The Obama Administration is experiencing the oddest post-election period of any president in recent memory. With the resignation of Petraeus as head of CIA and his subsequent testimony before Congress, a whole new can of worms has been opened related to the Benghazi attack. At the same time, the president is dealing with a blossoming sex scandal that led to the Petraeus resignation in the first place.
Now the president is being asked to nationalize the Twinkie. Maybe he should just put the thing on the endangered species list.
The truly sad part regarding the imminent shutdown of Hostess is that 18,000 employees will be laid off right before the holidays. Finding a new job in this economy is going to be, at best, a struggle. Of course, the Hostess company has been struggling for years. As even the owners have admitted, there are many reasons for the failure of the company, but clearly one of the largest struggles faced by the company has to do with the fact they were a union shop.
And while I’m not one of those who believes unions are necessarily bad, it’s perfectly clear that one union’s decision to go on strike rather than face a reduction in pay and benefits was the final nail in the coffin for Hostess. Even though other unions had already (albeit grudgingly) agreed to those reductions, understanding that a job with less pay and benefits was better than no job at all, the decision of the Baker’s Union to go on strike destroyed any hope the company had of surviving.
Not surprising, AFL-CIO President Richard Trumka is blaming this on “Bain-style” capitalism. If you want to see for yourself why Hostess failed, go to the store, find the aisle where they keep baked goods, and look at the price of, for example, Hostess Ho Hos and Little Debbie Swiss Cakes. I do a lot of the shopping for my family, so I’ve marveled many times over the fact that the identical product from McKee Foods (makers of Little Debbie products) is generally less than half the cost of the Hostess product.
Now, you might think that McKee Foods makes their products in China, thus undercutting Hostess prices which employs all those honest union workers. That is not the case. McKee Foods is a US company and their products are made in the US and sold through all 50 states (57 states if you’re the current US president), Canada, and Mexico. What they are not is a union shop.
I’m sorry, but when you look at two products sitting almost side-by-side on a shelf and one is less than half the price, and both are made in the US, what can you do but buy the lower-priced option? Like most families, we live on a budget and this is a basic rule of economics. Little Debbie cakes are cost-effective, they’re tasty, and they work better for us non-millionaires and billionaires.
This isn’t “Bain-style” capitalism at work. It’s nothing less or more than freedom of choice.