June 23, 2016 • 44 mins
Economists love their data because somewhere in the numbers lies the answer to the ills of the country. They also love to frame data in a way people can relate to. Such is the case with the famous "misery index."
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Speaker 1 (00:00):
Welcome to you stuff you should know from house Stuff
Works dot com. Hey, and welcome to the podcast. I'm
Josh Clark, and there's Charles W. Chuck Bryant. The W
stands for Wayne Dr Wayne Coyne. It gets you every time.
(00:22):
I know, it's funny to be forty five years old
and named after Wayne Coyne because he's like forty eight. Right, No,
he's in the fifties too, But it would be weird.
I would have been named after a very uh like
kindergarten age Wayne coin A. Right. You know, maybe your
parents were friends with his parents and they really thought
a lot about him. Play he's a real achiever, right
(00:44):
that Wayne Coyn going places? Okay, Uh, that's a weird
side track. It was already out of the gate. Man.
How are you feeling. I'm good. I got a lot
on your plate, got a lot going on. Oh you
know what today is? What? Dude? Today is the day
(01:04):
that I leave this office and I go to a
shop in Edmond Park and pick up four brand new
last chance garage hats. Oh wow, it's a big day,
very big day. So I have a couple of people
would like to thank It's a bigger deal than it
should be for a grown man in a hat. But
we all understand, first of all, Katie, my custom patchmaker,
(01:27):
this is really where it all came together. The patches
isn't right, the hat's not right. Katie killed it. It
looks identical and you can find her work at tulip
cake dot com c U L I P. Cake. And
I said, you know people might ask you to make
you to make them last chance garage patches. Did you
(01:47):
have her destroy the mold? And I said, I don't
you know. It's on you. It's up to you legally.
I'm just saying you might get requests. You should have
been like Ivan the Terrible who blinded his architect, except
that they built his pal Now, I don't care people.
I'd love to see these things around and la mood
big hats l A m o O d uh for
(02:09):
big heads because part of the problem was finding uh
big and tall hat. Yeah, man, like, uh the problem
I have with hats these days. I don't look like
I have a huge head, but they just fit so
snugly and they don't go far down enough on my head.
So I finally looked up oversized hats and found La
mood hats and dude, they're exactly like the old hat
(02:32):
except it doesn't stink. Oh yeah, like these are great.
I got four brands, an improvement for sure. So are
you gonna put one in like the seed Vault in Norway? Uh?
Probably one there. Uh, there will be one in the
nuclear suitcase, and um, I'll wear the other two at
the same time at the same that's right. Anyway, I'm
(02:53):
super excited. So it's pretty cool. Thank you to Katie
and the mood Hats for allowing me to spend too
much money getting four hats remade. And speaking of while
we're thanking people, we we owe a long overdue thank
you to a guy who um made us a really
cool sign. Um. Oh you mean the sign this guy
made for us like seven years ago. Yeah. His name's
(03:15):
Matt Street. He's at fat Bison dot com. And it
made a really cool woodcarved sign. It was in our
TV show. It was like like the production company got
clearance rights for it and all this stuff, and we
love the sign, but we just forgot to ever thank Matt.
So Matt, thank you so much for the sign. We
love it. We have it hanging here in the studio.
It is a work of art and we appreciate it.
We're sorry for the oversight. Um. Is that all the
(03:38):
thank you? So let's talk about the misery index high. Yeah.
What a great transition, have you? Um? Had you heard
of it before you came across this article? Yeah? I
didn't know a lot about it though, And um, apparently
it's going a little bit out of fashion lately from
what I understand. Yeah, I think so, because well, well
let's get into it. Okay. It turns out economics as
a whole is in danger of going out of fashion.
(04:01):
I've read this really interesting article on a on, which
is maybe the greatest website on the planet a e
O N dot It might be dot CEO because British
about a lot of websites. I think I said about
a on a lot and and it just seems like
I'm talking about different ones. But there's this article by
Allen J. Levinovitz and it's called the New Astrology, and
(04:22):
he basically makes a parallel between economics and economists and
economic theory when you take economics and try to apply
it to future forecasting and the um the b CE
Chinese astrologers that basically directed the way that the economy
or the government was going to move based on the
(04:46):
movements of the stars, you might as well just do that.
He drew some pretty pretty interesting parallels between the two
that that economics in and of itself is not necessarily flawed,
but when it's used to forecast the future, then it
becomes inherently flaw odd. Yeah, this this article really kind
of kind yeah, a little bit. Yeah, to an extent.
I mean, the misery index is a legitimate economic tool,
(05:09):
and it's hit or miss in a lot of ways. Yeah.
I think one thing that hit home to me with
researching this is it just seems impossible to say that
there's one correct way of doing things right or that
is absolute, and you're like, you know, if you do
things this way, then there will be nothing but growth
in jobs and the GDP s and g m P
(05:33):
and uh, it just it just doesn't seem to work
that way, right. I think the problem is is that
if you listen to economists, they like to act like
they do have a handle on that kind of thing.
But if you really look into economics, it's very politicized.
There's liberal economics and there's conservative economics, and the fact
that each one saying it's right kind of makes you
think that maybe no one is, you know, but the
(05:56):
misery index actually is is it started out from a
guy who was pretty good at walking the line between
conservative and liberal economics. UM, a guy uh what was
his name Okin? Yeah, Arthur Oakin, and he uh he
worked on Kennedy's staffs, Council of Economic Advisors, John F.
(06:16):
Kennedy that is, and he was, UM, I get the feeling,
one of the main influences and talking Kennedy, who initially
did not necessarily agree, but talking Kennedy into kind of
trying to enact both conservative and liberal economic policies simultaneously.
Right they were. The US was intercession when Kennedy took
(06:37):
office in nine one, UM, and they talked him into
not only increasing government spending like welfare programs. They raised
the UM, the minimum wade and UM some other stuff
like that, but they also cut taxes, which is, you
do one or the other. You cut taxes and hope
everything goes for the best because businesses will start investing
(07:00):
and spending, or you start you start investing in welfare
programs to help your ailing UM lower in middle classes. Right,
you don't do both, and Kennedy did both and it
was successful. Yeah. He well he at first he said,
I don't know about this. I don't know about this author.
Mike Kennedy sounds like a robot. My kinda did too.
