They're screwed up because of wealth inequality and rent seeking.
Essentially they're screwed up because American union power was destroyed by oligarchs and blue collar workers subsequently lost political representation.
"Everything bad is caused by government regulations!" was a story told repeatedly in many different forms by lavishly funded Koch think tanks (mercatus, which you cited, being just one example) and filtered through other oligarch run mainstream media outlets.
It was inspiredly largely by their battles with their nemesis - the EPA in the 70s/80s and was largely successful at promoting the "overregulation = bad" meme amongst the American proletariat. This was subsequently leveraged by Koch-funded politicians to democratically strip EPA regulations on their behalf.
> "Everything bad is caused by government regulations!"
Who said that? I mentioned two things that are bad because of regulations. But that doesn't mean that regulation is to blame for everything that's bad. Eg try as they may, regulation isn't what's keeping me from running 100m in 10s.
> Essentially they're screwed up because American union power was destroyed by oligarchs and blue collar workers subsequently lost political representation.
Huh? American auto union just got the fisc to pay them about four thousand dollars per electric car they make. I'm not sure how they lost political representation.
For medical care: 1970s style medical care is basically outlawed today, and there's lots of regulation. Eg if you want to open a new hospital, the existing hospital in your area that you would compete with have veto rights, and use them. See eg https://slatestarcodex.com/2017/02/09/considerations-on-cost... or look for 'Certificate of Need' in https://slatestarcodex.com/2016/12/04/highlights-from-the-co...
For housing: see eg https://www.mercatus.org/publications/monetary-policy/shut-o...
Basically, building houses used to be legal in the 1970s. Now it's illegal in many parts of the US.