These Buzzards Think They’re Eagles

18 Nov

Just a quick word on Pizzagate and then on to more important matters.  I’ve only eaten Papa John’s Pizza once in my life.  Fact is, their pizza totally sucks and once was enough, so while I can’t really lay claim to being part of any boycott, I almost wish I’d liked the food so I could actually boycott the place.  John Schnatter is to me the epitome of the “I want it all so %^$! everybody else” class of “job creators” and deserves nothing less than to lose his ass and be forced to live the way his employees have to live.  Unfortunately, that’s not the way it works in a country ruled by Neocapitalism and it will be the lowest of the rank and file who will continue to bear the brunt of this man’s avarice and there are apparently enough people in the country who believe in his way of doing business to keep him going.  Far better that John Schnatter be able to take $250 million from our economy without putting anything back than have to pay the three cents per pie it would take to provide health insurance for his workers.

Hostess is another story.  Hostess did indeed fall victim to forces beyond it’s control just as many have claimed.  It was NOT however the greed of its workers or their union that brought the whole thing down but but a combination of several of the facets of modern American capitalism in action, most notably the fact that over a period of several years… was simply and systematically sucked dry by it’s major shareholders which included at least one “private equity” firm and two hedge funds.

Understand, This is what “vulture capitalism”, the thing that was OK with 47% of the voters in the country is all about.  An outfit like Bain Capital for example.  They buy up distressed companies… some of which aren’t really all that distressed… and they milk every dime they can from it by cutting back on employees, eliminating benefits and pensions for rank and file employees, “monetizing” brand names, closing plants or outlets and selling off real estate or equipment… you name it.  If there’s a nickel to be gotten they’ll get it.  But where they really rake in the loot is they also borrow tons of money against the company’s assets which then… instead of being invested in the compnay goes for huge salaries and perks for their picked management teams, hundreds of millions in “fees” for the hedge fund managers and massive ROI for their institutional shareholders.  This creates huge amounts of debt which they know full well will never be repaid and eventually the companies wind up bankrupt and fading away to nothing but ONLY after the vultures have picked every scrap of meat they can from the rotting carcass.

What happened to Hostess provides a classic timeline of how it all works.  Oh I know, I know… Fox News has its usual screech on that the unions killed Hostess and well known voluminous radio gasbag Rush Limbaugh has naturally found a way to tie the loss of his favorite Twinkies and gravy breakfasts to the president but the simple facts are that Hostess has been dying for years and not only has no honest effort been made to save it, but the people that in a normal world would have been trying to save it have instead been systematically looting it for the their own gain. 

Indeed the fate of Hostess is the fate most companies meet once a private equity firm or hedge fund get’s its suckers attached.  One needs only to follow the saga of Sears, once THE icon of retail in America, under the thrall of Eddie Lampert since 2005 to see the parallels between it and other companies that have wound up being sacrificed after having been bled to death in the name of increased return for a hedge fund’s major shareholders.  But as for Hostess:

In 2004, the company entered bankruptcy with approximately $450 million in debt. It emerged after investment from Ripplewood Holdings. Today, it now stands at just shy of $1 billion in debt, despite additional investment by two more firms, Silver Point and Monarch. How did this happen?  These firms borrowed money to invest, which then they transferred that debt to the firm, simple. In effect, there never was any investment, only more debt added.   To emerge from bankruptcy, the companies unions agreed to large concessions which these vulture capitalists demanded, cutting thousands of jobs, transferring benefits or cutting benefits entirely. The companies also agreed to modernize the factories, which were running at a loss due to the age of the equipment, some of which dated to the 1930s. The investments from Silver Point and Monarch were to go towards this modernization. Instead the company found itself saddled with even more debt. To add to the company’s woes, the holding companies stopped supporting the retirement fund, raiding it for easy cash to extract from the firm. The current estimates put the liabilities of this fund at over $2 billion currently.

Hostess is certainly not the first but next to Sears, it’s one of the most significant examples of how “venture capitalists”, hedge funds and private equity firms make their money.  The 47% of the voting public mentioned above either remain blissfully unaware of the damage that people like Mitt Romney and companies like Bain Capital have done and continue to do to this country on a daily basis or they know full well what’s going on and simply feel that it’s more important to get the black dude out of the White House than it is to protect the country from predators like Mitt Romney.

One or the other.  They’ll have to wrestle it out with their own consciences as to which it was when vultures come for the company THEY work for.

And one thing you can bet on:  If you work for  wages for some company, eventually the vultures WILL be sitting on a limb looking down at you… kinda like them old boys on the left there… and deciding that you’re totally expendable and this kind of vulture isn’t known for having a lot of patience.  The fact that your company has attracted their attention means your goose is cooked.

So Mr. Tea Party Stalwart, I hope you thoroughly Enjoy this new world you’re helping to create for as long as it doesn’t suck your ass into the mess you’ve made for everyone else.   I have a distinct feeling that it won’t take long once you’ve helped the carrion eaters take control.  The joke… if there can be said to be one in a case like this… is in your thinking that you yourself are or ever were anything but carrion, just like the rest of us.

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Posted by on November 18, 2012 in Uncategorized


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