3 ms·

What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due t

What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating? I'm all for market efficiency, but the real world works differently than text books.

adventured 7y ago
I generally agree, and I'm very much in favor of market based economies. There is nothing wrong with France doing what is necessary toward production, during such an extreme event. The US extending massive credit to businesses, bailing out the airlines (coming), bailing out Boeing (coming), and the 407 other bailouts yet to come, are all variations of immense state intervention into the economy, due to a force of nature event. They're also necessary, as the alternative is a much harder reboot with dramatically more damage. You can let a few companies fail in a normal recession, if we let everything go here, the unnecessary economic damage will be measured in the $10 trillion type range. And some of it we may never get back (eg letting Boeing fall down now, they might never get back up, given China is absolutely coming online in the next 10-20 years with competitive planes).
solotronics 7y ago
An American example is: A company outsourced all its production over the last few years to China. With the global pandemic production of the goods in China came to a halt. The company experiences a crash due to their inability to get the goods from China. In its place competitors who kept production domestic but who had higher production costs would now rise to the top. If you "bail out" every bad company you distort the market completely and reward non-efficient behavior.
- stallmanite 7y ago
  But the competitors who kept production domestic went out of business several decades ago. So where does that leave us in practice?
  - pbhjpbhj 7y ago
    Not all of the domestic businesses? You need to ensure they now get their reward for that choice, otherwise you're rewarding taking the wrong decisions (for resilience) and then you're paying more to have a less optimal system. In a way, the companies making essentials that aren't struggling right now are the ones you should be supporting .. but we have to address the crises at hand first.
csomar 7y ago
> What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating? The economy restructures itself to be more resilient to such events? The coronavirus is not even close to the smallpox which has been circulating for much of humans history. Companies/Economy should be able to withstand such events.
- rumanator 7y ago
  > The economy restructures itself to be more resilient to such events? That's the kind of stuff that only exists in textbooks. In the real world you just get important parts of your economy be controlled by foreign corporations. > The coronavirus is not even close to the smallpox That's entirely irrelevant. We're talking about a disruptive event to an economy. It makes absolutely no difference if you can imagine worse events or diseases if we're discussing stuff regarding the economy.

adventured 7y ago

I generally agree, and I'm very much in favor of market based economies. There is nothing wrong with France doing what is necessary toward production, during such an extreme event. The US extending massive credit to businesses, bailing out the airlines (coming), bailing out Boeing (coming), and the 407 other bailouts yet to come, are all variations of immense state intervention into the economy, due to a force of nature event. They're also necessary, as the alternative is a much harder reboot with dramatically more damage. You can let a few companies fail in a normal recession, if we let everything go here, the unnecessary economic damage will be measured in the $10 trillion type range. And some of it we may never get back (eg letting Boeing fall down now, they might never get back up, given China is absolutely coming online in the next 10-20 years with competitive planes).

solotronics 7y ago

An American example is: A company outsourced all its production over the last few years to China. With the global pandemic production of the goods in China came to a halt. The company experiences a crash due to their inability to get the goods from China. In its place competitors who kept production domestic but who had higher production costs would now rise to the top. If you "bail out" every bad company you distort the market completely and reward non-efficient behavior.

stallmanite 7y ago
But the competitors who kept production domestic went out of business several decades ago. So where does that leave us in practice?
- pbhjpbhj 7y ago
  Not all of the domestic businesses? You need to ensure they now get their reward for that choice, otherwise you're rewarding taking the wrong decisions (for resilience) and then you're paying more to have a less optimal system. In a way, the companies making essentials that aren't struggling right now are the ones you should be supporting .. but we have to address the crises at hand first.

csomar 7y ago

> What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating? The economy restructures itself to be more resilient to such events? The coronavirus is not even close to the smallpox which has been circulating for much of humans history. Companies/Economy should be able to withstand such events.

rumanator 7y ago
> The economy restructures itself to be more resilient to such events? That's the kind of stuff that only exists in textbooks. In the real world you just get important parts of your economy be controlled by foreign corporations. > The coronavirus is not even close to the smallpox That's entirely irrelevant. We're talking about a disruptive event to an economy. It makes absolutely no difference if you can imagine worse events or diseases if we're discussing stuff regarding the economy.