Wednesday, February 16, 2011

Borders Files Bankruptcy After Years of Market Losses

Borders Group Inc., the number-two U.S. bookstore chain, filed for bankruptcy in New York today after management changes, job cuts and debt restructuring failed to make up for sagging book sales in the face of competition from Inc. and Wal-Mart Stores Inc.

Borders will shut about 30 percent of “underperforming” stores and restructure with $505 million in so-called debtor-in- possession financing from lenders led by GE Capital, according to a statement. The 40-year-old chain listed debt of $1.29 billion and assets of $1.28 billion as of Christmas 2010 in its Chapter 11 petition filed today in U.S. Bankruptcy Court in Manhattan. The company plans to restructure and continue to operate.

“Borders Group does not have the capital resources it needs to be a viable competitor,” the company’s president, Mike Edwards, said today in a statement. The filing will give it “time to reorganize in order to reposition itself to be a successful business for the long term.”

Borders, whose market value shrunk by more than $3 billion since 1998, racked up losses by failing to adapt to shifts in how consumers shop. Its first e-commerce site debuted in 2008, more than a decade after revolutionized publishing with online sales. The world’s largest online retailer beat it again by moving into digital books with the Kindle e-reader in 2007, a market Borders entered in July.

‘A Follower’

“Instead of leading and being innovative, they were certainly a follower,” said Michael Souers, an analyst for Standard & Poor’s in New York.

Borders, based in Ann Arbor, Michigan, began looking for a cash infusion in December after disclosing lenders cut its borrowing capacity and failure to find replacement credit could lead to a violation of its loan agreements and a “liquidity shortfall” in the first quarter of 2011.

The company has 639 stores under the Borders, Waldenbooks, Borders Express and Borders Outlet names in the U.S. and three in Puerto Rico, according to the court filing. The company has 6,100 full-time workers and 11,400 part-time employees, it said.

Penguin Putnam was listed as the largest unsecured creditor with a $41 million claim. Hachette Book Group has a claim of $36.9 million and Simon & Schuster Inc. has a claim of $33.8 million. Random House, the publisher owned by Bertelsmann AG, Europe’s biggest media company, has a claim of $33.5 million.

$25 Million

The company in May raised $25 million in a private sale to an entity controlled by Bennet S. LeBow, who was then named CEO and chairman. Pershing Square Capital Management LP is Borders’s largest shareholder, according to the filing. Borders’ biggest shareholders also include Zurich-based UBS AG, according to the court filing. It is typical in Chapter 11 bankruptcy for equity holders to receive no return.

Borders estimated that funds would be available for distribution to unsecured creditors, according to the filing signed by the company’s chief financial officer, Scott Henry.

Kasowitz, Benson, Torres & Friedman LLP is the law firm that filed the petition.

Borders has struggled with cash levels since at least 2008, when it ran short of money and was forced to borrow from Pershing, its largest shareholder at the time. After missing a deadline to find a buyer, the company issued 5.15 million warrants to Pershing Square, the hedge fund run by William Ackman, making the fund the bookseller’s largest investor.

Borders borrowed $42.5 million from Pershing to remodel stores and upgrade technology to compete with Barnes & Noble Inc., the largest bookseller in the U.S., and Cost- savings measures have been implemented over the past year.

Closing Stores

In January 2010, Borders announced it would close some of its 513 bookstores in the U.S. and cut 11 percent of staff at its headquarters and eliminate 76 other jobs. Chief Executive Officer Ron Marshall resigned after a year on the job. Michael Edwards was put in a role as interim CEO.

Borders delayed payments to publishers in December as part of a plan to restructure financing arrangements with vendors. The stock lost more than a fifth of its market value, its biggest drop in two years, after the announcement.

Kmart Corp. acquired Borders in 1992, then a chain of about 20 stores founded by Tom and Louis Borders, for about $190 million and combined the retailer with its Waldenbooks unit.

In 1995, Kmart renamed the unit Borders Group Inc. and spun it off in an initial public offering. The new public company, with a market value of about $500 million, had more than 1,000 locations under the Borders, Waldenbooks and Planet Music brands and generated $1.5 billion in revenue.

Borders then joined Barnes & Noble in dotting the U.S. with book superstores that proved to be more profitable than its mall-based Waldenbooks locations. The superstore unit grew to 200 by 1996, doubled by 2002 and peaked at more than 560.

“They over-expanded and built up some debt on their balance sheet,” said Souers, who has covered Borders for six years. “There was also less control to those businesses.”

The case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York.

'Many Egypt protesters still missing'

Pro-democracy protesters sit down in front of Egyptian Army tanks to prevent them from moving at the protest site near Cairo's Liberation Square on February 7, 2011.
Human rights groups says hundreds of Egyptian people have gone missing in the recent popular revolution that toppled former president Hosni Mubarak.

A leading human rights group said on Tuesday that some people were being held by the armed forces.

"There are hundreds of detained, but information on their numbers is still not complete ... The army was holding detainees," AFP quoted Gamal Eid, a lawyer who heads the Arabic Network for Human Rights Information, as saying.

The group says it was still receiving "information relating to the disappearances of many youths and citizens."

Eid urged the military to publish a list of detainees' names and to guarantee their rights.

Reports say at least 500 people were arrested in the recent popular protests that toppled the ruling regime.

But an estimated 17,000 political prisoners were already locked up in Egyptian prisons, which are notorious for the use of torture.

Egypt has also been the US destination of choice for its extraordinary rendition program -- the practice of taking terror suspects to a country where torture is used in an attempt to extract confessions.

Activists have demanded the release of political prisoners, the lifting of a 30-year-old state of emergency and the disbandment of military court. They say demonstrations will continue until the army accepts the reforms.

They are demanding a clear timetable for the transfer of power to a civilian government.


Too much hysteria over cyber attacks: US experts

© AFP/File Jim Watson

SAN FRANCISCO (AFP) - Overblown talk of full-on cyber war between nations fueled by recent attacks like the computer worm Stuxnet could hamper Internet security efforts, officials and experts warned Tuesday.

Serious attention should be paid to threats of cyber attacks from hackers, spies and terrorist groups but not to the extent of mass hysteria, speakers at the premier RSA computer security conference in San Francisco said.

"Cyber war is a terrible metaphor," said White House cybersecurity czar Howard Schmidt. "Don't make it something it's not."

Online espionage and hacking are not new, and hyping incidents as warfare distracts computer security champions from critical jobs such as safeguarding power grids, financial systems, and medical networks, he contended.

"We are in the midst of a cyber war of words," Schmidt said. "Let's quit pointing fingers and start cleaning up the infrastructure."

Renowned computer security specialist Bruce Schneier of BT Group said that use of warlike tactics in online conflicts is fueling hysteria that has the world on the brink of a "cyber arms race."

"We are not necessarily seeing cyber war, but increasing use of warlike tactics in more general cyber conflicts," Schneier said. "I think that is what's confusing us."

He cited a Stuxnet computer virus evidently crafted to find and disrupt an Iranian nuclear facility as an Internet Age attack that smacks of warfare but arguably falls short.

