I work next to a Hostess bakery. Right now a dozen employees are loitering outside as half a dozen TV vans prepare to do a story on today's demise of the fabled maker of Twinkies and Ding Dongs. It has been three years since we have been neighbors and in that time I have been struck by the ancient facilities, the ancient trucks and lack of investment in the this bakery. It looks like it has been run into the ground. And though the largest union, the Teamsters, agreed to carry on with bankruptcy mandated cram downs, the bakery union said enough and walked out - giving up jobs rather than continuing to work in an environment where workers' rights are steamrolled by courts that only look at deal making of the moneyed and investment types. I always am impressed by the in depth reporting on business issues like this - the unions are at fault despite this being a hollowed out second bankruptcy Bained company, and no one actually bothers to report on the actual numbers involved - the wages cut, the benefits slashed. Apparently those details are superfluous; perhaps they interfere with the narrative the unions and their greedy workers are at fault.
This sad spectacle is another manifestation of the absence of any moral compass or personal responsibility by our moneyed classes - by the 1 percent that keeps grasping for more regardless of the consequences, hiding behind University of Chicago economics and the creative destruction meme of capitalism. In Illinois we are a prosperous state but the divide between the wealthy and the educated and the poor and the less well educated is increasing daily. And it has to do with the failure of our political system to hold elites accountable and to incentivise people to operate both in their own self interest and the society's interests. Aligning those interests - bringing everyone along - was supposed to be one of the advantages of a democratic system where fundamental property and personal rights are protected. And yet that alignment has been ripped apart in the way our large companies and our moneyed classes do their business.
The most recent example of the moral and economic bankruptcy of this approach was offered by Caterpillar - the leading world class producer of mining and construction equipment based in Illinois which simultaneously crams down workers' pay and benefits, complains about taxes and moves to the South, and then bitches that the United States is not produding sufficiently trained and motivated workers. Caterpillar is the type of company that would flourish in Germany - like the automakers and tool makers that lead that economy - despite Germany's higher taxes, well educated work force, decent social safety net and health care and capitalism based on the interests of all the stakeholders - owners, workers and consumers. And yet Caterpillar cannot cope in the United States.
Yes Hostess as a company has issues - its products are not as popular since the optics are baked goods of their sort are unhealthy empty calories despite the fact that the granola bars and other "healthier" foods that compete with them for the most part have the same or more carbs, fats and calories. But Caterpillar does not have these issues; it too chooses to run its workers into the ground because it can and because as a publicly owned compnay apparently the only important constituency are its ruling executives. Certainly not shareholders since the share price has flagged, perhaps because the market knows the short termism of Caterpillar's approach will cause the company to deteriorate as it hollows out the human capital which is at the core of any successful enterprise.