Hostess Brands is out of business. It’s in bankruptcy because its bakers union would not accept terms of a new contract which the company’s hedge fund (a.k.a. vulture fund) debt holders demanded. These funds wanted as the price of keeping the company alive that its bakers accept an 8 percent pay cut and a 30 percent reduction in their benefits. The 18,000-member union stayed on strike instead, and now its members don’t have jobs.
The hedge funds in this deal do not include Bain Capital, Mitt Romney’s private equity firm. But…,
But this is the kind of bargaining that Bain-like funds make, or try to make, to secure their own profits. And though we can’t know how the hedge funds holding Hostess’ debt will ultimately end up from this deal as the bankruptcy process plays out — we can’t know because these funds don’t have to report the bargain prices they actually paid for Hostess debt — it’s possible they will do quite well as the company’s assets (including its Twinkies, Devil Dogs, DingDongs, etc. products) are bought up by others.
So what is the big lesson to be learned here? It’s this: Multiple this Twinkies deal by several thousand and you get a notion of what Romneynomics, honed at Bain Capital, might have looked like for American workers generally if the Mitt Man had been elected president. Union member “moochers” who refuse to labor for minimum wage would get the ax while hedge gamers could still squeeze out their profits.
That’s the law in Job Creator Land. A place where Twinkynomics and Romneynomics rule. Where if you don’t come in Sunday, don’t bother coming in Monday.
Perhaps with Mitt Man behind us now, we can move beyond this approach to running an economy. Let’s hope so. Americans deserve better.
NOTE: This author’s new comic novel, The Bellman’s Revenge, is now available on Amazon in both print and ebook formats. Check it out if you get a chance. It’s really very funny.
Copyright 2012 The Moderate Voice