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Hostess Bankruptcy: What Role Did Policy Play?
http://finance.townhall.com/columnists/chrisedwards/2012/11/19/hostess_bankruptcy_what_role_did_policy_play ^ | November 19, 2012 | Chris Edwards

Posted on 11/19/2012 7:51:39 AM PST by Kaslin

The demise of Hostess and Twinkies is not a national emergency, but it is certainly sad when a major business goes under and thousands of people lose their jobs.

If federal and state policymakers want to play a useful role here, they should study why Hostess couldn’t make a go of it. Were there tax or regulatory factors that stood in the way of the company earning a decent rate of return?

Unions were an important factor that pushed up the firm’s costs and reduced its operational efficiency. The policy reform here is obvious for people who appreciate market economics: repeal America’s coercive union laws. If policymakers don’t kill so-called collective bargaining, these rules will keep on killing companies.

Sugar apparently played a role in the demise of Hostess, as discussed in this excellent CSM article. Food manufacturers that use a lot of sugar are at a competitive disadvantage in the United States because federal import barriers on sugar substantially push up prices for that production input.

Perhaps taxes played a role as well. Income taxes may not have been a big factor if Hostess wasn’t earning profits in recent years. However, I suspect as a manufacturing firm, the company payed substantial property taxes. In this study, I discuss the anti-investment effects of state/local property taxes on U.S. businesses.

Some Democrats and Republicans may use Hostess as a political football, and some politicians will probably want to bail out the company. A more constructive response would be to find out what governments are doing that makes it so hard for some manufacturing firms to survive in this country.


TOPICS: Business/Economy; Culture/Society; Editorial
KEYWORDS: hostess; sourcetitlenoturl; unions

1 posted on 11/19/2012 7:51:43 AM PST by Kaslin
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To: Kaslin
Tallahassee: [discovers Hostess truck filled with Sno-Balls] Sno-Balls? Sno-Balls? SNO-BALLS? Where's the @#$%ing Twinkies -- ?!?

Columbus: I love Sno-Balls.

Tallahassee: I hate coconut. Not the taste, consistency.

Columbus: [eats a Sno-Ball] Fresh.

Tallahassee: [grimly] Oh, this Twinkie thing. It ain't over yet.

-- Zombieland (2009)

2 posted on 11/19/2012 7:57:08 AM PST by KentTrappedInLiberalSeattle ("If you're not fiscally AND socially conservative, you're not conservative!" - Jim Robinson, 9-1-10)
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To: Kaslin
Unions are the new Organized Crime syndicate.

They infect private employers, but MOSTLY infect Public Sectors (including youth indoctrination in Public Schoolz and Colleges), where the Socialist Workers' mentality becomes in-grained, the tenets of the Communist Manifesto are hammered home, and reliance on others as a "Right" are instilled.

For minorities, the Socialists create a generation-after-generation dependency, as evidenced by their near-unanimous voting pattern for more handouts.

There's plenty of guns and ammo out here now to protect what's left of Individual Freedom and Liberty (that's why Departments of the Federal Government are stockpiling ammo, too, so they can try to defend themselves against the coming "Resistance")

3 posted on 11/19/2012 8:00:58 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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To: Kaslin

Those union members were proud! They wanted it liquidated!

http://www.freerepublic.com/focus/f-news/2961115/posts
Hostess employees hope buyer will put them back to work

http://www.freerepublic.com/focus/f-bloggers/2960918/posts
A Labor Victory over Hostess (satire)


4 posted on 11/19/2012 8:02:37 AM PST by GeronL (http://asspos.blogspot.com)
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To: GeronL
Hostess employees hope buyer will put them back to work

Why work? Union strike bennies, then Fed and State unemployment bennies, then Social Security disability bennies then Social Security, with free medical care. Hell, why work?

5 posted on 11/19/2012 8:09:03 AM PST by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: traditional1

Unions: the hands that push the polls.


6 posted on 11/19/2012 8:11:28 AM PST by sarasota
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To: Kaslin
A more constructive response would be to find out what governments are doing that makes it so hard for some manufacturing firms to survive in this country.

Our government is increasingly comprised of Socialists who believe there is no reason for manufacturing firms to exist as entities separate from the State in the first place.

7 posted on 11/19/2012 8:11:28 AM PST by Mr. Jeeves (CTRL-GALT-DELETE)
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To: Don Corleone
Why work? Union strike bennies, then Fed and State unemployment bennies, then Social Security disability bennies then Social Security, with free medical care. Hell, why work?

