No more Twinkies - Hostess out of business

[Rupert Pupkin]

Originally Posted by GenuineRisk

It'll go even farther; just wait. A friend of mine who works in the legal profession told me that his law firm is testing out not assigning secretaries to the lower level lawyers; instead, they will email documents and things they need done to a floor of people they will never actually interact with. He thinks they'll eventually look to ship that sort of job overseas, too, or to a state with much lower wages.

I don't know what the answer is. Maybe the politicians need to give these companies some type of big incentive to stay here. Maybe companies that don't outsource should get big tax breaks. I don't know what else can be done.

[GenuineRisk]

Originally Posted by Rupert Pupkin

I don't know what the answer is. Maybe the politicians need to give these companies some type of big incentive to stay here. Maybe companies that don't outsource should get big tax breaks. I don't know what else can be done.

I don't know, either. One of the tough things is that in the mid-20th century, we were the only first-world nation that hadn't had the ever-loving sh*t blown out of it by WW2, so we had an edge on the rest of the world. Businesses had to hire workers here because it was the only option, and so workers could demand a middle-class salary because employers didn't have any other option. And union workers drove up everyone else's wages to the middle class.

I assume businesses get to claim employee salaries as business expenses- maybe not permit salaries paid to overseas employees to be counted as expenses. Though there's nothing to stop corporations from just incorporating outside of the country.

I've had so many friends lose jobs to overseas firms. It's really frustrating. And it's not like the jobs were even that good to start with. One hadn't had health insurance in years, and it wasn't until his family got poor enough to qualify for Medicaid that he was able to see a doctor, and found out he was suffering from glaucoma. Lovely.

That said, here's a piece saying the failure of Hostess is the free market at work:

http://www.outsidethebeltway.com/the...-a-good-thing/

[GenuineRisk]

And a timeline of the Hostess failure:

[Danzig]

Money not reinvested.....that tells the tale. A few got rich, everyone else gets the shaft

[Alabama Stakes]

Originally Posted by Danzig

Money not reinvested.....that tells the tale. A few got rich, everyone else gets the shaft

i thought it was too many guys on the lines were eating more twinkies than packing ?

[Cannon Shell]

Originally Posted by Danzig

Money not reinvested.....that tells the tale. A few got rich, everyone else gets the shaft

Money "saved" is often not "reinvested" because it isnt a tangible asset. If the company was losing money than "saving" money is simply lowering expenses though that doesnt mean the company isnt still losing money.

[jms62]

Originally Posted by Rupert Pupkin

I don't know what the answer is. Maybe the politicians need to give these companies some type of big incentive to stay here. Maybe companies that don't outsource should get big tax breaks. I don't know what else can be done.

You mean we should give tax breaks to companies that use all the loopholes to avoid taxes in the first place? And what makes you think the extra money they get from those tax breaks will not go directly into the pockets of Execs? What you are suggesting is paying ransom to those that are holding our country hostage. You and Joey always have the same answer to everything. Lower Taxes and it will create jobs. What is it going to take for you to see that has not worked for many years. Bush lowered taxes and we hemmoraged jobs for nearly a decade. We have 2 choices here. Lower our standard of living to be that of a third world country or Penalize companies with taxes that ship jobs overseas and make the penalty substansial enough that the economics of shipping jobs out of the country doesn't work. Since those that make the rules are owned by the corporate America this has no chance in hell of ever happening. We have a better chance of another American Revolution than our elected officials standing up to corporations.

[bigrun]

Originally Posted by jms62

You mean we should give tax breaks to companies that use all the loopholes to avoid taxes in the first place? And what makes you think the extra money they get from those tax breaks will not go directly into the pockets of Execs? What you are suggesting is paying ransom to those that are holding our country hostage. You and Joey always have the same answer to everything. Lower Taxes and it will create jobs. What is it going to take for you to see that has not worked for many years. Bush lowered taxes and we hemmoraged jobs for nearly a decade. We have 2 choices here. Lower our standard of living to be that of a third world country or Penalize companies with taxes that ship jobs overseas and make the penalty substansial enough that the economics of shipping jobs out of the country doesn't work. Since those that make the rules are owned by the corporate America this has no chance in hell of ever happening. We have a better chance of another American Revolution than our elected officials standing up to corporations.

....Too bad we are governed by the Golden Rule - He who has the gold makes the rules..

