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The Misery Index

A little known and often unreported metric of the economy is the misery index. From the website www.miseryindex.us the definition of the metric is given as follows:

The misery index was initiated by economist Arthur Okun, an adviser to President Lyndon Johnson in the 1960′s. It is simply the unemployment rate added to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. A combination of rising inflation and more people out of work implies a deterioration in economic performance and a rise in the misery index.

With the raw data obtained from this website I ran some of my own analysis. The data is given in a monthly level from the beginning of 1948 to 2012. This is a large amount of data, so I compressed it into annual averages. I found that in 1953 the United States was at its lowest annual percent of misery at 3.7%. The highest level experienced was in 1980 at an annual average of 20.8%. The annual average mean over this 64-year period was at 9.5% and over this long-term period nearly all of the years analyzed fell between the 1953 low of 3.7% and 16.5% of misery. The index over Obama’s tenure in office has been at a low of 8.9% (below the long-term average) in 2009, to a high of 12.1% (above the long-term average) in 2011. The average level of misery over these four years is 10.6%.

As I looked at these numbers, I couldn’t help but think how they don’t fit with reality. I know that the misery index is truly higher than is reported in these data. The Congressional Budget Office (CBO) tells us that we have had the longest period of persistently high unemployment since the Great Depression. Prices on food and energy are increasing at rates far outpacing the general inflation rate which is reported as a number excluding food and energy. People are paying more in taxes, more in education costs, and a lot more for healthcare despite Obama telling us nearly every day that costs are coming down. Houses are still being foreclosed on at high rates and the GDP experienced a contraction in the last quarter of 2012. Americans are definitely miserable, and the numbers do not reflect that.

The reason they don’t reflect reality is simple, they aren’t the real numbers. In the past, say in 1953, we measured inflation and the unemployment rates differently than we do today. Likewise, in 1980 the numbers were more accurately related to the 1953 numbers than they are today. How is it that Americans spend more and more on items each month, yet the inflation rate is reported at less than 2% annually over the past four years? Part of the answer is that, as mentioned above, we exclude food and energy. One reason the government does this is to keep the Cost-of-Living-Adjustment (COLA) rate down in order to not have to increase Social Security benefits more than they have to. Of course, that is not the official reasoning, but is a plausible one. By some estimates, removing food and energy from the inflation rate calculation lowers the actual number by as much as 7%.

With this then we can add to Obama’s misery index 7% for each year giving us a new average over his span to be now 17.6%. This number is getting close to the high reached in 1980 seen immediately after the disastrous presidency of Jimmy Carter.

Along with the false inflation number, comes the equally false unemployment number.

If you have taken any kind of economics class you may remember that full employment is achieved when the unemployment rate is near 5%. This is considered full employment because there are several men and women in situations where they either refuse to work or are incapable of working, so they are not counted. As of recently, the Obama administration has decided that those men and women who are persistently unemployed and have run out of unemployment benefits fall within this category and they remove them from the overall count. So, I took the estimated population for the United States, from the Census Bureau, for the year 2002 – nearly 288 million Americans. With that, I took the estimated number of men and women in the workforce for that year from the Bureau of Labor Statistics – 191 million Americans. I used these numbers as a baseline and applied the Census Bureau’s population growth rate. With that number I found an expected value for the number of people that should be in the workforce today, all other things being equal. The difference between that number and the actual number of people in the workforce in 2012 was nearly 9 million individuals. I then used this number to base my assumption that our true unemployment rate is 4% higher than the number actually recorded of 7.8%, giving us a more reasonable 11.8% unemployment rate. With that then, we can add 4% to Obama’s tally, and we get a misery index of something close to 21.6%. A new high!

I do not know about you, but I think the number stating that 1 in 5 Americans as unhappy is a much more accurate depiction of the current conditions we are all suffering through under this regime. Therefore, I dub our president: Obama the Miserable.

13 comments

  1. This administration, more than any other in our history, is prone to fudging the numbers to make things appear better than they really are. REAL unemployment is more nearly 20%…that’s 1/5th of the potential workforce that don’t have jobs and haven’t had for over 2 years now. If you add in the number of people with college degrees who are flipping burgers or cold-calling or spamming others trying to sell us “authentic, replica watches” or “penis-enlargement pills” or other such junk because they can’t find a decent-paying job elsewhere, the numbers inflate to more nearly 35% or even 40%!

    • It’s a bit hard to see why the administration wouldn’t paint the rosiest of pictures. The media then turns around and advertises it like it’s truth, sans any investigation or doubt.

      And why shouldn’t the media just broadcast whatever it deems most profitable? The public buys it like a crack addict chasing the ghost. The public also buys the cars, trucks, 2 bit insurance products and E.D. pills like its the hidden manna.

      The blame for this lies on an all believing, all forgiving populace of liability passers and dupes. Once a man turns off the njews, the largest of many veils is lifted. If one doesn’t believe in the njews, then by default a great portion of the Obama image is disbelieved, since the njews is a primary construct of that image.

