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TAP: High Ammunition Prices Are the Result of a Conspiracy By Monopolists…Or Something

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A photo from The Time Before (Dan Z for TTAG)

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DESPITE ALL THE ISSUES with the small arms market, there are steps that can be taken to help.

As in other industries, the Federal Trade Commission has been lax when it comes to enforcing antitrust regulations, so the FTC must get quicker on the draw. Further consolidation of the market should be stopped, but this does not unwind the last 50 years of mergers, which must be studied and potentially unwound.

The boom-and-bust cycle of ammunition demand, changing with the occupant of the White House, can make consistent production difficult, especially for small companies that may not have enough cash flow to withstand periods of difficulty. But while it is harder to predict, much less control, commercial market whims, the Pentagon can change how and when they want ammo.

The government could set consistent purchase requirements over a period of time, and then ensure that there is enough ammo stored in reserve to absorb any variations. Need more ammo than purchased in a year? Pull the extra out of the reserves. Didn’t use all the ammo that year? Put the extra in storage. The Defense Department could absorb and account for shifting demand instead of the small business, leaving them able to maintain consistent and robust supply chains and production capabilities. The Pentagon could also buy ammunition as futures to smooth the demand signal so that it is more predictable.

The government should methodically support small businesses through reliable contracting to build back a robust industrial base. To encourage this, the government could also split contracts, awarding them to multiple smaller companies, versus huge winner-take-all contracts. This would ensure competition and give smaller companies consistent military demand, and cash flow, to help weather dry spells.

Americans need to get wise to this conspiracy by monopolists. Large corporations line shareholders’ pockets while killing American jobs, costing government resources, and harming national security, in multiple industries, including ammunition. In the name of liberty, let this be the shot heard round the world.

— Elle Ekman in The Great American Ammunition Conspiracy

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