[bigrun]

Originally Posted by jms62

You mean we should give tax breaks to companies that use all the loopholes to avoid taxes in the first place? And what makes you think the extra money they get from those tax breaks will not go directly into the pockets of Execs? What you are suggesting is paying ransom to those that are holding our country hostage. You and Joey always have the same answer to everything. Lower Taxes and it will create jobs. What is it going to take for you to see that has not worked for many years. Bush lowered taxes and we hemmoraged jobs for nearly a decade. We have 2 choices here. Lower our standard of living to be that of a third world country or Penalize companies with taxes that ship jobs overseas and make the penalty substansial enough that the economics of shipping jobs out of the country doesn't work. Since those that make the rules are owned by the corporate America this has no chance in hell of ever happening. We have a better chance of another American Revolution than our elected officials standing up to corporations.

This Ned Beatty scene from the 1976 movie Network covers the world we live in..Corporations rule


http://www.bing.com/videos/search?q=...CC7EF8&first=0

[Rupert Pupkin]

Originally Posted by jms62

You mean we should give tax breaks to companies that use all the loopholes to avoid taxes in the first place? And what makes you think the extra money they get from those tax breaks will not go directly into the pockets of Execs? What you are suggesting is paying ransom to those that are holding our country hostage. You and Joey always have the same answer to everything. Lower Taxes and it will create jobs. What is it going to take for you to see that has not worked for many years. Bush lowered taxes and we hemmoraged jobs for nearly a decade. We have 2 choices here. Lower our standard of living to be that of a third world country or Penalize companies with taxes that ship jobs overseas and make the penalty substansial enough that the economics of shipping jobs out of the country doesn't work. Since those that make the rules are owned by the corporate America this has no chance in hell of ever happening. We have a better chance of another American Revolution than our elected officials standing up to corporations.

I was simply saying that there needs to be some type of incentive for these companies to stay here. You could raise taxes on companies that outsource. You could lower taxes on companies that don't outsource. I don't care how they do it. They just need to do something that makes it beneficial for companies to stay here and not outsource.

[Cannon Shell]

Originally Posted by Rupert Pupkin

I was simply saying that there needs to be some type of incentive for these companies to stay here. You could raise taxes on companies that outsource. You could lower taxes on companies that don't outsource. I don't care how they do it. They just need to do something that makes it beneficial for companies to stay here and not outsource.

The raise the taxes theory on outsourcing companies is a losing solution. Many corporations will just set up more foreign networks, subsidiaries, divisions, etc which will of course drive up consumer prices which of course hurts that same middle class that everyone wants to prop up. The reality is that there is a reason that jobs are outsourced and for the most part it is profits. Punishing business may simply lead to business relocating with more stringent regulations being a factor as well. Corporate tax rates in the US are high already compared to other industrialized countries despite the rhetoric to the contrary. Hell we see states undercutting other states by offering tax inducments and other incentives to get business to relocate within the US.

The best way to reduce outsourcing is grow our own economy because the worse the growth is the more appealing outsourcing becomes. Of course that isnt easy to do especially when the govt appears to be wanting to enforce growth prohibiting practices and the global economy is still so shaky (our own issues contributing to that as well)

[jms62]

Originally Posted by Cannon Shell

The raise the taxes theory on outsourcing companies is a losing solution. Many corporations will just set up more foreign networks, subsidiaries, divisions, etc which will of course drive up consumer prices which of course hurts that same middle class that everyone wants to prop up. The reality is that there is a reason that jobs are outsourced and for the most part it is profits. Punishing business may simply lead to business relocating with more stringent regulations being a factor as well. Corporate tax rates in the US are high already compared to other industrialized countries despite the rhetoric to the contrary. Hell we see states undercutting other states by offering tax inducments and other incentives to get business to relocate within the US.

The best way to reduce outsourcing is grow our own economy because the worse the growth is the more appealing outsourcing becomes. Of course that isnt easy to do especially when the govt appears to be wanting to enforce growth prohibiting practices and the global economy is still so shaky (our own issues contributing to that as well)

"Grow our Economy" . Such a simple solution. Problem is how can you grow your economy when those that purchase goods and services that cause the growth dont have any money? Why? Because their jobs which provide them with money have been shipped to The Third world. One comapnies wages are another companies revenue.

