It’s sometimes hard to find new angles on a story like the bum economy, which has been an ongoing story for going on four years now.
So give credit to The Miami Herald for creativity with its Economic Time Machine project, which looked at sixty different economic factors in South Florida to see how far the housing crash and recession has set back the state’s economy.
Here’s how the Herald calculated how far the economy had regressed:
We took nearly 60 different monthly indicators — from revenue generated by Miami-Dade hotels to building permits for Broward apartments to sales at the Big Daddy’s Liquors chain — and tracked them back as far as the 1980s.
We adjusted for inflation and seasonality. We weighted each indicator by its impact on the economy, a calculation based both on market share data and interviews with economists, analysts and industry leaders.
The answer: The crash sent the South Florida economy back almost a decade, to 2002.
The reading echoes a running theme in economic commentary that has the recession not only reversing economic growth, but also resetting the entire economy to a lower level or a “New Normal.’’
“It was probably the Great Depression when we last saw this kind of loss of wealth,’’ said Mark Vitner, a Wells Fargo economist who follows South Florida. “We’re probably collectively back a decade.’’
By the paper’s calculations, housing is back to where it was in 2002, business is in 1999, and jobs are stuck in 1998. South Florida’s mood is in 2003, according to the Herald.
The mood index is an example of how creative the paper got here. It used consumer confidence, wealth, and recreational spending to come to its mood estimate, which only points out that these are hardly scientific measures.
But it’s a project well worth doing to help readers get something of a handle on just how far the economy has fallen, although it would have been nice to have more anecdotal reporting to accompany the project—some of the individual pieces feel pretty skimpy.
The Herald is updating the Time Machine as new data come in. A positive jobs report recently moved the date forward two months to June 2002.
The area’s got a long ways to go.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.