The USA And Europe, The Twinkie Economies

We were having trouble with our flushes, no not those, the lavatory cistern in the bathroom.  Removing the lid, I saw not a basic system that I could fix but a complicated mechanism.  This was a new cistern, just over two years old.  So the plumber who fitted it had to be consulted.

Because it was so recent the cistern system had to conform to new EU regulations on the use and control of water.  This was designed to ensure that only 6 litres of water would be used at most and with a short flush option of 3.  As old cisterns did a 9 litre flush this was environmentally superior.

One snag we have found that very often the 6 litre flush does not do the job so a second is needed, that is 12 litres a time.  The plumber told us this was quite usual with the new cisterns.  The logic of this escapes me. 

It is not possible to adjust it so the whole mechanism has to be replaced from the manufacturer in some distant part of the world.  The plumber and I had an interesting talk on the impact of the various EU regulations on households aimed at helping the environment and achieving greater “efficiency”.

Recently, Hostess Foods a large US foods manufacturer had gone into liquidation and one of its lead products, very popular indeed, is one called “Twinkies”.  There is real fear out there amongst the consumers of sweet and high calorie items that it might not be available in the future. 

Dr. Paul Price has done a short item on what has happened which has been put onto Zero Hedge and deserves reading in full.  Essentially, Hostess Foods has gone to the wall because of the nature of the liabilities of employment, the rulings attached and the unwillingness of the trade unions to compromise on changing work conditions.  The link is here:

http://www.zerohedge.com/contributed/2012-11-22/union-rules-were-harder-digest-twinkies

Looking at the complexities and organisational implications for the company, it is clear that the heavy added costs on top of ordinary ones have had a crippling effect once the company experienced financially tight and challenging conditions.

They bear a remarkable similarity to the huge raft of regulations and impositions made by the EU on employers and manufacturers.  It is little wonder that with these to contend with so many companies flee to tax shelters and try to find ways of evading all these rules, notably in their labour recruitment.

All will not be lost for the devotees of “Twinkies”.  The product has a large following and therefore the brand name is a major asset that should easily be sold for a good price to reduce the losses of Hostess Foods.  The chances are that a foreign buyer will soon be to hand or a private equity firm will take it over and then out source it to another firm in an another country.

The low paid labour working in rather worse conditions together with a cheaper mix flavoured to taste the same and coming from animals and poultry reared without much regard for welfare, hygiene or health will enable the price to be competitive.

This will cover the cost of the trucking and chilled containers shipped in from where the production will be based.  Global trade these days has many benefits to those able to take advantage of them. 

We gave the plumber a cup of tea and a couple of biscuits.  Although where the cup was made and for that matter the biscuits is anyone’s guess.

The USA and Europe are going the way of the “Twinkies” and our economies going down the flush, so to say.