(07:22):
Actually this is fine, but Arthur mr Okun Okon, I
think it's a weird name. Okay, you in uh. He
talked him into it and said trust me, and things
worked out in that case. Yeah. Well, and a lot
of guys, including Oaken's names, were made by this advice
(07:45):
that panned out like the US Center to Boom and
um Okin ended up as being the head of the
Council of Economic Advisors for Kennedy's successor, Lyndon Johnson. Right, yeah,
and um one thing that economic economists economists love to
do is um I mean, he loved the forecasts and
all that stuff. But it's all about data, man. They
(08:08):
love to pour over data, like stuff that makes the
average person their mind bleed from boredom. They just find
it fascinating. That's what they do on Friday nights. Friday nights,
they pour over data, historical data, trying to find you know,
it's like the big puzzle and they're all trying to
solve it, so they pour over this data. Oakland did,
and um he said, you know what, I noticed something
(08:30):
here between when we started recording some some decent unemployment rates,
which I didn't know. I didn't know we started that.
It seems like it would have gone back before then.
But between sixty he said, you know what, I've noticed
that the gross national product rises three for every percentage
(08:51):
point that unemployment falls. With the caveat that unemployment has
to be between three and seven point five percent, which
is a pretty like, it's pretty bold statement to say
I've noticed this is a definite trend. It is, and
it came to be called Oakland's law because it was
verified other people poured over the data and like, this
(09:12):
guy is right, man, he just keeps coming up with hits,
doesn't he. Um. And the reason you would want to
know some arcane piece of data like that is that
if you know that that's the case, then you can say, well,
if we attack unemployment can get it down a couple
of points. We can you know, raise g d P
(09:34):
or g MP, you know, by three percent every time
we drop it. So when we need to bulk g
m P up, we just attack unemployment, right, easy, peasy,
uh yeah, and everyone said, thank you are Yeah. Things
worked out pretty well for a while, but then the
nineteen seventies came along, and UM, if you what, we're
(09:55):
gonna talk a little bit about stagflation now. But if
you haven't heard it, we have a two good episode
I think. So it's called what is Stagflation? From February
twenty four, two thousand. Um. Yeah, I think as far
as our economics episodes, it was not bad. I went
back and listened to a lot of it before I
(10:17):
got bored out. Yeah, the first three minutes were great. Um.
But yeah, I go back and listen to that. But um,
like he said, he served as chairman of the c
e A for Johnson, and then in seventy three, a
very unfortunate thing happened that kind of ended up rocking
the world and the United States in particular with our economy. Um,
(10:39):
so we're gonna take a break and we're gonna talk
when we get back about the Middle East. All right,
(11:07):
what happened in the old I am negative three? The
arab oil embargo happened. Right, So, at the time, until
very recently, the US was super dependent on foreign oil
like like other countries. We wouldn't even sit down at
the table with we were getting oil from right. Yeah,
(11:28):
we're doing better now, yeah, with our dependency, But back then,
very bad, very um. And it was it was a
source of anxiety for a lot of people, and that
anxiety actually panned out. So in Um nineteen seventy three,
Egypt and Syria and a few other Arab nations invaded
the Golden Heights and the Sinai Peninsula to attempt to
(11:52):
take back land Um from the State of Israel. The
US was found to be supply arms to Israel, So
as far as the Arab States were concerned, the US
had cast its lot on israel side, and they were
fairly peeved about that. So they literally shut off the
tap of oil flowing to the United States and other
(12:16):
countries that were found considered to be on the side
of Israel in this in this war Um huge deal.
It was an enormous deal. The the this foreign dependency
in the the precarious situation that it placed the United
States and came to pass, and the price of oil
rose thirty seven. The long lines at the gas station
(12:37):
were never seen before or since. Even after the financial
crisis of two thousand eight. UM, it was just insane.
There was gas rationing in the United States in nineteen
because the UM the oil embargo, and after a while
the taps were turned back on. But that shocked to
the system, screwed the economy up for a decade. Inflation
(13:00):
went out of control, and UM a very another unfortunately
happened along the same timeline. Unemployment started to creep up.
And these two things happening at the same time as devastating. Yeah,
and up to this point, so first of all, the
US had never had a shock to the system like that.
That was one thing. It wasn't a gradual thing. It
(13:21):
was like yeah. But the other thing is when you
have something that has never happened before, you can look
at it and say, wow, what what happened, and new
things that have never happened before come out of that.
And one of the things was inflation and unemployment going up,
because up to this point, economists just assumed that the
two were mutually exclusive. If you're if you're UM. If
(13:43):
inflation was up, prices were high, that meant that companies
could go out and hire more people, so unemployment of
course would be low. Yeah, it kind of made sense.
Well not not after the oil embargo. The shock to
the system led to, like you said, high unemployment rates
and high inflation, and uh, it was a miserable time. Yeah,
and that was called stagflation. It also led to skateboarding,
(14:05):
as we all know. Oh yeah, because of the pools, right, yeah,
they could and cal well actually that was the drought.
But I think the drought was also tied into the economics. Sure,
but they couldn't fill up swimm pools that they started
skating in swimming pools. Well, yeah, if you have a drought,
then you lose your crops. And if you lose your crops,
you lose money, a significant sector of money exactly. So
good news. We have half pipes now and quarter pipes
(14:31):
and peralta they're still around, right, I think bad news
is like you said, it had a devastating effect for many,
many years on the United States. So Oakin starts to
look around. He said, you know what, things are pretty
bad here. One might even say miserable. I haven't gotten
any acclaim for a while. Yeah, nothing's been named after
me in a while. So let me create this new
(14:52):
uh list, new method for looking at the economy. And
it turns out to not be like a look over
a period of time or anything, but just sort of
like a polaroid of that day and not just that
day for like the country as a whole, or um
for the FED or anything like that. But what he
(15:13):
did that was different was he looked into what the
what it was like that day or that year for
the average American in their daily life. And he called
it the misery Index. Yeah, and it was very rudimentary
at the time. It was just simple calculation of the
yearly rate of inflation plus the unemployment rate. Yeah. So
(15:36):
if you have like five percent inflation and two percent unemployment,
you have a seven percent misery index. It's as simple
as that. I don't know why it got so much,
you know what. It was hailed as a big deal
because I think Oakin had a a a knack for
noticing things that seemed obvious in retrospect, but at the
time no one had ever noticed before. I'll buy it.