"It is not war," Schneier said. "It is in the middle somewhere."

Fears of cyber war are driving a needless cyber arms race that brings with it the danger that software weapons might accidentally be released, he argued.

"We haven't seen offensive cyber weapons companies, but they are coming," Schneier said. "Big defense contractors are working on this; you know they would be dumb not to."

The most prevalent cyber threat has been theft of information from networks, US Deputy Secretary of Defense William Lynn said in a keynote address to the gathering.

Foreign spy agencies have accessed military plans and weapons systems designs, while source codes and intellectual property have been swiped from businesses and universities, according to Lynn.

Attacks on computer networks have thus far been "relatively unsophisticated" and short in duration, the defense official said.

An emerging threat is that cyber tools will cause real-world damage, according to Lynn.

"The threat is moving up a ladder of escalation, from exploitation to disruption to destruction," he said.

Foreign spies have focused on mining US networks instead of disrupting them, according to Lynn.

"Although we cannot dismiss the threat of a rogue state lashing out, most nations have no more interest in conducting a destructive cyber attack against us than they do a conventional military attack," Lynn said.

"The risk for them is too great."

US defense officials are more worried about an accidental release of "toxic malware," he explained.

"Perhaps the greatest concern in our judgement is a terrorist group that gains the level of disruptive and destructive capability currently possessed by nation-states," Lynn said.

Terrorist groups could craft their own cyber weapons or buy them on the black market, he added.

"As you know better than I, a couple dozen talented programmers wearing flip-flops and drinking Red Bull can do a lot of damage," Lynn told the gathering of software savants.

"We have to assume that if they have the means to strike, they will do so."

Cyber commandos are being trained in the military, and the US is reaching out to allies to form collective online defenses, he said.

Lynn called on specialists in the computer security industry to team with the military to defend the nation's networks.

"The government cannot protect our nation alone," Lynn said. "It is going to take a public-private partnership to secure our networks."

© AFP -- Published at Activist Post with license

Theft By Deception -- Deciphering The Federal Income Tax

Thousands of Wisconsin labor supporters protest

MADISON (AP) — Officials report no incidents of violence or disorder in and around the Wisconsin Capitol, where thousands of protesters gathered.

The Wisconsin Department of Administration estimates that 10,000 protesters demonstrated outside the Capitol on Tuesday, with 3,000 more filling the Capitol Rotunda. The labor supporters are protesting Gov. Scott Walker’s budget repair bill, which would strip most state and local workers of collective bargaining rights, except when negotiating salary.

The Capitol and surrounding square are being patrolled by Madison police and Dane County Sheriff’s deputies. DOA officials say there were no incidents between protesters and police.

Protesters outside the Capitol started to leave around 1 p.m., but many remained within the Capitol beating drums and occasionally chanting.

Copyright 2011 All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

How Big is the U.S. Debt?

Obama vows to tackle benefit spending

Editor's Note: Like a good international bankster puppet...take from the poor, give to the banks

© AFP Tim Sloan

WASHINGTON (AFP) - President Barack Obama on Tuesday vowed to tackle costly but fiercely guarded medical, retirement and jobless benefits, as he sought to rebuff criticism he is not willing to address tough spending issues.

Facing allegations that his 2012 budget does not tackle the main causes of the country's soaring deficits, Obama insisted the plan, presented Monday, puts the US on a path to pay for what it spends by the middle of the decade.

Urging Republicans to cooperate, Obama also sought to enlist his detractors in a broader reform effort, offering to examine unemployment, disability, old-age and health benefits that have long been sacrosanct in Democratic politics.

"To get where we need to go, we're going to have to do more, bring down health care costs further, including in programs like Medicare and Medicaid, the single biggest contributor to our long-term deficits," Obama told reporters.

Medicare provides health insurance for Americans over 65 years old, while Medicaid provides treatment for the poor. Along with Social Security -- which covers unemployment, disability and other benefits -- the programs will cost $20.4 trillion in the next ten years.

At the same time Obama backed reforming the corporate tax code, a move that could spell vastly larger tax bills for the Republicans' normally stalwart big business allies.

The administration has called for lowering minimum tax rates while closing loopholes that mean few large firms pay anything close to the current nominal rate.

Obama also raised the prospect of individual tax reform, an enticing if fraught prospect in the run up to a presidential election.

"I believe we should strengthen Social Security for future generations, and I think we can do that without slashing benefits or putting current retirees at risk, and I'm willing to work with everybody on Capitol Hill to simplify the individual tax code for all Americans.

"All of these steps are going to be difficult, and that's why all of them will require Democrats, Independents and Republicans to work together."

Obama pointed to previous examples of bipartisanship during the Clinton and Reagan eras and under his own administration as evidence that a deal could be reached.

But there was little evidence of common ground on Tuesday as members of both parties and the administration flooded the airwaves with their verdict of the budget, with comments almost exactly split along party lines.

© AFP -- Published at Activist Post with license

$300,000 Income Tax Reward

Freedom Law School is offering $100,000 to the first person who can demonstrate any of the three propositions listed below. The winner can collect up to $300,000 if he or she can prove all of the propositions below.

1. Show what statute written by the Congress of the United States that requiring Americans to file an income tax “CONFESSION” (return) and pay an income tax.

2. Show how Americans can file an income tax “CONFESSION” (return) without giving up their 5th amendment right to not give any information to the government that may be used to prosecute them.

3. Prove that the 16th amendment to the United States Constitution, which, according to the IRS and modern American courts permitted the income tax to exist was lawfully added to the United States Constitution.

Freedom Law School declares:

* There is no statute that makes any American Citizen who works and lives in the United States of America liable or responsible to pay an income tax. Individuals only become liable to pay the income tax when they "VOLUNTARILY" file a tax return and the IRS follows their assessment procedures as outlined in the Internal Revenue Code.
* If there were a statute, which clearly and unequivocally required the filing of such tax returns, such a statute would be unconstitutional under the present income tax system to the extent that it would require individuals to give the government information which could be used against them to prosecute them criminally. Although the IRS and the modern American courts claim that the 16th Amendment of the U.S. Constitution permitted the income tax to be imposed on the compensation for labor of the average working man, the 16th Amendment was not properly added to the United States Constitution. See for documentation of this issue.
* The IRS, under the United States Constitution, cannot legally require information on 1040 returns from individuals. This is the reason the IRS continually refers to the income tax as "voluntary."
Read More: ... eturns.jpg


Nine Pictures Of The Extreme Income/Wealth Gap

Many people don’t understand our country’s problem of concentration of income and wealth because they don’t see it. People just don't understand how much wealth there is at the top now. The wealth at the top is so extreme that it is beyond most people’s ability to comprehend.

If people understood just how concentrated wealth has become in our country and the effect is has on our politics, our democracy and our people, they would demand our politicians do something about it.

How Much Is A Billion?

