Hostess shutdown shows strength of market, not reason to bash unions

By David McElroy · November 19, 2012

I found out Sunday night that the Hostess Brownie Bits — and a few other Hostess products — are still on the shelves of the Target near me. But the shelves for Hostess products was mostly empty. I couldn’t find a Twinkie anywhere. What’s really going on as these iconic brands disappear from our store shelves?

Since the company best known for making products such as Twinkies and Wonder Bread announced it was shutting down, I’ve heard two consistent narratives about it. One comes from conservatives and one comes from progressives on the left. I’d like to suggest that both narratives are overly simplistic.

For conservatives, the story of Hostess Brands is a narrative of evil unions destroying an otherwise-healthy company. For progressives, the story of the shutdown is valiant workers standing up against evil bosses in the name of fairness. I don’t think either side has the facts to really back up the story in just those terms.

Let me admit my bias right up front. I can’t stand unions. I wouldn’t be a member of a union. I think they tend to make companies function poorly, because they tend to infect the workers’ attitude with an us vs. them mentality. I still remember when my father worked for a coal mining company when I was in high school, and the miners would go on “wildcat strikes” on the first day of deer-hunting season or when they wanted a day off. They were lazy and had lousy attitudes, from what I could tell.

But I know just as well that management at most companies is just as messed up as the unions are on the other side. I’ve worked for a very few good managers. Most of the ones I’ve worked for left me feeling that he was even more incompetent than the previous one was. And sometimes it seemed as though incompetence was part of the job description for higher-level positions. The more out of touch a manager was, the more likely he was going to rise to the top. Not in every case, but it was true in far too many cases. Many of us live in companies run just like a Dilbert comic strip.

So here’s the thing. Hostess Brands might have been dealing with unreasonable unions, but it’s just as likely that it was a lousy, poorly managed company. That doesn’t make me like unions anymore, but it does say that there might very well have been a bunch of problems that contributed to the company falling apart.

As a matter of fact, if you look at the history of this company, it’s a history of mergers, spinoffs and bankruptcies. The more I read about the company, the more clear it is that it’s been mismanaged and have a confrontational labor culture. The rank-and-file workers were hearing rumors that there might be a buyer for the company, so they stuck it out in hopes of getting a better deal. When there wasn’t a better deal, they lost.

A St. Louis business columnist summarized the situation in a good piece over the weekend:

Some people are trying to assign white or black hats to the strikers in this saga, but neither variety of head wear really fits.

These aren’t noble workers who “have bravely taken a stand against the corporate race to the bottom,” as AFL-CIO President Richard Trumka said in a statement. Nor are they ungrateful louts who deserved to lose their jobs, as some right-wing commentators have implied.

They’re simply human beings who got caught in a conflict and couldn’t find a way out. For that failing, labor and management must share the blame.

Those who are trying to make this into a story about the terrible union aren’t telling the full story. This isn’t a matter of the wonderful, honorable producers shrugging and moving to Galt’s Gulch, because it was a company with a history of serious trouble. And the unions clearly were pushing for terms that the company couldn’t survive with, either. Both sides deserve some of the blame for killing the company.

But do you want to know the best part?

Those factories and those brands are going to be sold. The brands that are worth something will be picked up by other bakeries. (You’ll see Twinkies back on the shelves soon, under a new company’s ownership.) The factories that are good enough to be profitable will be bought by other companies. Some of the same workers who lost their jobs when Hostess closed down might very well be working in those factories making the same products before long — working for another company.

That’s the beauty of the free market. Austrian economist Joseph Schumpeter called this process “creative destruction.” It’s the process by which inefficient and badly run companies are run out of business. It’s not a bad thing to be mourned. It’s a great thing because it gets the deadwood out of the way.

Hostess Brands seems to have been deadwood. The union workers involved in the dispute likewise seem to have been deadwood. In a properly functioning market, they’re both tossed out of the way. Something new will take the place of this company — and that’s a very good thing.

