Remember the “Misery Index?”
If, like me, you are a “child of the 70’s and 80’s,” then you probably have some acquaintance with the term.
Yet we don’t hear much about the Misery Index anymore. And given all that is and is not happening economically in our country right now, it seems like an appropriate time to bring back the index, although we’ll need to amend it just a bit.
Let me explain.
Back in 2009 when my co-author and I were doing research for our new book “The Virtues Of Capitalism,” I came across some background information about the Misery Index. We ultimately decided not to include it in the book (it is a bit “off topic” from what we were writing), but what I read about it did nonetheless get me thinking.
Many Americans, if they’re familiar with the index at all, are quick to associate it with President Jimmy Carter. This is because President Carter, in some strange ways, “popularized” the Misery Index, or at least got people in the habit of thinking about it and referencing it. This increased familiarity with the Misery Index ultimately ended-up hurting Carter politically (I’ll explain that in a bit), and as a result, Carter’s name has become synonymous with the Misery Index in the minds of some.
However, the Misery Index actually predates the “Carter era” by several years, as it was first proffered by American economist Arthur Okun earlier last century (Okun died eight months before Carter was elected President). Eventually, during Okun’s lifetime, the index was utilized to evaluate various period in U.S. and world history.
Okun calculated the Misery Index by adding the unemployment rate and the inflation rate, as they existed simultaneously at any given point in time. In his view, rising unemployment combined with an increase in the prices for goods and services brought about both economic, and social costs for a country, and the Misery Index was formulated to try and quantify those consequences in one accessible, easy-to-reference statistic.
Jimmy Carter became associated with the Misery Index by his own doing. In 1976, as the former Georgia Governor was campaigning for the presidency against incumbent President Gerald Ford, Carter began complaining publicly about the Misery Index which, by the summer of that year, had reached a high of 13.57.
Carter claimed that no man responsible for producing a Misery Index that high had the right to even ask to be President, let alone remain the President. Carter successfully used this rhetoric to engender resentment towards President Ford among the American electorate, which was part of what cost Ford the election in that year and ushered Carter into the White House in January of 1977.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.
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