Some Wall Street types (and others) make over a billion dollars a year – each year. How much is a billion dollars? How can you visualize an amount of money so high? Here is one way to think about it: The median income in the US is around $29,000, meaning half of us make less and half make more. If you make $29,000 a year, and don’t spend a single penny of it, it will take you 34,482 years to save a billion dollars. . . . (Please come back and read the rest of this after you have recovered.)

What Do People Do With SO Much?

What do people do with all that money? Good question. After you own a stable of politicians who will cut your taxes, there are still a few more things you can buy. Let’s see what $1 billion will buy.


This is a Maybach. Most people don’t even know there is something called a Maybach. The one in the picture, the Landaulet model, costs $1 million. (Rush Limbaugh, who has 5 homes in Palm Beach, drives a cheaper Maybach 57 S -- but makes up for it by owning 6 of them.)

Your $1 billion will only buy you a thousand Maybach Landaulets.

Here are pics of just some of Ralph Lauren’s collection of cars. This is not a museum, this is one person’s private collection. You don't get to go look at them.

Luxury Hotels

This is the Mardan Palace Hotel in Turkey, Burj Al Arab in Dubai.

Here is a photo gallery of some other expensive hotels, where people pay $20-30,000 per night. Yes, there are people who pay that much. Remember to send me a postcard!

A billion dollars will buy you a $20,000 room every night for 137 years.


Le Grand Bleu - $90 million.

Some people spend as much as $200 million or more on yachts.

You can buy ten $100 million yachts with a billion dollars.

Private Jets

Of course, there are private jets. There are approx. 15,000 private jets registered in the US according to NBAA. (Note: See the IPS High-Flyers study.)

This is a Gulfstream G550. You can pick one up for around $40 million, depending. Maybe $60 million top-of-the-line.

Your billion will buy you 25 of these.

Private Islands

If the rabble are getting you down you can always escape to a private island.

This one is going for only $24.5 million – castle included. You can only buy 40 of these with your billion.


This modest home (it actually is, for the neighborhood it is in) is offered right now at only about $8 million. I ride my bike past it on my regular exercise route, while I think about how the top tax rate used to be high enough to have good courts, schools & roads and counter the Soviet Union and we didn't even have deficits.

I ride there but that neighborhood is not like my neighborhood at all. While there is one family in that house, I live closer to the nearby soup kitchen that serves hundreds of families. One family in a huge estate and hundreds at a soup kitchen roughly matches the ratio of wealth concentration described below.

Here are a few nearby homes up for sale.

You can buy 125 houses like this one with your billion.

Luxury Items

Here is an article about ten watches that are more expensive than a Ferrari.

The one in this picture costs more than $5 million. You can buy 200 of these with your billion.

Medieval Castles

Just for fun, this is Derneburg Castle. Do you remember the big oil-price runup a few years ago that sent the price of a gallon at the pump up towards $5? One speculator who helped make that happen got a huge bonus paid with government bailout money. He owns this castle. He has filled it with rare art. You can’t go in and see any of the rare art.

Click here to see the layout in an aerial view. That’s as close as you're going to get, peasant.

Let's Go Shopping

So you say to yourself, "I want me some of that. I’d like to place the following order, please."

  • One Maybach Landaulet for $1 million to drive around in. (Actually to be driven around in.)
  • One $100 million yacht for when I want to get seasick.
  • One Gulfstream G550 private jet for $40 million.
  • One private island for $24.5 million (castle included) for when I want to escape the masses.
  • One $8 million estate for when I have to go ashore and mingle with the masses (but not too close.)
  • One $5 million watch so I can have one.
  • Total: $178.5 million.

My change after paying with a billion-dollar bill is a meager $821.5 million left over. I might be hard up for cash after my spending spree, but I can still stay in a $20,000 room every night for 112 and 1/2 years.

So, as you see, $1 billion is more than enough to really live it up. People today are amassing multiples of billions, paying very little in taxes and using it in ways that harm the rest of us.

How Extreme Is The Concentration?

Now you have a way to visualize just how much money is concentrated at the very top. And the concentration is increasing. The top 1% took in 23.5% of all of the country’s income in 2007. In 1979 they only took in 8.9%.

It is concentrating at the expense of the rest of us. Between 1979 and 2008, the top 5% of American families saw their real incomes increase 73%, according to Census data. Over the same period, the lowest-income fifth (20% of us) saw a decrease in real income of 4.1%. The rest were just stagnant or saw very little increase. This is why people are borrowing more and more, falling further and further behind. (From the Working Group on Extreme Inequality)

Income VS Wealth

There are a few people who make hundreds of millions of income in a single year. Some people make more than $1 billion in a year But that is in a single year. If you make vast sums every year, after a while it starts to add up. (And then there is the story of inherited wealth, passed down and growing for generation after generation...)

Top 1% owns more than 90% of us combined. "In 2007, the latest year for which figures are available from the Federal Reserve Board, the richest 1% of U.S. households owned 33.8% of the nation’s private wealth. That’s more than the combined wealth of the bottom 90 percent." (Also from the Working Group on Extreme Inequality)

400 people have as much wealth as half of our population. The combined net worth of the Forbes 400 wealthiest Americans in 2007: $1.5 trillion. The combined net worth of the poorest 50% of American households: $1.6 trillion.


Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:


The top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%.

Worse Than Egypt

In fact our country's concentration of wealth is worse than Egypt. Richard Eskow writes,

Imagine: A government run by and for the rich and powerful. Leaders who lecture others about "sacrifice" and deficits while cutting taxes for corporations and the wealthy. A system so corrupt that rich executives can break the law without fear of being punished. Increasing poverty and hardship even as the stock market rises. And now, a nation caught between a broken political system and a populist movement that could be hijacked by religious extremists at any moment.

Here's the reality: Income inequality is actually greater in the United States than it is in Egypt. Politicians here have close financial ties to big corporations, both personally and through their campaigns. Corporate lawbreakers often do go unpunished. Poverty and unemployment statistics for US minorities are surprisingly similar to Egypt's.

The Harmful Effect on The Rest Of Us

This concentration is having a harmful effect on the rest of us, and even on the wealthy. When income becomes so concentrated people who would otherwise think they are well off look up the ladder, see vastly more wealth accumulating, and think they are not doing all that well after all. This leads to dissatisfaction and risk-taking, in an effort to get even more. And this risk-taking is what leads to financial collapse.

Aside from the resultant risk of financial collapse, the effect of so much in the hands of so few is also bad psychologically. People need to feel they earned that they have earned what they have, and develop theories about why they have so much when others do not. Bizzare and cruel explanations like Ayn Rand's psychopathic theories about "producers" and "parasites" take hold. Regular people become little more than commodities, blamed for their misery ("personal responsibility") as they become ever poorer.

Teddy Roosevelt, speaking to the educators about "False Standards Resulting From Swollen Fortunes," warned that while teachers believe their ideals to be worth sacrifice and so do non-renumerative work for the good of others, seeing great wealth makes people think that obtaining wealth is itself a lofty ideal,

The chief harm done by men of swollen fortune to the community is not the harm that the demagogue is apt to depict as springing from their actions, but the effect that their success sets up a false standard, and serves as a bad example to the rest of us. If we do not ourselves attach an exaggerated importance to the rich man who is distinguished only by his riches, this rich man would have a most insignificant influence over us.

