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An Avoidable Tragedy

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Whatever your political leanings, the figures are staggering.

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The Cost of Guns

Virginia Tech was the site of a horrible tragedy yesterday.

The deadliest shooting rampage in U.S. history spanned three hours on the University's bucolic campus in Blacksburg. When it was over, 32 people were shot dead, along with the shooter, who ultimately turned the gun on himself. 15 people were injured.

Our thoughts and prayers are with the families, friends, and loved ones of those who perished, as well as those who survived and must now live with the memories of a day they should never have had the terrible misfortune to experience.

  • What we have in a free society is an assumption of personal responsibility.
  • As we all know, "personal responsibility" is an extremely nebulous concept.
  • What's responsible to one may be quite the opposite to another.
  • Is jaywalking "responsible?"
  • Depends on who's doing the jaywalking.
  • Are there cars coming?
  • Will traffic be disrupted?
  • Is it reasonably safe?
  • Is gun ownership "responsible?"
  • Depends on who owns the gun.
  • Is the gun owner trained properly?
  • Does he/she have a history of violent behavior?
  • How can one know?
  • One can't.
  • On January 14, 1999, at the Triad Center Office Building, De-Kieu Duy, a 24-year old woman with a history of mental illness, wounded two people and killed another with a 9 mm pistol.
  • Duy had never owned a gun but was able to pass a background check and purchase one.
  • The previous year, she had been committed to a mental institution by a judge, making her a prohibited purchaser.
  • However, most states do not make such mental health records accessible for the purposes of a background check.
  • Is this "responsible?!?"
  • Wouldn't someone have liked to have known that in 1996 when Duy went to a radio station armed with a knife, looking for a disc jockey she believed was putting voices in her head?


The Profit in Guns

The National Rifle Association estimates there are upwards of 65-70 million privately-owned handguns out of more than 200 million privately-owned firearms in the U.S.

  • That number rises by about 4.5 million each year.
  • There are 65-80 million gun owners in America; 30-35 million own handguns.
  • American households that have firearms: approximately 45%.
  • With 301,631,058 people in this country and about 80 million gun owners, that's 211,631,058 citizens who don't own a firearm.
  • Which is still 0.66 guns for every person.



  • The industry's revenue for the year 2006 was approximately $2,150,000,000.
  • The gross profit was 35.8% at $769,700,000.
  • There were 178 establishments in this industry that year.
  • Thus, average contribution (or revenue) per establishment annually was $12,051,000.
  • Smith & Wesson (SWHC) isn't crying in its beer:



  • Neither is Sturm, Ruger & Company (RGR):



  • On October 26, 2005, President George W. Bush signed into law S. 397, the "Protection of Lawful Commerce in Arms Act" to protect firearms manufacturers from lawsuits.
  • Tom DeLay issued a statement praising the gun bill vote as an important step toward revamping the nation's tort law system.
  • Shortly thereafter, the House passed another tort measure, the so-called "cheeseburger bill," which protects the restaurant industry from obesity-related lawsuits.


The Price We Pay

According to the Brady Campaign to Prevent Gun Violence, when the indirect costs of gun violence –loss of productivity, mental health treatment and rehabilitation, legal and judicial costs-are added to the direct costs, gun violence costs the US at least $100 billion annually.

Whatever your political leanings (mine happen to run straight down the middle), the figures are staggering:

  • In a recent study, the average costs for treating gunshot wounds were $22,400 each for unintentional shootings.
  • $18,400 each for gun-assault injuries.
  • $5,400 each for suicides.
  • Over the course of the lives of gunshot victims, medical treatment alone for each will amount to $1.9 billion.
  • Total estimated direct and indirect costs per incident comes to $2.8 million per firearms fatality.
  • $249,000 per hospitalization for gunshot wounds.
  • $73,000 per emergency room visit and release for gunshot wounds.
  • The annual costs of gun violence in the U.S. have been estimated at between $100 billion and $126 billion.
  • Annual costs.
  • The Government Accountability Office says that in 2006, the annual cost of the war in Iraq was $83.4 billion.
  • We're fighting a war for between $26.6 billion and $42.6 billion less per year than what gun violence costs in this country.
  • Wow.


Who Pays? Who Do You Think Pays?

This is not an abstract idea about "paying the price" in a non-monetized way. We actually do pay.

  • Most victims of gun violence are uninsured.
  • The public pays about 85 percent of their costs.
  • Of victims hospitalized for gunshot wounds in California in 1996, 81 percent were uninsured.


    UnitedHealth Group (UNH)


    Aetna (AET)


    Humana (HUM)

  • But then, why would the insurance companies mind?
  • They're not footing the bill for those who don't use their services.
  • David Kairys, a professor of law at Temple University Law School, was hired by Philadelphia Mayor Ed Rendell to draft a lawsuit against the major gun companies.
  • Kairys conceded that the companies cannot be held liable under current product liability law because, generally speaking, guns are not defective.
  • They work exactly as advertised.
  • Just like cigarettes.
  • They, um…kill you.
  • Instead, Kairys proposed suing the manufacturers for negligence, public nuisance, and fraud.
  • He said the companies created a public nuisance by interfering with the public's
    right to health, safety and peace by funneling handguns to criminals.
  • Kairys cited the rapid-firing Intratec TEC DC-9s, promoted by the manufacturer for its "excellent resistance to fingerprints."


    The Intratec TEC DC-9

  • I dunno…call me crazy, but I have a nagging suspicion that people aren't interested in "excellent resistance to fingerprints" because they dislike cleaning their guns.


A Final Word (Or Two...)

  • Bartenders can be prosecuted for overserving a patron who later commits an alcohol-related crime.
  • In states without Good Samaritan laws, civilian rescuers can be prosecuted if they stop performing CPR on an injured person before a medical doctor has officially pronounced them dead.
  • The NRA spent nearly $11 million lobbying elected and government officials from 1997 to 2003.
  • Gun Owners of America spent more than $18 million on lobbying over the same period.
  • The Brady Campaign to Prevent Gun Violence spent under $2 million on lobbying from 1997 to 2003.
  • The Coalition to Stop Gun Violence spent $580,000.
  • As the saying goes, money talks.
  • People killed by firearms don't.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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