Market Rates & Corporate Pigs: Who Killed The Twinkie?

As we head into this shorter than usual Thanksgiving week, our thoughts are with a few of our friends across the country who are the latest victims of corporate mismanagement, greed, and stupidity.

In case you missed the news at the end of last week, Hostess - the corporate owner of such iconic snack cakes as Twinkies, Ho-Hos, Dolly Madison, as well as comparatively healthier product lines like Nature's Pride and Wonder Breads - is going out of business, as of Friday.

Contrary to the hype you may have heard, most of the brands currently owned by Hostess will likely be back on store shelves within a couple of months. The shelf space on America's supermarkets and convenience stores is worth many, many millions per year, not to mention the brand names. There are already other companies looking to swoop in, and bring those brands back to life. Unfortunately, that business resurrection won't likely come before the end of the year - which means 18,500 American families are now facing the holiday season without jobs, thanks to the mismanagement of corporate America.

Whatever lies you've heard about the death of this company, we assure you - the facts surrounding the murder of Hostess this time are clear: The piggish, greedy corporate executives killed the company, not the unions.

Fortune magazine's David Kaplan had a brilliant and relatively thorough deconstruction of the whole sad Hostess tale back in July. Like Kaplan, we'd first noticed the troubling news coming out of Hostess several years ago.

It was the news coming out of Hostess over the past year that was the most troubling. According to the ever conservative Wall Street Journal, both the creditors and the unions began having serious problems with Hostess management after its executives boosted their own salaries, by as much 300% just before the company entered its latest bankruptcy filing - the company's second in less than a decade.

Multiple sources from inside the company, and across the country confirmed to us that over the past eight years different unions within Hostess had given back pay, benefits, and other concessions totaling hundreds of millions. Yet the corporate executives bleated and screamed this weekend it was the pension obligations to the unions that brought down the company.

Let's make something clear: Pensions are not "gifts" of the kind Mitt Romney whined about, and that smart Republicans are rebuking. Pensions - as well as health insurance, life insurance, and many other so-called benefits - are a legacy of corporate America trying to skip out on its obligations to pay workers a fair wage for a fair day's work.

As Forbes magazine's Adam Hartung points out perfectly, the biggest problem in corporate America today is the ignorance of the fact that, "Labor, like other suppliers, has a 'market rate.'" If Hostess' CEO had gone to their grain suppliers and demanded to pay 2/3 the market price for the same amount of grain, the suppliers would have laughed him out of their offices. Yet, by trying to get out of their responsibility to pay workers less than a fair rate of pay - a rate of pay, benefits, and pension olbigations that Hostess' management had agreed to not long ago - the corporate executives of Hostess were asking their workers to do the same work for only 2/3 of their market rate.

No one is saying pension obligations aren't a heavy lift for corporate America these days. Just as other business costs that can't be outsourced to China have gone up, the market rate of skilled labor in America has also gone up. Whether they like it or not, those costs are still part of the responsibilities of corporate executives, and of any stockholder who owns part of that company. If the standard operating procedures of corporate executives are to shirk their responsibilities to their workers whenever possible, how responsible have they ever been?

No matter how they want to cut the issue, if a company can't afford to pay its workers a fair wage, those workers will never buy its products - even if those products are just Twinkies.

Friday Funday: Secession Silliness

If you haven't been completely driven away from politics in the last week and a half since the election, it's likely that you've heard about the ridiculous secession petitions being filed by disgruntled right-wingers in many U.S. states.

When we first heard about this idiotic trend we were neither surprised or concerned. In fact, our initial response was quite simple: the rest of America survived eight years of Bush (barely), you fools will survive eight years of Obama. Of course, we also thought, "If you want to leave, go ahead! Get to steppin'!"

In truth, we couldn't really take the idea of secession seriously at first because the petitions were being filed using the "We The People" online petition tool − which is hosted on the White House's own website. Nothing says "We don't need you" like using the tools of the people you claim not to need.

Still, out of curiosity more than anything, we began to look into the issue a bit more closely, especially after reading an opinion piece by Dana Milbank of the Washington Post earlier this week.

After further review of the facts and numbers, we tend to agree with Mr. Milbank - AND the secessionists. If people like that want to leave, there are a whole host of reasons why we're more than willing to let them go.