Societies that are more equal do better. In the book The Spirit Level: Why More Equal Societies Almost Always Do Better, Richard G. Wilkinson and Kate Pickett make the case that great inequality harms us physically as well as spiritually, and the these harmful effects show up across society. The book examines social relations, mental health, drug use, physical health, life expectancy, violence, social mobility and other effects and show how inequality worsens each.

Influence Buying

There is a problem of the effect on our democracy from the influence that extreme, concentrated wealth buys. In the book Winner-Take-All Politics: How Washington Made the Rich Richer--and Turned Its Back on the Middle Class, Jacob Hacker and Paul Pierson make the case that the anti-democracy changes we have seen in America since the late 1970s that led to intense concentration of wealth and income are the intentional result of an organized campaign by the wealthy and businesses to use their wealth to, well, buy even more wealth.

The secretive Koch Brothers are said to have a net worth of $21.5 billion each and are particularly influential. They financed the Tea Party movement and along with big corporations and other billionaires they financed the massive assault of TV ads in the midterm elections that helped change the makeup of the Congress. And now Congress is paying them back,

Nine of the 12 new Republicans on the panel signed a pledge distributed by a Koch-founded advocacy group — Americans for Prosperity — to oppose the Obama administration's proposal to regulate greenhouse gases. Of the six GOP freshman lawmakers on the panel, five benefited from the group's separate advertising and grassroots activity during the 2010 campaign.

... Republicans on the committee have launched an agenda of the sort long backed by the Koch brothers. A top early goal: restricting the reach of the Environmental Protection Agency, which oversees the Kochs' core energy businesses.

We Must Address This

We owe it to ourselves to come to grips with this problem. We owe it to democracy to begin taxing high incomes and inheritance again. We owe it to future generations to use a temporary wealth tax to pay off the debt.


The Working Group on Extreme Inequality explains why inequality matters in many more ways, and is well worth clicking through to study. They also have a page of resources for study with links to other organizations. Also, spend some time at Too Much, A commentary on excess and inequality because it is "Dedicated to the notion that our world would be considerably more caring, prosperous, and democratic if we narrowed the vast gap that divides our wealthy from everyone else." The Center on Budget and Policy Priorities has a Poverty and Income area of research with good resources. The Center for Economic and Policy Research has a research section on Inequality and Poverty.

H1N1: Human to Animal Now Confirmed

In 2009 we saw the H1N1 flu surface with s massive push from vaccine companies to sell millions of doses of the very dangerous fast tracked vaccine.

Some researchers in the medical profession have stated that they believe the original 2009 strain of H1N1 to be a man made catalyst or primer for a secondary component to be triggered to mutate the strain into a much more deadly version (bio-weapon).

Others such as Jane Burgermeister have gone as far as to filed charges against this criminal syndicate, getting stone walled at every corner.

Large think tanks such as the Rand Corp. have been devising ways to vaccinate even more of the worlds population as outlined in this recently released document on the Rand Corp. website titled “Seasonal Flu Vaccination: Why Don’t More Americans Get It?

Some say older strains of the virus more than likely escaped the lab like this Paul Watson Joseph Article lays out:

Professor: Descendent Of H1N1 Virus “Accidentally” Released From Lab

Professor John Oxford stated that the strain of H1N1 that appeared in the 1970′s was “probably released accidentally from a laboratory, probably in northern China or just across the border in Russia, because everyone was experimenting with those viruses at the time in the lab.”

Oxford told NPR that he didn’t believe the release was malicious but came as a result of “some flu vaccine research that broke out of containment.”

Now a 6-year-old cat in Wisconsin has the H1N1 and the virus is spreading from humans to animals. Apparently, at this time, there are no reports of the virus spreading from animals to humans.

The following PR Newswire article is disturbing;

H1N1 Flu Confirmed in Wisconsin Cat

SCHAUMBURG, Ill., Feb. 14, 2011


Laboratory tests today confirmed that a 6-year-old cat in Wisconsin contracted the H1N1 influenza virus, the first confirmed case of H1N1 in a U.S. pet since January 2010.

A second cat in the household tested negative after it also developed severe respiratory disease, although it is now presumed that it too had the virus. Both cats were euthanized after failing to respond to treatment.

The owner of the cats had been ill with flu-like symptoms prior to the cats’ illness and is believed to be the source of the infection.

In addition to humans and cats, this strain of H1N1 influenza virus has also been found in pigs, birds, ferrets and a dog. There have been no confirmed cases of pets passing the virus back to people.

The American Veterinary Medical Association (AVMA) is reminding pet owners that some viruses can pass between people and animals, so this is not an altogether unexpected event. Pet owners should monitor their pets’ health very closely, no matter what type of animal, and visit a veterinarian if there are any signs of illness.

Fed dictator Bernanke needs to be toppled

ARROYO GRANDE, Calif. (MarketWatch) — Fed boss Ben Bernanke is the most dangerous human on earth, far more dangerous than Hosni Mubarak, Egypt’s 30-year dictator, ever was. Bernanke rules a monetary dictatorship that will trigger the coming third meltdown of the 21st century.

But this reign of economic terror will end.

Egyptian police show solidarity

Hundreds of police marched in Cairo's Tahrir Square Monday to show solidarity with protesters who helped to topple Hosni Mubarak.

Just as Mubarak was blind to the economic needs of the masses and democratic reforms, Bernanke is blind to the easy-money legacy that’s set the stage for revolution, turning the rich into super rich while the middle class stagnates and peanuts trickle down to the poor.

Warning, Egypt also had a huge wealth gap before its revolution. Bernanke is the final egomaniac in America’s bubbling 30-year wealth gap, where the top 1% went from owning 9% of America’s wealth to owning 23% during this dictatorship.

Bernanke’s ruling ideology is the culmination of a 30-year economic war that has forged together Reaganomics for the super rich, former Fed chairman Alan Greenspan’s toxic allegiance to Wall Street, the extreme Ayn Rand’s capitalist dogma, culminating in the toxic bailouts of Treasury Secretaries Hank Paulson and Tim Geithner, two Wall Street Trojan Horses corrupting government from within.

Since 1981 this monetary dictatorship has caused enormous collateral damage, systematically sabotaging democracy, capitalism and the American dream while fueling the rise of our most dangerous new enemy, China. See “Secret China war plan: trillions in U.S. debt.”

When Obama reappointed Bernanke a couple years ago, “Black Swan’s” Nicholas Taleb was “stunned.” Bernanke “doesn’t even know that he doesn’t understand how things work,” that Bernanke’s economic methods are so inadequate they make “homeopath and alternative healers look empirical and scientific.”

We called Bernanke, the “Captain of the Titanic,” warning that he was setting up the third meltdown of the 21st century, predicted by “Irrational Exuberance’s” Robert Shiller, a coming crash worse than the 2000 dot-com crash and the subprime credit meltdown of 2008 combined. See “Capt. Bernanke sinks the U.S.S. Titanic.”

