials who benefit from manufacturing more unemployment to create more people dependent on government handouts.

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Gun Panic Economics

From Valley Guns, via TheTruthAboutGuns:

Smith & Wesson: Running at Full capacity making 300+ guns/day, mainly M&P pistols. They are unable to produce any more guns to help with the shortages.

RUGER: Plans to increase from 75% to 100% in the next 90 days.

FNH: Moving from 50% production to 75% by Feb 1st and 100% by March 1.

Remington – Maxed out!

Armalite: Maxed out.

DPMS: Can’t get enough parts to produce any more product.

COLT: Production runs increasing weekly…bottle necked by Bolt carrier’s.

LWRC: Making only black guns, running at full capacity …can’t get enough gun quality steel to make barrels.

Springfield Armory: Only company who can meet demand, but are running 30-45 days behind.

AMMO: Every caliber is now Allocated! We are looking at a nation wide shortage of all calibers over the next 9 months. All plants are producing as much ammo as possible w/ 1 BILLION rounds produced weekly. Most is military followed by L.E. and civilians are third in line. MAGPUL is behind 1 MILLION mags. Do not expect any large quantities of magpul anytime soon.

RELOADERS:

ALL Remington, Winchester, CCI & Federal primers are going to ammo FIRST. There are no extra’s for reloading purposes. It could be 6-9 months b/f things get caught up.

Provided government doesn’t create any more uncertainty in the market, things will be back to normal in 6 months.  If the government starts going after the industry, it’s going to do just what every other industry would, and demand will outpace supply as supply is crushed by dictatorial fiat.

Of course, that’s what would-be tyrants want.

Powerline’s Out of Ammo… Because They Didn’t Buy It Cheap And Stack It Deep

Seems John Hinderaker at Powerline was a bit surprised this week by something he’s already covered.  Recently:

I really, really wanted to shoot today, but wasn’t able to. Why, you might ask? Was I backed up with work? Nope. Did I have a long list of chores to do, to stay in my wife’s good graces? Nope. I was free as a bird. But I couldn’t shoot because, with the exception of 100 rounds of 22LR and the loaded 9 mm magazines that I keep at home for purposes of self-defense, I was out out of ammo.

Nor was I alone. The shelves here in Minnesota are empty.

…

So what is going on? In part, certainly, the perception of a potential shortage due to the policies of the Obama administration has led to the reality of a shortage, as everyone started to stock up. I can understand the mentality: if I wandered into a gun store and found that they had just put 1,000 9 mm rounds on the shelf, I would buy them all. But does that fully explain what is happening?

To a very large degree, yes.  Remember, this is what 1100 rounds of .22s looks like:

A few years ago, each box would run about $10.  Today, they each run about $20.  So altogether, you can pick up 1100 rounds of .22lr for about $40, if you can find it.

1000 rounds of 9mm isn’t that big, either.

That’s 500 there, at about 7-years-ago prices, as compared to a 550 box of .22lr and Indiana Jones.  Just double the stack, and that’s 1100 and 1000 of each.

You can still find a few rounds of .380, .40 and even .45 caliber bullets, along with more exotic varieties, but the most popular ammunition–22LR and 9 mm–is sold out everywhere. The shelves are literally bare. Every now and then someone gets in a small shipment; a friend told me that a local Dick’s Sporting Goods got some 9 mm bullets in yesterday. They were gone almost instantly.

I’ll assume here that he means ammunition where he says bullets, and chalk it up to the desire of English speakers to use different terms rather than repeat the same one over and over again.  There is a difference between a cartridge (round) and a projectile (bullet).  Reloaders are the folks who are running into bullet, powder (to a lesser degree) and primer (to a greater degree) shortages.  Also, this may be a regional shortage, as .45 is by no means unpopular.  .380 ammo was in very high demand over the last few years as Ruger’s LCP took off, driving a large part of the concealed carry market to .380 – and emptying shelves.  .380 is only around now because supply finally caught up with demand.

Hinderaker looks to be an example of one of the awakening gun owners who are just now still realizing the gravity of the situation by the readily apparent economic situation.  A month ago, he said this while writing “Barack Obama, Ammo Salesman“:

There is something seriously wrong when Americans have to stand in line to buy ammo. But I can confirm that the shortage is spreading rapidly. My son and I went shooting at the GanderMountain Store in Lakeville, our usual haunt. I was running a little low on ammunition and thought I would pick up a box of 9 mm ammo on the way in. Forget it. Not a single 9 mm bullet in the store. No 22LR either, if you can imagine that.

Totally can imagine that.  The line is an indicator of the market – and shouldn’t be a surprise.

When we were done I tried the Fleet Farm across the highway, too: not a single 9 mm or 22LR bullet to be had.

Mr. Hinderaker, you know how I know you don’t shoot much?  You went to buy a box.  A box.  Even the biggest box of Winchester white box 9mm is only 100 rounds.  For serious shooters, that’s not much to go through in a very short period of time.  Doing just a few drills will burn through that quick.  It also doesn’t supply you for more than a trip.  Serious shooters know this creed:  Buy it cheap, stack it deep.

