By Ron Hart
There is upheaval in the world of cupcakes, Ding Dongs, Twinkies and Ho Hos – and I am not talking about the women in the former CIA Director David Petraeus scandal.
The Hostess Company was forced into Chapter 11 bankruptcy by its unions which, emboldened by Obama’s reelection, overplayed their hand with untenable demands the 85 year-old company could not afford. As an example of Obama’s folly reported by The Wall Street Journal, the contract offered to the union included a “17 percent increase in health care cost for employees.”
All the T&A going on at the CIA, and just which women had the launch codes to which general’s missile, is a sideshow compared to the most important matter: the economy. U.S. markets are down 7 percent since Obama’s reelection, wiping more than $1.4 trillion of net worth away from individuals, 401ks and pension funds.
With the country facing an obesity epidemic, it was no small feat to be able to run Twinkies out of business. The International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union did.
The result is 18,500 workers fired. This is a cautionary tale to other unions that try to bully their companies into untenable contracts in a weak economy.
Obama will take credit for anything he perceives as good. We all would be better off had Obama not intervened in the GM bankruptcy and put the unions ahead of secured creditors in the payback line. Saying “he saved the automobile industry” and boosted the economy is like al Qaeda saying they created good paying, union jobs in airport security.
No one is currently advocating government intervention in the Hostess bankruptcy. As hugely emotional as it must be for Obama acolyte Chris Christie to witness the Twinkies demise, even he is not suggesting government intercession.
The great rejuvenating component of free market capitalism is the Darwinist nature of bankruptcy. No business fails in vain. Companies that are poorly managed and/or burdened with non-market level costs and contracts can go through this time-tested process as penance for bad decision-making. What emerges is a new group of better managers with their own skin in the game who clean up the company, rationalize its existence, and compete in a world economy to bring consumers a better product at a lower price.
The only bad entity that can be propped up indefinitely while losing $1.4 trillion a year, burdening future stakeholders with debt and which consumers hate is our government.
Obama’s inflated view that “he saved the automobile industry” is his own hubris talking. Delta and most other airlines have gone through normal bankruptcy unknown to their customers and have emerged more viable. Mexicana Airlines, which flew Mexicans to L.A. and Phoenix, filed for Chapter 11 when it realized it could not compete with feet. Virgin Airways has also flirted with Chapter 11 because Americans are hesitant to board an airline that does not go all the way.
The L.A. Dodgers and Texas Rangers baseball teams recently danced through bankruptcy. When the Texas Rangers were auctioned off, bids were solicited in gold and the currency of the newly seceded Confederacy.
The best yet was when Borders went bankrupt; they could technically get government tax money and be classified as a library.
Obama views business as an oppressor. It was one of the themes of his campaign. When he is not explaining how “he” is always getting us out of the ditch someone else put us in, he is telling us how much more in taxes businesses and their investors should be paying “his” government. As Conjurer-in-Chief, he spins a narrative the media is all too willing to echo, that malignant forces out to shaft the middle class are perpetually at work in America – and but for him, they would get away with it. He campaigned on anger and antagonism against the job creators in this country, and now he cannot run away from it. He actually believes it.
He asked people to cast a “revenge” vote in this election, not for him, but against business and the people who run them. The difference between Obama and others who trafficked in class envy, like Roosevelt and Clinton, is that they had the ability to uplift and illuminate a positive path forward. Obama remains divisive, and businesses remain gun shy about investing capital in expansion or hiring. The U.S. economy – and American families – will continue to pay the price.
-A syndicated op-ed humorist, award winning author and TV/radio commentator, you can reach him at Ron@RonaldHart.com, Twitter @RonaldHart or at visit RonaldHart.com