Get familiar with this term kids, it was something that all of us, who lived through the 1970s knew very well.
It’s about to come to the foreground again. Yippeee!
The Misery Index is a compilation of the prevailing inflation rate and the unemployment rate to give a picture of the nation’s “misery.” These are the two most basic economic indicators – giving a snapshot of (1) at what rate the costs of goods and services increasing and (2) how many people are out of work.
The misery index was created by economist Arthur Okun (pictured above), an adviser to President Lyndon Johnson in the 1960's. It’s simply the unemployment rate added to the inflation rate. It’s assumed that both a higher rate of unemployment and a worsening of inflation combine to create economic and social costs/”misery” within an economy.
Suffice to say, with annual unemployment rates over 20%, the 1930s are unquestionable the worst decade for Misery and the “Misery Index,” so most data collected starts with post-WW II America.
Truman finished off FDR’s last term in 1948 with an 11.5 Index.
His own term saw 1949 come in at 5.1, 1950 at 6.3, 1951 at 11.2 and 1952 at 5.3.
To date, Dwight D. Eisenhower and William J. Clinton were the only post-WW II U.S. Presidents to preside over eight straight years of single digit Misery Indexes, with Ike dodging a bullet in 1958 when it hit 9.6 and Bill Clinton dodging one in 1993 with a 9.7!
GW Bush would’ve been only the third U.S. President to preside over eight straight years of single digit Misery Indexes, but with the current Misery Index at around 9.88 and rising (August's was 11.47), that doesn’t look like it’s gonna happen for George W.
The only other two Presidents to preside over single digit Misery Indexes throughout their tenures were JFK (1961 = 7.8, 1962 = 6.8 and 1963 = 6.9) and LBJ, whose spending spree’s bills didn’t come due until the 1970s.
Richard Nixon’s first term saw the first double digit Misery Index since 1951, when 1970 came in with a rollicking 10.2. The Index spiked to a high of 11 during his last full year (1973) and spiked even more during 1974 (he resigned that July) hitting 16.7 for that year!
Things got even worse for poor Gerald Ford, who followed Nixon’s “We’re all Keynesians now” view through his thirty months. Under Ford the Misery Index surged to a whopping 17.7 in 1975 and was brought back down to 13.5 (actually 13.45) in 1976...Happy Birthday America!
Unfortunately for Americans, that 13.5 was going to be the BEST they were going to see in awhile!
Jimmy Carter, who ran as a “Center-Right Democrat” and governed as a far-Left Liberal, saw the Misery Index increase EVERY year of his administration, the FIRST and, to date, ONLY post-WW II U.S. President to hold that distinction.
Under Carter the Misery Index climbed from 13.6 (1977) to 13.7 (1978) to 17.07 in 1979 and finally all the way to 21 in 1980, the year Ronald Reagan ended Carter’s tenure and the reign of Keynesian policies in America.
Did Reaganism work?
Just look to the Misery Index. Reagan’s first term was the FIRST time a post-WW II U.S. President presided over four straight years of DECREASING Misery Indexes!
The Misery Index fell from 18 (17.97) in 1981 to 15.87 in ’82, to 12.82 in ’83, to 11.81 in ’84. It dropped to 10.74 in 1985 and then dropped off into the single digits over his last three years. That was the first three year stretch of single digit Misery Indexes since 1967 thru 1969.
George Bush Sr. presided over four straight years of double digit Misery Indexes and became only the second post-WW II U.S. President to do that, although his 10.6 four year average pales in comparison to the stultifying Misery of the Carter years that come in at a staggering 16.5!
Hmmmmm, come to think about it, that sought of puts the lie to the Clinton’s idiotic campaign slogan used against George Bush Sr.’s economy, “The Worst Economy Since the Great Depression,” doesn’t it?
Bill Clinton’s first two years had a combined two year average of 9.4 (9.9 and 8.8 respectively), but once the Gingrich Congress stepped in and cut government spending, his final six years saw an average annual Misery Index of just 7.3, the lowest average in THREE DECADES!
1998’s Misery Index of just 6.05 was the LOWEST since 1956!
Amazingly enough, G W Bush’s seven year annual average Misery Index (2001 thru 2007) is very close to Bill Clinton’s average annual Misery Index over his last seven years (leaving off his first, and worst 9.9 in 1993). Bush’s seven year average, to date is 7.9, compared to Clinton’s 7.5!
With 2008 looking like it’s going to approach 10 for the first time since 1992, Clinton and Bush’s eight year averages will probably be very close.
Incredibly enough Supply-Siders Clinton and Bush have combined to deliver FIFTEEN straight years of single digit Misery Indexes.
