Misery Index

Back in the 70’s and 80’s, when we compared the economy to past years, to decide if it was getting better or worse, we talked about the “Misery Index.” It’s simply the sum of the unemployment, inflation, and interest rates. No one is talking about this index these days because they prefer to talk about the “worst economy since the Great Depression.” Just as an intellectual exercise I decided to recreate the Misery Index back to 1960 to see where we really stand. You can see on the chart that we’re not even half as miserable as we were back under Jimmy Carter. We’re not even as bad as we were under Nixon. Yet.

Where do we go from here? I’m guessing that the economy is going to get superheated by all of the deficit spending and we’ll see the inflation rate go from its current rate of zero to something HUGE. Then the government will drive up interest rates, to try to get inflation under control, and then we’ll WISH we had a misery index of only 40%. That’s my bet. So, I’m doing what the (LDS) Prophet says and I’m getting my year’s supply and planting a garden.