Inside the Fed: Cassandras, Chicken Littles, governors crying wolf

Unfortunately, as with Egypt’s dictator, the 30-year dictatorship now headed by Bernanke must end soon: And this class war will not be pretty. But it is no black swan; no one can claim they didn’t see a new crash coming.

For several years before the 2008 meltdown we reported on money managers, economists and financial gurus warning of a coming meltdown. They included two Fed governors who warned Greenspan in the early Bush years. And yet, as late as summer 2008 Bernanke, Paulson and Greenspan were systematically dismissing mounting evidence of a mega crash dead ahead.

That’s why Time magazine’s cover story about Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, grabbed me. David Von Drehle’s “The Man Who Said No to Easy Money” is a warning to all America.

Like Ed Gramlich and William Poole, the two Fed Governors who warned Greenspan during the Bush years, Hoenig regularly dissented from Bernanke’s easy-money policies that have been favored by Wall Street throughout this 30-year dictatorship.

We’re paraphrasing Drehle’s interview with Hoenig as 10 warnings because it brilliantly reveals the broader historical tragedy of the Fed’s 30-year monetary dictatorship driving America to the edge of another 1930s economic revolution, one that will be triggered by a repeat of the 1929 wake-up call.

1. Commodity price inflation will soon end the Fed dictatorship

Hoenig consistently “cast his lonely ballot against the indefinite reign of easy money. Eight meetings, eight no votes … an unyielding point of view, one that has become ever more relevant now that rising commodity prices have put inflation worries back on the economic radar screen.”

In short, global commodity inflation may soon do what Hoenig could not, put an end to America’s self-destructive easy money reign of economic terror, and more importantly finally end the Fed’s 30-year “monetary dictatorship.”

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Judge Finds MERS Has No Right To Transfer Mortgages, Finds Entire MERS Process Illegal

There was a time when news, especially very bad news, moved stocks. The last time that occurred was in the middle of 2009, before most robots had any idea just how massive the chairsatan's schizoid break with reality was. Now, that the appropriate sociopathology is fully priced in, bad news tends to have an even more profound upside impact on stocks than good news, as it guarantees that the Zimbabwe stock market will be upon us far sooner than if the economy were to have to go through another inter-QE episode. Which is why the just released news out of US Bankruptcy Judge Robert Grossman of Central Islip, New York, that MERS lacks rights to transfer mortgages will likely send the entire S&P circuit breaker up.

From Bloomberg:

“Merscorp Inc., operator of the electronic-registration system that contains about half of all U.S. home mortgages, has no right to transfer the mortgages under its membership rules, a judge said...U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, New York, in a decision he said he knew would have a “significant impact,” wrote that the membership rules of the company’s Mortgage Electronic Registration Systems, or MERS, don’t make it an agent of the banks that own the mortgages..."

“MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not supported by the law,” Grossman wrote in a Feb. 10 opinion. “MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal.”

MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage-recording process,” Grossman wrote. “The court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.

“An adverse ruling regarding MERS’s authority to assign mortgages or act on behalf of its member/lenders could have a significant impact on MERS and upon the lenders which do business with MERS throughout the United States,” Grossman wrote. “It is up to the legislative branch, if it chooses, to amend the current statutes to confer upon MERS the requisite authority to assign mortgages under its current business practices.”

“Without more, this court finds that MERS’s ‘nominee’ status and the rights bestowed upon MERS within the mortgage itself, are insufficient to empower MERS to effectuate a valid assignment of mortgage,” the judge wrote. “MERS’s position that it can be both the mortgagee and an agent of the mortgagee is absurd, at best.”

And with MERS now found to be a fraud, we expect MERS Commercial authority to be likewise eliminated. Which means that the entire US mortgage market, both residential and commercial, is a lie, and built on fraudulent foundations, and that every single MERS-mediated transaction will likely have to be unwound.

In reality what will happen, is that the Banker lobby will have to purchase a few more Appelate Judges, and in the worst case, a SCOTUS dude here and there, appeal the ruling to death, and end up victorious. After all, it is only taxpayer money.


Wisconsin National Guard Preps For Worker Unrest After Governor Unveils Emergency Budget

Wisconsin Gov. Scott Walker, a Republican, unveiled an emergency budget proposal Friday to deal with the state's growing budget woes. Wisconsin has a $137 million deficit this year, and faces a projected $2.9 billion budget shortfall for 2012 and 2013.

Under Walker's plan, public employees would lose all of their collective bargain rights, except a limited negotiation of wages. State workers would also have to contribute more to their pension and health care benefit plans.

Unions erupted in outrage as they learned about Walker's proposal. The Governor told Milwaukee Public Radio that he has briefed the Wisconsin National Guard to prepare them for any worker unrest today.

White House Acknowledges 'Real Impact' Of Cuts To Energy Assistance Funding

WASHINGTON -- The Obama administration acknowledged on Monday that its proposal to slash funding for heating assistance to the poor would, in fact, hurt the poor.

"This is a very hard cut," White House budget director Jacob Lew said during a press conference. "This is a cut that has real impact."

The White House's proposed budget for fiscal year 2012 halves funding for the Low Income Home Energy Assistance Program, reducing its allocation to $2.5 billion from just over $5 billion.

LIHEAP doles out money to states, which then hand it over to local relief agencies, which review personal financial data to ensure that applicants for the assistance really need it. Eligible applicants have the money credited to their accounts with the local utility company. Roughly 8.3 million people used the program last year. Its target population is the elderly and the disabled.

The National Energy Assistance Directors' Association, a group that represents state aid officials in Washington, estimated that the reduction would amount to 3.1 million households going without assistance on heating and cooling costs (not 3.5 million, per a previous estimate).

"I thought the administration would draw a circle around the social safety net for low income families. I thought we were part of that safety net," NEADA director Mark Wolfe said. "These are families who, without LIHEAP, will fall behind on their bills or cut back on basic essentials because they don't have any discretionary income."

Nearly two-dozen people who use the program told HuffPost in emails and phone interviews what LIHEAP has meant for them in recent years, and what they thought of Obama's decision to sacrifice its funding to appease deficit hawks.

Arthur Delaney

White House Acknowledges 'Real Impact' Of Cuts To Energy Assistance Funding

Posted: 02/14/11 05:43 PM

WASHINGTON -- The Obama administration acknowledged on Monday that its proposal to slash funding for heating assistance to the poor would, in fact, hurt the poor.

"This is a very hard cut," White House budget director Jacob Lew said during a press conference. "This is a cut that has real impact."

The White House's proposed budget for fiscal year 2012 halves funding for the Low Income Home Energy Assistance Program, reducing its allocation to $2.5 billion from just over $5 billion.

LIHEAP doles out money to states, which then hand it over to local relief agencies, which review personal financial data to ensure that applicants for the assistance really need it. Eligible applicants have the money credited to their accounts with the local utility company. Roughly 8.3 million people used the program last year. Its target population is the elderly and the disabled.

