The misery index was initiated by economist Arthur Okun, an advisor to President Lyndon B. Johnson in the 1960s. It is simply the unemployment rate added to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation together create economic and social costs for a country. A combination of rising inflation and more people out of work implies a deterioration in economic performance and a rise in the misery index.
The misery index is organized by both decade and by presidential term. It begins in 1948 with the Truman Administration, which was in office from 1948 through 1953. During Truman’s term was the lowest recorded misery index, at 2.97% in July of 1953.
The Eisenhower administration encompassed the late 1950s, from 1953-1960. During that period of relative peace and prosperity, the misery index never crept above 10%, in fact, it stayed around 7% to 8% for most of President Eisenhower’s term.
The short-lived Kennedy administration, from 1960-1963, was also a relatively peaceful and prosperous time, and the misery index hovered between 6% and 7% during those three years as well.
The Lyndon Johnson administration followed John Kennedy’s assassination and one subsequent reelection, lasting from 1963 until 1968. During this time, which saw increasing political and social unrest due to the escalation of the Vietnam War, the misery index remained surprisingly low, hovering around the 6%-7% that characterized the Kennedy administration.
The Nixon administration lasted until 1974, when President Nixon resigned, and was followed by the Ford administration, which lasted through 1978. This period saw the end of the Vietnam War and the oil embargoes of 1973-1974, which caused the misery index to shoot up between 16% and 17% during those two years, a record high at that point in time. For the rest of the Ford administration, the misery index hovered around 13%.
The Carter administration, which lasted from 1978-1981, experienced a surge in the misery index, hitting a record peak of 21.98% in June of 1980, but then fell to nearly 18% by the next year.
The Reagan presidency, which lasted most of the decade of the 1980s, witnessed a gradual tapering of the misery index. The index hovered above the 10% mark except in 1986, when it dipped to around 9%. The George Bush Sr. presidency followed the Reagan era, and both administrations saw the Savings and Loan Crisis of 1987-1992. This financial crisis did not drastically alter the misery index, which hovered between 9% and 11% through most of George Bush Sr.’s administration.
The Clinton administration lasted through most of the 1990s through the turn of the new century. The misery index experienced a steady decline, reaching a low of 6% in 1997, a return to the prosperity of the Kennedy and Johnson eras. However, the rate did increase again, peaking to nearly 8% in 1999.
The George W. Bush administration lasted most of the 2000s, encompassing the Great Recession which began in 2007 and seems to be continuing through 2010. During the first part of his presidency, the misery rate hovered around 7% to 8%. The misery rate peaked at between 9% and 10% in 2008. It remains to be seen what the misery rate will be during the Obama administration.