What does “the government picks winners and losers” mean?

I heard the phrase, “pick winners and losers” in AP Radio News (aired on March 19), relating GOP presidential candidate, Mitt Romney’s attack on President Obama’s economic policy:

-Republican Presidential candidate, Mitt Romney says President Obama is wrong to pick winners and losers to try to boost the economy:
“Because he has not worked in the economy, he doesn’t understand when the government picks winners, they think, and losers that the rest of the free economy shatters.”-

There are many “pick winners and losers” quotes in Google search, for instance;

“Aside from this disparity and the empirical evidence that suggests the ineffectiveness of such efforts, it turns out there is one more problem with picking winners and losers: sometimes the winners you pick turn out to be losers.” - www.ctnewsjunkie.com.

But I find the definition of this phrase nowhere.

I remember that Chinese government took 'winners first' policy once to try to make the rich richer first, then making the poor rich subsequently as if trickling its effect when they started to steer their economic policy toward the open-market.

Does “the government picks winners and losers” mean to try to protect or benefit everybody, i.e. the rich and the poor equally?
What does it exactly mean?

Solution 1:

The phrase picking winners and losers refers to the fact that any set of measures a government takes - intended to help one or more companies, industries, geographical areas or population groups - implicitly puts those group(s) not selected at a relative disadvantage.

So, you can interpret this as either:

• any entity receiving government aid is a winner, and any other entity which doesn't receive government aid is a loser
• or the government is picking entities it thinks are (or have the potential to be) winners, with the expectation that giving them direct aid will make them even more successful

This is a common criticism of interventionist industrial policy, where direct state aid to favoured companies risks being a substantial mis-allocation of resources.

Solution 2:

This is a reference to the administration's choice to proceed with the economic bailout of General Motors while choosing to let Lehman Brothers et al fail- they've essentially chosen who will win (GM) and who will lose (Lehman)

Solution 3:

Just a quick comment on what you said about Chinese government's policy - they do have a policy to help many port cities to get rich first. But I don't think it's called "Winner pick losers". It doesn't make sense. It's actually called "Let some people get rich first" from Deng Xiaoping. In fact, it seems that the Chinese government is also "picking winners and losers" in order to stimulate the economy in certain areas.

Now going back to your original question, the US government is doing what they can to save "winners" from falling apart, and let "losers" go to hell. So I find it's very similar to what Chinese government is doing.

Solution 4:

The point I think that the Radio is trying to make here, is that the government is not democratic.

"the government picks winners and losers" doesn't seem to mean 'trying to protect or benefit everybody', but rather, 'choosing who I think is the winner with no regard to the economy'

Mitt Romney thinks Obama is wrong to "pick winners and losers" because, he says, Obama "has not worked in the economy, he doesn't understand..."

"Pick winners and losers" isn't any idiomatic expression in English.