The National Energy Assistance Directors' Association, a group that represents state aid officials in Washington, estimated that the reduction would amount to 3.1 million households going without assistance on heating and cooling costs (not 3.5 million, per a previous estimate).

"I thought the administration would draw a circle around the social safety net for low income families. I thought we were part of that safety net," NEADA director Mark Wolfe said. "These are families who, without LIHEAP, will fall behind on their bills or cut back on basic essentials because they don't have any discretionary income."

Nearly two-dozen people who use the program told HuffPost in emails and phone interviews what LIHEAP has meant for them in recent years, and what they thought of Obama's decision to sacrifice its funding to appease deficit hawks.


"Obama was supposed to have this image that he was for the everyday person," said Karrin Herring, a resident of Beaver County, Pa., who said she received $300 from LIHEAP in the fall to pay her heating bill. "It helped me out and I was glad to get it, too."

Herring, a 56-year-old middle school registrar, is disabled with avascular necrosis in her knees. She said she's still in the president's corner, despite her frustration over LIHEAP.

"For him to go straight to a program like this, especially when there are so many unemployed people out here now, a lot of times through no fault of their own, and more people needing the LIHEAP, I just couldn't understand why he would even think about this program in particular. They can find someplace else to cut some money if they really wanted to."

Christie Graber of Council Bluffs, Iowa, said she just recently qualified for $350 in assistance for her heating bill after applying for LIHEAP for the first time. Graber, a 60-year-old former event planner, said she gets by on $1,035 monthly Social Security disability checks.

"I think he can cut other places," she said of the president's proposal to cut LIHEAP. "I'm very disappointed. I campaigned for him. I believed in him. I was thrilled. I had tears in my eyes watching the election results come in ... I don't think he should cut help to the poor."

Michele Tracey of Sun City, Calif., said LIHEAP has paid her electric bill for four or five months during the summer for the past three years.

"There's a lot of people more hurting than us, but that program is one of the really helpful programs. California's not a real cheap state to live," said Tracey, 50. She said she and her husband, who is 62, support their family-of-four with his Social Security disability payments supplemented with money she makes as an occasional substitute teacher.

"It really helps," she said. "If it goes, I'll sure miss it."

Lew defended the decision to cut LIHEAP funding, citing declining energy prices.

"Going back to 2008, the program was funded at roughly $2.5 billion," Lew said. "We had a huge spike in energy prices, and the program doubled to $5 billion. We're now at a price level that's close to where we were before that increase. looking at our fiscal challenges, we can't straight line the program at $5 billion. We went back to the level it was at when prices were roughly the same."

It's true that energy prices have declined, but as has been pointed out by opponents of the cuts, the economy is in worse shape than when the funding was increased in 2008.

"It's done an enormous amount of good for a lot of people," Lew said. "It was meant to be a grant program that the states administered. Balancing our fiscal challenges and the funding change from 2008 until now, we made the tough decision. We said in the documents and the budget that we will keep our eyes on what prices go and what the need of the future is, but we can't cruise at a historic high spending level when we're trying to make these very difficult savings. In terms of investing in the future, we've been very clear that we need to create more opportunities to invest in education, in innovation, and in billing the infrastructure for the future, so we've had tough tradeoffs."

The administration's proposal is not about to skid through Congress. A bipartisan bloc of 32 senators has already insisted that the White House back off the program.

Teachers sue shuttered Pinellas County Jewish Day School

LARGO — Twenty former teachers of the Pinellas County Jewish Day School say they weren't paid thousands of dollars in wages after the school closed last May.

Their claims, which total more than $145,000, and other debts were revealed in a bankruptcy court case filed by the school last month.

The Day School, the only private Jewish school in Pinellas, closed its doors abruptly last year after 30 years in the community.

The Chapter 11 filing also reveals that the Day School has an offer from a company based in Hollywood, Fla., to buy the school's property for $2.7 million for a charter school. That school is Pinellas Academy of Math and Science, according to an application approved by the School Board last year.

Thirteen of the former teachers also filed a suit against the Day School for unpaid wages in December. That case has been waylaid by the bankruptcy.

Teachers say their salaries for the 2009-10 school year, like previous years, were supposed to be paid over 12 months, but their pay ended just after the school closed.

The school's decision to stop paying them deprived them of 10 weeks' pay, said Fran Sosslau, who was the interim head of the school.

"We fulfilled our end of the contract," said Sosslau, whose claim says the school owed her more than $11,800. "We taught until the last day."

David Schechter, president of the Jewish Day School's board of directors, said lawyers have advised him that the teachers didn't have a contract.

The school is disputing the "amount and legality of the claim for the salaries," he said.

But he said that doesn't mean they won't be compensated.

"Our intention is to do everything we can to make the teachers whole," he said.

The teachers say in their final school year they were asked to sign a different, shorter agreement called a "letter of intent."

The document specifically listed each employee's salary and said that it would be "paid out twice monthly for 12 months," said Sosslau, who kept copies of those agreements.

One of the former teachers, Margaret "Peggy" Gerson, taught Jewish studies and Hebrew at the school for 11 years. She and Sosslau said the school hired a spokesman, lawyers and others when it ran into financial trouble.

"All of this money came out of school money that could have paid teachers," said Gerson, who now volunteers at Congregation Beth Shalom in Clearwater, where she teaches Hebrew and prayers.

Schechter said the board was looking out for a lot of different interests at the time.

"We thought we were spending the money in the best way possible for the overall good of the school," Schechter said.

Gerson, 67, said she will likely have to find a job in a different field. "I'm worried because my husband is retired and I was expecting to be working for a number of years," Gerson said. "We need that extra income."

In late May the teachers received a letter from the board of directors of the Day School reminding them to remove their personal property by June 1.

They were told that all of their pay and benefits would stop by May 31, 2010.

Elaine Kay, who taught at the school for five years, said teachers were even more upset about the way the school ended than the fact that they didn't get paid.

"It wasn't just a job to us," Kay said. "It was something we loved doing. We loved these kids. Just being cut out of the loop and discarded was very difficult."

Various factors have been linked to the school's collapse.

The poor economy, parents having difficulty paying dues, and benefactors who couldn't live up to their commitments all contributed to the downfall, Schechter said.

A number of parents also said they lost confidence in the school after they were repeatedly asked to chip in more money to keep the school afloat.

Schechter said his children were students at the school and he took a leadership role, hoping to save it.

"I felt strongly from an academic, religious and cultural perspective that our community needed a Jewish day school," he said.

The Day School's filing in U.S. Bankruptcy Court in Tampa lists 25 creditors owed a total of about $2.6 million. The debts include about $2 million for a loan and mortgage modification on the school's property at 1775 S Highland Ave., and $73,000 in unpaid payroll taxes to the Internal Revenue Service. The school also lists assets totaling about $2.8 million, including the property.

The new charter school is negotiating a contract with Pinellas County schools, said Dot Clark, the district's coordinator of partnership schools.

