Posted on 10/07/2004 1:59:16 AM PDT by Enduring Freedom
Kerry's campaign has invented a new "misery index" that makes Bush's economic record look, well, miserable.
Why a new index?
Perhaps because the classic "misery index" -- which adds together the unemployment rate and the rate of inflation -- currently is better than it's been in most years since World War II.
In fact, it's less than half the miserable level reached in 1980, the last year of the Carter administration, and better than in any of Clinton's first four years:
Source: Bureau of Labor Statistics. (Annual Average Unemployment Rate + Percentage Change in Annual Average Consumer Price Index)
Analysis
The original "misery index" is simply the jobless rate added to the inflation rate. The term was coined by economist Arthur Okun, an economic adviser in Lyndon Johnson’s administration. It was widely used during the "stagflation" of the '70s and '80s when stagnant economic growth kept unemployment high and inflation reduced the buying power of wages.
By that classic misery measure the country is faring better than average under Bush: the unemployment rate for March was 5.7% -- which is just 0.1% above the average for all months since 1948. And the inflation rate remains historically low – the Labor Department’s Consumer Price Index rose only 1.7% in the 12 months ending in February, the most recent month on record. So the classic “misery index” number is currently 7.4.
That's lower than it's been in all but 20 of the previous 56 years on record. It never got this low during any of the years under Richard Nixon, Jimmy Carter, Ronald Reagan or Bush's father.
And the classic "misery index" was higher in every one of Clinton's first four years than it has been in any of Bush's years. It was not until Clinton's second term that the long economic boom of the 1990's pulled the index down to below its current level.
Source: Bureau of Labor Statistics. (Annual Average Unemployment Rate + Percentage Change in Annual Average Consumer Price Index)
(Note: Kerry's advisers say presidents should be judged by the change in the index, not its absolute level. Under Clinton the index did improve significantly: it was 10.5 the year before he took office and nearly 30% lower in his final year. It worsened under Bush but currently has settled down to the same level as it was in Clinton's last year. Unemployment is worse but inflation is lower by the same amount.)
Kerry's New "Misery Index"
So it's not surprising that the Kerry campaign has come up with another way of looking at the economy. On April 12 Kerry issued a news release saying "Middle-Class Misery Hits Record Under George Bush," based on a new index put together by former Clinton economic adviser Gene Sperling and former Al Gore adviser Jason Furman.
The Kerry index is, to put it mildly, selective.
Rather than use all consumer prices, the Kerry index cherry-picks three items that have gone up faster than the overall rate of inflation: college tuition (at public four-year universities only), gasoline, and health care.
And rather than use the overall unemployment rate -- which was 5.5% at this point in Clinton's first term, only two-tenths of one percent lower than now -- Kerry has used the number of jobs, which produces a more negative picture.
Other statistical indicators chosen by Kerry are median family income and bankruptcies, which have both worsened under Bush, and home ownership -- the only one of the seven indicators in the Kerry index to show improvement.
A Dubious "Record"
The Kerry news release proclaimed that the new index under Bush shows "the largest three-year fall on record and the worst record of any president ever." But look closely: their own calculations don't back that up. The "record" only goes back to 1976, when some of the statistics Kerry uses were first collected. The 13-point drop that the Kerry advisers calculate for Bush is indeed the worst in that relatively brief 28-year period, but they can't call it the worst "ever." What about Herbert Hoover?
In a telephone conference call with reporters Sperling denied that the items in Kerry's index were selected just to make Bush look bad. Asked why the Consumer Price Index wasn't used, Sperling said the prices of gasoline, health-insurance premiums and college tuition were chosen because they are "the major things people see and feel." And Furman pointed out that the index generously includes one statistic that has shown improvement: home ownership, which has increased to 68.6% of all households since Bush took office, according to the Census Bureau. That's an increase of 1.1 percentage points and is due in part to record low mortgage rates.
But elsewhere the Kerry index selects those figures that look the worst. It includes median family income before taxes, for example. But that doesn't measure the typical family's take-home pay as well as the Census Bureau's measure of after-tax income. Worth noting is that the Center on Budget and Policy Priorities -- a liberal group often at odds with Bush's policies -- issued a report April 12 saying that the federal tax burden on the typical middle-income family of four was at its lowest level in decades. The Kerry index reflects none of the benefit of the Bush tax cuts. After-tax income has fallen, but not by as much as income before taxes.
Contributing the most to the gloomy picture presented by Kerry's index is college tuition. Kerry aides used only the figure for four-year public colleges and universities, which has shot up 13% under Bush, even after adjusting for inflation. But they excluded tuition for private colleges and universities, which went up only 5%. (Both figures are from the College Board's annual survey of college costs.)
When it came to measuring the change in employment, however, the Kerry aides focused on the loss of private sector jobs only, not total employment. That ignored gains in hiring of local, state and federal workers. The economy has lost 2.6 million private-sector jobs since Bush took office, but government hiring has kept the total job loss to just 1.8 million. The Kerry index uses the larger figure, making their index look worse.
