This is a frequently repeated mantra I see from talking heads and on social media. But is it true?
Let’s reframe the question in a a different context. Is it “crucial” for you to not default on the mortgage for your house? That might be crucial to you personally, but it is not crucial to the bank. It is not crucial to your neighbors. It is not crucial to the guy who wants to buy your house after you defaulted. It might not even be crucial to your wife, who was planning on leaving you for her boss anyway.
Let’s say you have a business startup that is failing. Should you take the L and file for bankruptcy, or should you double down and take out a bunch of personal loans with your home and car as collateral? The problem with this idea is that you have not changed the fact that your business is failing. All you succeeded in doing is risk other assets that weren’t originally in danger of being lost. If you just initially took the L, all you would have lost was the business and the assets associated with it. You could easily start a new business or (God forbid) get a job. By putting your personal property on the line, you are now losing not only your business, but everything you own.
This is really important to understand because you can ask a hundred different people for advice about your failing business, but nobody has a dog in the fight except you. Worse still, there are probably tons of people who are happy to take your money in exchange for “helping” your business, knowing full well that it is going to fail anyway. Some people might have ulterior motives besides money for encouraging you to continue fighting. Maybe “The longer this guy stays in business, the more he’ll hurt this other business owned by someone I don’t like.”
I am reminded of the 1998 romantic comedy You’ve Got Mail, which is about a woman who owns a family book store that is threatened by the opening of a large book store chain down the street. She is chatting online anonymously with a guy who turns out to be the owner of the store chain. Neither of them are aware of this, even as they publicly clash in real life. There is one particular scene when the woman asks her online friend for advice. He (still not knowing who she is) advises her to “fight to the death” to protect her business.
This is really awful advice, especially coming from an experienced business mogul who should know better. The woman is attached to her book store because she inherited it from her deceased mother. Not wanting to lose her mother’s store is understandable, but it is crazy to suffer in the name of protecting a physical object that she can live without. There is no logic or reason here, just sentimentality.
My biggest problem with this scene is that the man is giving his girlfriend advice that he obviously wouldn’t follow himself. If one of his stores, or the whole chain, was failing he would just close it and not even care. The man is rich so his stores don’t matter. But he is deliberately giving bad advice to a woman who has a lot less money than him and much more to lose. My best guess is that the man was only saying that because he was horny and thought that’s what she wanted to hear, and the woman was thinking sentimentally, not reasonably.
The Ukraine has a similar problem. There is a large peanut gallery of other countries that want to “fight to the last Ukrainian” to hurt and punish Russia, but none of that is of any help to Ukrainians. As of March 2022 they stood to lose 0 territories. But they wanted to get back Crimea, and now are losing four additional territories, and have hundreds of thousands of dead. Sure some warhawks will say “but but but but Russia lost a lot of people too!” Cool but that is of no help to Ukrainians. The war is crucial to Ukrainians and it is crucial to Russians, but not crucial to anyone else. Ukrainians not understanding this is the reason they keep losing more than what was originally on the table. If as a direct result of the war “Ukraine” ceases to exist as a state and Ukrainians cease to exist as a nation, that means absolutely nothing to the NATO cheerleaders. They’ll just shrug and look for a different battlefield that can be used to hurt and punish Russia.
Ian Kummer
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