Burger King: Carving Up the Cow for Fun and Profit
23 JunFinancial engineering has been part of the Burger King story for so long that it’s hard to believe there is still anything worth plucking from its carcass. “It’s been run as a cash cow for Wall Street,” said Bob Goldin, an executive vice president of Technomic, a food service consulting firm. Along the way it’s had 13 chief executives in 25 years, numerous strategy shifts and marketing campaigns — and has been constantly starved for cash. But, hey, the private equity guys got theirs. And isn’t that what really matters?
And Romney’s old firm, Bain, got in on the action:
In 2002, Goldman Sachs, along with two private equity firms, TGP and … hmmm … Bain Capital, teamed up to buy Burger King. This is exactly the kind of situation private equity firms like to trumpet: taking over a downtrodden company and nursing it back to health. And to get them their due, Burger King’s new owners did some good, stabilizing both the company and the franchisees, many of whom were in worse shape than Burger King itself.
But the private equity investors also cut themselves an incredibly sweet deal. Their $1.5 billion purchase price included only $210 million of their own money; the rest was borrowed. They immediately began taking out tens of millions of dollars in fees. Four years later, they took Burger King public. But, first, they rewarded themselves with a $448 million dividend. In all, according to The Wall Street Journal, “the firms received $511 million in dividend, fees, expense reimbursements and interest” — while still retaining a 76 percent stake.
Does it need to be said that Burger King was soon back to its old struggling self? Or that the solution, once again, was to sell to another private equity firm? Of course not! In 2010, Bain, Goldman and TPG cashed out, selling Burger King to 3G Capital, for $3.3 billion. In sum, the original private equity troika reaped a fortune by selling a company that was in nearly as much trouble as it had been when they first bought it. Surely this represents the apotheosis of financial engineering.
What’re the chances that Romney’s going to roll us the same way?
Sweet!
After Rio+20, We Have to Solve the Earth’s Problems – NYTimes.com
23 JunWe saw in the myriad Rio+20-related announcements from countries, communities and companies around the globe that they were taking action themselves — irrespective of any United Nations document. World development banks agreed to invest in a cleaner transportation network, for instance. Developing countries agreed to phase out incandescent light bulbs. Australia, Mexico and other coastal countries committed to protecting their irreplaceable seas.
We heard it from the young people who spoke at Rio+20 — sometimes through tears and with cracking voices — about the fears they have for the world we’re leaving for them.
Most of all, we recognized that the world’s people can assert their will and power to fix our problems.
The fact that 50,000 people came to Rio and that hundreds of thousands more participated virtually through technologies like YouTube and Twitter made that loud and clear. The incredible energy and the enthusiasm they demonstrated is only a hint of what individuals can do.
via After Rio+20, We Have to Solve the Earth’s Problems – NYTimes.com.
For the Ron Paul Wing, Now What? – NYTimes.com
22 JunThere are now
two significant competing visions of what the Republican Party will be, a struggle, by the way, that is no longer between a vast majority and a tiny fringe. Paul people consider themselves not weird outsiders, but the true conservatives who actually want to rein in government within affordable, constitutional limits. Ron Paul’s campaign spokesmen are quick to distance themselves from any hint of the Paul movement being an angry, raucous anti-establishment rabble — the words “respect” and “decorum” flow from their lips as much as “limited government” and “end the Fed now.”
New NSA docs contradict 9/11 claims – 9/11 – Salon.com
20 JunPerhaps most damning are the documents showing that the CIA had bin Laden in its cross hairs a full year before 9/11 — but didn’t get the funding from the Bush administration White House to take him out or even continue monitoring him. The CIA materials directly contradict the many claims of Bush officials that it was aggressively pursuing al-Qaida prior to 9/11, and that nobody could have predicted the attacks. “I don’t think the Bush administration would want to see these released, because they paint a picture of the CIA knowing something would happen before 9/11, but they didn’t get the institutional support they needed,” says Barbara Elias-Sanborn, the NSA fellow who edited the materials.
Wiping out for-profit schools – Student Loan Debt – Salon.com
20 JunOn a conference call with reporters Wednesday morning, Sen. Kay Hagan, D-N.C., promoted a bill she has introduced that would prohibit for-profit colleges from using taxpayer-funded financial aid for marketing, recruiting or advertising purposes.
Make no mistake, Hagan’s bill, if it becomes law, would cut for-profit schools off at their knees. The top 15 publicly traded for-profit colleges derive 85 percent of their revenue from federal financial aid. If they can’t spend that money on marketing, recruiting and advertising, then they effectively can’t market, recruit or advertise — or at least not at anywhere near the scale they currently do.
via Wiping out for-profit schools – Student Loan Debt – Salon.com.
