The gun explosion: why the firearms boom is good news for the American economy.

• Author: Beato, Greg
• Position: Columns - Column

IN A FEBRUARY 2012 fund-raising appearance, President Barack Obama expressed his desire to keep America's assembly lines humming. "I want to make sure the next generation of manufacturing isn't taking root just in Asia or Europe," he told a crowd of supporters. "I want it taking root in factories in Detroit and Pittsburgh and Cleveland and California.... I want to reward companies that are investing here in the United States and creating jobs all throughout this country." Perhaps because the president was speaking in San Francisco, where most of the local factories had long ago been converted into luxury condos for venture capitalists and software designers, he was short on specifics. Or maybe he just couldn't think of any American manufacturing industries that still seemed salvageable.

Two weeks earlier, however, a federal agency had released a report that suggested at least one component of the manufacturing sector was not only still making stuff in Detroit, Pittsburgh, Cleveland, California, and thousands of other places in America, but making more of it than it had in decades. According to the "Annual Firearms Production and Export Report" from the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATFE), American manufacturers produced 5,459,240 handguns, rifles, shotguns, and miscellaneous ordnance in 2010. (To comply with the Trade Secrets Act, the BATFE waits one year to publish these data; numbers for 2010 therefore are not published until January 2012.) It was the second year in a row the industry had attained numbers not seen since the glory days of the late Carter administration.

A little more than a decade ago, the domestic firearms industry was staggering like a villain on the wrong side of Dirty Harry's .357 Magnum. "The future has never been more uncertain for America's oldest manufacturing industry," a Businessweek cover story reported in 1999. Flat sales, the specter of more stringent regulation, and dozens of lawsuits filed by cities and counties seeking damages for the costs associated with gun violence threatened to destroy a uniquely American business. U.S. companies were going bankrupt, foreign competitors were claiming a bigger piece of the action, and even industry executives were expecting the market to "steadily shrink over the long term."

Yet here it is, 13 years later, well into America's great manufacturing exodus and the post-financial-crisis economic slump, and the domestic firearms industry is enjoying...