Because you got to show up to work for a little bit here and there to restart the clock on some of those bennies.

8 posted on 11/19/2012 8:16:34 AM PST by kevkrom (If a wise man has an argument with a foolish man, the fool only rages or laughs...)
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To: Kaslin

The real losers in this are the young people. These were jobs that a young person could make a decent living at without a college education. There are fewer and fewer jobs like that. Not everyone wants to go to college. After twelve years of the public education system, who can blame them? So we kill off another 18,000 jobs for the kids who want to work hard and earn a decent living and have a decent life. It’s a shame George Snuffleupagus and his buddies didn’t choke on those twinkies when they were making fun of the Hostess employees.


9 posted on 11/19/2012 8:22:36 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: Kaslin

10 posted on 11/19/2012 8:24:05 AM PST by Brandonmark (OWCM is The new American Minority!)
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To: traditional1
Unions are the new Organized Crime syndicate.

New? LOL

Where have you been? Unions have been cozy in bed with the mob forever.

11 posted on 11/19/2012 8:26:33 AM PST by TChris ("Hello", the politician lied.)
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To: traditional1

How dare those workers freely assemble and organize for better wages! :whyyou:


12 posted on 11/19/2012 8:27:35 AM PST by ksen
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To: Don Corleone

and a free phone


13 posted on 11/19/2012 8:34:55 AM PST by GeronL (http://asspos.blogspot.com)
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To: ksen
"How dare those workers freely assemble and organize for better wages"

Yep; "freely assembled" and found they priced themselves onto the public dole.....what a PLAN!

I wouldn't hire Union labor on a bet, for personal contractors, or business contractors.....

14 posted on 11/19/2012 8:35:16 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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To: TChris
"Unions have been cozy in bed with the mob forever"

No, Unions ARE the "Mob" today.....ancient history was when the Mob and Unions were cozy. They don't need the "Mob" anymore.....

15 posted on 11/19/2012 8:37:46 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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To: Kaslin

You mean like Moochelle’s “eat arugula or else” policy?


16 posted on 11/19/2012 8:48:13 AM PST by Buckeye McFrog
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To: traditional1
Yep; "freely assembled" and found they priced themselves onto the public dole.....what a PLAN!

I guess the closures have nothing to do with venture capitalists Silver Point Capital and Monarch Alternative Capital wanting to gut wages and benefits for the employees while still taking huge management fees ala Bain?

I wouldn't hire Union labor on a bet, for personal contractors, or business contractors.....

Ok, that's your prerogative.

17 posted on 11/19/2012 8:49:02 AM PST by ksen
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To: Kaslin

Unions have long since outlived their usefulness. They once served a useful purpose. They no longer do. They are detrimental to their own members. They are simply criminal operations engaged in legalized extortion.......


18 posted on 11/19/2012 8:51:26 AM PST by Red Badger (Lincoln freed the slaves. Obama just got them ALL back......................)
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To: traditional1

Hence the takeover from the Daley Machine in Chicago to the Obama Machine. Rahm Emmanuel as Mayor of the city? Illinois is so screwed.


19 posted on 11/19/2012 8:52:41 AM PST by sarasota
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To: ksen
"Ok, that's your prerogative."

Not for long.

Just as Unions put Davis-Bacon in place, to assure Unions their monopoly on Taxpayer-funded projects (consequently driving up costs, exponentially), they have infiltrated and destroyed nearly ALL manufacturing sector businesses.

For those who can't demonstrate competence on their own, nor be productive enough to be an ASSET to a business and desirable and commanding commensurate wages, we have Unions for those who must rely on the safety net of Contract Terms so they can sleep/slouch/slack their way through the day.

If you can't move on merit, move out of the way.

20 posted on 11/19/2012 9:06:48 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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To: traditional1

Unions are the new Organized Crime syndicate.
They infect private employers “””””

Just remind yourself- The NLRB-National Labor Relations Board—which operates outside the approval of Congress, wants EVERY SINGLE EMPLOYER in the country to give them complete data on every single EMPLOYEE they have—all personal data & all pay scale data & history.

We were raised to think that only ourselves, our employer, the Social Security Administration & the IRS would ever have access to such information. Now that info is supposed to be handed over to unions? Some backstabboing that is!!!

The Unions are striving to make every single private employee a UNION member. Obama has promised Card Check to Trumpka (union thug) in his 2nd term. What would prevent the Unions from forging a persons vote on card check to unionize a company?

