Wall Street Journal Sounds Fake Alarm Over Mortgage Debt

The Wall Street Journal, in its persistent quest to mislead people about financial statistics, has this to say today:

U.S. Mortgage Debt Hits Record, Eclipsing 2008 Peak

U.S. mortgage debt reached a record in the second quarter, exceeding its 2008 peak as the financial crisis unfolded. Mortgage balances rose by $162 billion in the second quarter to $9.406 trillion, surpassing the high of $9.294 trillion in the third quarter of 2008, the Federal Reserve Bank of New York said Tuesday….The figures are nominal, meaning they aren’t adjusted for inflation.

Nominal, you say? How about if we go ahead and correct for inflation, just for laughs? In fact, let’s take the advice of Diane Swonk, chief economist at Grant Thornton, who told the Journal, “What’s more interesting is when you look at the service burden, we don’t have more debt.” Here it is:

That sure doesn’t look like a new record, does it? It’s true that much of this decline is due to low interest rates, which can always change. But there’s sure no hint of that on the horizon. The Fed just lowered policy rates and certainly shows no inclination to raise them anytime soon.

The fact that some government agency reports a number that happens to be higher than some previous number is not necessarily a good hook for a story—and it’s definitely not a good reason for a big headline that screams “mortgage debt hits record.” At the absolute least, you need to correct a time series like this for inflation, and at best you need to present it in a way that actually makes sense. Percentage of income is usually the most sensible way to present debt.

But if you did that you wouldn’t have a story. Can’t have that, I guess.

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Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

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