Jumper Protests Human Folly
20 JunThe New York Times reports:
Racing regulators kept hearing the reports: trainers were giving their horses a powerful performance-enhancing potion drawn from the backs of a type of South American frog.
When asked for a comment, Jumper the Frog responded,”This is an outrage to frogs and horses everywhere. Have these humans no shame?”
Jumper further stated that the Amphibian Protection Association is investigating rumors that members of the Board of Visitors of the University of Virginia have been licking frog backs in late night sessions in the gardens at Monticello. “If these rumors prove true,” Jumper remarked, “the consequences will be most grave. Humans must not be allowed to continue acting like narcissistic damn fools. Frankly, they’re stinking up the planet. They need to stop it. Right now.”
Ruy Teixeira Reviews Samuel Bowles And Herbert Gintis’s “A Cooperative Species” | The New Republic
19 JunThe selfless gene (or, more likely, genes) allowed our ancestors to think and to act as a group, thereby outcompeting other chimp-like species—literally leaving them in the dust. Moreover, our cooperative nature allowed us to build ever more complex ways of interacting with one another, which led to further evolution of the traits that facilitate cooperation (referred to as “gene-culture coevolution”). The end result of this dynamic was civilization and, eventually, the globally interconnected society we live in today.
According to this view of human nature, we are defined by our sense of fairness, adherence to group norms, willingness to punish those who violate such norms, and to share and work for the good of the group. We are not a species of seven billion selfish individuals, uninterested in anything save our own welfare and willing to cheerfully break any rule and hurt any other individual to secure it. Indeed, we think of such people as sociopaths, and if their tendencies actually dominated humanity we would still be back on the savannah with the rest of the chimp-like species. This view, as it becomes more widely accepted and understood, should have enormous significance for economics, politics, and a wide range of public policy challenges.
via Ruy Teixeira Reviews Samuel Bowles And Herbert Gintis’s “A Cooperative Species” | The New Republic.
Aaron Swartz: Chris Hayes’ The Twilight of The Elites — Crooked Timber
18 JunWe thought we would just simply pick out the best and raise them to the top, but once they got there they inevitably used their privilege to entrench themselves and their kids (inequality is, Hayes says, “autocatalytic”). Opening up the elite to more efficient competition didn’t make things more fair, it just legitimated a more intense scramble. The result was an arms race among the elite, pushing all of them to embrace the most unscrupulous forms of cheating and fraud to secure their coveted positions. As competition takes over at the high end, personal worth resolves into exchange value, and the elite power accumulated in one sector can be traded for elite power in another… This creates a unitary elite, detached from the bulk of society, yet at the same time even more insecure…
The result is that our elites are trapped in a bubble, where the usual pointers toward accuracy (unanimity, proximity, good faith) only lead them astray. And their distance from the way the rest of the country really lives makes it impossible for them to do their jobs justly—they just don’t get the necessary feedback. The only cure is to reduce economic inequality, a view that has surprisingly support among the population (clear majorities want to close the deficit by raising taxes on the rich, which is more than can be said for any other plan). And while Hayes is not a fan of heightening the contradictions, it is possible that the next crisis will bring with it the opportunity to win this change.
via Guest Review by Aaron Swartz: Chris Hayes’ The Twilight of The Elites — Crooked Timber.
Drone Warfare…Medea Benjamin’s new book reviewed by Lynn Feinerman | Tikkun Magazine
18 JunIlluminating the pivotal reason why her articulate book is so very timely, and so very much needed, she informs us that drones themselves are not silent like the press. They are not voiceless. They have a vocal advocacy group in Congress: The Congressional Unmanned Systems Caucus. Yes, these machines have their own Congressional caucus!
“It seems that, like corporations, robots are people too…” quips Medea Benjamin. That quip cuts deeply, to the underlying reality of our nation: Dwight D. Eisenhower cautioned us about it. He warned us back in the ’50′s that the US was not disarming after World War II. We chose instead to militarize in order to jump start a lagging post-war economy, sucking our taxes into obscene military budgets, with rampant corporate profiteering from “endless war” manufacture, and with a Congress and Executive branch going right along with the program.
The US is hooked on war. Its so-called “economy” is so tied into the vicious cycle of ravaging the world for oil, feeding the war machine with that oil and our taxes, then going out to ravage again for oil, that the problems of any number of innocent civilians it harms don’t really amount to a hill of beans in most media …as Bogart said in CASABLANCA.
via Drone Warfare…Medea Benjamin’s new book reviewed by Lynn Feinerman | Tikkun Magazine.
Truth and Traditions 