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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 cam
by 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 agoBut the competitors who kept production domestic went out of business several decades ago. So where does that leave us in practice?
- pbhjpbhj 7y agoNot 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.