With much respect, your policies of reducing taxes has not worked for many a year. With all due respect you continue to be locked in a 1980's time warp repeating the same tired mantra.

These are extrodinary times and require extrodinary measures. Playing nice with those that have hijacked capitialism require thinking not found in a 1950's Economics textbook which most all of us have been operating from. But as I said before those that make the rules are owned by those that benefit from the rules so we are stymied. It will require a violent uprising for this country to ever get back on track.

[GenuineRisk]

Well, apparently while Hostess was failing, the CEOs were making sure they got theirs before 18,000 people lost their jobs:

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

http://gawker.com/5961444/dont-worry...pany-collapsed

I love how the failure of businesses is always blamed on greedy unions (how dare they expect their employers keep their end of their contracts!) but it's just shrugged off when the guys at the top loot the company on the way out.

[GenuineRisk]

This is from a balloon-juice post about the auto industry in 2008, but it applies here, too, other than I don't think Mitt has weighed in on the fate of Twinkies, probably because he doesn't eat junk food:

THE TRAGEDY OF THE AMERICAN AUTOMOBILE INDUSTRY:A Play in Three Acts
Dramatis Personae
BIG THREE, a manufacturer of automobiles
UAW, Big Three’s employee
MITT ROMNEY, an idiot

ACT ONE
BIG THREE: I have plans to build automobiles, but I need labor to do so!

UAW: I will labor for you if you will pay me $40 per hour.

BIG THREE: I will not pay you $40 per hour.

UAW: But I need to save for my inevitible retirement, and any health concerns that may arise.

BIG THREE: I will pay you $30 per hour, plus a generous pension of guaranteed payments and health care upon your retirement.

UAW: Then I agree to work for you!

ACT TWO
UAW: I am building cars for you, as I have promised to do!

BIG THREE: I am designing terrible cars that few people want to buy! Also, rather than save for UAW’s inevitible retirement when I will have to pay him the generous pension of guaranteed payments and health care that I promised, I am spending that money under the dubious assumption that my future revenues will be sufficient to meet those obligations.

ACT THREE
UAW: I have fulfilled my end of the deal by building the automobiles that you have asked me to build.

BIG THREE: Oh no! I am undone! My automobiles are no longer competitive due to my years of poor planning and poor judgment!

MITT ROMNEY: This is all UAW’s fault!

[jms62]

Originally Posted by GenuineRisk

Well, apparently while Hostess was failing, the CEOs were making sure they got theirs before 18,000 people lost their jobs:



http://gawker.com/5961444/dont-worry...pany-collapsed

I love how the failure of businesses is always blamed on greedy unions (how dare they expect their employers keep their end of their contracts!) but it's just shrugged off when the guys at the top loot the company on the way out.

I am just shocked

[bigrun]

Originally Posted by GenuineRisk

Well, apparently while Hostess was failing, the CEOs were making sure they got theirs before 18,000 people lost their jobs:



http://gawker.com/5961444/dont-worry...pany-collapsed

I love how the failure of businesses is always blamed on greedy unions (how dare they expect their employers keep their end of their contracts!) but it's just shrugged off when the guys at the top loot the company on the way out.

Nice farewell package for the top boys...Did all the employees get a 'mustering out' package... Yeah, they told them to bend over..

[Cannon Shell]

Originally Posted by GenuineRisk

Well, apparently while Hostess was failing, the CEOs were making sure they got theirs before 18,000 people lost their jobs:



http://gawker.com/5961444/dont-worry...pany-collapsed

I love how the failure of businesses is always blamed on greedy unions (how dare they expect their employers keep their end of their contracts!) but it's just shrugged off when the guys at the top loot the company on the way out.

Actually the failure of business is rarely blamed on greedy unions as most businesses dont employ union workers. But so often those that do are led into bankruptcy by union leaders which choose to hold a hardline even if it means that the actual union members are going to wind up in worse shape.

A good example is when the Meadowlands deal was being negotiated the union which the tellers were members of was hell bent on maintaining the status quo. Under the NJSEA labor costs were causing much of the losses due to the fact that as attendance waned and the use of modern technology (self betting machines) the necessity of the tellers was hugely diminished. Yet because the NJSEA consistently caved in to unions, a large number of overpaid, unnecessary tellers were on the books. There were some days where there were more tellers working than simulcast patrons. When Gural came in to try to buy the Meadowlands and more or less save the track (and the union jobs by proxy) they refused to budge even a little. Eventually the union had to circumvent its own rules and cede power away from its negotiating committee and membership to an executive board to prevent the entire racetrack deal from falling apart. What it came down to there was the tellers union had to be willing to accept a deal where 75% of its membership stayed employed at 80% of their salaries because the alternative was 100% of their membership was going to get 0 percent.

