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I have no comment on this specific case, but in general: all of those things—all government interventions that ostensibly protect an industry or company—make it
by abtinf 3y ago
I have no comment on this specific case, but in general: all of those things—all government interventions that ostensibly protect an industry or company—make it more brittle, less efficient, and more likely to fail. That is precisely the point.
You can’t build a successful business by ignoring reality.
- AYBABTME 3y agoAt the same time some industries and their major businesses are strategically important enough to warrant government support.
- verdverm 3y agoThe gov't might support an industry, but it should not pick winners in it. Look at what's happening to GM, called Government Motors when they were bailed out, they seem to be headed down the same path US Steel is. Their thinking is broken
- zbyte64 3y agoAre you saying GM's thinking is broken or the governments? GM did what was in their own best interests, the other was to declare bankruptcy - what company would have chosen different?
- verdverm 3y agoGM's thinking, not from the bailout, that is probably more a symptom but look at the recent decisions that led to - recent statements about EVs - the Cruise debacle - deciding not to allow Apple/Google car infotainment systems and opting for a homegrown solution, despite consumers repeatedly stating they want the system that aligns with their phone They aren't listening and management seems to think they know better
- FredPret 3y agoDefense companies are squarely in the "national interest" bracket. I think steel should be as well, though it's more of a grey area since they also supply civilian demand for steel whereas no-one's buying an F-35 for their personal use (right?!)
- abtinf 3y agoThis has been covered extensively elsewhere, even in 101 level macroecon courses. Literally the worst method of protecting “strategic” supplies is to subsidize the industry producing them.
- AYBABTME 3y agoSupport means more than just subsidies.
- Der_Einzige 3y ago[flagged]
- claytongulick 3y ago> You can’t build a successful business by ignoring reality. True, at least in the long term. However some of those government interventions are an attempt to balance out other government interventions. Sometimes tariffs are a response to a foreign government subsidizing a company in order to undercut a market and destroy dominant players.