Kerry isn't the only one spinning economic figures, of course. We pointed out earlier a Republican attempt to claim that after-tax income was up when the Census Bureau reported it was down. Our advice: be wary of all politicians spouting economic statistics.
MISERY INDEX!
Yes, the real one, not the fake Kerry-Edwards (aka Tax Me!-Sue Me!) scam version.
The Misery Index was the definition of domestic policy credibility of the past three decades.
But because it is so favorable to Dubya, it has fallen off the table.
Don't let it!
Talk it up, folks.
The Misery Index is where it's at for the domestic debate.
KARL ROVE, WHERE IN GOD'S NAME ARE YOU ON THIS?
OH boy... more sound bytes and propaganda...
I hope President Bush is ready If Kerry tries this one in the debate.
I think we can own this issue.
It is irrefutable and familiar to the American electorate.
Bush needs to make it crystal clear with a dismissive confidence catchy sound bite that is heard 'round the world.
This sounds like the Florida Supreme Court's decision to change the election rules in the middle of the election!
Kerry also doesn't mention, that while tuition rates have gone up, the tuition actually paid, has not gone up in the last ten years, because need based financial aid, has more than kept pace with tuition increases.
He may be ready for that. At least, it is an obvious point.
The Opportunity Index would be an interest number to come up with:
Let's add a few things together: Take the Employment Rate of 94.6% + The HomeOwnership Rate + the Mortgage Rate + The Educational Improvement Rate.
That could be an opportunity index: job, ownership, education....
Savings/Investments would be a good thing to add to it.
Social Security investments from one's own SS investments via the Bush Plan.
Whaddayathink?
"Bush needs to make it crystal clear with a dismissive confidence catchy sound bite that is heard 'round the world."
I agree 100%. After the first debate, I went back tthrought he transcript, and could see where President Bush was refuting points made by Lurch. But what hadn't come through in the debate was any fire or conviction to hammer it home and really let people see the difference between himself and Lurch. He seemed to be trying to put it out there and saying "you know what he said isn't right" without being forceful. Throw that strategy out the window and hammer this down people's throats that Lurch's healthcare and tax plan and defense record are going to be a complete and total disaster for this country!!
It HAS to be told! And told just like that!!
I talked to a nurse the other day and she told me she's voting for President Bush, but being in the trade she's in she knows she should really vote for Lurch. I didnt try to sugarcoat I asked her if she was nuts! I told her to stop and think a minute what healthcare under Lurch would be like. It didnt take her but a few seconds and she asks me "like Canada?" I said probably worse, because the scale is larger. She then went into a blistering tirade of her disdain of the Canadian and UK health care systems.
The point was, that she made her own argument that her original choice of President Bush was indeed the correct one, and she made it with knowledge she already had.
The average of the Clinton years calculates as...
Avg. 1st Term: = 8.85
Avg. Total: = 7.81
Despite Bush being handed an economy in recession and having to deal with the problems of corporate scams of the '90s which faked Clinton's success, the 9/11 attacks, the Lib media talking down the economy, the average M.I. to-date throughout the Bush administration years is approx. 7.65
Excellent point.
Canadian healthcare has the same quality as Mexican automobiles.
Glad you took the time to review the first debate. I believed all along that Bush won it. If you like a smooth talker you took Kerry. If you went for substance then you liked Bush. I for one want substance over smooth running this country. Kerry made a couple of statements that first debate that were so out of whack that he lost the debate right there. His "global test" comment was the worst but his idea of bi-lateral talks with North Korea was just plain stupid. Anyone with a half an ounce of brains knows the only country that can possibly get North Korea to back down their nuclear weapons program is the Chinese. If you go with a global test before any action we might as well disband our military as an outdated and not going to be used department of the government. When is the last time the UN did anything but bash the US. Look at the response they gave the thug who runs Zimbabwe for his anti-American speel. That should give a person an idea how far a "global test" is going to get us.
It would be helpful if a Republican, just one, would publicly say that.
It would be further helpful if someone pointed out that subsidizing something means you get more of the something.
Actually this is old news. Kerry came out with the new index...but even it started showing improvement...so he took it down.
In other words, he actually was for a new misery index, before he was against it.
Have you heard the correct Misery Index touted by the Bush administration, mainstream media, bloggers?
I haven't, and it is a major miss by this campaign.
When he trotted it out before it lasted all of 1 day. When people started pointing out that using his index the Carter years were better economicly than the Reagan years it was quickly dropped as they couldnt sell that. Even talking heads from the DNC went on TV to denounce it.
Kerry's has been dismissed, but the real one has NOT been promoted.
It summarizes the state of the economy in a single statistic.
And that summary is: We are doing great!
Hammering the airwaves with this will counter the lying Left.
Excellent analysis!
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