Podcast for 11-19-2012

[MrBogosity]

[mp3]https://bogosity.podbean.com/mf/web/4rt863/BogosityPodcast-2012-11-19.mp3[/mp3]


News of the Bogus:

• 0:25 - "Coca-Cola" Model for Delivering Malaria Meds is a Success, Should be Continued, Say Public Health Expert http://www.princeton.edu/research/news/features/a/?id=8912
  
  
  • "From Financing to Fevers: Lessons of an Antimalarial Subsidy Program," Science 338(6107):615-616, DOI: 10.1126/science.1231010 http://www.sciencemag.org/content/338/6107/615
• 2:45 - Man tasered by police while trying to save burning home http://www.firstcoastnews.com/news/article/282664/4/Man-tasered-by-police-while-trying-to-save-burning-home
• 5:00 - Woman 'denied a termination' dies in hospital http://www.irishtimes.com/newspaper/frontpage/2012/1114/1224326575203.html

7:20 - Biggest Bogon Emitter: Jillian Berman http://www.huffingtonpost.com/2012/11/13/papa-johns-obamacare_n_2123207.html

• Breaking Down Centi-Millionaire 'Papa' John Schnatter's Obamacare Math http://www.forbes.com/sites/calebmelby/2012/11/12/breaking-down-centi-millionaire-papa-john-schnatters-obamacare-math/
  

12:00 - Idiot Extraordinaire: The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union http://online.wsj.com/article/SB10001424127887324556304578122632560842670.html

• Hostess to Liquidate, Lay Off 18,500 After Crushing Union Fight http://www.foxbusiness.com/industries/2012/11/16/hostess-brands-moves-to-wind-down-operations-sell-assets
• Hostess Brands closing for good http://money.cnn.com/2012/11/16/news/companies/hostess-closing/

This Week's Quote: "Given the results of the War on Poverty and the War on Drugs, if the government starts a War on Abortion, in five years men will be having abortions." —Harry Browne

[Ibrahim90]

well, I have to say thanks for that line about Obama. it inspired me to make this smartassed picture:



and yes, I chose this particular depiction of Jesus on purpose. (it's from St. John's Aschfield)

I hope to make demotivators and meme posters (a la Philosoraptor or crazy wolf) based on this, but right now, enjoy this.

I know it can't outweigh the stupid and the evil shown in the late podcast, but still.

[Bignuncio]

So just to stir up some stuff I feel like bringing up the executive salaries at Hostess during the period of time between bankruptcies.  I haven't looked into it much and am generally on the side that believes the unions screwed the company and the workers over but I don't think they were alone.

It seems the CEO tripled his pay and several of the executives received rather large pay increases as well and then they turn around and ask the bakers to take a pay cut.  The CEO that got the pay raise actually quit which kind of indicates he saw the writing on the wall and took what he could get while the getting was good.

The history of bankruptcies does indicate the company wasn't being run very well and giving pay raises to the people asking the rest to take pay cuts is a slap in the face many people wouldn't tolerate even if it only amounts to a small fraction of the total debt.

[MrBogosity]

It seems the CEO tripled his pay

CEOs don't set their own pay. And he agreed to cut his salary to $1 as part of the restructuring.

[Canada71]

http://www.politicususa.com/romney-vulture-capitalist-style-management-killed-hostess-unions.html

[Canada71]

http://www.cps-news.com/2012/11/18/the-demise-of-hostess-brands-was-at-the-hands-of-venture-capitalist-not-unions/

[MrBogosity]

http://www.politicususa.com/romney-vulture-capitalist-style-management-killed-hostess-unions.html
http://www.cps-news.com/2012/11/18/the-demise-of-hostess-brands-was-at-the-hands-of-venture-capitalist-not-unions/

INCREDIBLE fail. More ignorant whining about the CEO's pay, while conveniently leaving out the fact that the CEO suggested and received a pay cut to $1/year.

Yes, they had a string of bad CEOs. Yes, bad business decisions caused the bankruptcy. But it was going to be a RESTRUCTURING. And the Teamster's union had their own experts look at the situation and agree that these pay and benefits cuts were vital if Hostess were to continue as a company (another fact conveniently left out). It was the Baker's Union AND THE BAKER'S UNION ALONE who were obstinate enough to refuse to see sense and destroyed the jobs for EVERYONE. They could have let Hostess restructure and kept their jobs. They didn't. This is ON THEM.

