Ever heard of the “Misery Index?”
It’s a metric first proposed in the 1960′s by economist Arthur Okun that combines the unemployment rate with the inflation rate, both of which are indeed miserable things. Especially if they’re happening to you. Especially at the same time.
In the Keynesian-based economics of our government experts, by the way, that can’t happen. Inflation, according to simple government economic theory, is from too many people having jobs, so they’re making too much money, which causes prices to rise when they all try to buy the same stuff at the same time. Unemployment, on the other hand, reduces that pressure on prices. So it’s not possible to have them both rising at once.
Jimmy Carter proved them wrong, ending with a 1980 economy sporting 7.6% unemployment and a 14.38% inflation rate for an all-time record 21.98% Misery Index leading into the election.
Fortunately for economists, their theories are evaluated on political expediency, not results.
Fortunately for Obama, in the 1990′s, government economists began “adjusting” the definitions of unemployment and inflation. Not surprisingly, these adjustments tend towards understatement. For example, people who have given up looking for work or whose benefits expired are no longer included in the unemployment number; and if steak prices go up 30% in a year, they assume that you’ll buy hamburger — hence, no inflation. As a result, the currently reported Misery Index is at an uncomfortable but not outrageous 9.9%.
However, if you were to measure unemployment and inflation the way they were originally defined, which exercise is still performed at the website shadowstats.com, you find a current inflation rate of around 9% and a real unemployment rate of 22%. That makes Obama the indisputable, but unofficial, steward of the worst economy ever with a breathtaking 31%.
Now that’s misery.