So, this ends a company that has been in business since 1930 providing delicious treats to generations of customers. While it is a sad day for most Americans, one person who will be celebrating is First Lady Michelle Obama, who is the self-appointed healthy eating czar in our country. She famously told her husband that he could not eat a fried Twinkie at the Iowa State Fair. Not long ago, Mrs. Obama bashed Gabby Douglas, Olympic gymnast and Gold Medalist, for craving the taste of an Egg McMuffin after the games.
Will this nonsense end with Americans only being able to eat food approved by Mrs. Obama? In just the past few months, New York Mayor Michael Bloomberg killed the Big Gulp and now the labor unions and the Obama economy have killed Twinkie.
Yeah, it could be Michelle Obama and a bunch of arugula and granola eating "union thugs" got together and formed a Death Panel for America's deadliest delicious food approximations. Looks like they've got their work cut out for them yet so I wouldn't get too worked up.
Bacon Fried Hot Dogs at Magazine Street Blues Festival November 2012
Still, we know how much even our supposedly mainstream conservative pundits enjoy a good conspiracy. Unfortunately the nation's kooks are mostly preoccupied with philandering generals at the moment so Twinkiegate may pass most of us by.
But becasue Crouere brought it up, it's worth pointing out that Michele Obama did not, in fact, kill the Twinkie. Despite the first lady's best efforts, Americans are more diabetic and obese than they've ever been.
More to the point, despite the efforts of conservative blabbers like Crouere to convince us otherwise, the unionized Hostess employees are also not the problem.The number of people living with diabetes is soaring in the U.S., as 18 states had at least a doubling in those with the illness since 1995, a government survey found.Diabetics made up 6 percent or more of the population in all 50 states in 2010, an increase from just three states, the District of Columbia and Puerto Rico in 1995, according to the report from the U.S. Centers for Disease Control and Prevention. Rates are increasing in tandem with obesity, which has reached epidemic proportions as physical activity levels plunge and daily calorie counts soar, according to the CDC.
Hostess is in bankruptcy for the second time in recent years. Workers took concessions just a few years ago and this year the company has stopped making its contractually obligated contributions to their pensions. Meanwhile, according to the union, the company's CEO got a 300 percent raise, from $750,000 to $2,250,000, while other top executives got raises of hundreds of thousands of dollars apiece. Hostess may have problems, but, like the possible plant closings, they don't come from what the rank and file workers have done.If you're wondering how it is a supposedly failing company can afford to raise its executive compensation by 300 percent you haven't been paying much attention to how vulture capitalism works.
In 2004, the company entered bankruptcy with approximately $450 million in debt. It emerged after investment from Ripplewood Holdings. Today, it now stands at just shy of $1 billion in debt, despite additional investment by two more firms, Silver Point and Monarch. How did this happen?
These firms borrowed money to invest, which then they transferred that debt to the firm, simple. In effect, there never was any investment, only more debt added.
To emerge from bankruptcy, the companies unions agreed to large concessions which these vulture capitalists demanded, cutting thousands of jobs, transferring benefits or cutting benefits entirely. The companies also agreed to modernize the factories, which were running at a loss due to the age of the equipment, some of which dated to the 1930s. The investments from Silver Point and Monarch were to go towards this modernization. Instead the company found itself saddled with even more debt. To add to the company’s woes, the holding companies stopped supporting the retirement fund, raiding it for easy cash to extract from the firm. The current estimates put the liabilities of this fund at over $2 billion currently.
In order to “save” the firm, the operators of the company turned to the unions, which had already surrendered huge concessions just a few years back to turn the company around, and demanded an across the board slash, an additional 31%, along with eliminating the retirement and benefits entirely. It was a bridge too far. The union went on strike, and now the company has declared it will be liquidated.
In essence, they were bleeding the operation dry the whole time. All the while making obscene amounts of money specifically by putting the livelihoods and retirement benefits of their workers at risk.
Incidentally this is precisely the sort of thing that made Mitt Romney as spectacularly wealthy as he is today. No wonder he was so fond of Zingers.