[Canada71]

You seem to be ignoring that the debt increased after being taken over by a venture capital firm after bankruptcy.  It would be hard to interpret that as anything other than raiding.  Asking for wage concessions in factories where it had already been pre-determined that they would be closing is similarly disingenuous.

The union was faced with making an ever-increasing spiral of wage cuts, for no perceptible benefit.   It was clear that the business was being intentionally run into the ground, with whatever capital could be extracted from it siphoned off in the meantime.

Imagine your boss dramatically cut your wages, and then cut them again, and wanted to cut them yet again, all while being almost totally incompetent at his job.  How long would you put up with that?

[MrBogosity]

You seem to be ignoring that the debt increased after being taken over by a venture capital firm after bankruptcy.

Covered in the podcast, along with the fact that they will most likely LOSE money because of Hostess shutting down. Try again.

The union was faced with making an ever-increasing spiral of wage cuts, for no perceptible benefit.

Why was that not the case with the Teamsters?

If these arguments were made about any other subject, they'd be called paranoid conspiracy theories--and rightly so. NO ONE WANTED THIS. NO ONE did this intentionally. And THEY ARE GOING TO LOSE MONEY BECAUSE OF IT.

Wake up and face reality.

[Canada71]

Covered in the podcast, along with the fact that they will most likely LOSE money because of Hostess shutting down. Try again.

Not addressed in the podcast. This is a typical technique for equity firms, burden the company with excessive debt, which is of course owed to you. If the company can manage to dig itself out of the now deeper hole, great. If not, then at least you got that initial money out of it, up front.

Why was that not the case with the Teamsters?

One union decided it was willing to swallow yet another wage cut and one union decided enough was enough.  How much you are willing to take is something different people are going to draw different lines on.

If these arguments were made about any other subject, they'd be called paranoid conspiracy theories--and rightly so. NO ONE WANTED THIS. NO ONE did this intentionally. And THEY ARE GOING TO LOSE MONEY BECAUSE OF IT.

They'll be fine, they've already paid themselves handsomely up front. Admittedly, there's no proof they intentionally ruined it, but they certainly didn't exercise any significant amount of care, competence or due diligence to try to keep it afloat.

What puzzles me is that the obvious blame for the failure of this company lies not with the union that decided it wasn't worth debasing itself to try to keep on life support for a few more months but rather with the blatantly incompetent ownership and management that drove it into the ground in the preceding years. You yourself have acknowledged that it was managed badly. So why save the majority of your venom for the union, not the people who actually ruined it?

[MrBogosity]

Not addressed in the podcast.

Yes, addressed in the podcast. I even give the numbers.

One union decided it was willing to swallow yet another wage cut and one union decided enough was enough.  How much you are willing to take is something different people are going to draw different lines on.

How much of a cut were the union workers asked to take, compared to how much of a cut the CEO asked for himself?

The rest of your bullshit has already been refuted. Repeating it does nothing. Respond to the refutations or STFU.

[Canada71]

Yes, addressed in the podcast. I even give the numbers.

Cite the reference. I've listened to it from 12:00 onwards four times, and if its there, I'm missing it. The word 'debt' isn't even mentioned, much less any numbers discussing the debt load before and after bankruptcy. You don't mention any numbers indicating how that debt came to be,  most particularly how that debt burden came to be increased during the leveraged buyout by a private equity owner, Ripplewood Holdings. I would agree that you give numbers, but none relevant to the debt load.

How much of a cut were the union workers asked to take, compared to how much of a cut the CEO asked for himself?

After being paid $100,00 a month, he did, apparently, agree to lower his salary to $1 a year. I should note that there is no indication that other executives who received exorbitant raises for a moribund company did the same. But, again, if your boss or CEO agreed to the same deal, would you then agree to lower your own salary? How low would you lower it? To $1/year? Can you not at least agree that there becomes a point where your salary could be lowered to a point where it would become untenable?

The rest of your bullshit has already been refuted. Repeating it does nothing. Respond to the refutations or STFU.

Again, as far as I can determine, at no point in the podcast or in this form have you addressed the simple fact that the vast majority of the blame for the failure with this company lies with ownership and management, not the union.

