Written on Sunday, July 29, 2012 by Tad Cronn
Remember the Misery Index?
That was a little idea whipped up by economist Arthur Okun back in the 1970s. It was intended to put a number on just how crummy things were in the country by adding the unemployment rate to the rate of inflation.
It was assumed that both unemployment and inflation have economic and social costs beyond just what can be represented by those individual figures.
Under the Carter Administration and into the Reagan era, the media loved to tout the Misery Index. Some papers even kept running graphics on their front pages.
Since the creation of the index, economists have gone back several presidents to try to place the country’s misery in some historical context, and even though the media don’t like to talk about the Misery Index these days, there are still people who keep track of the numbers.
For instance, under Harry Truman, the Misery Index started out at 13.63 in January 1948. By the end of his tenure, it was down to 3.45, according to MiseryIndex.us. Nixon came in with an index of 7.8 and brought us to 17.01 by the time he left office in shame. President Carter shot from 12.72 to 19.72, with an all-time high of 21.98.
President Reagan brought the country back down to a Misery Index of 9.72, and every president since then has been a beneficiary of Reagan’s legacy. Clinton also wrestled the index down significantly to 7.29. Despite the “mess” the Left wants you to believe the second President Bush created, he managed an average 8.11 over his two terms compared with Clinton’s average 7.8, and gave us an index of 7.49 by the time he left office, all despite the after effects of 9-11 and a Congress that sent the housing market into a spin.
What King Obama actually “inherited” has grown under his watch, posting an average 10.75 and currently at 9.9.
Sometime during the Reagan years, the media started ignoring the Misery Index, presumably because it wasn’t fun letting the public know a Republican president was succeeding. The index made a brief reappearance a couple of years ago under Obama, but that notion was quickly quashed.
Carter has borne the shame of having the highest Misery Index in history, but you have to realize that the government since the 1980s has massaged unemployment and inflation numbers to make them look good to the public. If you use “alternative” measures that are closer to those used in Carter’s day, a different picture emerges.
Utilizing what are today called “U-6″ numbers for unemployment, published by the Bureau of Labor Statistics, the jobless rate is 14.9 for June 2012, not the 8.2 published in the newspapers.
Right there, you’ve got a real current Misery Index of 16.6.
The issue of inflation is a sticky one, as well. The government likes to leave out and “adjust” its numbers. Unlike with unemployment, the Bureau of Labor Statistics doesn’t advertise “alternative” measures of its Consumer Price Index, and while items like food have soared recently, the CPI has been held down by a sudden drop in gas prices, just in time for the election.
While there are different takes on inflation, estimates of the “real” current rate using Carter-era standards range as high as above 10 percent. If that’s the case, that would put Obama’s Misery Index around 26 percent, well above anything Carter achieved.
That would also help explain why the media aren’t into touting the Misery Index these days.
The bottom line seems to be that you can’t trust the government to tell you what’s really going on, and you sure can’t trust the media. So you may have to go with your gut.
Do you feel less miserable today than you did four years ago?