Why is a market behaving in an efficient manner a weird situation to you? Lower prices for consumers and faster job completion is good for everyone. Use regulation to fix the safety issues and protect workers from exploitation.
Low barrier to entry means if prices rise, more people join the industry and drive prices down again. When overtime and overworking becomes too much, people exit or don't join and prices rise.
The white lie didn't stop profiteering, it was transparent for anyone watching with their eyes open and only made hoarding worse.
Telling the truth would have resulted in far less supply shocks, instead, half the population willfully ignored the obvious lie by putting their heads in the sand and the other half ratcheted up their preparedness (because the govt clearly lying about everything at this point)