Some investors make a point about guns
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The irony is brutal: Public schoolteachers' pensions have been heavily invested in the maker of .223 Bushmaster rifles like the one used to kill 20 elementary school children and six teachers in Newtown, Conn.
That was reported by Fortune magazine Monday. By Tuesday, these pension funds -- including the Pennsylvania Public School Employee Retirement System -- were able to say they won't be investing in high-powered rifles anymore.
There is huge money in guns. So it should be no real surprise that Pennsylvania teachers had an $8.2 million stake in the Freedom Group, a private firearms conglomerate that was set up by the equity and hedge fund group Cerberus Capital Management. Pennsylvania teachers got into semi-automatic weaponry through Cerberus but were relatively small players. California teachers had a $500 million stake in the fund that helped bankroll Freedom Group, according to Fortune.
The Pennsylvania fund contacted Cerberus on Monday to express concern over its investment in the Freedom Group. After that contact, Cerberus announced it would sell its interest in the Freedom Group, and "PSERS appreciates Cerberus' quick response and will continue to monitor this matter," the pension fund announced late Tuesday.
Cerberus, in Greek mythology, is the three-headed dog that guards the entrance to hell. In the real world, Cerberus has been a smart investor. This time, though, it's getting out while the getting's bad. Stock prices for gunmakers are sinking. Fortune writer Dan Primack guessed that a foreign firearms company should be able to buy Freedom Group at a steep discount.
So does Cerberus' change of heart mean anything? Mr. Primack opined that, "If a schoolteachers union or university endowment or nonprofit foundation truly cares about stopping the next mass killing, then they should not provide capital that produces the instruments of such destruction."
Fair enough, but we also shouldn't kid ourselves. The capital for firearms will be found somewhere. One online critic predicted "zero impact" from such divestitures, saying the company was worth a certain amount and someone "will always be willing to pay that fair value. Changing the mix of investors does nothing to change the end result."
In other words, be wary of cosmetic fixes. That might also serve as fair warning for the oncoming congressional debate about gun control. We need to be wary of any quick fix that does little to stem gun violence.
The good news is that legislators who know guns, who own guns, and who are fully conscious of Americans' constitutional right to bear arms are entering the debate in a serious way. Among them is U.S. Sen. Joe Manchin, the West Virginia Democrat whose campaign commercials in 2010 showed him using cap-and-trade legislation as a rifle target.
Mr. Manchin would include National Rifle Association leaders in the discussion, but says "everything should be on the table." In the House, U.S. Rep. Mike Thompson, a hunter and a wounded Vietnam veteran, will lead a Democratic task force on gun violence.
"Gun owners and hunters across this country have every right to own legitimate guns for legitimate purposes," Mr. Thompson said. "We are not going to take law-abiding citizens' guns away from them."
Nobody should want the government alone to have all the guns, but that doesn't mean the status quo should remain. Our Second Amendment, which is more often quoted in part than in full, says, "A well-regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed." It does not say, "People shall be able to have whatever guns they want, and how many they want, wherever and whenever they want them."
Because of Friday's horror at Sandy Hook Elementary School, the semi-automatics widely known as "assault weapons" are in the forefront of the gun debate. But even if they are banned -- as they were between 1994 and 2004 -- that would hardly dent the problem of gun violence.
America also needs to address the gun-show loophole that allows people to buy guns from private dealers without a background check. We need to examine the link that mass shootings have with mental illness. Pittsburghers should recall that John Shick, who had been previously committed to a mental health institution, used guns he bought from a guy in an Albuquerque, N.M., parking lot to kill Michael Schaab and wound five others at Western Psychiatric Institute and Clinic on March 8. That sale was legal.
It doesn't matter so much who's invested in guns. It matters very much that all parties be invested in real solutions to rampant murder.
First Published December 20, 2012 12:00 am