The news this week has been about Hostess closing its doors. At first, the situation was simple enough: Hostess' costs of doing business were greater than its revenue, so management asked employees to take salary and retirement benefit cuts, and the unions (of course) refused.

But then the liberal media came out with its spin, reporting that Hostess has been sold three times since the 1980s (and gaining debt each time), and has filed for bankruptcy twice in the last ten years. The media has also reported that Hostess executives gave themselves considerable salary raises in the months before the liquidation.

True? Yes. But that was the plan. That's how venture capital works.

Remember -- businesses are in business for a profit, and the people who start and run businesses do so to make a profit. They're not in business to save the world, or even to provide jobs. This is simply how venture capitalism works.

The bankruptcies and salary increases were part one -- the latter isn't greed; it's simply compensation. The liquidation was also carefully managed, and the proposal to cut workers' salaries and retirement benefits was specifically designed to be a win-win -- if they capitulated, then the company would stay in business. And if they did not, then the assets would be sold to the highest bidder. And, Twinkies and the other Hostess brands will survive.

If this sounds harsh, just remember that businesses are in business to make a profit, and sometimes the most profitable thing to do is to shut down the business, or take it through a managed bankruptcy. This is what Mitt Romney would have done with GM, and had people listened to his advice, then GM would be even more profitable than it is today, and they probably wouldn't have released stinkers like the Chevrolet Volt.

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