Harvard professors Carmen Reinhart and Kenneth Rogoff took to the pages of The New York Times Thursday to defend their highly influential work, but their "don't blame us" response isn't gaining them many fans. 

 

As I reported earlier this month, their much-cited 2010 study claimed that withering "stagflation" can result when a country's ratio of debt to gross domestic product reaches 90%. Politicians such as Rep. Paul Ryan, R-Wis., who ran as Mitt Romney's vice presidential candidate, cited the paper in calls for austerity measures.

 

But their paper was found to have serious problems by economists at the University of Massachusetts at Amherst, including an embarrassing Excel flub that excluded data from five countries.

 

Shares of J.C. Penney (JCP) surged more than 11% Friday on news that billionaire George Soros had taken a 7.9% stake in the beleaguered retailer.

 

Investors, though, need to keep this development in perspective. The 17.4 million shares were acquired by Soros Fund Management LLC, a hedge fund that reportedly controls about $25 billion in assets. 

 

So the investment in J.C. Penney, worth about $281 million at current prices, is relatively small potatoes for the Hungarian-born financier. In fact, Soros, the company's chairman, wasn't personally involved in the decision to make this investment, according to CNBC's David Faber. 

 

Remember the urban legend that said Hostess Twinkies had an indefinite shelf life? While that myth has been busted, it appears the spongy snack food simply refuses to give up its place in the American culinary pantheon.

Hostess filed for bankruptcy in January of last year after a bitter labor dispute with its employees, most of whom were union members. It also shut down operations at dozens of bakeries and hundreds of outlets and distribution centers nationwide, putting more than 18,000 out of work.

But the two private equity groups, Apollo Global Management (APO) and C. Dean Metropoulos & Co., recently paid $410 million for the rights to acquire the Hostess and Dolly Madison pastry brands, as well as five plants.

The new owners are now doing business as Hostess Brands LLC.

 

Damn the man, save Guitar Center.

In a case of rockers vs. squares normally reserved for '90s films like "Airheads" -- or at least a time when the increasingly antiquated notion of “rock 'n' roll” still had cultural impact -- Guitar Center workers in New York City are attempting to unionize with some help from the Retail, Wholesale and Department Store Union.

They've filed an election petition to unionize the music equipment chain's flagship store in Manhattan and, according to The Huffington Post, have signatures from 80% of workers in their expected bargaining unit.

Who are the suits inspiring this move? Let's just say they look a lot like this guy. Bain Capital, former Republican presidential candidate Mitt Romney's old firm, bought the Guitar Center chain for $2.1 billion in October 2007, with Goldman Sachs sitting in as an adviser on the deal.

 

Why do folks in Colorado and Washington state who voted to legalize recreational marijuana use remain paranoid about lighting up? Because they can still get fired for it.

The Colorado Court of Appeals just harshed everyone's buzz on Friday, when it ruled 2-1 that there's no employment protection for medical marijuana users in the state because the federal government still considers the drug illegal. That's bad news for Brandon Coats of Englewood, Colo., a former Dish Network (DISH) phone operator who opened the case by suing for wrongful termination after failing a company drug test in 2010.

 

Call it McDonald's (MCD) secret sauce for executive pay, if you will. It's the list of peers the fast-food chain compares itself with when setting executive pay. 

 

The list provides a glimpse into the black box of executive compensation, which has come under fire from shareholders and Americans for growing ever more distant from that of the common worker. 

 

McDonald's noted in its proxy that it considers nearly two dozen major American companies as its peer group when it comes to setting executive pay, ranging from Walt Disney (DIS) to FedEx (FDX). Not all of those companies directly compete with McDonald's, but the burger giant said it competes with them "for talent."

 

Yet hidden in the regulatory filing was an eye-opening nugget. The compensation committee last year banished Costco (COST) from its peer group. 

 

It's been a rough week for air travelers in the U.S., as the automatic federal spending cuts required by the sequester kicked in. Furloughs were triggered for about 15,000 Federal Aviation Administration air traffic controllers as part of the FAA's $600 million, across-the-board budget cuts.

The resulting flight delays at major cities like Los Angeles, Chicago and New York were expected, but they came with a vengeance. According to FAA data quoted by CNN more than 3,000 flights have experienced significant delays since last Sunday, thanks to reduced staffing of air traffic controllers.

But late Thursday night, just as Congress was planning its Friday getaway from Washington for a week-long recess, the Senate unanimously passed a plan to ease those FAA spending cuts. The U.S. House of Representatives passed it on Friday, and President Barack Obama is likely to sign it shortly.

 

Here's a diagnosis of the country's health care crisis: Costs are simply out of control. 

That's supported by a new study from the Commonwealth Fund Biennial Health Insurance survey, which found that an astonishing 80 million Americans -- or 43% of working-age adults -- last year skipped going to the doctor or snubbed medicine because of cost. 

That represents a 27% jump since just a decade ago, when 63 million people said they went without medical care because of cost. Even worse, it's not only the uninsured who are cutting corners on their own health because of high prices, the study said. 

About 28% of people with private health insurance reported avoiding treatment because of the price, an eye-opening statistic about skyrocketing rates.