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If you have problems with high blood pressure, I’d like to encourage you to consider making serious changes to your diet. There might be some people who don’t have any choice but to start taking prescription medications for high blood pressure, but I’d like to tell you that I have completely eliminated my issue by eliminating all sugar and almost all carbohydrates. (A couple of months ago, my blood pressure hit 185/144, which was dangerously high — considered stage 3 hypertension.) By completely changing my eating habits, I’m down 22 pounds and my blood pressure is now in the “ideal” range — without taking any medication. In addition, I sleep better and I have more energy. Getting away from the sugar-laden mess that we generally refer to as “highly processed food” has been a life-changer for me. Now my challenge is to avoid slipping back into old habits — by eating in the dangerous ways that almost everyone in our society has come to see as normal.

When I first heard about this, I thought it must be satire. When I discovered it was real, I was appalled, but I still thought it must be a one-time thing from some nutty activist. But it turns out it’s the latest bit of pandering to a bunch of far-left activists who believe that a man can become a woman if he decides to claim he’s a woman. As everybody knows, men have prostate glands. Women do not. Period. End of story. Men can get prostate cancer. Women cannot. But political activists are so eager to pretend that a man claiming to be a “trans woman” is really a woman that they are insisting that “women” be included in public health messages about the issue. This is nothing but political virtue-signaling. If you’re a man, you know which parts you have. You know that you ought to be screened. Nobody is made any safer by dragging far-left gender ideology into simple medical reality.

Every time someone tries to tighten requirements around the use of absentee ballots, I hear screams from Democrats and others on the political left that such efforts are nothing but “suppression of black voters.” These protests have never made sense to me, especially because it’s never been a secret that absentee ballot fraud goes on all the time in certain areas. (Everybody knew it when I worked in politics.) The people who engage in such fraud are rarely caught — often because the local political establishment approves of the crime — but a Democrat who won a primary election in Clay County, Alabama, last year has pleaded guilty to this sort of cheating. Terry Andrew Heflin was running for a place on the Clay County Commission. He was caught ordering seven absentee ballots in the names of various voters and sending them to his post office box — after which he used the ballots to vote absentee for himself seven time. Did he have other people cast additional fraudulent ballots? We’ll never know. But in a primary in which he was able to win with only 141 votes, it wouldn’t take many fraudulent votes to change the election. The next time you hear “civil rights activists” claim that it’s just “voter suppression” to hurt blacks which is at the root of efforts to stop this fraud, remember Terry Heflin. If you care about fair and honest elections, ballot security and voter identity should matter to you.

A state legislator in Maine has been stripped of the ability to speak in the state Legislature — and her votes are not being counted on legislative issues — all because she made a truthful social media post. Rep. Laurel Libby (R-Auburn, Maine) opposes allowing boys to compete against girls’ teams in school athletics and she’s become known for making an issue of it. On Feb. 17, she posted on Facebook about a recent example that she found outrageous. She posted side-by-side photos of a boy named John who competed last year in a state track event and won fifth place against other boys two years ago — and a photo of the same boy (now called Katie) who won first place in the same event this year against girls. Whether you find this outrageous or not, Libby is clearly being honest and truthful about the objective facts of an issue of public importance. But the state Legislature censured her. Democrats decreed that she could not speak in the House and that her votes would not count on legislation — until she apologized for the outrage of telling the truth. She refused and her constituents have been unrepresented in the state House since then. The people who promote this ideology are out of touch with reality and won’t rest until they force the rest of us to join them in this delusion. But even if you agree with “trans” ideology, you should be appalled at this heavy-handed attack on political speech.

The late Steve Jobs was at the center of our culture’s transition from analog to digital. He co-founded Apple Computer. He led the team that revolutionized personal computing with the first Macintosh. As CEO of Apple, he led the development of the iPhone and later the iPad. You would think the children of such a man would be surrounded by technology. But Jobs and his wife Laureen didn’t let their children use iPads. Their home had few screens of any kind. Even though Jobs spent most of his time developing and selling Macs and iPhones and iPads, he was home with his wife and children for dinner when he was in town. The family ate together at a simple wooden table in their kitchen — and there were no digital devices or focus on popular culture. Instead, he’s said to have guided his family toward deep discussions of art, philosophy and education — with no iPads to be found. If the man who guided the development of such products chose a different path for his own children, does that suggest that his digital experience taught him that children need human connection, not screens? And does it suggest the possibility that we might be better off if we made the same choice for our families?

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