Kerry's "Misery Index" Accentuates the Negative

We all know that Kerry has been touting his "misery index" to show how bad the Economy is under Bush. A misery index has been around since the Truman administration and has been used by Presidents and economist to show how effective the economy is. I checked out Factcheck.org and was surprised at what I found.

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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.

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.

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.

www.factcheck.org...

Kerry's 'misery index' was just one item in a long string
of catch phrases he tried to get America using. None
of them worked. His 'misery index' bombed on opening
day. Betchya' folks forgot about it within hours of his
unveiling it.

I kind of think that when you discuss the rate of inflation, as it pertains to hardship on the american people, the things that should be included would be housing, energy, healthcare, food, taxes, ect. The things you really need to survive, not the cost of that brand new luxury automobile and such....since quite frankly, if you're scraping the bottom of the barrel, well, who cares if someone can get a great deal with 0 percent interest on a new automobile...you're worried about fixing the tansmission on your beat up old wreck!!

All I can say is that they are predicting that the cost of heating our home will be going up by something like 25% this winter.....I am thinking about closing off half of the house, digging out the electric heater, and us all camping out in our living room!!! The barrel is scraped clean now!

Na, things are great!!!

While I agree with you on the price of Oil increasing and not caring about getting a great deal on a car when you can't afford to fix your old car, I disagree with the concept of creating an artifical misery index based on selected items. The items that Kerry selected were designed to make President Bush look bad, not to give an accurate picture of the Economy. He did not want to use what has been used by most economist, the classic misery index because it shows that President Bush has brought this country back from the Clinton recession and from the financial devistation brought on by the 9-11 attacks. Kerry talks a good game, but he has to make up statistics to make himself look good.

Originally posted by jrsdls
While I agree with you on the price of Oil increasing and not caring about getting a great deal on a car when you can't afford to fix your old car, I disagree with the concept of creating an artifical misery index based on selected items. The items that Kerry selected were designed to make President Bush look bad, not to give an accurate picture of the Economy. He did not want to use what has been used by most economist, the classic misery index because it shows that President Bush has brought this country back from the Clinton recession and from the financial devistation brought on by the 9-11 attacks. Kerry talks a good game, but he has to make up statistics to make himself look good.

I'm just pointing out that the old index is just a tad flawed. If the price of the luxury items drop, it can offset any rise in the cost of the bare essentials...when talking about any type of "misery index", who cares if BMW has decreased it's price on the newest models. I don't feel that me not being able to have a BMW is making me miserable. The fact that every step I take hurts, and I went close to two years without the financial means to take care of it, well, ya, that can make one quite miserable!

I agree with you on the bare essentials of life and yes not having the financial means to pay for the physical needs does tend to make one miserable. I tend to fault the trail lawyers for the high price of medical premiums. I know here in Maryland, my insurance has gone up and up. The main reason is due to the rise of malpractice insurance the doctors are required to maintain. Tort reform is needed, but that's for another thread. High priced items like a BMW are out of my reach also, I drive a used 96 oldmobile cutlass, but I can tell you I am better off now under Bush than I was under Clinton. I have more take home pay and thanks to lower mortages rates I have been able to purchase my first home. I would not be able to do this during Clinton's administration.

Originally posted by jrsdls
I agree with you on the bare essentials of life and yes not having the financial means to pay for the physical needs does tend to make one miserable. I tend to fault the trail lawyers for the high price of medical premiums. I know here in Maryland, my insurance has gone up and up. The main reason is due to the rise of malpractice insurance the doctors are required to maintain. Tort reform is needed, but that's for another thread. High priced items like a BMW are out of my reach also, I drive a used 96 oldmobile cutlass, but I can tell you I am better off now under Bush than I was under Clinton. I have more take home pay and thanks to lower mortages rates I have been able to purchase my first home. I would not be able to do this during Clinton's administration.

hope you got a fixed rate mortgage!!!

I'm in NY......and well, any tax break (which wasn't much to begin with) has been eaten up by increases in sales and property taxes on the local level, since both state and federal governments decided that the money was better used to fund wars, stregthen drug companies, build golf courses and the like...so they just didn't fully fund the mandates that they imposed on us....like the "no child left behind act".
No, we are not better off now. The year I got hurt, Blue Cross/Blue shield decided that all their upper managers deserved these really nice raises (really nice!!), while at the same time they hiked up their insurance.. Malpractice suits, and the rewards they sometimes give out are only a small part of the picture when talking about the high healthcare costs.