The new charter school's consultant, Michael Strader, said the school's founders are "pretty confident" it will be housed at the Highland Avenue property as soon as next fall.

Obama's Budget Pits Him Against His Own Life Story

WASHINGTON -- The budget introduced by the Obama administration on Monday is notable not only for the cuts suggested or investments proposed, but also for the message it conveys about the political identity of the president himself.

Aiming to cut the annual deficit by more than $1 trillion over the next decade, President Barack Obama chose to slash across the board. But the most glaring cuts were not to a bloated defense budget, or to entitlement programs that both parties say are in need of reform. Rather, they were to programs and policies that are at the heart of Obama's personal story.

A former community organizer in Chicago, Obama proposed a 50-percent cut to a $700-million community-service block grant program. A former lawyer who touted his work to improve living conditions for the poor, Obama proposed a sharp cut in energy assistance for low-income families. A graduate-school alumnus who only recently, and quite publicly, was able to pay off his debts, Obama proposed refiguring loan programs so that students would accrue interest even while they're enrolled.

Combined, the new policies and cuts carry more symbolic than fiscal significance. They would save only a pinch of money from being added to the deficit. But that may well be the point. Senior administration officials, in previewing the budget, didn't downplay or hide any of the above provisions -- either by spinning their impact or obscuring their language. Rather, they were part of the big pitch. Office of Management and Budget Director Jacob Lew made a point of saying on CNN's "State of the Union" that it was "not easy" to cut those programs on which "President Obama worked [as] a community organizer."

Even administration allies who were gloomy about the cuts admitted that they made for solid politics.

"It tells you he is making a statement," said Andy Stern, the former president of the Service Employees International Union, a longtime Obama supporter and a member of the president's fiscal commission. "It is shared sacrifice ... They stuck their chin right out asked people to hit them, and they are being hit. But it is with the intention, particularly with independent voters, of appreciating that no one is immune from being hurt here."

But if the goal was to present an image of a president putting himself through personal pains, not everyone got the message. Hours after the budget was formally released, Republicans insisted that it was too limited and unworthy of serious consideration.

Progressives, meanwhile, noted that while Obama was slashing money for community-service grants and energy assistance for the poor, he was calling for a lot less give from the other side of the income distribution. Not only had the president signed an extension of the Bush-era tax cuts for the wealthy during the lame-duck session, his budget brought a yet-to-be-enacted bank tax down from an initial proposal of $90 billion over 10 years to about $30 billion.

"I think if they were going to go the 'these cuts will hurt me as much as they hurt you' route, they should have gone into some middle-class programs and not just 'poor people' programs," a senior Democratic official said.

Not everyone in progressive circles, however, jumped to trash the president's plan. There is, some Obama allies said, more nuance to some of the proposed cuts.

Jerry Kellman, a social activist who mentored Obama during his community-organizing days, noted that with community-service grants, much of the money doesn't end up in the hands of groups that do on-the-ground work, but rather with municipal governments which spend it on a variety of projects. Far more stressful, he said, were the cuts to the Low Income Home Energy Assistance Program, which Obama officials have defended as a simple adjustment to the drop in commodity prices. But even then, Kellman acknowledged, Obama had to consider broader political implications.

"Would we be better with Barack Obama getting reelected or Republicans taking back control of the White House?" he asked. "Anyone who wants Obama to act in ways that wouldn't get Obama get reelected is being highly unrealistic about politics."

Rich Williams, a higher-education advocate for the U.S. Public Interest Research Group, the national lobbying arm of a coalition of public-interest organizations, noted that while billing in-school interest rates would result in further debt burdens for students, the money saved would be plowed back into funds to help prospective students pay for tuition.

"It is less bad than it sounds," Williams said of the proposal. "The in-school interest subsidies definitely helps kids out, but it is untargeted financial aid. While some show some level of need, by the time they finish their graduate degree not all of them will have trouble playing their loans back. If you remove the $2 billion we are putting towards those subsidies and find a different way to target it so that those who need it get it, it really makes more sense."

And in the world of policy think tanks and academia, there was genuine appreciation that amid the cuts, Obama had proposed some infrastructure investment. This, offered Bill Galston, a former policy advisor to President Bill Clinton and fellow at the Brookings Institution, was more a measure of the president's pragmatic ethos than anything else.

"I think this budget is evidence that the president meant it in the State of the Union when he talked about a new emphasis on investing in the future," said Galston. "It's also consistent with fiscal reality as the administration understands it. They can only boost investment by clearing fiscal space for it."

this mutant form of capitalism... a predatory form of capitalism, has created an extremely unstable, unsustainable, unjust & very,very dangerous world

"It’s fair to say that we economic hit men have managed to create the world’s first truly global empire. And it’s basically a secret empire." - John Perkins, 'former economic hitman'.

(Transcript of the video): We do it in many ways, but principally, we identify a country that has resources that corporations covet, like oil, arrange a huge loan to that country from the World Bank or one of its sisters. The money never actually goes to the country; it goes to our own corporations to build the infrastructure projects in that country that help a few very wealthy people, but don’t benefit the majority of the people, who are too poor to buy electricity or have cars to drive on the highways. And yet, they’re left holding a huge debt that they can’t repay.

So we go back at some point and say, “You know, you can’t pay your debts. Give us a pound of flesh. Sell your oil real cheap to our oil companies. Vote with us on the next critical UN vote. Allow us to build a military base in your backyard.” Something along these lines.

And when we fail with Jaime Roldos, president of Ecuador, Omar Torrijos of Panama—the Jackals go in and either overthrow or assassinate these leaders. And if the Jackals fail, as they did in Iraq, then we send in the military.

I was with Jaime Roldos in Ecuador. I was the guy—one of the guys who was supposed to corrupt him, bring him around, and Omar Torrijos of Panama and many others. When I failed with those two gentlemen, the Jackals went in and assassinated both of them. And I was there; I was in those front lines. My official title was chief economist of Charles T. Main. I had about three dozen employees working for me and did this for ten years, and finally saw the light.

What’s really important about all this is that in this period of time, since the 1970s, and really beginning very strongly in the 1980s, we’ve created what I consider a mutant, viral form of capitalism. I don’t think the failure is capitalism. I think it’s the specific kind of capitalism that we’ve developed in the last thirty or forty years, particularly beginning with the time of Reagan and Milton Friedman’s economic theories, which stress that the only goal of business is to maximize profit, regardless of the social and environmental costs, and not to regulate businesses at all—regulation is bad, all forms—and to privatize everything, so that everything is run by private business. And this mutant form of capitalism, which I think is really a predatory form of capitalism, has created an extremely unstable, unsustainable, unjust and very, very dangerous world.

We’ve seen robber barons recently on Wall Street, the people from Goldman Sachs and Citigroup and so many other organizations, people like Jack Welch, who is a former CEO of General Electric. And as I lecture at business schools and MBA programs, Jack Welch is often held up as this idol. Jack Welch laid off a quarter of GE’s employees. He said he was making the company meaner and leaner—he certainly was making it meaner—gave himself huge raises and bonuses at the same time, turned General Electric essentially from a manufacturing company into a financial services company, which really was one of the leaders in taking us down this course today that we’re on of a failed economic system.

