Right now, the AR-15, the civilian generic name for weapons related to the Army M16 and M4, is the most popular gun in America. It has its own dedicated gun magazine, Guns & Ammo’s Book of the AR-15. How popular is it? So popular you not only have a hard time getting the guns, you can’t get the parts. Heck, even the manufacturers are hurting for the parts they need to stay in production.
That’s according to a poster at ARFCOM who generated a hasty report on the status of AR-15 parts and components yesterday. “57Strat” wrote the excerpt you see below, and in the thread under him others add some makers (Spike’s Tactical is one) to the list, and many fulminate about profiteering.
Whereupon others step in to provide a B-School-worthy lecture on manufacturing economics. And still others report that manufactures have told them of difficulty securing bolt carrier groups, raw receiver forgings, and both finished barrels and raw steel for barrels.
Bottom line: demand is huge right now, but makers don’t want to, or can’t add capacity (because if you’re still holding the machine lease and employee commitments when the glut is sated, then what?). Many point to the election as the cause of much of the demand, and of the FUD (fear, uncertainty and doubt) that is driving it.
Old-timers remind youngsters what happened to prices and product during the lead-up to and pendency of the Federal 1994-2004 “Assault Weapon” ban. In classical economic terms, prices transcended mere shortage behavior (where scarcity drives prices higher) and formed a bubble (where prices are higher than can be rationally supported, buyers are hoarding, sellers are setting prices they don’t expect to get, etc.)
If there is one Law of Bubbles it is this: they pop.
But right now, the balloon is still going up. And up. And the supply is drying up like a waterhole in the Kalahari, leaving nothing but the bleached bones of buyers who didn’t make their transaction in time. (Excerpt follows. On the original page each line is linked to the vendor websites):
I have never seen it this bad. Check out the “out of stock” situation on the below examples:
- Bravo Company upper receivers. Out of stock on 10 out of 11 uppers.
- Bravo Company complete uppers.
- LMT is 20 weeks backordered on their 16″ upper.
- Most rifles at LMT are backordered up to 20 weeks.
- Rainer Arms is “out of stock” on more than half of their complete upper models.
- Noveske is “out of stock” on nearly every upper they offer.
- Most complete uppers are “out of stock” at DSG Arms.
- AIM “sold out” on uppers.
- AIM “sold out” on complete upper.
This is just a few examples. If you check other sites you’ll find similar situations.
Likewise, prices for other and substitute goods, like parts kits, receivers and incomplete receivers/forgings, are up considerably in a few months, and availability is constrained.
It is impossible to discuss the causes and consequences of this bubble without discussing politics, which we’ll try to do in a nonpartisan, neutral manner (it may not work for us any more than it does for the Washington Post, but we’ll try). The subtext is the general impression, based on passed experience, that Democrats are generally anti-gun and Republicans generally pro. Even the exceptions are either of limited utility (even an anti-gun Republican like the recently defeated Dick Lugar votes to confirm Republican presidents’ generally pro-gun judicial appointees, and even a nominally pro-gun Democrat like Joe Manchin votes to confirm judges with anti-gun views — if they’re fellow Democrats. And “pro-gun Democrats” Manchin and Mark Begich recently put forward a bill that purports to provide concealed-carry reciprocity, but does the opposite).
So the end game for this bubble depends upon what happens in November. If Mr Romney is elected, and Congress is more conservative and more Republican, the ban-fearing public will breathe easier and demand will suddenly relax, unless he pursues gun bans once in office, in which case the ZOMG PANIC!!!1!!11! crowd will be back in full-throated force, and prices will do what prices in panics do. .
If Mr Obama is elected, and/or Congress winds up in Democratic hands, then expect the bubble to initially inflate at a faster rate, until the market prices in what the second-term Obama administration does. If he does nothing, expect the bubble to deflate some, and prices to go soft as buyers who overextended themselves in the buying spree are forced to cash out.
If Washngton launches a round of attacks on gun rights, either by legislation or execive orders or rule-making, the bubble-driven high rate of inflation will continue indefinitely.
Anyway, go to the link and read all pages, and make your own decisions. Hat tip The Firearms Blog.