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.
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.