The way I see it, distributing universally needed goods in a crisis is about flattening the distribution of wealth one has vs. amount of goods one can get. Usually competition provides a downward pressure, but I think this fails in times of sudden demand shifts. As long as either the shop or the reseller can expect the demand to be stronger tomorrow than it is today, they have every reason to hold onto their stock and keep rising prices. Eventually, a peak is reached, all those pent-up stock starts getting unloaded on the market, prices go down - but this evolution takes time, and throughout all this, a lot of people cannot afford to buy the good.
So it seems better to me to prevent prices from going up, in order to prevent the least wealthy from being priced out of buying emergency supplies, and at the same time eliminate the main incentive for excessive hoarding: the ability to sell the hoard back later, at a profit.
The price controls actually make the price higher, because then the normal channels run out of supply and if you need it you have to turn to the black market. The black market prices are higher both because the people who didn't need it very much but lucked into official supply weren't deterred by pricing (wasting supply) and because the black market operators can collect a risk premium for breaking the rules.
> As long as either the shop or the reseller can expect the demand to be stronger tomorrow than it is today, they have every reason to hold onto their stock and keep rising prices.
If they expect the price to be higher tomorrow then all they have to do is demand that price today. You can still get it from them.
And that's what you want, because if the shortage is going to get worse rather than better over time then you want the higher prices immediately to induce rationing and avoid an even worse shortage in the near future.
> So it seems better to me to prevent prices from going up, in order to prevent the least wealthy from being priced out of buying emergency supplies
The assumption is that this actually happens.
If the price of a mask triples from $1.50 to $4.50, even someone making minimum wage can afford a mask, or even ten masks, if they really need them. If they don't really need them then they may be deterred by the price, but that's the whole point.
> and at the same time eliminate the main incentive for excessive hoarding: the ability to sell the hoard back later, at a profit.
Which the high prices do by themselves. Paying an extra $30 for ten masks is one thing, but the hoarder who had been intent on buying ten thousand then has to pay a premium of $30,000, which leaves them with all risk and no profit.
That assumes the price is stable or near the peak. But if the price curve is rising, that's no different than a stock that's going up, is it?
You're still buying low and selling high. If the price goes up $10/week for 30 masks, you're making money by hoarding them.
Opportunist speculators who buy up all of supermarket's stock aren't going to be in it for a long term: it's super high risk. They want to buy it cheaper than it should be, and sell for it for what the price should actually be. Holding onto product for long is very risky.
If the store itself is allowed to raise prices then there is no opportunity for profiteering because they'd have to pay the store the market price to begin with. The arbitrage opportunity only exists as a result of the price controls.
> That would just price out anyone without $2k credit.
It would price them out of buying out the whole store, not price them out of buying a few for their own use.