In military strategy, there is a principle of reinforcing success.
To follow this, if an element of your forces is doing well you will reinforce that element to enable a victory. For instance, if some of your troops are defeating the enemy in a certain sector of battle, you will send in more troops in that sector to ensure a breakthrough or a victory.
On the other hand, if you are being defeated in a certain area, it is often wise to retreat from that area so you can reinforce the areas that are having success and minimize the losses to the troops facing defeat.
Nationally we have recently applied bailout strategies to certain parts of our economy. My concern is that they are not parts of our economy that will be successful, even with the bailout.
The auto industry, for example. Or perhaps I should say the American owned original auto makers in Detroit. They have showed no signs of being successful in their practices. Well, that is not entirely accurate. They sell plenty of cars. How they are able to do this without making a profit is beyond me. But, there are no signs that they will become a profitable part of our economy if we only prop them up one more time.
There are other auto makers in our country that do well. They employ a good number of us, make cars that people ask for, sell them at more reasonable prices* and make a profit. Maybe we should give them money to do more of the same.
* I have to say "more reasonable" because I think cars are overpriced. Much like the sub-prime mortgage stuff, the prices have become inflated because credit is available for everyone to buy a car at pretty much any price.
1 comment:
I have heard that much of the "over-pricedness" of cars comes not only from the union contracts, but also from the taxes and regulations the government puts on the auto industry.
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