That phrase, "picking winners and losers," is a loser. It totally denies the structure of human society, in which most achievements require broad collaboration. Yes, collaboration can lead to conspiracy and corruption. But it is also essential to building civilization. A major role of government and politicians is to encourage the healthy sorts of collaboration, and discourage the corrupt sorts. So already, government and politicians should be trying to pick "winners" who display good ethics, and make "losers" of those who don't. Can government go overboard? Sure. Like all things worth doing well, it can also be done badly. But it needs to be attempted, or we end up with conspiracy and corruption dominating, and become a nation like Italy or Afghanistan or Somalia, depending on the degree of that domination.
So the question isn't "Does government pick winners and losers?" Government has to be picking winners, which is to say encouraging collaborations in society among the ethically good players - where "good" in defined in terms of virtues like honesty and concern for the broader well-being of society. Governments aren't just about penalities for those who are bad players (e.g., torturers, those committing fraud in financial institutions - neither of whom are currently penalized, as it happens, due to the weakness of our government), but rewards for those who are good players (including giving them government contracts, such as the Ryan family as prospered from for generations). Government should contract and collaborate with and support good players, and shun and otherwise hinder the bad. That's just essential. And there's no way to separate that from "picking winners and losers." Those who use that phrase are not just opposed to bad government, but even to good government, as if the withering away of the state to produce the utopia foreseen by an intellectual vanguard were not just the failed dream of Karl Marx, but a practical program for today. This libertarian dream is the mirror image of Marxism, and just as evil when put into practice. We need government, we need government to be good, and we need government to be on the side of good, or else good cannot prevail. Because all government is is a large-scale structure for social collaboration. And without that, there can be no civilization.