Pulling the trigger: Sellers and shareholders take action on heavy guns
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The announcement Tuesday by private equity firm Cerberus Capital Management that it is selling its share of Freedom Group, the company that makes the Bushmaster semi-automatic rifle used in the Newtown, Conn., school killings, is clear, decisive action in response to last Friday's slaughter. So was the decision by Dick's Sporting Goods to suspend sales of high-powered rifles.
These two responses were rapid and definitive, compared to the mere words offered by America's politicians in the face of the tragedy. The equivocal positions taken by most elected officials have reflected their political calculations to keep both sides of the street happy -- the gun rights advocates and those demanding action after horrific gun assaults -- and to keep flowing the campaign contributions from the National Rifle Association and companies that manufacture the guns.
On Wednesday President Barack Obama said he would propose specific gun control action in January. He also said the nation must "work on making access to mental health care at least as easy as access to guns." In the meantime, he urged Congress to revive the assault weapons ban that ended in 2004, limit high-capacity ammo clips and close the gun show "loophole" that lets buyers get weapons from private dealers without a background check.
The response from various Republicans in the GOP-controlled House was continued opposition to gun limits. Some probably believe that the national furor after Newtown will blow over, as it did after the Aurora, Tucson and Virginia Tech massacres, and that Congress will not be obliged to act.
Another advantage of the actions by Cerberus, backed by the California State Teachers' Retirement System with $750 million in the firm, and Dick's, a company which clearly has a sense of community responsibility for what it sells, is that the moves hit the backers of unfettered gun sales right where they live -- in their profits. Despite the spike in sales of guns and ammunition in the wake of the Connecticut killings, prompted by fears of new limits from government, the prices of shares in companies such as the Freedom Group, Colt Defense, Smith & Wesson and Sturm, Ruger & Co. plunged in recent days.
With 856,000 members, the California teachers' pension fund can bring pressure to bear on such an issue. Other teachers' and pension funds across the country as well as other big stockholder groups may take the same course of action in forcing their fund managers to get rid of stocks in companies that make military-style assault weapons.
Divestment is a decisive, valid response to what has happened. All concerned persons should look at their investment portfolios and consider a similar course.
First Published December 20, 2012 12:00 am