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As is often the case, the problem is millions of millionaires instead of a handful of billionaires.

There are 18.6 million millionaires in the US. If each of them bought 10 n95 masks just in case, or for themselves + family + friends, that's 186 million masks. They could easily pay $20 / mask (that's only $200 per millionaire), which would significantly push up the cost to hospitals of acquiring masks.

Hospitals might not even be able to afford the masks they need. They are having budget shortfalls due to the ban on elective surgery. Cuomo was complaining about paying $7/mask, and NY state is going to have budget shortfalls as well due to the recession.

But then you're still expecting something implausible to happen, because everybody knows there is a shortage of masks and they're needed by healthcare workers, so the chances that 100% of millionaires will disregard that and buy masks they don't need is negligible.

I guess you disregard the nature of millionaires :-D

The majority of millionaires in the US are ordinary retirees who fully own their homes and have a decent amount in their 401k

I'm not sure what that has to do with them not buying masks

Except that has never happened.

That is absolutely factually wrong. Mask prices on Amazon were already inflated back in February, and stocks were already very low.

But the most annoying thing about this thread is how it has turned into some kind of let's-forecast-the-markets game, instead of dealing with the underlying reality - that the markets failed to provide an essential good when it was needed, resulting in a significant number of avoidable deaths.

There should be a special word for the moral delusion that markets exist in an abstract philosophical vacuum and price signals are somehow more important than people's lives.

> Mask prices on Amazon were already inflated back in February, and stocks were already very low.

Please cite evidence that this was "millions of millionaires" buying masks.

When an oil refinery blows up and gas prices rise, that isn't evidence of millionaires hoarding, either. It's evidence of supply and demand at work.

You're talking about $200 per person. This isn't even "millions of millionaires" territory. This is "most of the middle class of a country of 300 million people".

> There should be a special word for the moral delusion that markets exist in an abstract philosophical vacuum and price signals are somehow more important than people's lives.

From my perspective, there should be some word for the delusion that equitable distribution of a smaller, price-fixed supply is better than prioritized distribution of a larger, price-gouging supply. The lack of masks that not allowing higher prices causes is going to kill people, and you want to restrict the supply available to everyone in order to not be unfair to the poor?

In an abstract philosophical vacuum, where manufacturers can instantaneously increase production of arbitrary goods to an arbitrary extent, such an argument makes sense.

In the real world, which recently has provided an ample sufficiency of evidence that manufacturers can do no such thing because the process depends on specialized machinery that takes considerable time to manufacture in its own right, such an argument can most kindly be described as struggling to achieve relevance.

Somewhat less kindly, one might note that such an argument equates to saying that, well, actually you can produce a baby in one month by getting nine women pregnant, as long as you pay all the women enough.

Manufacturers could have bought a lot of extra machinery knowing it's hardly ever needed, but they didn't. Why? During a crisis it's illegal to raise prices enough to fully pay off all that machinery.

The price is not limited right now, and yet production is barely ramping

Ooh, that's a good point. I think of it as related to free-market fundamentalism, but it deserves a word on its own.

I agree with you and would add that it's not just millionaires. People on median incomes are buying masks at these inflated prices from profiteers, so the market is massively inflated.

> nobody would be buying a million masks to hoard in a bunker right now.

No, that's correct, because you can't (profitably) buy a million masks to hoard them right now.

If you'd done it on January 1 though, you'd have been able to buy as many masks as you liked.

Selling them now? Is this the height of the crisis? Perhaps.

> Real people don't behave like this.

They do, but most people don't have millions of dollars to fuck around with.

But if they think they can make a quick buck, they'll happily empty shelves in the local stores of masks, hand sanitiser, toilet paper, etc, and then turn around and try selling it on for a huge markup.

This is why I've not seen a roll of toilet paper on shelves in my local supermarkets or stores for three months now. Nor a bottle of hand santitiser, nor masks of any kind. But hey, I jump on local buy&sell sites and there's heaps of it there, at 10-100x markups.

For most of these folks, it is/was fairly low risk - they had the free cash, and they thought they could always return it. Some of them are stuck with supplies they now can't sell on, or return - so they now have a few years worth of toilet paper and hand sanitiser, but hey - it's not a huge loss for them.

> This is why I've not seen a roll of toilet paper on shelves in my local supermarkets or stores for three months now

Three months ago was January 14th. Perhaps you are being a mite hyperbolic?

Maybe they were, a little bit. Two and a half months ago it was becoming obvious it's going to be a problem.

Sorry, yes. It just feels like three months.

Mid February is when Toilet Paper, Kitchen Towels, Facial Tissues, and Hand Sanitiser disappeared. My understanding is that masks went earlier, but I don't have direct knowledge of those.

There were no purchase limits then, and now every time they're restocked there's a pile of people buying up every single one of them in record time. There's video from my local supermarket of a whole pallet stacked high with toiletpaper being delivered, and disappearing in minutes.