(15:59):
Thank why not? Alright, So now he has this index,
and not only can he look at a snapshot of
that day, he can go back because he was a
a data walk sure he could look at data throughout history. Well,
at least in nine, Yeah, which is when we started
recording unemployment, like we said, which must have been frustrating
for him because our um our inflation rates data goes
(16:22):
back to nineteen fourteen. But that's only part of the equation. Well,
it must have been like, oh, sure, and to be
able to look at the Great Depression, you could have
learned a lot, you know. Uh. So he went and
he looked back, and he says, here is what we've noticed,
and this is so obvious to me, uh, that that
presidents and political parties are brought in and out of
office largely depending on how the economy is doing. Yeah,
(16:45):
but they kind of proved it, but not even just
how the economy is doing. Like he he was saying,
like the misery index you can use to predict whether
the the presidency's going to change hands politically. Yeah. So
nineteen fifty six, Uh, misery index is six point five three,
which is great. That's during like, yeah, very low, Mr Eisenhower,
(17:09):
President Eisenhower, and he got reelected because things were pretty good,
right as far as the misery index goes. Yeah, Yeah,
everybody was pretty happy, even though they didn't really know
what the misery index was because it wasn't invented yet.
They just had a general sense. Well, yeah, they didn't
call it that at a time. No, They're just like,
seems fine to me. You're miserable. We like, no, I'm
(17:30):
not miserable, are you. So in Johnson came to the
end of his term and the misery index was up
to eight point one three, and then he had his
Democratic successor, Hubert Humphrey in line, and because the thing
had crept up, people a little more miserable and they said, no,
get out of here, I want Mr Nixon in office, right,
(17:50):
And I guess I'm not. I'm not sure about this.
So I don't understand why Johnson was replaced by Humphrey
by the Democrats and in this article, and it seems
to be because of this misery index that it would
have predicted that. But he was the incumbent president, so
(18:11):
let's see, so he was he would have should know this. No,
he yeah, he was a one term or technically one
in a third or one in a quarter because he
took over after Kennedy's assassination. But if his term was
up in sixty eight, then he would have won the
sixty four election. So he technically I think would have
been able to have been president. Again, I'm not sure
(18:32):
we could have found this out too sure, but I'll
bet there's somebody out there who can explain it to us,
and so email us, will you? Uh? At any rate,
Nixon gets elected and um, the misery index shot up
to eleven point six seven during the first term, but
then started to this decline enough that he did get
re elected. Um. But then uh in n with Watergate,
(18:54):
the misery index leapt all the way up to seventeen
point oh one. That's not good. Now, that's that is
the all time high at the time from what I understand. UM,
and that happened around nineteen seventy four, which meant that
when Watergate broke, some people who really subscribed to the
misery index say Watergate might not have been quite as
(19:15):
big a deal. If um, the misery index have been
low at the time, he might have been able to
squeak by without resigning or being forced out of office.
I think everyone has more leeway if things are great,
you know. But he his his his his currency had
been spent. Man. I watched all the president's men a
few weeks ago. Again, you ever seen that great, great movie. Yeah,
(19:39):
I've always meant to really really good and just sort
of like, they don't make a lot of movies like
that anymore. Spotlight reminded me of all it's good. It's
just I call it movies for adults. You know. There's
no chase scenes or anything remarkable. It's just good dramatic
movie making. Yeah, good stuff anyway. Wait, what's wrong with
the chasing? Uh? What's wrong with chase? No, there's nothing
(20:03):
inherently wrong with this, but I know what you mean,
just for the sake of a chasing, which we see
a lot of these days, you know what I mean,
Like Mark Ruffalo is chasing a priest in a car
and spotlight. Yeah, um, where were we? Okay, we're with Nixon. Um, well,
not with Nixon, you know what I mean. Ford comes
in office for a short time, and he actually managed
(20:25):
to get the misery indext year down. Well. I think
just the fact that Nixon was out. I think that
probably helped um you know and inspire like consumer confidence
in the like. So it crept back down to twelve
point six six, but not enough to keep um, the
Democrats and Jimmy Carter from coming into office and Carter
actually cited the misery Index. It was relatively new at
(20:48):
the time. He talked too much about it, but it
was it was a g whiz thing that you could
really just point to, like this post this, This is
the misery index. Can you can you hear me? That's
my car? But that was his amous quote, can you
hear me? It came back to haunt him though, to
say the least, because he talked a lot about the
misery Index, and then in his term the it reached
(21:10):
an all time high of twenty one. Yeah, which, man,
I really think that shock to the system under the
oil embargo, um and plenty of other stuff. This stuff
gets laid at Carter's feet, I think unfairly in a
lot of respects. Well, I mean, I would love for
someone to really that really knows their stuff to explain
(21:33):
to me exactly how much a president's influence has on
the economy and how long it takes for that to
bear fruit. Yeah, I would love to know that too.
I think though, Uh, the guy who came after Carter, Reagan,
is a pretty sterling, unassailable example of an impact a
(21:54):
president can have on the economy, whether you agree with
his politics or his economic policies are not. He most
decidedly had an effect on the economy. Yeah. I just
remember hearing one time. I need to look this up,
but somebody told me once that that the economic impact
of the presidential a four year term is felt the
most like eight years later or something. Yeah, that makes
(22:15):
sense to me. Economies don't move on a dime. Yeah,
I just I don't know if that's talking lumbering things.
They aren't fully understood by anybody. Yeah, it's interesting to
me now more than ever before though, because remember economics
used to I know, I was really really surprised when
you suggested this one. It's slightly more interesting to me. Oh,
(22:36):
just wondering things like that, and during an election season,
like are the decisions we make now gonna affect us
in one year or two years? Eight years? Uh? Yeah, Well,
if there's any economists who are still listening after that
initial remark about the new astrology, we'd love to to
get a primer on how long it takes for a
(22:56):
president to impact an economy, if they do at all.
I'm sure it's a arrange, you know, it's not like
starting it eight years and really, honestly was Carter that
band or was he a victim of cross stars. Yeah.
I mean you can make a case where a lot
of bills of presidencies not being directly at their feet.
