The "Economic Time Machine": In South Florida, it's 2002
One way to think about national and regional economic conditions is to compare the present with the past. When a recession hits, in other words, it's as if the economic clock starts to run backwards: instead of getting richer from year to year, economies get poorer. In a recent article, The Economist of London has developed this notion into a detailed analysis of the global economy (" The Proust index"). Writes The Economist: "Now almost five years old, the economic crisis rumbles on. In order to assess how much economic progress it has undone, The Economist has constructed a measure of lost time for hard-hit countries. It shows that Greece's economic clock has been turned back furthest: it has been rewound by over 12 years. Elsewhere in the euro area, Ireland, Italy, Portugal and Spain have lost seven years or more. Britain, the first country forced to rescue a credit-crunched bank, has lost eight years. America, where the trouble started, has lost ten." If the trouble indeed started in the U.S., as The Economist claims, you could perhaps argue that within the U.S., the trouble started in south Florida. And whether that's true or not, the Miami Herald is thinking along the same lines as The Economist about tracking the trouble: the paper has set up a section called " The Economic Time Machine" that tracks current economic indicators against historical benchmarks. Right now, says the Herald, we're back in 2002. More specifically, says the Herald: " In economic terms, it's June 2002 in South Florida." Are things getting better? Well, kinda sorta. The recovery we keep hoping for, the Herald reports, is more promise than production at this point (" Four years later, South Florida's worst recession only hints at a real recovery," by Douglas Hanks). Jobs are slow to rebound, the Herald writes: "Nearly four years after hiring first started to contract in Miami-Dade County, employment only recently hit 1.8 percent growth in Miami-Dade. For all of South Florida, the pace is slower €” jobs are growing at about 1.4 percent a month, well behind the average of 3.6 percent a month outside of recessions." The big trouble is construction, says the Herald: "The biggest source of the hiring lag: a construction industry down nearly 80,000 jobs from peak hiring levels. That amounts to almost 40 percent of the jobs South Florida would need to erase employment losses from the recession." But if construction is at the root of the problem, the financial ripple effects are prolonging the hangover: "The housing depression prompted a global banking crisis that lingers. Miami-Dade now loses more jobs in finance each month than from construction. Those continued losses from the mortgage industry and insurance carriers are diluting the gains made by record hiring in the healthcare and hospitality industry." So when will we get back to the future? The Herald writes, "Economists think 2012 will finally bring a decent recovery." Meanwhile €¦ throw some more banana peels into Mr. Fusion.