March 18, 2004, 9:56 a.m.
Remember the Misery Index?
Here’s why the press doesn’t play this oldie anymore.

BuzzCharts is in a nostalgic mood this week and has decided to play a hit from the "'70s, '80s, and '90s" — the misery index. During the stagflation days of the late '70s and the deep recession of the early Reagan years and the high-unemployment recession of the late George H.W. Bush years, reporters couldn't get enough of it. In fact, like most hits, it eventually become over-played. BuzzCharts is hoping for a comeback.

For those who only began following economic statistics within the past 10 years, a definition is in order. The misery index, as the name suggests, is designed to measure the amount of misery felt by ordinary people in the economy. Since fear of unemployment and loss of purchasing power through inflation have pervasive effects in the lives of ordinary Americans, the misery index is simply the unemployment rate added to the inflation rate. Unemployment is based on the (recently neglected) household survey of employment, compiled by the Labor Department. And the inflation rate is based on the annual change in the Consumer Price Index.

How does the current misery index stack up with earlier periods? You be the judge:

The ranking for the average misery index for given periods in descending order are as follows:

George Herbert Walker's average misery index is a massively large 10.7 percent.
The Post WWII period's average is a rather large 9.5 percent.
The average for Clinton's first term weighs in at a moderate 8.8 percent.
George W.'s current misery index is 7.6 percent.
The average for Clinton's second term is 6.8 percent.

This means that George W.'s current misery index is roughly only two-thirds of his father's average. In other words, with the exception of the hyper-growth of Clinton's second term, the current misery index compares very favorably with every other time-period analyzed here.

The point here is not that the misery index is the be all and end all of economic health. Instead, BuzzCharts believes that the decision by the press to ignore this particular statistic at a time when it shows robust economic health indicates a tendency to exaggerate bad news and to ignore good news. This gap between coverage and reality is what creates investment and entrepreneurial opportunities for those who pay closer attention than the general public.

— Jerry Bowyer is a radio and television talk show host and the author of The Bush Boom.

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