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Subject:  Re: Thomas Sowell on the unions killing Hostess Date:  11/20/2012  1:04 PM
Author:  xLife Number:  656134 of 753944

"Killing the goose that lays the golden egg is one of those old fairy tales for children which has a heavy message that a lot of adults should listen to. The labor unions which have driven the makers of Twinkies into bankruptcy, potentially destroying 18,500 jobs, could have learned a lot from that old children's fairy tale.

Except in the case of Hostess, the goose was't laying golden eggs for the workers. It was laying them for management and the hedge fund debt speculators who were cutting workers wages and raiding their pension funds.

The work rules imposed in union contracts required the company that makes Twinkies, which also makes Wonder Bread, to deliver these two products to stores in separate trucks.

Cute story, but it has absolutely nothing to do with bakers' strike. And Hostess's problem wasn't costs. The unions had already agreed to $100 million of cost-cutting... only to watch management reward themselves with big bonuses and then, three years later, demand more concessions from the unions. Hostess's problem is too much debt, declining revenue and sales, things the workers and their unions have absolutely no control over.

Is Thomas Sowell really an economist? Seems more like a polemicist. This is pretty simple stuff to understand and get right.

http://dealbook.nytimes.com/2012/11/19/hostess-and-bakers-un...
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