(23:16):
But you remember that, uh Simpsons where they unveil a
statue of Jimmy Carter in Springfield and on the pedestal
it says Malaise Forever, and somebody goes, Jimmy Carter, He's
history's greatest monster Carter. So, like we said, it came
back to haunt Carter because he talked a lot about
(23:37):
the index. It rose a lot. Then Reagan came in
was like, well, let's talk about that misery index that
you like to talk about so much. That's in an
all time high. Reagan got in there, um knocked it
down to nine point five five by the end of
his term, enough to get Bush Senior in Um, it
inched up some then Clinton was able to Uh, it
(23:57):
didn't go up that much though. And I read an
interesting article to day on whether or not ross Pero
really got Clinton elected, because that's sort of the popular
thought he was a spoiler. Yeah, I could see that,
but um, he was definitely more in line with um
Bush seniors policies and Clinton's well at the time, yeah,
you would think, but I read, uh, I read one
article that said that it was kind of a myth
(24:18):
that basically that Clinton won by six million votes and
it would have taken of Paros supporters to have uh
been aligned with UM with Bush m hm, and supposedly
exit polls showed showed it more like thirty And so
they're saying it's sort of a myth that Pero swung
(24:40):
the election to Clinton. I see, but I mean that
was one person's opinion to who knows. You know, I've
been reading a lot about you know that we that
that suspicion you can't quite kick that there's really no
difference between Republicans and Democrats these days, that they're really
just kind of all in the same little club. I
think people feel that way sometimes. I've been reading a
(25:00):
lot about that, and apparently it's all based on neoliberalism.
That's like the key and um, there's there's a lot
of If you look into Neil liberalism and the policies
of neoliberalism, you realize we're like living in the thick
of it. But no one everyone's kind of blind to
the idea that it's just a single thing that basically
everybody in power subscribes to and that it has a
(25:25):
triple down effect of screwing over everybody below the top. Um.
But just the name itself seems totally fine, you know.
But it's uh, it's it's interesting. Yeah. I researched that
a little bit lately too. Yeah, there's been some good article.
We totally should let's do it, agreed. Man, we're gonna
get some emails for that one from billionaires. Yeah. Um,
(25:48):
So let's just finish out this quick little recap. Clinton
brought it down to seven point three five. Things were great,
Bush Junior gets elected. Um, despite the fact that Clinton
had a low index. Well, it depends on how you
look at the two thousand election. We should do one
on that one too. But this is the this is
that's considered one of those rare instances where the misery
(26:10):
index didn't indicate where it was going to go. But
you could also say it might have had things gone
slightly differently. In the Supreme Court George W. Bush, the
index rose from seven point three five to eleven point four,
and then Obama came in it went down to seven
point eight seven. But another weird flaw in the system
is exposed there because, um, despite the fact that the
(26:32):
misery index was lower, things were not good. The stock
market had crashed, unemployment was rising at a rapid rate,
and they said, you know this. It basically was another
example of like, look, this misery index isn't all it's
cracked up to be right, so let's work on it. Yeah.
I think a lot of people said this is too simplistic.
You can't rely on this. But we'll talk about some
(26:54):
of the additional factors that people have worked into the
misery index after this. All right, Chuck, so the misery
(27:24):
index open. Everybody's happy with him. They're like, this is
just too simple, especially in what's called the post stag
inflation era after the oil embargo. Um. And so some
people have said, okay, you can there's certainly there's other
things you can add in to give a genuine, true
snapshot of what the conditions are like on the ground,
(27:46):
as it were. Right, Well, yeah, not only what the
conditions are, but whether or not performance over a period
of time is getting better getting worse. Yes, And you know,
rather than say, oh, under under this president, the misery
index was this, you know, and it gives you a
pretty good idea this with this one guy UM named
Robert Barrow. He wrote a book called Getting It Right,
(28:08):
Markets and Choices in a Free Society, and in it
he takes the misery index Oakin's Misery Index, and he says,
we can add some stuff to this to to make
it an even clearer picture, not just of the conditions
on the ground, but you can take it and apply
it genuinely to a president's entire term to see just
how good their economic policies were or weren't for the
(28:29):
health of the economy. And he added some other stuff. Yeah,
he added four main new measurements. Uh. Took the inflation
rate during the last year of the president's term, compared
it to the average inflation rate over the entire course
of the subsequent presidents, which is based on what you
were saying that like the a four year term, the
(28:52):
effects are felt like years down the road. So I
think that's what he was doing there, right, Yeah, it
makes sense. Did the same thing with the rate of unemployment.
That was number two. Uh. He added in changes for
the thirty year government bond yield over a presidency. And
then finally he said, um, I need to look at
the difference between the long term GDP growth the real
(29:14):
rate of growth. Compare all these things along with the
original Uh, this plus this equals this, right, and with
the real growth rate. Um, that's where you take the
actual change either the shrinking or the growth of the
economy the g d P year over year. Right. And
he took that for year after year over the course
(29:35):
of the presidency and averaged it out. I guess that's right. Yeah,
And he came up with what's called the Barrow Misery Index.
And UM, a lot of people think that that's where
the misery Index started, when in fact it was Oakin
who came up with it about twenty years before Barrow
took it up and improved it. So under Barrow's Misery Index, UM,
Clinton and Reagan, that's Bill. Clinton of course came out
(29:58):
on top. And then it got named Steve Hankey about
ten years later. This was originally in and then Hankey
came along in two thousand six and said, you know what,
we need to add even more things. And this all
just makes sense. You need to if you want a
more detailed picture, then add more detail to the data
going in, you know. So he said, we need more
detail Uh, why don't we do this. Let's um, let's
(30:22):
measure inflation and unemployment like we're doing, and then let's
now add interest rates and subtract annual percentages from the
GDP to get a more accurate picture. And he said,
you can use this anywhere, you can use it all
over the world. Well, that's what he did, and that's
kind of what made his his version of it pretty famous.
He figured out how to apply it to other countries,
(30:44):
even countries that used UM price controls to keep inflation
in check, which means price inflation is held back artificially.
