At the end of the summer in 1869, the price of gold began to move upward. Soon all commodities were rising, chasing gold to unprecedented heights. Gold had always been the refuge for investors worried about the stability of the government, and now the process worked in reverse -- the rising price of gold fueled nervousness about the new administration. To pay for the Civil War, the US had issued paper money backed only by the credit of the government. People had placed their faith in the the Grant administration's ability to stand behind those bills, but maybe that had been a mistake. Maybe, having ended the war that would have ripped the nation in half, the expense of that war was going to plunge the whole enterprise into financial collapse.
As gold rose, stocks tumbled. Distrust of paper money grew daily. A ten dollar gold piece cost $13 paper. Then $14. $15. $16. Finally the government had to intervene by opening up the vaults and releasing some of the treasury's own gold to satisfy the market's growing hunger for the yellow metal. And just like that, the gold fever ended.
It ended because it had never been real. Sure, the issuing of credit-backed bills was new, and it planted a seed of doubt, but it wasn't enough to spur the sharp rise in gold... until it was helped.
Two men, Jason "Jay" Gould and "Diamond Jim" Fisk had manipulated the markets, placing large orders for gold specifically to drive the price higher. Why? Railroads. The two men owned railroads. The high price of gold itself had never really been the goal. The goal was to push commodity prices sharply higher right at harvest season and to build distrust. The reasoning was that when farmers in the west suddenly discovered that the wheat and corn in their silos, and the cattle in their fields, were worth much more than they had been at the start of the year, they'd sell. And then all those commodities would need to be moved east. By rail. And it worked.
Up until June of 2000, California had only experienced a handful of widespread power shortages, and those had come at times of peak electrical demand -- in the middle of the hottest days of the summer. Over the next few weeks, that changed. On June 14th, customers in San Francisco Bay area found power going out for minutes or hours due to shortages. Blackouts, "brownouts" and "rolling blackouts" came with greater and greater frequencies, hitting different areas of the state at different times of the day. In a matter of months, the price of electricity was up 30%. Then 50%. The handful of peak demand blackouts that had occurred in the past had been limited to mid-summer, but these shortages continued into the fall. Finally, even in the middle of January when power demands in California were at their lowest, hundreds of thousands were without power day after day.
With the system seeming to be falling apart around them amid accusations of poor planning, failing infrastructure, and impending collapse, people lost faith in the state government. The state itself was forced into buying power at rates much higher than the past, just to fend off disaster. As a result California's budget was pushed deeper into the red and other services were pressured for reductions. The governor not only seemed completely incapable of addressing the crisis, he was. Because there was no solution. Because there was no crisis.
At no time during that period did California's demand for electricity actually outstrip supply. There was no need for any of the blackouts that struck the state, and no justification for the sharp jumps in electrical cost. Like the 1869 gold panic, it was all manipulation by traders such as Enron, who limited capacity on the electrical grid to simulate a shortage. And it worked.
Soon after the election in the fall of 2008, gun dealers across the country saw a sharp uptick in their business. Customers were buying rifles and handgun at an unprecedented pace. Within weeks, many dealers were declaring a shortage of many popular weapons. Prices for guns, both at the dealers and at gun shows, rose quickly. Even on the wholesale market certain guns began to demand a higher premium. Even as the demand for guns was still high, another shortage began -- ammunition.
As the supply of ammunition tightened, gun dealers and owners hoarded the boxes on hand. It didn't matter whether it was .38 caliber or 9mm, the shortage spread across the board. Even .22 rimfire ammunition and shotgun shells ran short. Worried owners put away all they could and called the stores each day, checking to see if any more ammunition had come in. Chain stores like Walmart found men waiting at their doors each morning, ready to check the sporting goods section for any new arrivals. But as demand rose, supply seemed actually to diminish. Stores found themselves able to secure only a fraction of the ammunition that had been available in previous years.
"In our busiest times, we would get shipments in every week," Bales said. "We would get 20 to 30 boxes of ammunition at a time. Now, when we get a shipment it's 10 to 12 boxes."
And, as happens when any item whose supply and demand seem so disconnected, prices are up sharply. The shortage has become so severe that even law enforcement agencies can't find the ammunition they need -- a problem that generates lots of news about the shortage, and drives demand still higher.
But why should the demand for ammunition be suddenly outstripping supply?
Local experts said Wednesday that a fear of a tax on ammunition has led to a shortage of bullets in the Upstate.
Similar motivations have driven the rise in gun sales. A majority of those flooding the dealers since last fall have expressed a desire to get the guns they want, before the government either blocks sales or taxes guns out of reach.
There is no impending bill before Congress that would increase taxes on ammunition or guns. There's been no suggestion from the President of such a move. So why would people believe it?
This weekend, NRA leaders were keen to lay out in stark terms the threat they see in the Obama administration. Gun owners face "the slickest, most aggressive anti-gun White House in history," said CEO Wayne Lapierre.
Other NRA brass predict that the Second Amendment could be repealed within the next five years.
Starting well before the election, the NRA has waged a campaign designed to instill fear in the heart of any gun owner. Throughout the campaign, President Obama made it clear that he was a supporter of individual gun rights. There has been no move to restrict access to guns. In fact, the passage of the new rule allowing loaded weapons into National Parks -- reversing a rule signed by Ronald Reagan -- demonstrates that the gun lobby has the power in Washington not just to hold the line, but extend gun rights in nearly any way they can imagine. Not only that, recent Supreme Court rulings have put gun ownership on more solid Constitutional ground than, well, ever.
The NRA should be celebrating. Instead...
Despite these successes, Mr. Lapierre, the NRA CEO, spoke almost in doomsday terms this weekend about opponents of the Second Amendment. "The bomb is armed and the fuse is lit," he said. "They are going to come at us with everything they've got, and we are going to be ready for them. If they want to fight, we will fight."
As gun rights are victorious in court, as gun ownership clears every hurdle in Congress, and with no prospect of restrictions on the horizon, the NRA is still screaming that the end is nigh.
Why? Because the truth wouldn't cause a panic. Because the truth wouldn't drive up sales. Because the truth wouldn't give the NRA disproportional power. Because the NRA long ago stopped being about protecting the rights of gun owners and became about supporting the gun industry and raising the political power of the NRA in general and Wayne Lapierre in particular. They trumpet bills that long ago died in committee as if they're on the brink of passage. They distort the language and intent of legislation to make it seem as if the smallest changes are sweeping attacks on gun ownership. And when there's no problem -- they just make shit up.
Oh, and back to that ammunition shortage; how odd is it that everyone is not only reporting that not only is demand up, . As for the reason people were buying all that ammo in the first place, the bit about worrying taxes might go up...
That is when ammunition is available. When it is, the price from the distributor is likely higher than usual, and most stores appear to be forwarding the cost increase to customers.
There you go, gun owners. Just think of it as the Unreasonable Fear Tax, brought to you by the fine people at the NRA.
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