Free Markets, Free People

Is everyone feeling miserable?

The “Misery Index” was invented by economist Arthur Koon, an adviser to President Lyndon Johnson in the 1960’s.  It’s a fairly simple formula really.  Inflation plus the unemployment rate equals the misery index.  Of course since it was first published, we’ve changed the way we compute unemployment so when you see that number today, you have to remember it is lower because of that change.

But still, relatively speaking, it is a good indicator of our economic condition.  Today, the misery index stands at 12.87.  For the past 4 presidents, the index has ranged from a low of 6.05 under Bill Clinton to the high you see today.  Interestingly one term president George H.W. Bush had high index numbers during his presidency (low 10.9, high 11.10).  And we know how that turned out.

Barack Obama’s numbers are the highest of the 4. 

I noticed that some pundits are trying to compare Obama’s approval ratings at this point in his presidency to those of Ronald Reagan.  The misery index gives you an idea of why that won’t fly.

Obama’s index numbers started at 8.92 in 2009.  Reagan had an index of 17.97 his first year in office.  But the second year numbers tell the tale.  In his second year (1982) the index dropped by 2 plus points to 15.87.  And the third year numbers are actually a tick lower than Obama’s at 12.82.  But notice the trend.  It’s down.  Markedly down.

Obama’s is going the other way – from 8.92 to 12.87.  So while you can certainly say they had similar numbers, what you can’t draw from those numbers is the probability of similar results when election time rolls around.  One was trending markedly down and the other is doing the same on the up side.   The only thing that has saved Obama from a much higher misery index is the fact that inflation has been successfully dampened by the Fed to this point.  If that ever breaks loose, we may see an Carter era Misery Index.

Here’s another comparison that isn’t favorable for the incumbent.  The new poverty index numbers are in and they’re not good.  A sample:

Americans below the poverty line in 2010: 46.2 million

Official U.S. poverty rate in 2007, before the recession: 12.5 percent

Poverty rate in 2009: 14.3 percent

Poverty rate in 2010: 15.1 percent

Last time the poverty level was this high: 1993

Another index trending upward that isn’t good news for an incumbent.

So when you see the left trying to put a brave face on the numbers and making comparisons, all you need to remember to understand they’re simply whistling past the graveyard is that at the same point in each presidency, Reagan’s numbers were getting a lot better while Obama’s continue to get a lot worse.  If you’re going to make a comparison to a recent President, Jimmy Carter or even George H.W. Bush are better comparisons – not Ronald Reagan. 

And the key to remember about Bush and Carter is this salient description – “one term president”.


Twitter: @McQandO

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11 Responses to Is everyone feeling miserable?

  • Another big difference is what people saw.

    With Reagan, you could see things were improving. Expanding. Progressing (can I use that word?).
    With Bad Luck Barry, things are diminishing, because that is the choice he’s made for America.
    It also defines how these men envisioned their nation.  Reagan’s light on the hill, versus Obama’s guilty party.

  • I want to echo / expand on a point made by <b>Ragspierre</b>:

    <i>With Bad Luck Barry, things are diminishing…</i>

    The key is confidence: how many people worry about what tomorrow will bring?  How many people worry that, though they may be OK today, they may be f*cked in a week?  I have this issue: I have a decent job in the chemical industry.  However, I know that, in a sh*tty economy, the demand for our products isn’t all that great, and if one or two of our customers really cut back on their orders (or go belly up), my job disappears.  Indeed, my company may disappear and put all of us out of work.  It’s not a happy place to be.  I suppose that the Consumer Confidence Index is some measure of this, but it’s not explicit and doesn’t quite encapsulate the misery of worrying about getting a pink slip because the economy is in the dumper.

    I also add that this fear doesn’t just affect me: it affects businesses that I patronize.  For example, I used to frequent my local coffee shop quite a lot (coffee is really good and it’s owned by a friend of mine).  Now, I hardly go there at all because, in the interests of paying off debt and saving against the distinct possibility that I may join the ranks of the unemployed, I don’t have that kind of disposable income any more.  This hurts the coffee shop’s bottom line, which impacts the owner’s spending habits, including whether or not he can hire other people.  If enough people do as I do, the shop goes out of business.

    Now I’m depressed…

    • Now I’m depressed…

      As is our economy, international standing, the state of science and its status with the American people, culture, etc.
      The fruits of the Frankfort School, rotting.

  • We’re all miserable now but some of us will be MUCH more miserable after they’re avalanched out of office in the next Pres. election

    • naw, they will all get book deals and do just fine.  Now if you make me your benevolent dictator, I promise to destroy 80% of the federal government, but not before we have show trials and a lot of these bozos go up on meathooks.

  • Poverty rate in 2010: 15.1 percent
    This is the same rate of poverty at the beginning of the “Great Society” some 45 years ago.
    Obviously, the “War on Poverty” is now officially a quagmire.
    “I’m trying the Federal Government Diet. Since I was going to gain 10 pounds, if I only gain 8 I’m 2 pounds ahead and can reward myself with some cake.”

  • Well  sheeeeirrrrt – these ivy league poops aren’t very bright, they need to understand most of America is like the corporate head that used to roam the building putting his employees on the spot with his favorite question “what have you done for me TODAY“.
    Do these jackass’s really think we’re sitting around thinking to ourselves how grateful we are to Obama because it sucked as much under Regan?  Do they seriously think people are thinking it would be WORSE if Obama hadn’t been here to save us?  And that should make us smile and thank our lucky stars he’s here?  Seriously?

    • Sadly, that’s exactly what they think.  Remember when Bad Luck Barry, sounding really put out, said that people ought to say, “Thank you”?

      • Well good, I hope they go on thinking that and we’ll be able to bid farewell to Barry come Jan 2013.

  • In my own business, securities regulations have prohibited me from hiring brokers for more than three years. I was even fined fifteen thousand dollar expressly for hiring too many brokers in 2008. In the process I incurred more than $500,000 in legal bills to mitigate a more severe regulatory outcome as a result of hiring too many workers. I have also been prohibited from opening up additional offices. I had a major expansion plan that would have resulted in my creating hundreds of additional jobs. Regulations have forced me to put those jobs on hold.

    Obviously, somebody didn’t get the memo