So Hanky looked into other things like UM the exchange
rate in the black market, and then given country that
kind of thing UM, and he figured out real inflation rates,
and he applied it around the world to find out
what country is the most miserable in what country is
(31:07):
the least miserable. And what he found in two thousand
fourteen was that the most miserable country in the world
was Venezuela, which had a Hanky misery index of seventy
nine point four. It's pretty high, very high. And then
Japan had the lowest misery at five point four one. Yeah,
the US came in at about nineteen, correct, I think eleven? Yeah? No, no, no,
(31:31):
eleven was our Oh I'm sorry. Nineteenth yeah, yeah, ranked
nineteen within eleven. I didn't hear that, yeah, because my
tooth is still gone. You think it'd be. It would
be more pronounced if they were nineteen. I would have
heard it clearly as about August can't get here soon enough.
(31:54):
So um, there are critics of this one too, though,
there's critics all these indexes. Well, yeah, the the A
lot of them say, no, still too elementary. Some people
say this is all just try like you can't. You
can't use this stuff to to make any real predictions.
You could use it to look back at the past,
but to use it for the future, probably not. But
(32:17):
some people do believe in the idea that if you
have enough data and the right kind of data, you
can get a clear picture of misery. And again that's
what we're after here, Like, the whole point of the
misery index is to figure out how unhappy and and
just low the average person in a country is feeling
at that moment, right, so um, HuffPo actually came up
(32:40):
with a pretty good one. HuffPo boo in two thousand nine,
HuffPo came up with what they called the Real Misery Index, right,
and so a lot of people cite the the use
of what's called YOU three unemployment statistics, which when you
hear unemployment numbers in the news, that till you're hearing
(33:00):
that's what the Bureau of Labor Statistics issues as the
official unemployment numbers. Right, yeah, And that's the very first
thing that people will say if they want to poopoo
the unemployment numbers, that that these are these are just
false numbers. Yeah. If someone says, hey, man, look how
great ex president is doing. Look at the unemployment rate,
right man, they're just using the U three. They need
(33:22):
to use the U six. Wake up, pal up in
your eyes, which you know is valid. Well yeah, so, um,
the BLS has six measurements of unemployment you one through
U six, and YOU six is the broadest. It includes
people who are so discouraged with the state of the
job market that they've given up looking for work and
(33:45):
they're just like, have given themselves over entirely to judge
Alex right, and then um. It also includes people who
are working part time but wish they could work full time,
but there's no full time work available. I'm a graphic designer,
but I work at Starbucks. So that's the U six
measurement that and that's considered the the broadest snapshot of unemployment,
(34:09):
the real m vision of unemployment. Yeah, like you said,
mostly they use you three, I guess because it's in
the middle. I mean you one. They would never use
you two. Everybody used to like, but not anymore. I
still like you too, get yeah, you know, not like
(34:30):
I used to. I'm not anything, but I did see
that concert they did on the HBO, and I have
to hand it to him. My big problem with you
two for years was that they just got so out
of control with those live shows like these giant spider
spaceships and things. And I was always of the belief that, man,
you need to go back to basics and just get
(34:51):
up on stage and play again. And that's what they
did with this new tour. I mean, there was a
cool visual element, but the stage set up in the
way they did it was very much back to basics
in it. I think they really connected with fans again. Yeah,
that's kind of help. Yeah, because you can only when
the when the interactions between you and the fans rather
than the fans and giant spiders. Yeah, you just you
(35:13):
can only go so far in that direction. I think
they realize that. Sure, anyway, where do you go, Youtuo,
I'll defend those guys. Um, even though I know everyone
in the world generally wants to punch Bono in the face,
I'm not one of them. It's kind of feel weird
like them. Yeah, I'm on record. I know if you're listening, well,
(35:33):
if you're Jared indicators, any any predictor Bonno is going
to come out to be canonized one day. What oh yeah, yeah,
you know you're like, there's something about Jared. I don't
like him, and you know, we found out about Jared
and then um, you're saying something's good, like they're gonna
find a cure for cancer and a saliva or something.
(35:55):
You never know. Um, so did we even mention what
the HuffPo what kind of outrageous numbers they came up with? No, well,
we didn't mention everything they used. We were talking about
the use six measurement. HuffPo used that measurement the most
extreme of unemployment numbers. They also used other things like, um,
the inflation rate of food and drink and fuel and
(36:18):
healthcare because other The misery index just uses the consumer
price index, which is inflation as a whole. HuffPo used, um,
the the inflation of some really essential things that people
can't do without and where you're gonna immediately feel the
pinch when prices go up. With those two factors, right. Um.
They also included the rate of credit card delinquency, the
(36:39):
cost of housing, how many people are using food stamps
that seems like a smart move home, equity loan deficiencies,
I guess, people who are laid on their payments. Um.
And then they took the average of those seven numbers
and added it to the U six unemployment numbers, which
here you can step back and say, wait a minute,
how would you how are you adding this together? How
(37:01):
does this make any sense? You can't just keep adding things, right,
And really you can take that all the way back
to the initial misery index, Like what you're just adding
unemployment percentage and inflation, and all of a sudden you
have a magic number that doesn't make any sense. This
HuffPo metric really points out the inherent flaw in it.
I think, yeah, because in two thousand eight, the Oakland
Misery index was eight point one, but huff po's Real
(37:25):
Misery Index a k A. You think things are bad,
here's how bad they really are index was twenty nine
point nine compared to the eight point one, right, and
some people are like, oh, well, that just shows how
off the oaken misery index is. Who knows. I know
they quit doing the real Misery Index at HuffPo like
five years ago. I think it was a am I
(37:47):
going to call it a stunt. It was a bit
of a stunt maybe, but I'm sure really what happened
was the writer who was contributing it for free, like
left for a paying job. That's probably what U into
the huff Real Misery and day Yeah. Um, I was
reading this guy, Tim McMahon. He has a site, or
he writes first site, I'm not sure it's his. Are
(38:09):
not called inflation data dot com. Jim McMahon, Tim his brother,
not the Super Bowl Shuffle, No, his brother. Um. So
he mentioned this two thousand one paper that concluded that
unemployment causes one point seven times more misery than inflation.
And so if you're doing any kind of misery index
(38:30):
that uses those two, you need to first multiply the
unemployment number by one point seven before adding it to
UM the inflation number to to properly wait it, and like,
how did they come up with that? So I looked
at the paper. It was actually pretty clever. There's like
twenty three years of this survey of life satisfaction and
happiness that these researchers looked at back in two thousand one,
(38:53):
and they found that UM economically based or just like
how happy are you? Know, here's the thing, it was,
how happy are you? It was like a single question
like would you say, based on how you're feeling right now,
that you are fairly satisfied, unsatisfied, very satisfied with your
life right now right? And then they took that that
measurement for that that country as a whole, and you
(39:13):
can do this for any country that participated in the survey.
