The Hostess Bankruptcy: America in Crisis (A Galileo Feynman Special Report)

Twinkies were served to the Indians at the first Thanksgiving

(IRVING, TEXAS) America's leading snack cake provider, Hostess Brands, Inc., announced Friday (November 16) that it was seeking to liquidate its business in response to a strike by workers. In liquidating Hostess would fire about 18,300 workers. The strike arose after union rejection (by over 95% of its members) of reductions in wages as well as benefits, pension, and retirement obligations.

Hostess or its predecessor companies have been in and out of bankruptcy and receivership since 2004. The cuts were trustee ordered, but the problem has been exacerbated since the Hostess CEO was given a $1.5 million compensation package the prior year (with $2 million more to follow), and a few executives had been given raises of up to 80%. The Hostess CEO has been replaced and the executives involved who remain with the company are working for $1 under court order.

Events are unfolding rapidly, with President Obama considering a TARP style bailout and Governor Christie now personally consuming as many Ding Dongs as possible to keep Hostesses afloat. Hostess executives, however, have exacerbated the situation saying "let them eat cake" while themselves having their cake and eating it too. (I deeply regret that last sentence.) Twinkies are now being rapidly loaded into Fort Knox to replace less valuable gold bars, and Ron Paul is insisting that our economy be placed on the "new gold" standard. Rush Limbaugh has asserted the crisis is due to President Obama (really he said this), while middle America is experiencing extreme Twinkie hoarding (okay, it's cubical stuffing, but whatever). This, people, is yet another sign that the world will end in 2012.