The Horse Sense Blog compares the nonsense in today's news with good ol' fashioned horse sense

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Saturday, November 17, 2012

Union Led By Ding Dongs Forces Hostess Out Of Business While Others Are Leading The U. S. In The Same Direction

NOTE: This post updated on 11-20-12 and 11-22-12 at end of post below.

Here’s the Nonsense:  The workers in America need to stand up to businesses to give them what they deserve or be forced out of business.

Here’s the Horse Sense:  It’s time for Americans to understand how an economy really works and quit believing the nonsense the schools, unions, and politicians are selling.  America is about to go the same route as companies like Hostess unless something is done right away.

What part of “there is no money” don’t people understand?  Not only do the majority of citizens not understand the financial disaster that is coming down on us like an avalanche, but those who are leading us are aiding in that ignorance.  And it’s not just those who lead us politically, but it’s also in other areas, too.  From educators to union leaders we see so many people in our society that don’t understand the first thing about how a successful economy functions and what is needed for it to flourish.  And the sad part is that they are imposing their errant understanding on our youth and now, after decades of this happening, we have a large part of our society with little or no understanding of the mess we’ve gotten ourselves into and how to get out of it.  A perfect example is what has just happened with Hostess Brands.

Hostess Brands, the maker of those wonderful snacks like Twinkies, Ding Dongs, and Ho Hos along with all the great products from their other brands like Wonder Bread, Dolly Madison, Home Pride and others that we remember from childhood has been forced out of business.  Tyler Durden wrote at about their bankruptcy filing for liquidation with the explanation for such action as being: 

"...insurmountable (and unfundable) difference in the firm's collective bargaining agreements and pension obligations, which resulted in a crippling strike that basically shut down the company. In other words, Twinkies may well survive the nuclear apocalypse, but there was one weakest link: the company making them, was unable to survive empowered labor unions who thought they had all the negotiating leverage...  until they led their bankrupt employer right off liquidation cliff."

To put it simply, Hostess was trapped by rising costs, narrow margins due to the competitiveness of their industry, and after working to reduce whatever costs they could to meet necessary overhead costs and get bankruptcy court approval they had to turn to their labor force and ask for concessions in their labor contracts.  However, one union refused what is reported to be an 8% pay cut.   Hostess gave them until November 15 to accept the offer or, as Hostess management warned them, the company would have to shut down and liquidate its assets.

A union refused the offer and Hostess management had no choice but to shut down their business.  The union won, but in a very shallow victory.  Instead of retaining jobs for over 18,000 people with a slight cut in income, they stood strong and got a victory that left those 18,000 people without work.
I don’t know about you, but I have found that sometimes things get tough in life.  Sometimes things aren’t fair.  Sometimes you have to make hard decisions.  If my business gets slow my income drops.  I have to make choices.  I can’t keep living at the same level that I have when things are going better.  So, for example, instead of steak for dinner I may have to have a peanut butter sandwich, macaroni and cheese, rice and beans, or something else that costs less.  It’s not that I want to, but I have to save money or I will lose everything.

That is exactly what Hostess and its employees faced.  Hostess offered to give them most of what had been promised and explained what would happen if they didn’t accept the offer.  The union thought, as the old saying goes, that they could get blood out of a turnip and refused.  Now they lose everything.  Not a very smart move was it?  It’s all because of stupidity and stubbornness.  Great job union bosses, you bunch of ding dongs!  (By the way, I’d like to apologize to the Hostess Ding Dongs for calling the union leaders that name.  The tasty treat from Hostess deserves to be respected, unlike the union leaders.)

Reading about it now after the fact it may seem that the union should have given in because 92% of something is a whole lot better than 100% of nothing, but oddly many people think Hostess was wrong.  There's even a petition that's been submitted to the White House for the government to bail out Hostess, which would do nothing other than compound the problem.  There is a misunderstanding on the part of many in America that corporations have deep pockets and that the fault is all because the companies are keeping those profits for owners and executives while workers starve.  I doubt there could be a more nonsensical thought about economics uttered.  One commenter on Durden’s article wrote:

"This [is] only the beginning. The workers are rising up against the capitalists trying to sell us expensive goods and offer us low wage jobs. We’re going to SHUT THESE BASTARDS DOWN one by one until we get what we want. The people want RAISES and they don’t care where the money comes from. This is the start of the progressive revolution. Capitalism and entrepreneurship is dead, and the golden age of collective bargaining has begun."

This should send a cold chill down the spine of every thinking American patriot.  It is the kind of stupidity believed by the progressive left and being taught to our children in schools these days.  In fact, it’s been taught in our school systems for decades and now become so ingrained in the thinking of people who’ve grown up being taught this garbage that when kids come home from school and talk like this their parents just nod in agreement and think to themselves that the corporate bullies sure make life tough for people and do it on the backs of the working class.

