Where's The Hostess Twinkie Bailout?

By Frank Hill

Twinkies, Cupcakes and Ding-Dongs...All Gone
Hostess, the baker maker of such great American iconic foods as Twinkies, Cupcakes and Ding-Dongs, as well as the relatively more healthy Wonder breads, has decided to file for bankruptcy after a prolonged strike by its workers eventually exhausted its remaining resources.

Here's our question of the day...


'When will the federal government and the Obama Administration propose a bailout for Hostess and their 18,000 union workers?

Why the heck not?  What makes the union workers who work for Hostess any different from the union workers who worked for GM or Chrysler in 2009 when things were falling apart at the seams for them?

Are the jobs of the people who make (fattening, artery-clogging) food any less important than the workers who make hurtling assemblages of metal and computers that carry us around on the nation's highways and byways?

18,000 people.  That is a lot of people.  That is about the number of people who can sit in the Dean Dome at Chapel Hill for a college basketball game.

Guess we will see how the new Obama health care exchanges will work now that they won't have the union health care plan paid for probably in total by the management of Hostess over the years.

Just to push at the comparison with the GM bailout for a moment, here's what we don't get:

  1. At what point is a government bailout 'ok'?
  2. If the Obama Administration does not propose a bailout for Hostess and their 18,000 workers, then who would be 'eligible' for any future federal bailout?
  3. Why not ask the union to buy the assets of Hostess and make them 'owners' of the company just like the Obama Administration installed the unions as major owners of GM?
  4. If the unions can run GM from a plurality of stock ownership position, can't they run a bakery?
Now is the chance for everyone to see how a 'managed bankruptcy' with Hostess would have worked for GM, Chrysler and even Wall Street investment banking firms and major banks in 2008.

The company would file for bankruptcy protection under the law; current stockholders equity would be wiped out; the creditors would get in line and get paid something, maybe 10 cents on the dollar of debt exposure they had with Hostess....and then the unions could negotiate with themselves to come up with a wage formula and benefit package plan that would allow Hostess to stay in business and keep 18,000 people employed.
Isn't that what American free enterprise is all about?  Take a risk, hope you succeed.  If not, file for bankruptcy and try again with another plan.
That is what the Obama Administration failed to allow happen in the case of GM and Wall Street and the 'Too Big To Fail' (TBTF) banks.  Operations could have still proceeded all during 2008 and 2009 and 2010 as these companies were rearranged, even with some short-term bridge-funded input of federal bailout assistance.  Most of the workers could have been retained during this transition period and employed, albeit with some major concessions to the gravity of the marketplace.
If something costs too much to make and sell, you can't make a profit and stay in business.  That is Business Economics 101.  But there is some level at which costs can be lowered that allow that product or service to be sold and make a profit.  That is what management of any enterprise has to decide as part of the reason why they 'get paid the big bucks'.
We are as sad as anyone to see a truly American icon such as Twinkies bite the proverbial dust. It feels like when the Beatles broke up, UCLA stopped winning NCAA basketball championships or you found out that Santa Claus just might not really fit in the chimney everyone said he came down out of every Christmas.
However, on the other hand, now perhaps even Mayor Bloomberg of New York City will be happy since no one will be able to be tempted by the empty high calories of Twinkies, Ding-Dongs and Ho-Ho's ever again.  
  • The body fat of Americans might drop in half just because of the unfortunate demise of Hostess.
  • Their body weight should start to return to some sort of 'normal' weight once again.  
  • Blood pressures will drop. 
  • Heart attacks and strokes will diminish substantially.  
  • People will not have to have expensive open heart surgery or transplants later in life now that their tickers won't be destroyed by the chemical compounds and fat content of Twinkies, Cupcakes, Ring-Dings and Sno-Balls for 65 years...if they make it that long.
  • Heck!  We are willing to bet that health care costs drop overnight by 50% or more simply because people will not be able to stuff boxes of Hostess products into their mouths while sitting on the couch watching tv when they should be walking, playing tennis or working out.
And then, guess what will happen?  We won't need Obamacare any more, or so many big bad health insurance companies or even so many gyms, diet plans or Spanx for Women (and now Men, from what we hear...bring out the 'Bro' from Kramer on 'Seinfield)
So maybe the bankruptcy of Hostess Twinkies is a 'good thing' for the American Republic!

(Editor's Note: Frank Hill's resumé includes working as chief of staff for Senator Elizabeth Dole and Congressman Alex McMillan, serving on the House Budget Committee and serving on the Commission on Entitlement and Tax Reform. He takes on politics from a fiercely independent perspective at the blog Telemachus).

6 comments:

  1. This needs to happen more often... So that Unions will either die off or see their future fade away.
    The freeloaders and Obama supporters (same) will eventually kill the goose that lays their golden eggs. Like dead flesh feeding on that of the living!

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  2. Why doesn't the Obama Administration just tell the unions to buy the company and try to run it themselves?

    Then the unions would have to NEGOTIATE with THEMSELVES on wage and benefits agreements! They either would have to take lower pay and benefits in order to keep the stock value high so they could benefit that way.

    They can't have it both ways. Not in the real world at least.

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  3. What, can't have your cake and eat it too? Who knew?

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  4. Jack Wiley Dithers has acquired an advance copy of Moochelle Obama's citation awarding the Presidential Medal of Freedom to each of the 18,000 Hostess employees. It comes with one free breakfast at IHOP.

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  5. "The body fat of Americans might drop in half just because of the unfortunate demise of Hostess."

    I understand this is some attempt at humor, but to suggest that a Twinkie or a Cupcake is less healthy than white bread is to peddle a falsehood. A falsehood that is killing people. Hamburger buns are responsible for much more health problems than Hostess could ever hope to cause. No one is eating Twinkies or cupcakes at every meal.

    One of the most perverse things the Federal government has ever done is to plant these lies about nutrition that get repeated over and over again. Want to be healthy? Eat butter and sausage. Quit eating refined flour (or any flour). Quit eating unsaturated fats. Quit eating cane sugar. In the end, Hostess went out of business because of a lack of business. The union gang cemented the deal, but if their brands were flying off the shelves, they could've weathered an attack from the union gang.

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  6. I cannot condone in all good conscience, Government Twinkies. I'd rather see Zombieland become a historically inaccurate film....

    But it's not likely Hostess gets a bailout. There's no angle in it the way there was for Government Motors, at least not one of enough consequence.

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