– Stanislaw Lec
WASHINGTON – And also brands, the gods of the marketplace. Earthquakes may strike, dynasties may fall and locusts may devour the crops, but Oldsmobile and Pan Am are forever. Never mind.
But about the death of Twinkies: Write obituaries in the subjunctive mood. Like Lazarus, but for a reason more mundane than miraculous, this confection may be resurrected. In any case, the crisis of Hostess Brands Inc., the maker of Twinkies, involves two potent lessons. First, market forces will have their way. Second, never underestimate baby boomer nostalgia, which is acute narcissism. The Twinkies melodrama has the boomers thinking – as usual, about themselves: If an 82-year-old brand can die, so can we. Is that even legal?
Hostess, which had 18,500 employees making and distributing more than 30 brands made in 36 plants, had been in and out of bankruptcy several times since 2004. Its terminal crisis began on Nov. 9 when thousands of members of the bakers union went out on strike to protest wage, health care and pension cuts imposed by a court.
Amazingly, Washington did not offer Hostess a bailout. This discriminatory policy may be a constitutional violation – denial of equal protection of the laws. Since the onset of the financial crisis, the government has decided that some SIFIs are TBTF – some systemically important financial institutions are too big to fail.
Granted, it was not big in the technical, crabbed, hairsplitting, narrow-minded way that “big” is normally understood, as a boring matter of mere size. It was, however, big in what matters most – in boomers’ minds. They fondly remember opening their Roy Rogers or Hopalong Cassidy or Davey Crocket lunchboxes at school and finding Twinkies nestled next to peanut butter and jelly sandwiches made of Wonder Bread (another endangered Hostess species). Boomers, a generation of food scolds, became adults who considered Twinkies and other sugary things sinful. They should be shedding scalding tears of remorse.
Anyway, why GM and not Hostess? The Troubled Asset Relief Program, aka TARP, was passed to rescue financial institutions. But Washington reasoned: “What’s legality among cronies?” So soon TARP was succoring GM, which was not a financial institution. It was not even a car company. It was a health care provider unsuccessfully trying to sell cars fast enough to generate enough revenue to pay health benefits for its employees and approximately twice as many retirees.
The bakers rejected management’s final offer by a voice vote.
The market said that Hostess as configured made no sense. If, however, Twinkies and perhaps other Hostess brands retain value, the market will say so, and someone will produce them. Probably in a right-to-work state, which is how “entrepreneurial federalism” (another Boorstin phrase) should work: Business moves to states that make it welcome.
Whatever else a hospital ought to do, supposedly said Florence Nightingale, it ought not to spread disease. And whatever else unions should do, they should not put employers out of business.
George Will’s email address is firstname.lastname@example.org.