      What gets me, is how many people know that Obama is a fraud, know that he has horrible intentions, and know he is totally unqualified to actually be an American president, yet continue to watch the njews, read the njews and listen to the squawk radio njews. And if it’s not Obama, it’s that drunken closeted moron Bush. I cannot imagine what possible benefit that njews nonsense can provide anyone. What I do imagine is that a populace of button pushers are too lazy to actually think critically and investigate for themselves. It’s easier to just let some stranger/actor tell one how to think.

    • To get the real number, food and energy costs have to be added in. Leaving out two necessary items for survival in this economy is ludicrous ! Shall we just let people starve and die from the cold in the winter, because we don’t want to consider these two essentials???

  2. Figures don’t Lye and Liars don’t Figure!! Abomination and Congress are the Latter !! Viet Nam Vet 67-68

  3. Only fools expect to hear the TRUTH from a LIAR with a deceitful agenda. My misery index has been at 25 for the past 3 years.

  4. Trouble is the unemployment rate is so easily manipulated by both parties to distort the perception the way they each would want. Truth is there are two other means that are far more likely to give one a better feel for how things are going. Those two things are Food Banks and food stamps. The first, food banks, are increasingly unable to provide enough food to those needing it. This has gotten worse under Obama’s tenure but was bad as well during the Bush presidency, just not as bad but bad just the same. The Food stamp program is a more definitive measure of what’s happening. During the 8 years of Bush’s time in office the food stamp program GREW 63%. Under the first 3 years of Obama’s time in office the food stamp program GREW 59%. That means Obama has increased food stamp usage 2.6 times faster than did Bush. These are the facts using the same criteria for both administrations. Now as a citizen of this country I don’t need these facts to tell me what I know since I am paying $80.00 or so to fill my gas tank on my Toyota truck, or that I am paying $20 to $25 to fill one of those tiny plastic bags they give you at the grocery store. Never mind the household bills that just keep going up and up. To me those of you who stick to their respective party of choice despite the true facts that both are responsible for this mess are just plain idiots and don’t have the sense GOD gave a knat.

  5. In a way, I agree, Jerry. However, MOST of the economic problems we experienced during the Bush years came AFTER the Democrats took over control of the House and Senate on January 1, 2007, not, of course, that the Republican-controlled Congress was very frugal with our money either…just not as free-spending as ANY Democrat House always is.

    By the way, it’s spelled “gnat.”

    • @ pappadave,

      Yes, sorry about the “knat”. You are right. Sometimes my fingers move different than my mind. You would think I would learn to proof read my own text. Anyway I agree with your statement about a Democratic Congress always being hell bent to spend money without regard for anybody. That’s mostly because the only way their respective minds can see them staying ahead is to BUY their votes. It truly saddens me that in my Lifetime I will never see a President nor a Congress that truly knows, respects, and honors their oath of office and the Constitution of these United States. How awesome would that be!

  6. The Americans can be forgiven for putting Obama in the first time but why they then compounded the felony by putting him in the second time makes one think they are all CRAZY.Well they are now paying for it.Poor devils

    • I always chuckle when you Limeys, or Aussies, or whatever commonwealth feels so superior to the mistakes of American governance, when it is quite obvious that your own monarchy disguised as an oligarchical parliament is the most lying assed wealth sucking bunch of mobsters the world has ever known.

      I’ll readily admit that America is in freefall decline, a fault only to be placed on the people. What is amazing is that the commonwealth believes that they have a government on their side, and ‘God Save the Queen!’

      The same banks that are crushing America have the entire wealth of the west in their sites, you had better believe it. Any ideal that your queen will save you is a joke. You are going to find very soon that the divine right leaders you hold dear are frauds, to be exposed, then dragged from their palaces, only to end up speaking out of their neck hole. Once that buffer is gone, the bankers will have to start killing a lot of people to keep themselves from the same fate. When that happens, it’s still not too late to blame Americans.

  7. The cost of food and energy ARE “factored into” the misery index as part of the “cost of living” and the inability of the people to buy either as they lose their jobs in this simply AWFUL economy.

  8. Remember Obama’s Smiling Mug when he Announced that he’d see to it that everyone currently Unemployed would have a Shovel in their hands soon??
    What he failed to mention was this; Those shovels were to help us all Did our own Graves!
    His only Solution for Solving America’s Unemployment, Is to “Starve out those citizens, HE Deems as,
    ” Non-Productive Citizens “, thereby reducing the Burden these unemployed & non-productive citizens place on our current, Food Stamp & Welfare & Health, programs!!
    Of course, His Illegals from all of our borders are exempt from these ” Non-Productive & Termination “, List, How else, do you explain away those Millions of Fiberglass Coffins, that the Army corp of engineers, have been hiding around the country, for the last ten plus years?

  9. Misery loves company

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