Misery Index Loves & Needs Company?

After mixed midterm outcomes, WSJ piece suggests famed “Misery Index” should be tweaked to give more weight to unemployment rate & less to inflation rate. So, as long as folks have jobs they hope to survive inflation?

The Dems retaining control of the US Senate despite an historic level of inflation while unemployment remains low would seem to support as much. As author Josh Zumbrun wrote, the Misery Index was invented by the late economist Arthur Okun 50 years ago to help forecast the impact of economic events on everyday life, including elections. “The formula is simple: Add the unemployment rate (3.7% in October) to the inflation rate (7.7% in October), which currently comes to 11.4%.” The MI has only been higher, he noted, during the 2007 recession and for a couple of months during the 2020 pandemic outbreak. So, why didn’t the party in power get totally wiped out on Nov. 8? Apparently, argues Zumbrun, a high percentage of folks still having a job despite inflationiary pressures is more important than originally thought; the fix, he says, might be to double it in the political calculus.

Yet, if true about those WITH jobs, perhaps another tweak: For those WITHOUT debt ala A Wonderful Life’s codger Henry Potter. In this case, maybe inflation can be a boon, at least, to savers, so why not SUBTRACT A POINT in arriving at the tweaked Misery Index?

Davd Soul