So, we know that Trump doesn’t want to implement a national plan to buy anything related to the pandemic. Let me explain just how mind-numbingly stupid this is.
Let’s assume that product X costs $1/unit with a 20% profit margin. Suddenly this product is in demand big time. As in, people can’t seem to live without it. Let’s also assume there are two ways to procure this item.
1.) In situation 1, there are 50 potential buyers, all of whom are now bidding for the product. So a manufacturer can say to 1 of the 50, “thanks for offering to buy my product at $1. But I’ve got 49 other people who want to buy it. And they want to pay more. So, why don’t you up the bid?” What is the bidder going to do? He really needs the product — as in, his life depends on it. So he offers $1.10. Then the manufacturer goes to the next bidder and says, “I’d really like to sell it to you at $1/unit. But I’ve got a guy that wants to pay $1.10/unit. What am I supposed to do — not take that offer?” Multiply this process through half a million calls and emails, and you can see that prices will hit sky-high levels.
2.) In situation 2, one bidder represents the 50 bidders from example 1. We’ll call him, “Big Bidder” or BB. BB says to the first manufacturer, “I represent a HUGE buy for you. I mean — it’s probably the biggest order that you’ll ever see. You’ll be making more product than you knew existed. But, because I’m going to be bringing you a ton of business, I’m expecting you to cut me a favor on price. If you don’t, I’ll take my mammoth order and make another manufacturer rich.”
Notice the difference in the balance of negotiating power? In situation 1, the manufacturers are in control. In situation 2, it’s the buyer. In situation 2, BB keeps the price lower.
Folks, this isn’t rocket science. It’s actually pretty easy to comprehend. Which is also why it’s beyond the average Republican’s ability to understand.