The Parasite That Kills Its Hostess

The news about the bankruptcy of Hostess, maker of the Twinkie and other legendary junk foods, touched off some memories of growing up in a mid-sized Midwestern town in the 1970s and '80s. No, not that kind of memory, though come to think of it, the 1980s was the last time I actually ate a Hostess snack. What I'm recalling has a lot less nostalgic charm: the whole phenomenon of a kamikaze labor union that keeps demanding more for workers--who end up getting nothing when their employer goes belly-up.

That's pretty much what the unions did, or tried to do, to three of the big employers in our area, and it taught me some early lessons about the real nature of labor unions and of government intervention.

I grew up in an area known as the Quad Cities, a cluster of four towns in Illinois and Iowa, on opposite banks of the Mississippi River. The big local employers at the time were the Rock Island Arsenal, which made howitzers and machine guns for the US Army, the celebrated Rock Island Line, and two big manufacturers of farm equipment, John Deere and International Harvester.

What might strike you about this list is that half of these companies no longer exist. I watched them go down, and that's why the Hostess story seems so familiar.

GREED is what kills companies.

Greedy workers and greedy management and greedy stockholders who all demand an unreasonable return on their respective investments.

The union where I work just voted NOT to walk out by about 9 to 1. The owners have threatened several times to shut it down if it loses money consistently.Keep in mind many of the union workers receive over $25 per hour,some near $35.

GREED is what kills companies.

BS.

You think the people running successful companies aren't greedy? They are, because everyone is. Every person in management, and every worker, and every customer is "greedy." People are greedy. They want the highest pay they can get, and the most stuff for their money.

Everyone.

The genius of capitalism is that it pits the greed of sellers against each other and against the greed of buyers, thereby cancelling it all out. Buyers and sellers must compete for business or it doesn't happen. The only way a free-market transaction takes place is if both buyer and seller voluntarily agree to it.

What messes up this equilibrium is when either buyers or sellers have a disproportionate amount of power in the transaction. That's a monopoly. It reduces or eliminates the competition, so the best deal can't be reached. Your only choice is "all or nothing."

People understand that a monopoly is a bad deal, but some seem to think that the labor monopoly created by unions is somehow a Good Thing. It's not.

Such "free association and collective bargaining" is prohibited by law when it comes to businesses; it's called "price fixing." But the "price fixing" labor monopoly among workers is called a Union. It's protected by law.

Everyone in the economy is both a buyer and a seller. Employers are buying labor, and should be allowed to shop around for it just as workers are allowed to shop around for employment. But they can't.

Unions are a Bad Thing which have caused whole industries to collapse. The American steel industry is one, and our auto industry is very nearly the next.

Hostess chose the "nothing" option, because it simply couldn't afford to continue with the union's "all" position any longer. Government unions put the same unfair and expensive "deal" over on taxpayers. But we don't get to liquidate and kick the union to the curb. We just have to eat it.

I put in a summer working for Youngstown Sheet & Tube company in East Chicago while I was in college, back in the 1950s. The company was already obviously in trouble. None of the workers liked their jobs (can’t say that I altogether blame them), and everyone did as little as possible. When they added stuff to the steel pours, they did it carelessly, so a lot of the product had scabs after it went through the rollers, and had to be done all over again.

The mill shut down soon afterward, as did virtually all the other steel mills in the country. They were squeezed between cheaper imported steel and demanding labor unions, and no longer could cut it or afford to modernize.

I believe in free trade, but I also believe in moderate and reasonable import duties, to level the playing field. But the steel users evidently had a better in with the politicians than the steel makers. And the unions pushed the whole business over the cliff.

What we have now, of course, is a playing field that is tilted AGAINST us, with free entry of goods from other countries but very little reciprocity for exporting OUR goods to them. But that’s another story.

BS yourself.

Let me restate the GREED is what kills companies(and many other things).

Greed is demanding totally ridiculous,unreasonable return on your investment of labor,time ,or money.Geed is wanting it AL,right now, and to heck with everyone else.

The unions seek monopoly because they are excessively greedy.

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