In response to:

Hostess Bankruptcy: What Role Did Policy Play?

R.3 Wrote: Nov 19, 2012 10:10 AM
From what I've heard about the many unions deal Hostess had to sign on to, I am surprised they made it this long. Many of the issues unions fought for and won have now become local or federal laws. Beyond the fundamentals, which are now guaranteed by law, what does the union do for its members? From my observation, it seems the primary job now is to keep alive the default mindset of "the company is screwing us".

The demise of Hostess and Twinkies is not a national emergency, but it is certainly sad when a major business goes under and thousands of people lose their jobs.

If federal and state policymakers want to play a useful role here, they should study why Hostess couldn’t make a go of it. Were there tax or regulatory factors that stood in the way of the company earning a decent rate of return?

Unions were an important factor that pushed up the firm’s costs and reduced its operational efficiency. The policy reform here is obvious for people who appreciate market economics: repeal America’s coercive union laws. If policymakers don’t...