With 2008 teetering on the brink (it was 11.47 for August 2008), the year is averaging 9.98 through the first eight months, we COULD see the first double digit Misery Index since 1992.
Where do we go from here?
That’s anybody’s guess.
What we have currently is a Republican Gerald Ford running against a Democratic Jimmy Carter.
Anybody care for a 1970s redux?
Cause here it comes. That's why lessons like this are important. Those who don't know history, are indeed doomed to repeat it.
It’s about to come to the foreground again. Yippeee!
The Misery Index is a compilation of the prevailing inflation rate and the unemployment rate to give a picture of the nation’s “misery.” These are the two most basic economic indicators – giving a snapshot of (1) at what rate the costs of goods and services increasing and (2) how many people are out of work.
The misery index was created by economist Arthur Okun (pictured above), an adviser to President Lyndon Johnson in the 1960's. It’s simply the unemployment rate added to the inflation rate. It’s assumed that both a higher rate of unemployment and a worsening of inflation combine to create economic and social costs/”misery” within an economy.
Suffice to say, with annual unemployment rates over 20%, the 1930s are unquestionable the worst decade for Misery and the “Misery Index,” so most data collected starts with post-WW II America.
Truman finished off FDR’s last term in 1948 with an 11.5 Index.
His own term saw 1949 come in at 5.1, 1950 at 6.3, 1951 at 11.2 and 1952 at 5.3.
To date, Dwight D. Eisenhower and William J. Clinton were the only post-WW II U.S. Presidents to preside over eight straight years of single digit Misery Indexes, with Ike dodging a bullet in 1958 when it hit 9.6 and Bill Clinton dodging one in 1993 with a 9.7!
GW Bush would’ve been only the third U.S. President to preside over eight straight years of single digit Misery Indexes, but with the current Misery Index at around 9.88 and rising (August's was 11.47), that doesn’t look like it’s gonna happen for George W.
The only other two Presidents to preside over single digit Misery Indexes throughout their tenures were JFK (1961 = 7.8, 1962 = 6.8 and 1963 = 6.9) and LBJ, whose spending spree’s bills didn’t come due until the 1970s.
Richard Nixon’s first term saw the first double digit Misery Index since 1951, when 1970 came in with a rollicking 10.2. The Index spiked to a high of 11 during his last full year (1973) and spiked even more during 1974 (he resigned that July) hitting 16.7 for that year!
Things got even worse for poor Gerald Ford, who followed Nixon’s “We’re all Keynesians now” view through his thirty months. Under Ford the Misery Index surged to a whopping 17.7 in 1975 and was brought back down to 13.5 (actually 13.45) in 1976...Happy Birthday America!
Unfortunately for Americans, that 13.5 was going to be the BEST they were going to see in awhile!
Jimmy Carter, who ran as a “Center-Right Democrat” and governed as a far-Left Liberal, saw the Misery Index increase EVERY year of his administration, the FIRST and, to date, ONLY post-WW II U.S. President to hold that distinction.
Under Carter the Misery Index climbed from 13.6 (1977) to 13.7 (1978) to 17.07 in 1979 and finally all the way to 21 in 1980, the year Ronald Reagan ended Carter’s tenure and the reign of Keynesian policies in America.
Did Reaganism work?
Just look to the Misery Index. Reagan’s first term was the FIRST time a post-WW II U.S. President presided over four straight years of DECREASING Misery Indexes!
The Misery Index fell from 18 (17.97) in 1981 to 15.87 in ’82, to 12.82 in ’83, to 11.81 in ’84. It dropped to 10.74 in 1985 and then dropped off into the single digits over his last three years. That was the first three year stretch of single digit Misery Indexes since 1967 thru 1969.
George Bush Sr. presided over four straight years of double digit Misery Indexes and became only the second post-WW II U.S. President to do that, although his 10.6 four year average pales in comparison to the stultifying Misery of the Carter years that come in at a staggering 16.5!
Hmmmmm, come to think about it, that sought of puts the lie to the Clinton’s idiotic campaign slogan used against George Bush Sr.’s economy, “The Worst Economy Since the Great Depression,” doesn’t it?
Bill Clinton’s first two years had a combined two year average of 9.4 (9.9 and 8.8 respectively), but once the Gingrich Congress stepped in and cut government spending, his final six years saw an average annual Misery Index of just 7.3, the lowest average in THREE DECADES!
1998’s Misery Index of just 6.05 was the LOWEST since 1956!