There are just a few problems though.

For one thing, secession in the United States is illegal. It's an act of treason. For another, it's unconstitutional. We know - the Supreme Court already covered that back in 1869, in the Texas v. White case, the case that proved Texas may not secede from the union.

There's also the problem of money.

Most of the states leading the secession charge are "taker states", as Mr. Milbank pointed out in his piece. That means that for every dollar in taxes they pay to the U.S. federal government, they get back far more than a buck. Louisiana takes about $1.45 for every dollar they send to Washington, DC. Missouri takes $1.29 for each dollar. Nebraska doesn't mooch too badly, only taking $1.07 for every dollar we give.

Of course, all the people in those states that were leaving would have to give up their Social Security, Medicare, Medicare, and VA Benefits too.

The biggest problem with the idea of secession though isn't all the stuff.

It's the people.

We like Austin, Texas, home of The Derailers, among other things. We also like Corpus Christi. We have family and friends in Arizona and Indiana, in Nashville, Tennessee and rural Nebraska too. The feeling goes the other direction too, as we know many "red staters" that have family and friends in New York, Chicago, L.A. - and of course, Washington, DC.

There's no reason to unfriend all those people who disagree with you on Facebook, or stop shopping at retailers who don't share your political views. We are one country - with millions of different viewpoints.

As President Obama first noted in his 2004 speech, and as he echoed again in his victory speech last week, we are not just a collection of red states and blue states. We are the United States.

If you want to leave, that's up to you. But we'd rather you actually stayed. After all, that's how the melting pot concept is supposed to work.

Ill Communications

If there's one thing that's become blindingly obvious over the last week or so, it's how utterly bereft of purpose much of our national media machine is.

Sure, we've been following the embarrassing, tawdry, and effectively pointless "scandal" of the now-former head of the CIA, David Petraeus. What we know about the Petraeus incident so far is sad, and personally embarrassing to most of the primary actors in this real-life tragedy. Still, after the FBI spent months investigating parts of this case, and apparently gathered piles and piles of data what they found was salacious and sad - but not illegal.

What most of those in the major media outlets - who still have their hype generators on full-blast, after months of doing so during campaign season - haven't yet acknowledged is that there just doesn't appear to be any "there" there in this nontroversy. At least there's nothing important where most in the media are pointing.

The fact that over 20,000 pages of e-mails were exchanged by parties involved in the Petraeus scandal, and that the whole Petraeus affair was discovered by the FBI using surveillance powers in an ethically questionable, if not questionably legal manner? That's where the real story is.

It's well known that more and more companies are tracking what each of us do online, in an attempt to sell that information to advertisers who'd like a more accurate target for their ad dollars. Even games on your smartphone are collecting GPS data about where you are, and at what time of day.

That's because there are few if any serious and significant laws protecting the privacy of Americans online. We've known that fact for many years. The ECPA - the Electronic Communications Privacy Act  — was passed in 1986, long before the modern internet came into being, and has yet to be updated.

Like so many of our nation's infrastructure problems over the last 30 years, the legal infrastructure problem of protecting the privacy of Americans has been left to rot.

Until now.

While we're fairly certain the ECPA 2.0 and Global Free Internet Act won't be passed in this lame duck session of Congress, Rep. Zoe Lofgren of California has made it a key goal of hers to get both bills passed in the 113th Congress.

As Lofgren explained in a recent TechCrunch article, the ECPA 2.0 bill modernizes our current U.S. electronic privacy laws to protect Americans from government intrusion. The new law would apply Fourth Amendment rights against illegal search and seizure to our online digital property much as it does our physical property now.

The second bill would protect Americans from corporate intrusion and international collusion that might suddenly put the internet out of the reach of everyday people. In other words, it would help keep the Internet free and accessible for everyone.

We know - these kinds of legislative battles aren't nearly as sexy as twins from Tampa sending sexy e-mails to top government and military officials while being involved in love triangles. The legislative battles, however, are exactly what the real responsibilities of our government should be - and where our focus should be too.

The long arm of the law can indeed get too long for its own good. It's up to "We the people" to keep those law enforcement officials at a proper arms' length.