Last year we reported that President Obama’s Misery Index topped that of George W. Bush. Today we want to look at how the Misery Index affects incumbents in an election year.
The Misery index can be calculated simply by adding the current unemployment rate (8.1) by the inflation rate (2.3) = 10.4 Misery Index
Historically, a high (or climbing) misery index has been a political football resulting in a change of Presidents while a low (or falling) misery index resulted in reelection. Eisenhower was reelected in November 1956 with a misery index of 6.53%. Johnson (D) ended with a misery index of 8.13 in November of 1968. So Humphrey the Democratic candidate lost to Nixon.
Early in the Nixon administration the misery index climbed to a high of 11.67% in December 1970. From there through the election in November 1972 the index was falling and Nixon was re-elected. As a matter of fact, according to Wikipedia, “Emphasizing a good economy and his successes in foreign affairs, such as ending American involvement in Vietnam and establishing relations with China, Nixon won the election in a landslide.” However, the Misery Index bottomed two months later at 8.55% and from there the misery index climbed drastically. Finally, Nixon resigned when his misery index climbed to 17.01% in July of 1974.
Gerald Ford took office in September 1974 with a misery index of 17.85%. It peaked at 19.9% a few months later and then fell steadily as his term progressed to 12.66% in December 1976 but he still lost. Perhaps if his term had been slightly longer he might have been reelected.
Jimmy Carter quoted the misery index extensively during his 1976 Presidential campaign to unseat Ford, even though Ford actually presided over a declining Misery index. Carter on the other hand presided over an increasing misery index of his own, starting his term at 12.72% and increasing to levels well above Ford’s highs. Carter’s misery index peaked at 21.98% in June of 1980. His misery index was still above 20% come November 1980, so Reagan was able to use Carter’s own words and the misery index against him in the following election and make Carter a one-term President.
Reagan took office in January 1981 with a misery index of 19.33%. By November of 1984 the misery index had fallen steadily to 11.25% and Reagan was reelected. By November 1988 the misery index was 9.55% and so the Republicans were able to elect Bush 1 in the hopes of more prosperity to come. But four years later (November 1992) the misery index was higher at 10.45% and Clinton was elected. In January the index stood at 10.56%.
By November 1996 the misery index had fallen to 8.66% and Clinton was reelected. By November 2000, the misery index still stood at 7.35% and Bush 2 was elected. This election and the Nixon win over Johnson are the only two elections in the history of the misery index where the misery index was relatively low when parties changed. But in both cases the misery index was climbing fairly steeply prior to the election. So it is possible that people felt they were becoming worse off.
During Bush’s first term, the misery index rose slightly to 8.92% by November 2004 and the election was very close. Resulting in Bush barely getting re-elected. In July 2008 the Republicans were in trouble with the misery index at 11.4% and a banking crisis at hand. By November the misery index had fallen to 7.87% but that was primarily due to a collapse in inflation even though unemployment continued to rise. The inflationary collapse was due to a massive contraction in the money supply due to a stock market crash rather than any positive economic factors. So the social mood was ready for a change in political parties.
Worldwide this same phenomenon appears to hold as well, this seems to be confirmed by the recent elections in both France and Greece where their economies were faltering and the seated Presidents were both voted out.
Read more at Misery Index | InflationData.com.
Some groups has tied the Misery Index to the Debt
Rise in Unemployment and Debt Combine for a Record “Obama Misery Index”
After a dismal May jobs report revealing 220,000 more men and women out of work, the Obama Misery Index rose to a record high of 80 percent. The Obama Misery Index measures the rise in unemployment and debt since the beginning of the President’s term. The Administration’s failed policies and out-of-control spending have led to a 5.6 percent increase in the number of unemployed and a staggering 74.5 percent ($4.7 trillion) increase in the debt held by the public.
Sadly, the President and Democrats in Congress seem perfectly content to allow a bad situation to get worse by refusing to offer any viable solution to these growing problems.
But the American people can’t wait. Now is the time for the President and Congressional Democrats to work with Republicans to get the unemployed back to work and our debt and deficits under control.
Other writers are calling it the “Obama Misery Index” and taking him to task by using the great Democrat party tactic – Economists
1) Take this “Great Recession” business.
Remember the “misery index”? The term, popularized by former President Jimmy Carter, used to mean inflation plus unemployment. Unfortunately for John Kerry, by the time he ran for president in 2004, the misery index stood at 7.4 midway into the election year, the same as when George W. Bush won the presidency in 2000. What to do? Change the definition. Kerry invented a new misery index, one that included only high-rising costs like college tuition, health care and gas prices.
Similarly, “bad economic times” used to mean, above all, high unemployment. Within a year of Obama’s presidency, unemployment climbed to 10.2 percent. Within three years of Reagan’s presidency, unemployment reached 10.8 percent. Under Obama, inflation has been — at least so far — rather modest. Early in Reagan’s presidency, inflation reached 13.5 percent. Rather than describe this era as the “Great-Recession-turned-around-by-Reagan’s-pro-growth-policies,” many pundits and scribes dismiss this period of extraordinary growth as the “me decade” or the “decade of greed.”
2) “There is no disagreement,” said then-President-elect Barack Obama, “that we need action by our government, a recovery plan that will help to jump-start the economy.”
What?! More than 200 economists, including several Nobel laureates, signed on to a full-page ad placed in major newspapers by the libertarian Cato Institute. Eventually, over 130 more economists became signatories to the ad.
It read: “With all due respect, Mr. President, that is not true. Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance.
“More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s ‘lost decade’ in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today.