Amazingly enough, G W Bush’s seven year annual average Misery Index (2001 thru 2007) is very close to Bill Clinton’s average annual Misery Index over his last seven years (leaving off his first, and worst 9.9 in 1993). Bush’s seven year average, to date is 7.9, compared to Clinton’s 7.5!
With 2008 looking like it’s going to approach 10 for the first time since 1992, Clinton and Bush’s eight year averages will probably be very close.
Incredibly enough Supply-Siders Clinton and Bush have combined to deliver FIFTEEN straight years of single digit Misery Indexes.
With 2008 teetering on the brink (it was 11.47 for August 2008), the year is averaging 9.98 through the first eight months, we COULD see the first double digit Misery Index since 1992.
Where do we go from here?
That’s anybody’s guess.
What we have currently is a Republican Gerald Ford running against a Democratic Jimmy Carter.
Anybody care for a 1970s redux?
Cause here it comes. That's why lessons like this are important. Those who don't know history, are indeed doomed to repeat it.
8 comments:
I remember the misery index. I'll bet that Obama's high poll numbers have a bit to do with the stock markets low numbers, too.
The misery index will be a factor under Obama no doubt jmk, but not as severe as carter. As oil continues to decline, more people will start to realize the "wealth effect" and start spending more thus increasing GDP and restarting the economy. What also must be taken into consideration is "consumer confidence". If people don't feel confident in the economy, they won't spend no matter how much gas prices fall. If Obama does what I think he will do as president, this economy is going to be sour for at least four years, and he will be a one and out president. Going after the upper income brackets by raising taxes and thinking that will spur economic growth is beyond stupid. That's Obama for ya.
I don't know about that Uncle Sloane - a LOT of Wall Streeters support Liberal Democrats because they're addicted to the free government money.
That's a tough one Tyrone.
While oil prices ARE heading lower, due to decreased demand (right now), the Misery Index - the inflation rate added to the unemployment rate seem far more likely to be effected by declining private sector revenues, forcing massive public sector layoffs and an exploding national debt putting an upward pressure on both interest rates AND inflation.
What I'd expect iss for Democrats to blame it all on G W Bush's "disastrous eight years."
Within two years of EITHER Obama or McCain, G W Bush's "disastrous eight years" are going to look like "the good old days."
The primary thing Liberals fon't understand about tax policy Tyrone is that (1) the top 10% of income earners ALREADY pay about 70% of all income taxes and that (2) when tax rates rise, those folks, who have more "disposable income" respond by deferring (saving) more of their income up front, in various tax-deferred vehicles. That's why the end result of raising taxes on the top 10% of income earners ("the hated rich") actually decreases revenues, as those people respond by deferring more of their incomes in tax-deferred vehicles.
Obama is surrounded by so many whacky Leftists, from David Axelrod to Bill Ayers....I don't think such people even consider the real implications of "punishing the so-called rich."
More ironic still, there is actually very little overlap between "the top 10% of income earners in America" and "the richest 10% of Americans."
Income is a very poor wealth-generator.
What raising the top income tax rates amounts to is "punishing the most productive Americans."
jmk" e free government money."
lol free government money. Liberals actually believe that too. No way other people taxes are paying for that "free" government money including the people that are getting that money lol
jmk"Obama is surrounded by so many whacky Leftists, from David Axelrod to Bill Ayers....I don't think such people even consider the real implications of "punishing the so-called rich."
People during the 70's had to learn from their mistakes by electing Carter. The old saying is that time heals all wounds jmk. It was 28 years since Carter left the white house and most people have forgotten and young people only know of him from a history book. If Obama wins, they too will learn what socialism is like under carters second term. Oddly enough jmk, thanks to Carter Republicans has 12 years straight rule of the white house, and that could have been 16 years if it wasn't for "read my lips no new taxes" bush 41 lying about raising taxes.All it will take is one true conservative to run against Obama if he wins and Obama can head back to the south side of Chicago.
Very informative post, JMK. As usual. Thank you!
Hi Dan O!
Keep an eye out for the Misery Index over the next four years.
I know I will.
I have a feeling that we could see, only the third U.S. President to preside over four straight years of double digit Misery Indexes (Carter at 16.5 and Bush Sr. at 10.5) were the other two.
I know a lot of people disagree with me, but I've said since May, that it mightn't be the worst thing if an Obama administration and a Democratic Congress preside over a late-1970s redux, with double digit Misery Indexes, out of control social spending, and if we're EXTREMELY UNLUCKY, perhaps another terrorist event on American soil.
You think that'd wake most Americans up to casting the blame exactly where it belongs (on Liberals ad Liberalism)?
If that wouldn't, nothing will.
Of course, I believe it WOULD.
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