In the same vein as Justin’s Signal Watch, or Mario’s In The Know, The Haul is kicking off an end-of-the-week Business Round-up for national business and economic news. Follow what I’m reading and make suggestions on Twitter. I’m also kicking off a local Biz Briefs column next week for Maine business news.
The joke this week is that Recovery Summer was probably the wrong name for the Obama administration to affix to this season, after news that existing home sales hit a 15-year low, and the economy grew at a rate of only 1.6 percent in the second quarter.
Obama was betting the slew of construction jobs set to kick off in June would jump start a stubbornly dreary economy. The fact they haven’t has provided fodder for critics as the country closes in on midterm elections.
But with an unemployment rate hovering near the 10 percent mark (still) some should take comfort in the fact that at least one group of people are doing well: rich folks.
The National Bureau of Economic Research this morning released data showing corporate profits are near their pre-recession peak. But as Charlotte Rampell of the New York Times points out, these profits haven’t exactly trickled down yet.
“…while companies may be sitting on mountains of profits, they have still been reluctant to use those profits to hire additional workers.”
Meanwhile, Ben Bernanke acknowledged this morning that the Fed plans to prop up the economy by buying longer-term debt, of which the central bank already has boatloads. The move is meant to stave off deflation, or a downward spiral of prices. According to the New York Times, Bernanke says there is no fear of fiscal policy causing inflation — for the time being.
“Because a significant further weakening in the economic outlook would likely be associated with further disinflation, in the current environment there is little or no potential conflict between the goals of supporting growth and employment and of maintaining price stability.”
A joint report by ProPublica, a nonprofit (though apparently high-paying) investigative news outfit and Planet Money, NPR’s economic news team, shows bankers knew exactly what they were getting into before the financial crash — they actually helped kick-start the biggest economic downturn since the Great Depression.
According to their report, nobody really wanted to buy the financial products they were peddling (collatoralized debt obligations, and other nebulous and nefarious products concocted using complicated physics.) But the bankers bought their own products to stimulate demand — sometimes buying others’ too.
But why read when you can watch a video? Enjoy: