The Misery Index

I spotted this chart at The U.S. Misery Index: It Ain’t as Sweet as Your Ice Cream, Jack – PJ Media the other day.  One of the advantages of being an old guy is that I remember when the Misery Index was new – back when Jimmy Carter was a president.

The Misery Index doesn’t have a lot of scientific basis – it’s just the inflation rate and the unemployment rate added together, though it was first developed by an economist.  It does make for an interesting chart. The interesting thing about today’s Misery Index is that it is developed with relatively low unemployment – something like 3 ½ percent.  I’ve heard some fairly solid economists explain that when unemployment stands at 5 percent, it translates to full employment, and that 3 ½ percent is actually too low for a healthy economy.  I recall a time of even lower unemployment – with clerks who couldn’t make change.  This time, the Misery Index is dominated by inflation – and things may not be the same as we saw when Reagan was a president.

This chart, from  shows inflation from 1872.  It’s no new problem.  It is a whole lot easier to get inflation when you can increase the money supply by printing press instead of mining.

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