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The Hostess debacle, and all the other recent outrageous statements by CEOs around the country planning on cutting off their noses to spite their faces/take their ball and go home by shutting down their companies (Aetna, PapaJohns, Florida real estate guy, etc.) really leave me speechless.

Their arguments are basically:  "Now my taxes and health care costs are going up!  Screw all of you for voting for the Black Guy!  I'm gonna shut down the company and retire!  Cuz I won't be able to make all the money I want to!"

For none of these d-bags was it a problem re: their companies no longer being able to run effectively or being able to make a profit; it was all about their bottom line in how much cash would be thrown off to allow them to continue to be multi-millionaires and billionaires.

It all comes down to:  Gee, I'll end up making only hundreds of millions of dollars instead of billions!  Fuck that!  Screw all of you, I'm goin' home and retire on the beach and you all can suffer!

Just like the "heroes" in an Ayn Rand novel.

What she--and they--completely ignore is the fact that:  If a CEO is unwilling to run a company and make money in a given industry, there are plenty of other hungry competitors in every industry that will immediately step into the gap.

The only person being hurt is the idiot deciding to forego profitable cashflow out of spite.

Imagine if Steve Jobs or Bill Gates felt this way; if either one of them had at any point simply decided that they, personally, were so important to a given industry that they could extort their preferred behavior from customers or politicians by threatening to retire or shut down their companies, the market reaction would have been--punish their stock, and reward any and all competitors that would immediately be able to step in and fill the gap in the market left by such foolish hubris.

The tantrum thrown by Hostess is in a similar vein.  "We're gonna hold Twinkies hostage!  If we don't get what we want from those mean old unions, there won't be any Twinkies anymore!"

And the ignorant believe it.

What would really happen?

If Hostess were to actually liquidate, some of their assets would be all their various brands that are household-names (twinkies, ho-hos, ding-dongs, etc.), and the accountants assign a value to each of these things.

The right to make these products is an asset that is bought and sold like any other intellectual property.

There is no such thing as Reardon Steel in the real world; given a recipe, anyone can build anything, including a Twinkie.

If the market wants something, it will make it happen.  Including twinkies, and there's nothing that a petulant CEO can do about it.

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Comment Preferences

  •  Tip Jar (5+ / 0-)

    "When and if fascism comes to will not even be called 'fascism'; it will be called, of course, 'Americanism'" --Professor Halford E. Luccock of Yale Divinity School; New York Times article from September 12, 1938, page 15

    by demongo on Mon Nov 19, 2012 at 01:36:27 PM PST

  •  The 1% don't need us to work for them nor to (1+ / 0-)
    Recommended by:

    be consumers.
     "Someone" voted to make us obsolete. Those people have voted for R's my entire adult life.


    The radical Republican party is the party of oppression, fear, loathing and above all more money and power for the people who robbed us.

    by a2nite on Mon Nov 19, 2012 at 02:05:24 PM PST

  •  What infuriates me (1+ / 0-)
    Recommended by:

    about this and the American Airlines (and similarly GM pre-meltdown)coverage in the media is the complete ignoring of the well known history of legendary mismanagement by the corporate executives of both of those companies that have stretched on for decades. They focus only on the unions and either imply or outright blame them for the corporations downfall.

    So here we are with Hostess with management threatening to liquidate the company rather then live up to the legally binding contractual agreements they knowingly and willingly agreed to. Ready to make out with their salaries, likely to be hired on at some other multinational and equal to or better pay and leaving the people who made the product that got them rich and made their careers possible out in the lurch. Bent over a barrel. Yet nobody covers it this way instead playing into the tired B.S. narrative of greedy unions trying to destroy a company rather then suffer some sacrifice neglecting the fact that they made years worth of concessions in order to keep the company afloat.

  •  Noticed at the grocery store yesterday (1+ / 0-)
    Recommended by:

    that not only where all the Hostess products were gone, but also most of the Lil' Debbie's product as well. Which, in the long run, just goes to show that even if Twinkies never come back there is already a competitor providing a similar service (and at a lower price, to boot). We don't need Hostess; Hostess needed us. And who knows? Maybe if the Hostess brand doesn't come back in a few years, another company will decide to fill the "void" with an even better product. CEOs better realize that there really isn't one brand or product on the market that America will truly rend their clothes over if it suddenly disappeared.

    They can Go Gault if they want; we'll survive.

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