When a small group of mostly unnecessary employees can undermine a project that employs and impacts thousands of people you often see the true colors of union leaders. Often the membership isnt to blame as they are just normal people trying to make a living. But the political nature and take no prisoners attitude of the heads of these unions and their unwillingness to actually try to compromise in order to make the best of a bad situation can not be overstated.

[Rupert Pupkin]

Originally Posted by GenuineRisk

Well, apparently while Hostess was failing, the CEOs were making sure they got theirs before 18,000 people lost their jobs:



http://gawker.com/5961444/dont-worry...pany-collapsed

I love how the failure of businesses is always blamed on greedy unions (how dare they expect their employers keep their end of their contracts!) but it's just shrugged off when the guys at the top loot the company on the way out.

I don't condone the behavior of either side in most of these cases. CEOs should not be making huge amounts of money when their company is doing lousy. By the same token, union workers should not expect to be getting raises and having huge pensions when their company is losing money.

I have done some work for a hedge fund for about 14 years. When things are going well, they have been generous to me. A few years back they were doing very well and they gave me a nice pay raise. But after about a year things went south and they told me that they could no longer afford to pay me the higher wage. They said they would have to go back to paying me what they were paying me before I got the raise. I didn't complain in the least bit. I totally understood the situation. The company was really struggling and they could no longer afford to pay me the higher wage. I had no problem with that.

I don't understand why people complain in those types of situations. When things are bad, everyone should have to bite the bullet.

[Cannon Shell]

Originally Posted by jms62

"Grow our Economy" . Such a simple solution. Problem is how can you grow your economy when those that purchase goods and services that cause the growth dont have any money? Why? Because their jobs which provide them with money have been shipped to The Third world. One comapnies wages are another companies revenue.

With much respect, your policies of reducing taxes has not worked for many a year. With all due respect you continue to be locked in a 1980's time warp repeating the same tired mantra.

These are extrodinary times and require extrodinary measures. Playing nice with those that have hijacked capitialism require thinking not found in a 1950's Economics textbook which most all of us have been operating from. But as I said before those that make the rules are owned by those that benefit from the rules so we are stymied. It will require a violent uprising for this country to ever get back on track.

Reducing taxes on individuals is far different than reducing corporate tax rates, capital gains, etc. You want to get caught up in the chicken or egg argument. The idea that you can penalize businesses into hiring people is not supported by any reasonable theory. These times are no more extraordinary than any other time in our history just different because the world is different. Being that the global economy is so much larger and we are not as soley in control of our own destiny as we were in the past dwelling on certain segments while ignoring others is folly.

In sports the saying is "winning solves everything". Growing the economy solves most issues. It isnt easy to do especially with politicians pandering for votes, the voters wanting something regardless of which party is in charge (yeah everyone wants something whether it be social programs, tax cuts, prefered status, etc.) and most people being too stupid to realize this.

[jms62]

Originally Posted by Cannon Shell

Reducing taxes on individuals is far different than reducing corporate tax rates, capital gains, etc. You want to get caught up in the chicken or egg argument. The idea that you can penalize businesses into hiring people is not supported by any reasonable theory. These times are no more extraordinary than any other time in our history just different because the world is different. Being that the global economy is so much larger and we are not as soley in control of our own destiny as we were in the past dwelling on certain segments while ignoring others is folly.

In sports the saying is "winning solves everything". Growing the economy solves most issues. It isnt easy to do especially with politicians pandering for votes, the voters wanting something regardless of which party is in charge (yeah everyone wants something whether it be social programs, tax cuts, prefered status, etc.) and most people being too stupid to realize this.

You say these arent extordinary times but Never in the history of our country were we at a point where improving business didnt directly translate into jobs for the country. And your reasonable theory is again from 1950's text books. The game has completely changed, countries like China and India are not buying our products as they are protecting their economies . We are not and we are getting absolutley crushed. I hope you are right and I am wrong but I am not seeing that at this point.