What happened in 2020 when COVID hit will probably go down as of the greatest examples in US history of market regulation failure.
When Covid-19 first struck the US and the country began going into shutdown, Companies, importers, businesses, and manufacturers were making and bringing in masks by the millions. And millions of frontline workers and healthcare professionals were badly in need of them.
But there was one problem: every online business in America banned their sale. Amazon, Ebay, Mercari, Offerup and Facebook marketplace all prohibited attempts at selling them. Sellers by the thousands tried constantly to sell the much needed PPE gear online. Buyers working in hospitals and wearing stockings or homemade masks made from clothing articles would attempt to buy them. And then tech giants would ban hammer the listings before anything could be purchased.
The problem was exasperated by government municipalities passing laws banning “price gouging.” And so while international prices of raw material to make mask and PPE soared, importers were afraid of even bringing any into the country. If a mask cost $0.02 to the importer before the pandemic and was sold at $0.10, now the mask could cost as much as $0.70 a piece to the importer. Any price the companies could have sold masks for would be considered price gouging, so there was no longer an incentive to. Worse still, there was no market available to sell them on.
Today, most of those sites still have policies in place banning PPE. Fortunately the supply has caught up to demand, but there is now still massive backlogs of masks, gloves, and medical supplies that are unable to be effectively put on the market, and keep prices today higher than they should be. The lesson we all learned from covid should be loud and clear.