And we truly have a failed economic system at this point. It’s deep. One of the reasons I wrote Hoodwinked is because I saw a lot of books coming out that deal with what I consider triage. What do you do with AIG? What do you do with General Electric? What do you do about the immediate problems with Wall Street? But the problem is much, much deeper. There’s a cancer beneath all that. And this is this very basics of our current economic system. And we must delve down and root out that cancer and move into something much better.

I have a two-year-old grandson. And as I look at this baby, I think, what’s this world going to look like in six decades, when he’s my age? If we stay the course, it will be horrible. But we have this opportunity now, and I think this economic turmoil that we’re in today is teaching us that we must change. We have a failed system. We must create something better. And we must realize that my grandson can’t possibly hope to inherit a sustainable, just and peaceful world, unless every child growing up in Ethiopia and in Bolivia and in Indonesia and in Israel and Palestine has that same expectation. For the first time in history, we’re really living on a very, very tiny, highly integrated planet, and we’re all communicating with each other. We really get it. We’re a very, very small community, and we need to recognize that.

The democratically elected president, Zelaya, had called for a new constitution to replace the old one that was really set up by the oligarchy in favor of the very, very, very wealthy and the international companies. He also called for a 60 percent increase in the bottom wage rate, which had a huge impact on Dole and Chiquita, two of the biggest employers in that company. They, along with a number of companies that have sweatshops in Honduras, strongly objected, very much the same way that they had objected to Aristide in Haiti, when he did something similar, and called in the military. The general in charge of the military was a graduate of our School of the Americas, this, school that’s famous for creating dictators, and they overthrew Zelaya. It was a classic CIA-sponsored type of coup, very similar to what United Fruit had done in Guatemala in the early ’50s. And, of course, United Fruit became Chiquita.

This strong relationship and got rid of this democratically elected president, because he was drawing a line in the sand. We had seen ten countries in Latin America bring in new presidents who are instituting very significant reforms in favor of the people, in favor of using local resources to help the people pull themselves up by the bootstraps, and I think the corporatocracy decided to draw a line in the sand in Honduras.

Iran is this example of where we went in and overthrew a democratically elected president, Mosaddeq, in the early ’50s, and we’ve seen terrible blowback from that ever since. It’s, not only in Iran, but it impacted the whole Middle East. If we had supported that president, who simply wanted to use more of his oil money, his country’s oil money, to help the poor people—we strongly objected. We overthrew him in a coup and replaced him with the Shah. So we’ve seen the blowback that comes out of that. And this has led to this situation that we’re in today.

And the swirling clouds, to me, are the big corporations. So, in the past, you had roughly 200 countries on the planet, which a few had a lot of power—the United Kingdom, the Soviet Union, the United States. But today the geopolitics might better be envisioned as the same roughly 200 countries with these huge swirling clouds that are the big corporations. And they are really calling the shots all over the planet. They know no national boundaries. They don’t listen to any specific set of laws. They strike deals with the Chinese and the Taiwanese and the Tibetans and the Israelis and the Arab nations. Whoever has the markets or the resources, they cut deals with. And as we’ve seen in our most recent election here in the United States, we bring in a president who is very diametrically different from the former president, and yet the corporations are still calling the shots.

Which takes us back, Amy, to the fact that we, the people, must create the change. This has always been the case. And this is a clarion call for us at this point now in history, that we must get out there. We’ve got to get behind Obama and all the other politicians. We’ve got to force the corporations to change their goal, get away from this goal of maximizing profits regardless of social and environmental costs, and instead say, “Yeah, it’s OK. Make profits, but only within a context of creating a sustainable, just and peaceful world,” only within the context of creating a world that my grandson will want to inherit, and that means every child on the planet will want to inherit it, because I think it’s really important that we understand today we cannot have homeland security unless we understand that the whole planet is our homeland. Our homeland is now no longer defined by the Rio Grande and the Canadian border. It is—we are one—one human species living on a very fragile planet.

I was in Tibet a couple of years ago, and I stood there with these nomads and looked at this glacier that had been down at the road a decade or so before, now it’s way back a mile away. And these glaciers up in the Himalayas feed the five largest rivers in the world. They provide water to China and to India. And as these glaciers melt, the water is drying up. The glaciers are melting because of global warming, because of us. And what we have to understand is the huge consequences. If these five rivers no longer can feed water to the Chinese and the Indians, these people are going to die of thirst. And before they die of thirst, they’ll become very rebellious.

We have to understand that one of the root causes of terrorism—I don’t even like the word “terrorism,” because I don’t think it really is—it’s a whole bunch of diverse groups all over the world. But in every—practically every case, it results from starvation, from desperation. I’ve met a lot of terrorists. I’ve interviewed them for books. I’ve never met one who wanted to be a terrorist. These are farmers who have been driven off their farmlands by oil companies or hydroelectric projects, or they’re fishermen, like the Somali pirates, who can no longer make a living fishing, because their waters have been fished dry or destroyed by nuclear waste from US military vessels. I have not met anyone who wanted to be a terrorist. They’re desperate people. If we want to get rid of terrorism, we must get rid of the root causes, that cancer that is destroying our whole system.

We all know that getting rid of the rules that protected us from another recession has helped to bring on this current recession, you know, things like Glass-Steagall and the banking laws and so forth. We need to implement a lot of those again.

But I think we also need another whole new set of laws that says businesses must be—look at being environmentally and socially responsible. For a hundred years after United States became the United States, no corporation was allowed to get a charter unless it could prove that it served the public interest. And charters came up for renewal every ten years or so. They didn’t get a renewal unless they could prove they served the public interest. That all changed with a Supreme Court ruling that made corporations equivalent to individuals in the late 1880s, and then John D. Rockefeller stepped in and really took things—made things go out of hand.

But we need to go back to an understanding that corporations are there to serve us. When I went to business school, I was taught that a good CEO takes care of the long-term interests of the corporation—the employees, the customers, the general economy—not just there to make short-term profits. And we really need to get back to that, to an understanding. I think we need laws and rules that say that corporations must be aiming toward creating a sustainable and just and peaceful world. We simply have to do that. These are our main controlling organizations today, and they must be answerable to what’s best in the public interest, not just the interests of a few very wealthy, powerful people.

Discussion with John Perkins

John Perkins calls himself a former economic hit man. He has seen the signs of today’s financial meltdown before. The subprime mortgage fiasco, the collapse of the banking industry, the rising unemployment rate—these are all familiar to him.

Perkins was on the front lines of monitoring and helping create these very events that were once just confined to the third world. From ’71 to 1981, he worked for the international consulting firm Chas T. Main, where he was a self-described “economic hit man.” It was based in Boston.

He’s the author of the New York Times bestseller, Confessions of an Economic Hit Man and The Secret History of the American Empire. Well, he’s out with a new book. It’s called Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded—and What We Need to Do to Remake Them.