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Fed chief describes 
consumers as too bleak

WASHINGTON — Ben S. Bernanke PhD ’79, the Federal Reserve chairman, offered a new twist on a familiar subject Thursday, revisiting the question of why growth continues to fall short of hopes and expectations.

Bernanke, speaking at a luncheon in Minneapolis, offered the standard explanations, including the absence of home construction and the deep and lingering pain inflicted by financial crises. He warned again that reductions in government spending amount to reductions in short-term growth.

Then he said something new: Consumers are depressed beyond reason or expectation.

Oh, sure, there are reasons to be depressed, and the Fed chairman rattled them off: “The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high.”

However, Bernanke continued, “Even taking into account the many financial pressures that they face, households seem exceptionally cautious.”

—Binyamin Appelbaum, The New York Times

In a twist, Google reviews Zagat and decides to bite

On Thursday, Zagat, whose burgundy-covered restaurant and bar guides were among the first examples of user-generated content, sold itself to Google, which has made local services one of its highest priorities.

Terms of the deal were not disclosed, but people briefed on the matter said that Google had paid $100 million to $200 million. Tim and Nina Zagat, who began the company by compiling restaurant ratings from friends into slim surveys more than three decades ago, will remain with the business.

The deal will most likely mean a lucrative payout for the Zagats, as well as for the private equity firm General Atlantic, which bought a third of the company in 2000. But it also raises questions about how Google will integrate Zagat, whose main offerings include its popular paper guidebooks and a paid subscription website.

—Michael J. De La Merced, Ron Lieber
 and Claire Cain Miller, The New York Times

Senate approves an overhaul
of US patent system

WASHINGTON — The Senate approved a sweeping reform of the nation’s patent laws on Thursday, sending to President Barack Obama a bill that changes the system for determining priority for inventions at the patent office and provides more financing for an agency beset by application backlogs and outdated computer systems.

After rejecting proposed amendments to a bill approved by the House last June, the Senate voted 89-9 to pass the bill, completing an effort of at least six years to overhaul the patent office’s operations and the procedures by which patents can be challenged.

Obama, who has made his support for the bill a central piece of his focus on promoting jobs, is expected to sign it into law soon.

The bill, known as the “America Invents Act,” has not received universal acclaim. The bill changes the method for determining the priority of patent applications to a “first-to-file” system from the historic “first-to-invent” method.

Several groups representing small businesses, entrepreneurs and early-stage investors have said that change puts small companies, which usually account for the bulk of new jobs, and individuals at a disadvantage to large companies that employ fleets of patent attorneys.

—Edward Wyatt, The New York Times