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View Diary: Private equity-owned Hostess blames striking workers as it liquidates (263 comments)

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  •  I think it is cynical. It's an inherent, (11+ / 0-)

    structural cynicism, one that goes so deep that it ceases to even be cynical anymore.

    The company was happy for the optics of striking workers ostensibly crippling the ability of Hostess to stay afloat. However, the fact of the matter is that private equity firms work by extracting profit from the firms they own, whether that profit is generated by honest revenue, or from the liquidation and consolidation of company assets.

    It's cynical not just because the company is saying one thing and doing another. It's cynical because the basic structural premise of private equity, or leveraged buyouts, or any of these Gordon Gecko takeover mechanisms is that a parent company can obtain more profit from dissolving a company than by putting its people to work. The profitability of a private equity firm is potentially in inverse proportion to its positive effects on the surrounding economy. There is a fundamentally parasitic relation of financial capital on the host organism of struggling manufacturers and brick-and-mortar firms.

    So the whole shebang becomes a conduit for the massive upwards redistribution of wealth. The whole enterprise is cynical well before the strikes or lack of strikes even come into the picture.

    Nothing requires a greater effort of thought than arguments to justify the rule of non-thought. -- Milan Kundera

    by Dale on Fri Nov 16, 2012 at 07:56:54 AM PST

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    •  Put every Tom, Dick and Jane into the stock (11+ / 0-)

      market via IRA and 401(k) vehicles and they will allow corporate America to do ANYTHING to make their own portfolio look good.

      I am old.  I remember when few people gave a shit if the stock market went up or down a few points.  Of course, back then, it was barely at 5,000.  But now that more people are dependent on that money to live in dignity, nevermind comfort, in their retirement years, everyone checks the stock market every day.  And they all get a statement every 3 months that says their balance is up or down.

      So, profit is the most important thing to even Joe Normalguy now.  And more profit equals higher stock prices, which makes Joe Normalguy's 401(k) look great, even though cost-cutting = reducing labor and Joe's job may very well go away in the interest of profit.

      It's quite the Chinese Handcuff the American workers have put themselves into.....all the ego-stroking "You can manage your money better than the government!" blather from 30 years ago really took hold.  Now, the rug is being pulled out from under us.  Some of us went through it in the 1980's and the 1990's and the 2000's....our jobs sacrificed to the alter of "profit".

      The good thing is I know who to point the finger at for the blame....too many Americans don't.  They've been conditioned to blame the government when it has been private industry all along that fucked them over.

      David Koch is Longshanks, and Occupy is the real Braveheart.

      by PsychoSavannah on Fri Nov 16, 2012 at 09:17:07 AM PST

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      •  But it's a trap (4+ / 0-)

        because the little guys' share of the overall market even through pension plans and 401ks and the like is miniscule compared to the percentage of corporate shares owned by the billionheirs.

        Forcing workers to invest in the private markets is nothing more than forcing them to align themselves against their own best interests. We all know that the stock market game is rigged to favor those with very specialized skills that the vast majority lack, not to even mention fraud and insider trading.

        Al Qeada is a faith-based initiative.

        by drewfromct on Fri Nov 16, 2012 at 09:53:59 AM PST

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      •  Exactly right. (5+ / 0-)

        And you make the best possible argument for NOT putting SocSec into the Stock Market.

        If I ran this circus, things would be DIFFERENT!

        by CwV on Fri Nov 16, 2012 at 10:09:29 AM PST

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        •  I write the letter yearly, for almost (4+ / 0-)
          Recommended by:
          TKO333, tinfoilhat, sfbob, CwV

          2 decades now.  No way in hell is MY money going to the gamblers and I will fight with my last breath anyone who suggests it.  I'm in SC now, and I always get a form letter back from Lindsey Graham, "You Lie" Wilson and Demented Demint that something just MUST be done about entitlements.  I fire back that you're damn right it's an entitlement and i will remain entitled to the money I paid in and they better stop stealing it for other stuff.  I remind them that their entitlement to their paycheck is going to come to an end.

          They write back to thank me for my input.

          And then they get the letter again, in January :-)  it's a fucked up relationship, but I am on record and that's important.

          David Koch is Longshanks, and Occupy is the real Braveheart.

          by PsychoSavannah on Fri Nov 16, 2012 at 10:45:22 AM PST

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      •  Wages vs Stock Growth (2+ / 0-)
        Recommended by:
        JustinBinFL, PsychoSavannah

        Another thing that people miss in this is that a $1 per hour raise is an extra $2000 per year for a full time worker.

        If the market went up by 5% you would need a $40,000 stock portfolio to equal the $1.   The average portfolio of families that DO hold stock was $12000 in 2009.

        So, all things considered, most people should be far more concerned about their wages than about the value of the market.

        According to the Federal Reserve's most recent report, the median value of directly held stock in 2009, for families holding any, was approximately $12,000. This represented a decline of 36% from $18,500 reported in 2007 and was largely attributable to the stock market's free fall and the cyclical unemployment that forced households to raid their savings.

        Religion gives men the strength to do what should not be done.

        by bobtmn on Fri Nov 16, 2012 at 01:22:45 PM PST

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        •  Exactly. Workers gave up wages (0+ / 0-)

          for some mythical, magical pot of gold at the end of the retirement rainbow.  The con was thorough, and good.

          And, what so many people just don't, or won't see, is money stuck in a bank account somewhere is not in the economy working.  And waaaaay too much money is in Switzerland and on islands :-)

          David Koch is Longshanks, and Occupy is the real Braveheart.

          by PsychoSavannah on Fri Nov 16, 2012 at 04:07:46 PM PST

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