And then they looked at inflation, and then they looked
at UM unemployment for those years and they could figure
out the the variation between or the interplay between unemployment
and inflation and satisfaction, and they found that uh, that
UM that unemployment was one time one point seven times
(39:38):
more miserable than inflation in regards to life satisfaction, as
that survey. Guess it's pretty clever. It's a lot of
hocus pocus, but it's I thought it was pretty clever
how they did it. That makes sense to me because
to be without work, like if you have a job
and things inflation is happening, you still have your job, sure,
and you're like, man, this sucks to pay this much more,
but you can still conceivably pay for Yeah, I'll cut
(40:00):
back here or there if you if you're unemployed, then
there's not a lot of hope. Yeah, one, the number
might be conservative here. Yeah, I agree with you. Very
interesting stuff. So that's uh, that's it, man, that's the
misery Index. You got anything else? No, but I'm looking
forward to hearing from economists that me too, like in
(40:22):
an unbiased way to try to explain things. Me too.
If you if you send just you know, these crazy
political emails and they're they're gonna fall in deaf years
because everyone yells at each other that they're right. I
just want to hear some real numbers, do it, chuck. Uh.
If you want to know more about the misery Index,
you can type those words in the search bar how
(40:43):
stuff works dot com. And since I said search bar,
just play an old search bar. It's time for a
listener mail. I'm gonna call this, uh, follow up on
vocal pride once again. Um. Regarding vocal pride, guys, Uh,
you guys were offended because someone said local pride was repulsive.
(41:04):
But there is another side of this, dudes. I suffer
from a neurological disorder known as miss aphonia, which we
totally should do a show in this. It's a condition
where a person has extreme emotional response commonly occurring sounds,
and I remember hearing a lot of times it's like
people chewing noises or gum or whatever. Um he said.
In my case, my trigger noise is the high pitched
(41:26):
s sound when some people speak. Uh. It feels like
my brain is cringing, as if an allergic reaction is
taking place. Cannot stress enough. This is not a mere annoyance,
as a legitimate mental disorder that can vary great and
greatly in severity. I don't visibly freak out when I
hear my trigger noise, but it really kills me inside,
gives me an instant headache. And that's why, which is
(41:47):
why I will get away from the noise if at
all possible. Um, I believe in avoiding complaining in life
and playing the victim. But this disorder really has made
my life like a subtle hell. It's been especially toxic
to my emily relationships and my ability to learn in school. Um.
I felt compelled to email you guys, because you definitely
appreciate interesting medical conditions. I think would be a great
(42:09):
topic for a show someday. I was a documentary about
it called Quiet Please. If you watch the trailer, you
might be inspired to watch it to learn what the
condition is. Huge. Thanks to everyone of Stuff you Should Know.
You make a mundane parts of my life interesting and educational. Uh.
I'm gonna anonymize this from Texas because I didn't hear
back from him from text. Yeah, text PS was in
(42:33):
disbelief when Chuck said he had not seen Billy Madison
or Happy Gilmore. That's a good PS. I believe it.
It's a good PostScript and post PPS right, not p
s S. I think it's post PostScript. Yeah, but people
who often put PSS what doesn't mean? Do you think
Stuff you Should Know could ever become a television show? Well?
(42:54):
Text never we actually did that. We we found out
the hard way that it came Yeah, we did a
TV show on the Science Channel and it ran for
one full season that played out over the course of
several days, which we'll always have. We'll always have that
season of television we did once. It lasted nine or
ten days. Yea, let's just show them all at once,
(43:16):
out of order. But you never know, we might get
another shot at stardom. But we're not looking to it. No.
I like it in this room where no one's looking
at us. Jerry be there looking away in discuss That's right,
good idea about the mesophonia. I think we mentioned that before,
(43:37):
Like that was I really like that vocal fry episode.
And that was the one thing that I wish we
would have mentioned because it's a legitimate thing that it
does affect some people. Um, but yeah, look for a
mesophonia episode at some point in the future. Text. If
you want to get in touch with us, we're all
over social media. We're on Twitter and Instagram at s
(43:57):
y s K podcast, We're on Facebook dot com, slide
Stuff you Should Know. You can send us an email
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you can join us at our very own home on
the web. Stuff you Should Know dot com. For more
on this and thousands of other topics, visit how stuff
(44:17):
Works dot com.
Welcome to you stuff you should know from house Stuff
Works dot com. Hey, and welcome to the podcast. I'm
Josh Clark, and there's Charles W. Chuck Bryant. The W
stands for Wayne Dr Wayne Coyne. It gets you every time.
(00:22):
I know, it's funny to be forty five years old
and named after Wayne Coyne because he's like forty eight. Right, No,
he's in the fifties too, But it would be weird.
I would have been named after a very uh like
kindergarten age Wayne coin A. Right. You know, maybe your
parents were friends with his parents and they really thought
a lot about him. Play he's a real achiever, right
(00:44):
that Wayne Coyn going places? Okay, Uh, that's a weird
side track. It was already out of the gate. Man.
How are you feeling. I'm good. I got a lot
on your plate, got a lot going on. Oh you
know what today is? What? Dude? Today is the day
(01:04):
that I leave this office and I go to a
shop in Edmond Park and pick up four brand new
last chance garage hats. Oh wow, it's a big day,
very big day. So I have a couple of people
would like to thank It's a bigger deal than it
should be for a grown man in a hat. But
we all understand, first of all, Katie, my custom patchmaker,
(01:27):
this is really where it all came together. The patches
isn't right, the hat's not right. Katie killed it. It
looks identical and you can find her work at tulip
cake dot com c U L I P. Cake. And
I said, you know people might ask you to make
you to make them last chance garage patches. Did you
(01:47):
have her destroy the mold? And I said, I don't
you know. It's on you. It's up to you legally.
I'm just saying you might get requests. You should have
been like Ivan the Terrible who blinded his architect, except
that they built his pal Now, I don't care people.
I'd love to see these things around and la mood
big hats l A m o O d uh for
(02:09):
big heads because part of the problem was finding uh
big and tall hat. Yeah, man, like, uh the problem
I have with hats these days. I don't look like
I have a huge head, but they just fit so
snugly and they don't go far down enough on my head.