If I were still in business, I would absolutely shut the doors before I would comply with the NLRB. There are many parts of the Federal government which are totally out of control & NLRB, EPA, HHS and Homeland Security are only the tip of the iceberg.

This has to stop or there will be only the owner of each company working—non-union.


21 posted on 11/19/2012 9:07:09 AM PST by ridesthemiles
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To: Kaslin

Headed that way all along. Hostess declares bankruptcy, sells rights and equipment to Bimbo in fire sale, whole operation moves to Mexico, problem solved. Does that mean that the price of twinkies will go down now?


22 posted on 11/19/2012 9:07:13 AM PST by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: traditional1

I keep hearkening back to the 1950s when everything conservatives don’t want to do, i.e. unionization, high taxes, etc., was occuring and yet we had tremendous growth and a strong, vibrant middle-class.

How on earth were these things possible if high taxes and unionism are so destructive?

Of course the only thing the above items are destructive too is the accruing of most of the nation’s income among very few people but I’d like to hear your opinion.


23 posted on 11/19/2012 9:16:53 AM PST by ksen
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24 posted on 11/19/2012 9:34:23 AM PST by RedMDer (May we always be happy and may our enemies always know it. - Sarah Palin, 10-18-2010)
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To: Brandonmark
We had a wonder bread bakery here in San Diego,when you went downtown the smell of fresh baked bread wafted over the city, kinda like San Fran sourdough used to. Enter environmental wackos, "Air pollution" ended it all, as filter were required to eliminate all aroma. Sad day in San Diego.
25 posted on 11/19/2012 9:41:00 AM PST by Foolsgold (L I B Lacking in Brains)
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To: ksen
"Of course the only thing the above items are destructive too is the accruing of most of the nation’s income among very few people but I’d like to hear your opinion."

I live in an area that once was very "vibrant" with UAW, USW, and other Blue Collar Unions that drove their wages and benefits to the sky. ALL those industries are GONE, as they priced themselves out of the market, and those "very few" you say accrued the wealth are STILL accruing the wealth, but now are doing so with foreign investments.

Those who are willing to work (up until the past 10 years or so), could start out on their own, free to build a business, start a trade, provide a service, etc., free of government over-regulation, over-sight, over-red-taped, etc., and now INCREASINGLY over-taxed, and STILL trying to stifle them even more with MORE taxes, just to buy more votes with handouts, and destroy/control/take over private sector business.

In the early days of America, the least among us were helped up by direct charity and benevolence, not FORCED handouts to establish the handouts as the SOLE source of income, housing, food, etc.

Unions depress work ethic, and foster the same style of DEPENDANCE ON THEM, and funnel money to their benefactors from the Dues of the Members.

America is now a 3rd world-style country, with a virtual Dictatorship (executive orders and regulation, bypassing Congress), and the Socialist Workers' Party is alive and well, just like ACORN, living under assumed aliases like SEIU, AFSCME, UAW, AFT, etc.

26 posted on 11/19/2012 10:33:37 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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To: ksen
"Of course the only thing the above items are destructive too is the accruing of most of the nation’s income among very few people but I’d like to hear your opinion."

I live in an area that once was very "vibrant" with UAW, USW, and other Blue Collar Unions that drove their wages and benefits to the sky. ALL those industries are GONE, as they priced themselves out of the market, and those "very few" you say accrued the wealth are STILL accruing the wealth, but now are doing so with foreign investments.

Those who are willing to work (up until the past 10 years or so), could start out on their own, free to build a business, start a trade, provide a service, etc., free of government over-regulation, over-sight, over-red-taped, etc., and now INCREASINGLY over-taxed, and STILL trying to stifle them even more with MORE taxes, just to buy more votes with handouts, and destroy/control/take over private sector business.

In the early days of America, the least among us were helped up by direct charity and benevolence, not FORCED handouts to establish the handouts as the SOLE source of income, housing, food, etc.

Unions depress work ethic, and foster the same style of DEPENDANCE ON THEM, and funnel money to their benefactors from the Dues of the Members.

America is now a 3rd world-style country, with a virtual Dictatorship (executive orders and regulation, bypassing Congress), and the Socialist Workers' Party is alive and well, just like ACORN, living under assumed aliases like SEIU, AFSCME, UAW, AFT, etc.

27 posted on 11/19/2012 10:36:00 AM PST by traditional1 (Don't gotsta worry 'bout no mo'gage, don't gotsta worry 'bout no gas; Obama gonna take care o' me!)
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