> This is why I've not seen a roll of toilet paper on shelves in my local supermarkets or stores for three months now.

Whereas my local Costco has had continuous stock of massive piles of toilet paper available for over 2 weeks now. That's an arbitrage opportunity that's not being exploited because of the difficulty travelling.

The assumption here is that 'doctor's offices' have that kind of cash to throw around? I'm wracking my brain trying to understand who these mythical doctors are who need masks more than hospitals which are the actual front lines of treating COVID-19 and are alarmingly low on PPE.

Some doctors treat COVID-19 patients. If they have no PPE, they're more likely to get infected themselves and pass the virus to their other patients. Or they can outbid some hypochondriacs.

Sounds like a wonderful system!

> And willingness to pay is a pretty good proxy when marginal utility falls off pretty quickly with quantity.

I don't understand why people aren't talking about how disposable PPE defies this point at the low end. Hoarding a million masks doesn't make you better off than buying a thousand, but buying ten N95 masks is as good as buying zero. Masks, gloves, even hand sanitizer are consumables, so getting a little bit of them for everyone is as good as just throwing them into a hole and setting on fire. They work only when concentrated in bulk. Like a thousand of masks per household, or a million per hospital. Enough hand sanitizer that you can actually disinfect your hands every time you accidentally touch something outside. Etc.

Probably because despite how the media is portraying things, people are concerned and can actually act out of altruism. Plus, individuals who are practicing social distancing probably don't need to go through PPE like you would in an intensive care ward.

I'm in China and have sold over 30,000 masks to the US (not for profit, but I don't have the cash to just donate them). We've sold to hundreds of different individuals at this point, and none of them are using the buying patterns you describe. The only people buying more than a hundred or so are buying for employees, hospitals, or doing a good job of lying about their intentions. Everyone is buying just a few and making them last.

So far I've personally taken one 10-pack of KN95s from our stock (of which I use 4 so far, on rotation. the other 6 are still in the pack), and about 5 surgical masks. There are strategies for extending the life if you do a little research.

The vast majority of regular people just aren't currently using PPE in the way you describe. After reading up on it, personally I think there's a useful middle ground between throwing away masks like you would in an ICU and completely doing without.

Sanitizer and gloves I know less about. But we do sell gloves and nobody is ordering more than a few boxes of those, either.

Citizens shouldn't be buying gloves at all - they're close to completely useless. What's on your gloves...stays on your gloves and promptly travels to everything you touch. SARS-CoV-2 doesn't penetrate the skin. You'd be ubiquitously better off using hand sanitizer.

s/hand sanitizer/soap/g

> but buying ten N95 masks is as good as buying zero

Depends on the situation. N95 masks can be decontaminated and reused pretty easily (IIRC 150C for 10 minutes). If you're only using them once or twice per week, letting the mask sit for 3-4 days is enough for most of the viral material to be destroyed by exposure to the normal environment.

My hyperbole aside, real people do behave like this. Look at the guys buying up all the hand sanitizer. Look at all the hoarding and panic buying that went on. It's 18 months or so before we get a vaccine. There's plenty of incentive to hoard PPE.

And even taking your clinic example, you see the same issues there. If rich clinics outbid poor clinics for a limited supply, we'll see rich places stocking up and poor places going without.

> My hyperbole aside, real people do behave like this. Look at the guys buying up all the hand sanitizer. Look at all the hoarding and panic buying that went on.

But then they're not price-insensitive billionaires, so if the price goes up it deters them from hoarding (and gives them a financial motive to unload their existing hoard), which is exactly what you want.

> It's 18 months or so before we get a vaccine. There's plenty of incentive to hoard PPE.

It's 18 months or so before we get a vaccine, but not before anybody can start manufacturing more PPE, which is already starting to happen and will only increase if demand doesn't subside. And if demand does subside, same result.

> If rich clinics outbid poor clinics for a limited supply, we'll see rich places stocking up and poor places going without.

What allocation process are you proposing that would avoid things like that happening? The same one we use to allocate tax dollars to bailouts doesn't feel like a strong candidate.

Panic buying is definitionally price insensitivity. You can also look at people like preppers, who consider hoarding a positive virtue. Despite a spike in demand, they won't be arbitraging. These are common human behaviors in a crisis.

> but not before anybody can start manufacturing more PPE

I think you really aren't coming to grips with how people think and behave differently in crises. Possibly having more PPE in a few months is only valuable for reducing hoarding and profiteering now to the extent that people are confident that will happen.

> What allocation process are you proposing that would avoid things like that happening?

Letting local and state public health officials allocate scarce medical supplies is the obvious start. Point-of-sale purchase controls are another one that's easy to implement. In the long term, transparent rationing where needed. Fining, arresting, and imprisoning disaster profiteers are all excellent options when it's severe.