I’m not young anymore.  I’m a baby boomer but I remember growing up in the liberal progressive school systems of Minnesota.  We had great school systems for quality of education, but I can honestly say that looking back I’m surprised I survived the radical nonsense that was taught.  The idea of the unions being the savior of the working class today and the management being the enemy was taught throughout my school years.  I had teachers in junior and senior high school and professors in college who were proud that they thought communists had better systems of government than the United States does.

Thankfully I had a father who was a businessman who didn’t just tell me, he got me actively involved in business from a young age to learn the truth through experience.  I started my first business while in school to finance my education.  I learned more about the economy and business doing that than I ever learned in school.  Don’t get me wrong, there were many good things about school, but being indoctrinated in progressive ideology was not just wrong, it was dangerous.  And that is one of the reasons our society has so many people today who believed and agreed with Barack Obama when he said during the campaign that if you own a business you didn’t build that.  That’s absolute rubbish.  These people know no more about starting and running a business than a hedgehog (and the hedgehog may actually know more).

In my recent book, No Tomorrows:  How To Halt America’s Imminent Collapse And Return To The American Dream – And Why It Must Start With The 2012 Elections, I warned that we face imminent collapse if we continue on the fiscal path that Barack Obama and his Democrat Party along with the establishment Republicans had us on.  He won the recent election and we are not only still on that path, he and his cronies on both sides of the aisle in Congress have already shown that they intend to accelerate the pace they have America headed.

The news talks about trying to avert the fiscal cliff, but no one is paying attention to the fact that our nation has already gone over the fiscal cliff.  When the president and Congress talk about averting the cliff they are trying to get the public to support the idea of higher taxes on those they define as rich and paint a false picture that that will fix America’s problems.  America’s problems are so deep that that is a drop in the ocean compared to what we face.  If we not only increased taxes on the wealthy, but took all assets of every millionaire and billionaire in America it would not even cover America’s government expenses for a year.  And once you’ve taken all of those assets they would no longer be there to be taken again in the future.  Within less than a year we’d be back to where we are today.  Well, actually we’d be in worse shape because we would have lost the taxes that those people pay now so our national income would be far less than it is today.  That would make our crisis even greater than it is now.

That is why President Obama wants to grab any money he can for the government.  This week he let it be known that he wants to take over private IRAs, 401Ks, and other retirement accounts held by private citizens.  He would put them under government control to get his hands on the trillions of dollars that citizens have saved for their retirement.  He would essentially be issuing an IOU to the citizens to take care of us in retirement while he uses the money for more of his bast spending programs.  This is what has happened in countries like Venezuela where dictator Hugo Chavez has taken control of the private retirement accounts to raise more money for the government.  Leaders like this first take over the healthcare system and then they go after every source of money they can find.

Raising taxes simply lets our government continue to grow out of control and the larger the government gets the more freedoms the citizens lose.  We have a very weak group of people leading the GOP these days.  They pretty much go along with most everything the Democrats want to do.  But that’s all we’ve got right now to protect us from more and more increased spending and debt.  Until the 2014 mid-term elections when we have the chance of electing more conservative people to Congress who can start to turn this nation around we have to work with what we have.

Until that time it is imperative that all Americans continually put pressure on the representatives and senators to stop spending.  They do respond to pressure from voters and the threat that we can and will vote them out of office.  If we want to save the future for not just ourselves, but for our children and grandchildren, then we must keep the pressure on our elected officials until stronger people can be voted into leadership that will take our nation in the right direction.

In the meantime, you are going to see more and more companies fail as the progressives that control the left, the labor unions, and our educational system vilify those who keep our economy going, which is the businesses of America.  If you don’t stand against them you will see more and more done to destroy American business and wipe out our economy.

UPDATE 11-20-12:

Hostess Bakers and the union have been informed by the bankruptcy court that they are to try to mediate their differences in an effort to save the company and the jobs.  The court has given them until tomorrow to resolve their issues.  Depending on the outcome, Hostess may survive and retain some of their facilities and employees.  The real question is whether the parties have learned anything from this. If they are both truly working for a positive resolution, then they should be able to come to an agreement.  However, if they do not decide to work together they cannot survive long term, even if they come to an agreement now.

Business and labor unions, just like political parties, must learn to put the best interest of everyone on the table and find reasonable compromises or there is no real success.  And that is what ultimately plagues America and stands in the way of our nation's future.

UPDATE 11-22-12:

Since the parties could not come to an agreement, even in court ordered mediation, the negotiations fell apart.  The result is that the court has approved the liquidation of Hostess.  This is very sad for an iconic brand (or "brands" when you consider all the great products they had) and even moreso for over 18,000 employees.  While the company will take a year to wind down and approximtely 3200 employees will be needed to complete that process, in the end they will all be out of work.  And this is all because a union refused to come to terms with the concept that "some" is better than "none." 

Heaven help America if this is the best that can be accomplished in labor contracts when our nation is only holding on by a thin thread.  It will take little more for our nation to break that thread and plunge America into the death spiral that awaits us unless we make significant changes rapidly.