Economy, as in Twinkie
As comic relief in the classic Bruce Willis movie "Die Hard" a beleaguered Bruce, fighting off terrorists in a high-rise building, finds an ancient but still edible Twinkie. He reaches out by radio to Twinkie-addicted police Sgt. Al Powell (portrayed by Reginald VelJohnson) and asks what’s in a Twinkie.
"Sugar, enriched flour, partially hydrogenated vegetable oil, polysorbate 60 and yellow dye No.5," Al replies. "Everything a growing boy needs."
Well, yes. But as America has learned since Hostess Brands -- bakers of Twinkies, Ho-Hos, Drake’s Cakes, Ding-Dongs, Wonder Bread and dozens of other delicious delights -- filed for bankruptcy protection, the entire American economy is inside a Twinkie, slathered in a mysterious cream-like filling.
The predecessor firm, Interstate Bakeries of Kansas City, grew by gobbling up smaller firms (goodbye, mom-and-pop shops) and big competitors, too (goodbye, Continental Baking, a unit of Ralston-Purina of sainted memory).
Overextended, Interstate operated in bankruptcy between 2004 and 2009, emerging after Ripplewood Holdings, a private equity firm (hello, venture-vs.-vulture-capitalist controversy) took over and renamed it Hostess.
The reorganization wasn’t enough. Hostess now says it is weighed down by rising commodity and transportation costs (hello, worldwide demand and rising fuel costs) and legacy pension and health care benefits owed to its union retirees (goodbye, vanishing middle class). Hostess faces aggressive international competition from Mexico’s Grupo Bimbo (hello, globalization).
And then there’s the sad but true fact that Hostess makes a lot of stuff that makes nutritionists blanch. A couple of Twinkies or Sno Balls washed down with a Mountain Dew might get you through the night, but it is not conducive to a healthy diet (hello, Michelle Obama).
Even good old "builds strong bodies 12 ways" Wonder Bread is in decline. Thirty-three percent fewer Americans are eating white bread at home than did in 2000. Blame the fiber lobby.
The company and its unions say they are in good-faith negotiations about pension changes, but clearly some reductions are coming and some jobs will be lost. But the unions want investors, creditors and other stakeholders to share the burden. If the bankruptcy court allows the company to dump its pension obligations, the government’s Pension Benefit Guaranty Corp. would be on the hook (hello, deficits).
Blame unions? Blame poor business decisions and overleveraged investors? Blame ourselves? If we’d all been like Sgt. Powell, this wouldn’t have happened.