Re:Economists who defend disaster profiteers are wrong
by wpietri on Tuesday April 14, 2020 @10:49AM
(#22866690)
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.
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.