You know the second reason I know you don’t shoot much?   You went to Gander Mountain before you went to Fleet Farm.  Unless your local Gander Mountain is an aberration, it probably pales in comparison to Fleet Farm.  Also, in the last month, Mills Fleet Farm went so far as to make a long pro-2A video as an open letter to their government officials from Minnesota.  Given those two choices, I’d always go to Fleet Farm (and have).

That Fleet Farm is out of ammo is a pretty big sign, but it’s also indicative of the customer base.  Folks who go to Fleet Farm already know to buy it cheap and stack it deep.  As one example, Fleet Farm used to (and probably still does, occasionally) carry milsurp rifles like Russian Mosin-Nagants, for which the cheapest ammo can be had by buying Eastern European 440-round tins (spam cans).  If you spend 80 bucks you have enough ammo to last for at least a few trips to the range.  As a non-gun related example, Fleet Farm sells everything from military surplus to snacks in large amounts at cheap prices – and that’s indicative of a more thrifty mindset.  It’s like comparing Sam’s Club or Costco to a corner store – they may have the same product, but one has paper towels in 2-packs, the other in 20-packs at a discount.  Same financial principles apply to ammo.

Most Americans, and certainly Minnesotans, are familiar with this image, and know exactly what to buy the most of:

The issue is that people today are buying cheap and stacking deep – the market for the last decade has taught them.

Folks who’ve been firearms enthusiasts for a long time have their own supply from which to shoot.  That’s why they buy in bulk.  The rest of the nation, seeing that there have been shortages, is now catching on.  You don’t buy 1000 rounds of .45 because you’re going to go fight the Taliban with your 1911.  You buy it because every range trip is 100-200 rounds, and stores don’t always carry ammo.  Metals prices fluctuate, the dollar fluctuates against imported ammo (which can also be outright banned by import restrictions), surplus ammo dries up as supply is exhausted, and inflation drives prices up.  There are other economic factors as well – in the current case, there’s a much, much greater demand than there is supply.  Folks who shoot a lot have seen this in the last decade.

If you scroll back up to that slightly fuzzy image of Indiana Jones on the box of 500 9mm rounds, note the price.  Yes, that says $60 for 500.  That’d be $6/box.  You won’t find that price anymore, not even for cheap Russian Silver Bear.

Dick’s Sporting Goods used to have sales on Remington UMC 9mm ammo – brass cased, quality ammo – for $5/box as late as 2006.   The skyrocketing metals prices of the mid-90s caused ammo to shoot up in price – and anyone who shot a lot, or though they might shoot later in life, even – knew to start buying.  Of course now they’re getting out of the firearm and ammo market as Dick’s has gone limp due to political pressure.

Hinderaker now says he’d buy 1000 rounds if he could find it.  He’s a casual shooter who’s now been taught a harsh lesson by the market.  He gets it now.  His casual attitude towards firearms as something that will always be there has changed with the market.  He’s well on the road to learning to buy it cheap, stack it deep.  Multiply his casual shooter realization times millions of gun owners and yes, you pretty much have the answer for the current ammo shortage.

On a slightly different note, Hinderaker mentioned this a month ago:

So, in our effort to be scrupulously fair to President Obama, we can no longer say that his policies have uniformly been catastrophic for the economy. No: from now on, we must admit that he has been an unprecedented boon to manufacturers of firearms and ammunition.

All Obama’s done is introduce uncertainty into the gun & ammo market.  People are buying because of uncertainty over governmental policies, inflation, metals prices, how international trade will mess with those prices, as well as concern for future governmental interference in the market (in violation of the Second Amendment), and so on.  That massive uncertainty has driven up demand, but also screwed up the supply side of the equation.  Manufacturers aren’t going to go out and start investing in new CNC machinery to provide more capacity.  They don’t know if they’re going to be driven out of business, have the banks they put their money in threatened, or have the banks freeze their assets entirely due to politics.

I know Hinderaker was joking there a bit, but looking at it seriously, it’s not a normal market boom at all.

Hinderaker finishes yesterday’s post with this:

How about the fact that government agencies are buying up billions of rounds? There have been lots of news reports and lots of rumors, but no clear explanation of why the federal government has invested so massively in ammunition–including the most popular civilian calibers–over the last year. One way or another, it seems that there is a story here. But for it to be pursued, we would need “reporters.” Remember them? Nah, that was a bygone era: you probably don’t.

This has been asked and answered a few times.  I’ll go back to my original answer here.  And I addressed the Social Security Adminstration’s ammo purchases here.  For the most part, it’s still the case.  Is it worth asking about, sure?  But is it necessarily sinister, no.  Is it enough to change the market dramatically?  I’d say somewhat, but I doubt it – even government agencies are having a hard time getting ammo, because their budgets are cut back, too.  Contracts made doesn’t necessarily mean contracts filled, either.  And US govt. agencies aren’t buying Wolf’s or Golden/Silver/Brown Bear.

Is there a story there?  Maybe.  Is it just a story of how “buy it cheap, stack it deep” works for everyone?  Probably.

Economic Facts and Fallacies with Thomas Sowell

Another good Hoover Institution video with Thomas Sowell.