What is the Miser Index and why should you care?
The Miser Index is a concept used to measure the health of an economy. In particular, economists and politicians have used the Misery Index to gauge the effectiveness of a President’s management of the economy since the 1960s. You should be concerned about the fact that another presidential election is heating up and the candidates are already running around the term. You should make sure that at least one candidate already seems to be tweaking the idea to say what they want to say.
On March 8, 2011, the Boston Herald wrote an opinion/editorial by Republican presidential candidate Mitt Romney. In this article, Mr. Romney strongly criticizes President Obama’s handling of the economy. While that criticism may be justified, Mr. Romney appeared to take liberties with the facts on the Miserable List. Specifically, Mr. Romney’s “Obama Misery Index” topped the Misery Index during the 1980 presidential election, in which the incumbent, Jimmy Carter, was denied reelection by Ronald Reagan. Mr. Romney stated that the “Obama Misery Index” is “at a record high, even the deficit of the Carter years as the boom does.”
The problem is that the “Obama Misery Index” Mr. Romney came up with, something Mr. Romney developed, is not the same as the Misery Index in use since the 1960s. Therefore, comparing this discovered measure with the historical Misery Index of another President is like comparing apples to oranges. Fallacious When the Traditional Misery Index and data from a reliable source (http://www.miseryindex.us/) were used, the Misery Index as of the end of June 2011, 12.76, was not a record high. Commentary on the Chief Misery Index, occurring in June 1980, the last year of Carter’s presidency 21.98. The Compassion Index averaged 16.26 during the four years of Carter’s presidency. The Carter years hardly “looked like a bomb” as Mr. Romney stated. The current Misery Index of 12.76 is far better than the Misery Index when Mr. Carter was in office and in fact equals the Misery Index of 12.76 that Mr. Reagan had in 1983, the third year of the President’s first term. Since the current Misery Index last 28 years, it is not higher than in the Carter years as Mr. Romney imported. Mr. Romney later clearly denied why his “Obama Misery Index” differs significantly from historical facts, although he continues to use it.
So what is a “traditional” Misery Index that you can compare to one without studying how the President’s economy has done? According to Investopedia.com (http://en.wikipedia.org/wiki/Misery_index_(economics), economist Arthur Okun, an adviser to President Johnson in the 1960s, developed the idea of the first Misery Index and it is an easy method. :
Current (or historical at a point in time) unemployment rate
MORE
The current (or at a historical point in time) inflation rate
EQUAL
Current (or historically at a point in time) Miser Index
For example, the June 2011 unemployment rate was 9.2% PLUS the June 2011 inflation rate of 3.56% equals the Compassionate Index of 12.76%. (Source: http://www.miseryindex.us/)
To make things easier, a number of pages have been dedicated to the Index of Mercy. The best, in my opinion, is www.miseryindex/us. Although the Compassion Index did not exist until 1960, this page contains data going back to 1948. The page shows Compassion Indexes, unemployment rates, and growth from 1948 to the present, by month, year, President, and Congress. This page gives you everything you need to get our politicians honest when they talk about the Misery Index. More importantly, the site provides everything you need to tell us when our politicians are lying about the Misery List.
I hope this explanation of the Misery Index will help you make more informed decisions during the upcoming election season. After all, citizen books have always said that informing voters makes for better voting!
Report:
- www.bostonherald.com/news/opinion/op_ed/ view/2011_0308obama_misery_index_hits_a_record< /a>
- www.miseryindex.us/
- www.investopedia.com/terms/m/miseryindex.asp< /a>< /li>
