Hostess Shrugs

The Hostess website reads as follows:

We are sorry to announce that Hostess Brands, Inc. has been forced by a Bakers Union strike to shut down all operations and sell all company assets. For more information, go to Thank you for all of your loyalty and support over the years.

Hostess Brands is winding down the Company after a nationwide strike initiated by the BCTGM that commenced on November 9th crippled its operations at a time when the Company lacked the financial resources to survive a significant labor action.

Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down.  Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year.

In her novel, Atlas Shrugged, Ayn Rand wrote a fictional story about what happened to the world when the best and brightest, including the best in the business world, got tired of the abuse by the government and went on strike. In essence, she dramatized what happened when “Atlas” — meaning the innovators who keep the engine of the world moving — simply shrug.

While such a drama is unlikely to play out so literally and consciously in real-life, there’s still no escaping the consequences of imposing endless burdens on businesses. Put simply, the more you regulate and tax and impose union laws and Obamacare and everything else on businesses, the sooner they will cave or simply give up under the pressure.

Case in point: Hostess. For generations Hostess has been a valued American product, something of a cultural icon. This icon was not generated or maintained by government programs. It existed because people willingly bought the product in mass numbers, and employers and employees willingly worked together to create the product in a way that benefited everyone, by mutual agreement.

There’s nothing inherently wrong with unions, but in our society government gives unions an unfair advantage by essentially (via union laws and regulations) forcing employers to deal with them on the union’s terms. If you read about the Hostess saga in more detail, you’ll see how the bakers’ unions in that company ultimately participated in their own destruction. They used government pull and force to essentially bankrupt the company that paid them. How good is this for workers?

No doubt the unions and their political advocates in government will blame this on the “selfishness” of Hostess executives. Well of course they’re selfish. They want to make a profit. If they don’t make a profit, and are forced by union laws and tactics to operate at a loss — and still pay the employees anyway — then why is it so irrational and wrong to say, “I’m out of here”? And if it’s morally wrong for the owners, executives and stockholders of Hostess to selfishly want to make a product, then why is it morally right for the workers to want endless rights and benefits that ultimately destroy the company — and their own jobs, in the process?

No answer is given, because the question is never asked. And it’s considered heresy to even ask the question.

Some will argue that Hostess failed due to bad management. Perhaps that’s true, and it certainly happens. But my reply to that is: How will we ever know? Government laws, regulation and confiscation of profits do untold damage to businesses. Think of all the jobs that might have been, but never will be, thanks to what government destroys. We’ll never know, and government never, ever gets the blame for anything, while the private sector shoulders the blame for absolutely everything.

Government is doing more than ever before to strangle the engine of society. Somebody or something has to make jobs possible. When our President and congressional leaders morally denounce profit and business on a daily basis, they are impairing if not destroying the abilities of businesses to function. Sooner or later, businesses will stop making profits and they’ll simply give up or shut down. The American people are doing this to themselves and to their economy, because they are willingly voting in the politicians and parasites who literally eat away — like a cancer — at what otherwise might have been the humming engine of a productive economy.

Put simply: You cannot spit on somebody and then expect them to do your bidding. Yet this is what dictators do. Union and government officials can scream all they want that the problem is the self-interest of business owners. But if you spit on the business owners, the ones who take the risk and organize the businesses so there are employees to unionize in the first place, this is what you’re going to get.

As taxes and regulations expand more than ever before, you’re going to see more cases like Hostess. You’re going to see more American icons go by the wayside. Granted, in a free market businesses sometimes go away or become less profitable because the wants and needs of customers change over time. But with government intervention in and control of the private sector, it’s not the customers deciding most things; it’s the bureaucrats, lawmakers and lawyers.

Down to the last failing company, the proponents of government control of the economy will scream that it’s “capitalism” or “selfishness” destroying the jobs. Earth to screamers: Capitalism and self-interest are the things that create jobs, not destroy them. You spit on these things — and destroy them — at your peril.


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