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Excellent point. What is 3M for example — an American company — doing? Are they attempting to ramp up production in the US or have they determined that it’s not

Excellent point. What is 3M for example — an American company — doing? Are they attempting to ramp up production in the US or have they determined that it’s not feasible because PPE prices are are not permitted to rise because of anti gouging laws?

tinalumfoil 6y ago
The issue is a lot of the factories that make these products are in China. The US has foresight to ensure military supply lines aren't dependent on China, but that foresight didnt extend to medical equipment. There simply isnt the capacity enough masks in the US.
- baybal2 6y ago
  > The US has foresight to ensure military supply lines aren't dependent on China I have to surprise you. A surprising amount of US defence hardware is double digit Chinese BOM.
ardy42 6y ago
The problem isn't anti-gouging laws, it's that medical customers aren't willing to commit to long-term contracts to justify the investment to increase production. https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-i... > ...during an outbreak like this, everybody wants to be [an American mask/respirator maker's] customer. But as soon as an outbreak subsides, his customers dump him and run back to China. The reason? His masks may cost a dime each, but a made-in-China mask might go for two cents. > “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” Also, why would you think anti-gouging laws would be the problem? The only thing raising prices would do is send PPE towards people with money who may or may not have actual need. No one sensible is going to ramp up extra capacity or create stockpiles of perishable goods with the idea that they'd be able to gouge during infrequent, unpredictable crises. The only people that price gouging helps are the parasitic middlemen who make a profit engaging in it, and the fools with money to burn who can't demonstrate priority need.
- bluGill 6y ago
  Gouging helps those who have the foresight to stock up long before. If I knew I could see large amounts of 2 cent masks for $10 every few years I could stock up, and throw away expired masks. Every few years my profit more than makes up for the losses every other year. Of course it is unlikely someone would take the risk, but gouging laws make it impossible.
  - ardy42 6y ago
    I already said gauging helps parasitic middlemen who are just out to make a profit for themselves. It just doesn't do anything to actually help society in a crisis. For every $10 of masks some wannabe gouger was motivated to buy and store in their closest for years, a professional gouger will buy $10,000 worth the day the crisis starts and help hasten the arrival of empty shelves and shortages. Then he'll turn around and ask those who truly need them for $100,000. If he can't sell all his inventory at his markup, he'll just dump the remainder after it's no longer needed for the crisis at the regular market price.
    - dTal 6y ago
      What the "gouger" is doing is correcting a market inefficiency by performing arbitrage through time. In order to turn any sort of profit, they must have more accurate information than the rest of the market. The guy who chooses to buy $10,000 bucks of masks on day 1 of a crisis is sending a message to the market - "I believe that masks are currently undervalued." If they are right, it might indeed hasten the day you can no longer buy the masks at their original, undervalued price. It might also spike demand earlier than it would have spiked, which sends a signal to ramp up production. That is a market correction they are helping to realize. And the result is it prolongs the time you can buy any masks at all, at any price. 1 person snapping up 10,000 masks with intent to sell is better than 100 people snapping up 100 masks each that they intend to stick in their closet "just in case", while people that really need them find empty shelves. Nothing is exempt from market forces. Masks are more valuable now than they used to be, that's just a fact. If you try and hide that fact, you will prolong the shortage and cause more harm than good. If you don't like the idea of the government having to pay more to procure this essential commodity in this time of sudden shortage, the people you should be annoyed with are the ones who depleted the national PPE stockpile in time of plenty, when it existed for this very reason. Don't shoot the messenger.
Thriptic 6y ago
According to anecdata from a friend of mine at 3M, they are running manufacturing 24 hours / day and are expanding. Apparently one of the problems was that when China was infected, 3M depleted a lot of their existing mask stock selling to the Chinese. When the virus came to the US, existing stocks were already somewhat depleted.

tinalumfoil 6y ago

The issue is a lot of the factories that make these products are in China. The US has foresight to ensure military supply lines aren't dependent on China, but that foresight didnt extend to medical equipment. There simply isnt the capacity enough masks in the US.

baybal2 6y ago
> The US has foresight to ensure military supply lines aren't dependent on China I have to surprise you. A surprising amount of US defence hardware is double digit Chinese BOM.

ardy42 6y ago

The problem isn't anti-gouging laws, it's that medical customers aren't willing to commit to long-term contracts to justify the investment to increase production. https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-imagine-that-a-local-business-making-surgical-face-masks-is-working-247-guess-again/ https://www.dallasnews.com/news/watchdog/2020/04/03/if-you-i... > ...during an outbreak like this, everybody wants to be [an American mask/respirator maker's] customer. But as soon as an outbreak subsides, his customers dump him and run back to China. The reason? His masks may cost a dime each, but a made-in-China mask might go for two cents. > “Last time he geared up and went three shifts a day working his tail off,” the mayor recalled. “As soon as the issue died, he didn’t have any sales. He had to pay unemployment for all these people, and he had to gear down.” Also, why would you think anti-gouging laws would be the problem? The only thing raising prices would do is send PPE towards people with money who may or may not have actual need. No one sensible is going to ramp up extra capacity or create stockpiles of perishable goods with the idea that they'd be able to gouge during infrequent, unpredictable crises. The only people that price gouging helps are the parasitic middlemen who make a profit engaging in it, and the fools with money to burn who can't demonstrate priority need.

bluGill 6y ago
Gouging helps those who have the foresight to stock up long before. If I knew I could see large amounts of 2 cent masks for $10 every few years I could stock up, and throw away expired masks. Every few years my profit more than makes up for the losses every other year. Of course it is unlikely someone would take the risk, but gouging laws make it impossible.
- ardy42 6y ago
  I already said gauging helps parasitic middlemen who are just out to make a profit for themselves. It just doesn't do anything to actually help society in a crisis. For every $10 of masks some wannabe gouger was motivated to buy and store in their closest for years, a professional gouger will buy $10,000 worth the day the crisis starts and help hasten the arrival of empty shelves and shortages. Then he'll turn around and ask those who truly need them for $100,000. If he can't sell all his inventory at his markup, he'll just dump the remainder after it's no longer needed for the crisis at the regular market price.
  - dTal 6y ago
    What the "gouger" is doing is correcting a market inefficiency by performing arbitrage through time. In order to turn any sort of profit, they must have more accurate information than the rest of the market. The guy who chooses to buy $10,000 bucks of masks on day 1 of a crisis is sending a message to the market - "I believe that masks are currently undervalued." If they are right, it might indeed hasten the day you can no longer buy the masks at their original, undervalued price. It might also spike demand earlier than it would have spiked, which sends a signal to ramp up production. That is a market correction they are helping to realize. And the result is it prolongs the time you can buy any masks at all, at any price. 1 person snapping up 10,000 masks with intent to sell is better than 100 people snapping up 100 masks each that they intend to stick in their closet "just in case", while people that really need them find empty shelves. Nothing is exempt from market forces. Masks are more valuable now than they used to be, that's just a fact. If you try and hide that fact, you will prolong the shortage and cause more harm than good. If you don't like the idea of the government having to pay more to procure this essential commodity in this time of sudden shortage, the people you should be annoyed with are the ones who depleted the national PPE stockpile in time of plenty, when it existed for this very reason. Don't shoot the messenger.

Thriptic 6y ago

According to anecdata from a friend of mine at 3M, they are running manufacturing 24 hours / day and are expanding. Apparently one of the problems was that when China was infected, 3M depleted a lot of their existing mask stock selling to the Chinese. When the virus came to the US, existing stocks were already somewhat depleted.