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Borders’ Bankruptcy Shakes Industry - (www.nytimes.com) After Borders, the 40-year-old retail chain that helped define the age of the book superstore, filed for bankruptcy protection on Wednesday, the struggling book industry was left wondering what was next — and maybe even who was next. The troubles of Borders are rooted in a series of strategic missteps, executive turnover and a failure to understand the digital revolution — problems in many ways of Borders’ own making. But as those in the volatile industry digested the news that most saw coming, they were acutely aware of the bigger picture: that in a fast-evolving bookselling environment there is slim margin for error. “The book retailing industry is very challenging right now,” said Michael Souers, an analyst for Standard & Poor’s. “We’ve had significant transformation. Bookstores have gradually been losing their prominence, and the U.S. market is oversaturated in terms of the number of retail stores. So that trend will likely continue as e-books gain more prevalence in the market.”
Bloomberg's New York City Budget Said to Include Firing of 4,666 Teachers - (www.bloomberg.com) New York Mayor Michael Bloomberg will present a preliminary budget for next fiscal year today that proposes reducing the city’s 80,000 teachers by 6,166, including 4,666 dismissals, administration officials said. An improving economy has helped pour about $2 billion of unanticipated revenue into city coffers, though it’s not enough to avoid personnel cuts, said the officials, who have seen the proposal. In November, Bloomberg said he would eliminate 10,000 of the most-populous U.S. city’s 300,000 workers to close a $2.4 billion deficit in a $67.5 billion spending plan.
Washington can't save our highways - (fortune.cnn.com) Washington talks a good game about transportation infrastructure, but refuses to agree on how to fund it. So let's stop waiting for Washington. Here are two things we all can agree on about America's transportation infrastructure: (1) It is in desperate need of costly repairs, and (2) Our political leaders cannot agree on how to pay for them. President Obama dove into the conversation this week, proposing $556 billion in new infrastructure spending over the next six years. Not only would it include money for road and bridge repair, but also high-speed rail development and the formation of a National Infrastructure Bank that would (hopefully) prevent the next Bridge to Nowhere from being federally funded. It is an important step, considering that the American Society of Civil Engineers estimates that the nation's 5-year infrastructure investment need is approximately $2.2 trillion. Unfortunately, Obama didn't explain how the new spending would be paid for. Increases in transportation infrastructure spending traditionally have been paid for via gas tax increases, but today's GOP orthodoxy is to oppose all new revenue generators (even if this particular one originated with Ronald Reagan). This isn't to say that Republicans don't believe the civil engineers – it's just that they consider their version of fiscal discipline to be more vital.
Jamie Dimon’s ‘Biggest Disaster’ Is Waiting: Simon Johnson - (www.bloomberg.com) Jamie Dimon, chief executive officer of JPMorgan Chase & Co., has harsh words for Fannie Mae and Freddie Mac. They are “the biggest disasters of all time,” Dimon told the Financial Crisis Inquiry Commission last fall, according to his just-released interview. Along with others, Dimon greatly exaggerates the role Fannie and Freddie played in the financial crisis, a theme my MIT colleague, Daron Acemoglu, has written about with great clarity. Too many bankers assert some version of the refrain: Fannie Mae made me do it. As the FCIC’s report makes clear, it was the private sector that led us into the financial crisis by making massive subprime bets and then using complex derivatives deals to magnify the downside risks.
UPDATE: Democrats Flee Wisconsin To Avoid Vote On Union Bill - (www.businessinsider.com) Wisconsin Democrats have "gone into hiding" to avoid a Senate vote on an emergency budget bill that would sharply curtail collective bargaining rights for public employees. Wisconsin police are now trying to round up the truant lawmakers - every single Democrat in the state Senate - who have reportedly left the state, according to local news reports. Republicans need at least one Democrat to be present before they can vote on the bill. Democratic Minority Leader Mark Miller released a statement on behalf of the Democrats, urging Republicans to consider a compromise, the AP reports. The statement does not say where he and his cohorts are hiding. Meanwhile, thousands of protesters have gathered outside of the Senate chamber and in front of the state capitol. Classes have been been canceled in Madison and other school districts across the state as teachers join the demonstrations.
OTHER STORIES:
Consumer Prices in U.S. Climb More Than Forecast - (www.bloomberg.com)
U.S. Initial Jobless Claims Rose 25,000 to 410,000 Last Week - (www.bloomberg.com)
G-20 Ministers Squabble Over Measures to Diagnose Imbalances - (www.bloomberg.com)
Fed Officials Were Divided On Easing While Voicing Dismay Over Job Growth - (www.bloomberg.com)
Fed Tells U.S. Banks to Test Capital For Recession Scenario - (www.bloomberg.com)
Bernanke Says Fed Has Learned Lessons From the Recession - (www.nytimes.com)
Inflation rate signals likely QE2 freeze - (www.ft.com)
Deficit Plan Details Emerge - (online.wsj.com)
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