Return Of The Dreaded Misery Index
As if the picture weren't bleak enough, here's one more data point to worry about — the Misery Index is on the rise.
Conceived by economist Arthur Okun in the early 1970s, the Misery Index simply adds together the inflation and unemployment rates to create an effective indicator of real-world suffering.
It gained notoriety under President Carter, whose growth-choking, easy-money policies pushed the index to its post-World War II high. Now, under President Obama's equally disastrous economic policies, the Misery Index is making its return.
The annual inflation rate for May climbed to 3.6% as price spikes spread beyond oil and food. At the same time, May's unemployment rate edged up to 9.1%, yielding a Misery Index of 12.7.
That marks the fourth straight monthly increase in the index, which is now 62% higher than it was when Obama took office, and 57% higher than it was when the recession officially ended.
Obama's Misery Index average of 10.37 is higher than George W. Bush's (8.11) or Bill Clinton's ( 7.8 ).
Admittedly, we're a long way from the 21.98 peak during the Carter administration. But with Obama vigorously stirring the stagflation cauldron for the past 2 1/2 years, it should be no surprise that we're heading in that direction. Consider:
Regulation: In just his first 18 months in office, Obama imposed 43 regulations that will cost, by government estimates, $26 billion. And that doesn't count the avalanche of costly new rules headed our way courtesy of ObamaCare.
And his out-of-control Environmental Protection Agency and National Labor Relations Board have virtually declared war on private enterprise, with no regard to cost or jobs.
Obama's response has been to try to score PR points by asking his agency heads to scrape off regulatory flecks while wondering aloud how "we deal with making sure our regulations make sense."
Taxes: While Obama grudgingly acceded to keep all of Bush's tax rates in force for two more years, he agitates endlessly for massive tax hikes on the "rich." His debt plan calls for raising the top tax rates to pre-Bush levels and squeezing an additional $1 trillion out of them under the guise of "tax reform." All of the tax cuts he has approved have been gimmicky and short-term.
Spending: Federal outlays have risen more than 25% since Obama took office, and they're on track to eat up almost a quarter of gross domestic product for the foreseeable future — a spending level not seen since World War II. Annual deficits, meanwhile, have topped $1 trillion every year since Obama took office.
Debt: Gross federal debt has climbed more than a third under Obama, topping $14 trillion. His budget plan puts it on a course to reach $20 trillion by 2016.
Easy money: The Fed has acted as the Democrat's big-spending enabler by buying hundreds of billions in Treasury debt through its quantitative easing programs — and in so doing, sowing more seeds of inflation.
We can only hope the president will admit to his mistakes and make a sharp course correction, rather than continue to try to lay blame for all bad economic news at the feet of his predecessor.
After a prolonged recession and a terrible recovery, the nation doesn't deserve even more misery.
http://www.investors.com/NewsAndAnalysis/Article/575513/201106151855/Return-Of-The-Dreaded-Misery-Index.htm
