Economic guru Ron Insana says investors should strike back at firearms manufacturers and call for gun makers to be held accountable, and legally liable, for every massacre caused by their weapons.
“It would seem that the time for polite debate about gun control is over,” Insana wrote in a blog for CNBC.
“We need a much more radical approach to the problems of guns in America.”
Investors could, and should, make a pivotal difference in the debate, the CNBC and MSNBC contributor explained.
"Impact investors," formerly known as "socially responsible investors," should wage proxy wars to alter the business plans of gun manufacturers, Insana urged.
“Certainly, gun makers should have every right to supply the armed forces, police departments and other special forces the equipment they need to protect civilians,” Insana wrote.
“But investors should challenge these merchants of death. They have done so with other so-called sin stocks, like tobacco and alcohol companies,” Insana wrote.
“They have fought the actions of large corporate polluters or companies whose carbon footprints are unreasonably large. They have brought about positive changes by being true activist investors, not angling for some financially engineered profit, but by making companies more accountable,” Insana wrote.
“Gun makers, as tobacco companies have been, should be held accountable, and legally liable, for the mass casualties that their products are responsible for, with severe penalties, class-action lawsuits and other disincentives awaiting them at every turn,” the author of four books on Wall Street explained.
To be sure, deadly public mass shootings do sway the stock prices.
The grim predictability of stock-market reactions to U.S. mass shootings—where before a final tally of casualties can be reached, shares of gun makers rise—continued Monday in the wake of a Las Vegas attack that killed at least 59 and wounded more than 500, Bloomberg reported.
Historically, gun stocks have experienced a bump after a mass shooting for reasons both political and emotional. Gun sales typically rise over concerns that a deadly event could lead to more stringent gun-control legislation. An additional driver of sales, and by extension shares, is the rush by some consumers to purchase guns to defend against future attacks.
As news of the attack spread, firearm-related stocks began to rise. Following the Pulse nightclub shooting in Orlando, Fla., last summer, which left dozens dead, Sturm Ruger and Smith & Wesson saw stock prices increase. The same phenomenon occurred after the San Bernardino, Calif. shooting in late 2015, which left 14 dead.
In the past, gun rights supporters and organizations such as the National Rifle Association have warned of future regulatory efforts Democratic administrations may try to impose using a mass shooting as justification. This pattern continued throughout the Obama administration, even when the Democratic Party lost control of the House and Senate. Things could turn out differently, however, now that Republicans control the White House and both houses of Congress.
Gun makers have made it clear they see a connection between the partisan politics, high-profile shootings, and their business.
“Concerns about presidential, congressional, and state elections and legislature and policy shifts resulting from those elections can affect the demand for our products. In addition, speculation surrounding increased gun control at the federal, state, and local level and heightened fears of terrorism and crime can affect consumer demand,” American Outdoor Brands wrote in its annual report this year, citing the “impact of news events, including terrorism” on gun buying habits.
Political change can have an adverse effect on gun stocks, too. After the 2016 election of Donald Trump, who has espoused less-strict gun control policies than those of his Democratic predecessor, gun stocks sank. American Outdoor Brands has seen a double digit stock decline in the months since the presidential election.
(Newsmax wire services, Reuters and Bloomberg news contributed to this report).
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