[MrBogosity]

Cite the reference. I've listened to it from 12:00 onwards four times, and if its there, I'm missing it. The word 'debt' isn't even mentioned, much less any numbers discussing the debt load before and after bankruptcy.

AHEM, DIRECT QUOTE: "Now, the only option left to Hostess is to liquidate, selling its assets to the highest bidders. The cost of wrapping up operations will be some $41 million, and the liquidation should generate about $77 million, partly financed by a $75 million bankruptcy loan." (And a loan isn't debt or something? "It's not likely that their private equity owner, Ripplewood Holdings LLC, will be able to recover ANYTHING."

You don't mention any numbers indicating how that debt came to be,

Yes I did. $75 million bankruptcy loan.

came to be increased during the leveraged buyout by a private equity owner, Ripplewood Holdings.

Who stands to LOSE money on the deal, AS I SAID.

After being paid $100,00 a month, he did, apparently, agree to lower his salary to $1 a year.

Shortly after he was hired to get them out of bankruptcy. So tell me, how would the labor unions feel about a 120,000% pay cut?

I should note that there is no indication that other executives who received exorbitant raises for a moribund company did the same.

Outright lie. Most executives were faced with a drastic pay cut--perhaps even net losses--as a result of the bankruptcy and restructuring.

at no point in the podcast or in this form have you addressed the simple fact that the vast majority of the blame for the failure with this company lies with ownership and management, not the union.

You just don't seem to realize that there's a difference between the bankruptcy and the end of the company. AT NO POINT do I blame unions for the bankruptcy, AT ALL. And I SPECIFICALLY mention the down economy as a contributing factor (which it was, probably the most significant one). The bankruptcy was going to end in a RESTRUCTURING, and I don't know how I could possibly drum this into your clearly-bigoted head any more than I already have.

The Baker's union, on the other hand, is absolutely 100% to blame for the restructuring resulting in the destruction of the company, and your paranoid conspiracy theories do NOTHING to change that fact.

[Canada71]

Yes I did. $75 million bankruptcy loan.

Which goes virtually nowhere in explaining how you can emerge from bankruptcy with a higher debt load. The purpose of bankruptcy is to make a company more financially feasible, almost invariably by reducing its debt by giving its creditors pennies on the dollar. The notion that it would emerge from bankruptcy with a higher debt load, and thus less likely, not more likely, to be able to achieve profitability should raise eyebrows. I can't state authoritatively that there is anything funny going on here, but it should make one very suspicious. The claim is that the debt load was higher because the company had "expectations of 'growing' into its capital structure". This I also find suspicious, because there is no evidence to suggest that they actually had that expectation, or that a rational person would have had that expectation.

Outright lie. Most executives were faced with a drastic pay cut--perhaps even net losses--as a result of the bankruptcy and restructuring.

Nice try. As I stated, there is no evidence those other executives, whose salaries were raised 80%, voluntarily lowered their salary to $1 per year. Facing a pay cut, not of their own choosing, is very different from voluntarily lowering one's own salary to $1 per year. I should also note that those pay cuts would have have to have been pretty dramatic just to return them to where they were prior to their pay raise.

AT NO POINT do I blame unions for the bankruptcy, AT ALL.

Excellent.

[MrBogosity]

Which goes virtually nowhere in explaining how you can emerge from bankruptcy with a higher debt load.

They're NOT going to emerge from bankruptcy, though, are they? They're done!

The purpose of bankruptcy is to make a company more financially feasible,

Which is what they were trying to do, and the Baker's union stopped them from doing.

almost invariably by reducing its debt by giving its creditors pennies on the dollar.

Creditors aren't going to do that without the company showing that they're cutting back expenses. They needed those $200 million in cuts to be solvent.

The notion that it would emerge from bankruptcy with a higher debt load, and thus less likely, not more likely, to be able to achieve profitability should raise eyebrows.

They WOULDN'T have. But they ARE, because now thanks to the Baker's union they couldn't restructure and are closing down. So the only money they're going to get is whatever the assets sell for, which at current values won't be enough.

I can't state authoritatively that there is anything funny going on here, but it should make one very suspicious.

Not anyone who actually understands finances or bankruptcies. It's anomaly-hunting, nothing more.

Facing a pay cut, not of their own choosing,

Um, it was the executives who made the decision. How was it not of their own choosing?