So I finally looked up oversized hats and found La
mood hats and dude, they're exactly like the old hat
(02:32):
except it doesn't stink. Oh yeah, like these are great.
I got four brands, an improvement for sure. So are
you gonna put one in like the seed Vault in Norway? Uh?
Probably one there. Uh, there will be one in the
nuclear suitcase, and um, I'll wear the other two at
the same time at the same that's right. Anyway, I'm
(02:53):
super excited. So it's pretty cool. Thank you to Katie
and the mood Hats for allowing me to spend too
much money getting four hats remade. And speaking of while
we're thanking people, we we owe a long overdue thank
you to a guy who um made us a really
cool sign. Um. Oh you mean the sign this guy
made for us like seven years ago. Yeah. His name's
(03:15):
Matt Street. He's at fat Bison dot com. And it
made a really cool woodcarved sign. It was in our
TV show. It was like like the production company got
clearance rights for it and all this stuff, and we
love the sign, but we just forgot to ever thank Matt.
So Matt, thank you so much for the sign. We
love it. We have it hanging here in the studio.
It is a work of art and we appreciate it.
We're sorry for the oversight. Um. Is that all the
(03:38):
thank you? So let's talk about the misery index high. Yeah.
What a great transition, have you? Um? Had you heard
of it before you came across this article? Yeah? I
didn't know a lot about it though, And um, apparently
it's going a little bit out of fashion lately from
what I understand. Yeah, I think so, because well, well
let's get into it. Okay. It turns out economics as
a whole is in danger of going out of fashion.
(04:01):
I've read this really interesting article on a on, which
is maybe the greatest website on the planet a e
O N dot It might be dot CEO because British
about a lot of websites. I think I said about
a on a lot and and it just seems like
I'm talking about different ones. But there's this article by
Allen J. Levinovitz and it's called the New Astrology, and
(04:22):
he basically makes a parallel between economics and economists and
economic theory when you take economics and try to apply
it to future forecasting and the um the b CE
Chinese astrologers that basically directed the way that the economy
or the government was going to move based on the
(04:46):
movements of the stars, you might as well just do that.
He drew some pretty pretty interesting parallels between the two
that that economics in and of itself is not necessarily flawed,
but when it's used to forecast the future, then it
becomes inherently flaw odd. Yeah, this this article really kind
of kind yeah, a little bit. Yeah, to an extent.
I mean, the misery index is a legitimate economic tool,
(05:09):
and it's hit or miss in a lot of ways. Yeah.
I think one thing that hit home to me with
researching this is it just seems impossible to say that
there's one correct way of doing things right or that
is absolute, and you're like, you know, if you do
things this way, then there will be nothing but growth
in jobs and the GDP s and g m P
(05:33):
and uh, it just it just doesn't seem to work
that way, right. I think the problem is is that
if you listen to economists, they like to act like
they do have a handle on that kind of thing.
But if you really look into economics, it's very politicized.
There's liberal economics and there's conservative economics, and the fact
that each one saying it's right kind of makes you
think that maybe no one is, you know, but the
(05:56):
misery index actually is is it started out from a
guy who was pretty good at walking the line between
conservative and liberal economics. UM, a guy uh what was
his name Okin? Yeah, Arthur Oakin, and he uh he
worked on Kennedy's staffs, Council of Economic Advisors, John F.
(06:16):
Kennedy that is, and he was, UM, I get the feeling,
one of the main influences and talking Kennedy, who initially
did not necessarily agree, but talking Kennedy into kind of
trying to enact both conservative and liberal economic policies simultaneously.
Right they were. The US was intercession when Kennedy took
(06:37):
office in nine one, UM, and they talked him into
not only increasing government spending like welfare programs. They raised
the UM, the minimum wade and UM some other stuff
like that, but they also cut taxes, which is, you
do one or the other. You cut taxes and hope
everything goes for the best because businesses will start investing
(07:00):
and spending, or you start you start investing in welfare
programs to help your ailing UM lower in middle classes. Right,
you don't do both, and Kennedy did both and it
was successful. Yeah. He well he at first he said,
I don't know about this. I don't know about this author.
Mike Kennedy sounds like a robot. My kinda did too.
(07:22):
Actually this is fine, but Arthur mr Okun Okon, I
think it's a weird name. Okay, you in uh. He
talked him into it and said trust me, and things
worked out in that case. Yeah. Well, and a lot
of guys, including Oaken's names, were made by this advice
(07:45):
that panned out like the US Center to Boom and
um Okin ended up as being the head of the
Council of Economic Advisors for Kennedy's successor, Lyndon Johnson. Right, yeah,
and um one thing that economic economists economists love to
do is um I mean, he loved the forecasts and
all that stuff. But it's all about data, man. They
(08:08):
love to pour over data, like stuff that makes the
average person their mind bleed from boredom. They just find
it fascinating. That's what they do on Friday nights. Friday nights,
they pour over data, historical data, trying to find you know,
it's like the big puzzle and they're all trying to
solve it, so they pour over this data. Oakland did,
and um he said, you know what, I noticed something
(08:30):
here between when we started recording some some decent unemployment rates,
which I didn't know. I didn't know we started that.
It seems like it would have gone back before then.
But between sixty he said, you know what, I've noticed
that the gross national product rises three for every percentage
(08:51):
point that unemployment falls. With the caveat that unemployment has
to be between three and seven point five percent, which
is a pretty like, it's pretty bold statement to say
I've noticed this is a definite trend. It is, and
it came to be called Oakland's law because it was
verified other people poured over the data and like, this
(09:12):
guy is right, man, he just keeps coming up with hits,
doesn't he. Um. And the reason you would want to
know some arcane piece of data like that is that
if you know that that's the case, then you can say, well,
if we attack unemployment can get it down a couple
of points. We can you know, raise g d P
(09:34):
or g MP, you know, by three percent every time
we drop it. So when we need to bulk g
m P up, we just attack unemployment, right, easy, peasy,
uh yeah, and everyone said, thank you are Yeah. Things
worked out pretty well for a while, but then the
nineteen seventies came along, and UM, if you what, we're
(09:55):
gonna talk a little bit about stagflation now. But if
you haven't heard it, we have a two good episode
I think. So it's called what is Stagflation? From February
twenty four, two thousand. Um. Yeah, I think as far
as our economics episodes, it was not bad. I went
back and listened to a lot of it before I
(10:17):
got bored out. Yeah, the first three minutes were great. Um.
