Working On Our Backwards Walk

When telling a story, it's important to talk about past events in the past tense and present events in the present tense. Otherwise readers are likely to get very confused. This is true for economic stories, just as it is for fairy tales and mystery novels. Let's explore an example. Joe Weisenthal writes:

You could make a very strong argument that the economy isn't stabilizing, it's getting worse. At least along some measures. Sure, we stepped back from the precipice of total collapse courtesy of massive government intervention, but some of the most basic indicators are only getting worse.

In standard bloggy fashion, he provides supporting evidence in the form of a block quote from a Bloomberg story. I'll repost it here:

Americans fell behind on their mortgages and banks seized homes at a record pace in the fourth quarter as unemployment rose to a 15-year high and real estate values tumbled.

Mortgage delinquencies increased to a seasonally adjusted 7.88 percent of all loans, the highest in records going back to 1972, the Mortgage Bankers Association said today. Loans in foreclosure rose to 3.30 percent, also an all-time high.

Emphasis mine. Man, I know that data is necessarily backward looking, but the fourth quarter? We're closer to the fourth quarter of 2009 than we are to the fourth quarter of 2008. There's plenty of relatively bleak current data available to those wishing to paint a dark picture of the economy; no need to muddy the waters by asking everyone to remember how bad things were between five and eight months ago.

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Ryan Avent is The Economist's economics correspondent and the primary contributor to Free Exchange, an economics blog

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