But yeah, I go back and listen to that. But um,
like he said, he served as chairman of the c
e A for Johnson, and then in seventy three, a
very unfortunate thing happened that kind of ended up rocking
the world and the United States in particular with our economy. Um,
(10:39):
so we're gonna take a break and we're gonna talk
when we get back about the Middle East. All right,
(11:07):
what happened in the old I am negative three? The
arab oil embargo happened. Right, So, at the time, until
very recently, the US was super dependent on foreign oil
like like other countries. We wouldn't even sit down at
the table with we were getting oil from right. Yeah,
(11:28):
we're doing better now, yeah, with our dependency, But back then,
very bad, very um. And it was it was a
source of anxiety for a lot of people, and that
anxiety actually panned out. So in Um nineteen seventy three,
Egypt and Syria and a few other Arab nations invaded
the Golden Heights and the Sinai Peninsula to attempt to
(11:52):
take back land Um from the State of Israel. The
US was found to be supply arms to Israel, So
as far as the Arab States were concerned, the US
had cast its lot on israel side, and they were
fairly peeved about that. So they literally shut off the
tap of oil flowing to the United States and other
(12:16):
countries that were found considered to be on the side
of Israel in this in this war Um huge deal.
It was an enormous deal. The the this foreign dependency
in the the precarious situation that it placed the United
States and came to pass, and the price of oil
rose thirty seven. The long lines at the gas station
(12:37):
were never seen before or since. Even after the financial
crisis of two thousand eight. UM, it was just insane.
There was gas rationing in the United States in nineteen
because the UM the oil embargo, and after a while
the taps were turned back on. But that shocked to
the system, screwed the economy up for a decade. Inflation
(13:00):
went out of control, and UM a very another unfortunately
happened along the same timeline. Unemployment started to creep up.
And these two things happening at the same time as devastating. Yeah,
and up to this point, so first of all, the
US had never had a shock to the system like that.
That was one thing. It wasn't a gradual thing. It
(13:21):
was like yeah. But the other thing is when you
have something that has never happened before, you can look
at it and say, wow, what what happened, and new
things that have never happened before come out of that.
And one of the things was inflation and unemployment going up,
because up to this point, economists just assumed that the
two were mutually exclusive. If you're if you're UM. If
(13:43):
inflation was up, prices were high, that meant that companies
could go out and hire more people, so unemployment of
course would be low. Yeah, it kind of made sense.
Well not not after the oil embargo. The shock to
the system led to, like you said, high unemployment rates
and high inflation, and uh, it was a miserable time. Yeah,
and that was called stagflation. It also led to skateboarding,
(14:05):
as we all know. Oh yeah, because of the pools, right, yeah,
they could and cal well actually that was the drought.
But I think the drought was also tied into the economics. Sure,
but they couldn't fill up swimm pools that they started
skating in swimming pools. Well, yeah, if you have a drought,
then you lose your crops. And if you lose your crops,
you lose money, a significant sector of money exactly. So
good news. We have half pipes now and quarter pipes
(14:31):
and peralta they're still around, right, I think bad news
is like you said, it had a devastating effect for many,
many years on the United States. So Oakin starts to
look around. He said, you know what, things are pretty
bad here. One might even say miserable. I haven't gotten
any acclaim for a while. Yeah, nothing's been named after
me in a while. So let me create this new
(14:52):
uh list, new method for looking at the economy. And
it turns out to not be like a look over
a period of time or anything, but just sort of
like a polaroid of that day and not just that
day for like the country as a whole, or um
for the FED or anything like that. But what he
(15:13):
did that was different was he looked into what the
what it was like that day or that year for
the average American in their daily life. And he called
it the misery Index. Yeah, and it was very rudimentary
at the time. It was just simple calculation of the
yearly rate of inflation plus the unemployment rate. Yeah. So
(15:36):
if you have like five percent inflation and two percent unemployment,
you have a seven percent misery index. It's as simple
as that. I don't know why it got so much,
you know what. It was hailed as a big deal
because I think Oakin had a a a knack for
noticing things that seemed obvious in retrospect, but at the
time no one had ever noticed before. I'll buy it.
(15:59):
Thank why not? Alright, So now he has this index,
and not only can he look at a snapshot of
that day, he can go back because he was a
a data walk sure he could look at data throughout history. Well,
at least in nine, Yeah, which is when we started
recording unemployment, like we said, which must have been frustrating
for him because our um our inflation rates data goes
(16:22):
back to nineteen fourteen. But that's only part of the equation. Well,
it must have been like, oh, sure, and to be
able to look at the Great Depression, you could have
learned a lot, you know. Uh. So he went and
he looked back, and he says, here is what we've noticed,
and this is so obvious to me, uh, that that
presidents and political parties are brought in and out of
office largely depending on how the economy is doing. Yeah,
(16:45):
but they kind of proved it, but not even just
how the economy is doing. Like he he was saying,
like the misery index you can use to predict whether
the the presidency's going to change hands politically. Yeah. So
nineteen fifty six, Uh, misery index is six point five three,
which is great. That's during like, yeah, very low, Mr Eisenhower,
(17:09):
President Eisenhower, and he got reelected because things were pretty good,
right as far as the misery index goes. Yeah, Yeah,
everybody was pretty happy, even though they didn't really know
what the misery index was because it wasn't invented yet.
They just had a general sense. Well, yeah, they didn't
call it that at a time. No, They're just like,
seems fine to me. You're miserable. We like, no, I'm
(17:30):
not miserable, are you. So in Johnson came to the
end of his term and the misery index was up
to eight point one three, and then he had his
Democratic successor, Hubert Humphrey in line, and because the thing
had crept up, people a little more miserable and they said, no,
get out of here, I want Mr Nixon in office, right,
(17:50):
And I guess I'm not. I'm not sure about this.
So I don't understand why Johnson was replaced by Humphrey
by the Democrats and in this article, and it seems
to be because of this misery index that it would
have predicted that. But he was the incumbent president, so
(18:11):
let's see, so he was he would have should know this. No,
he yeah, he was a one term or technically one
in a third or one in a quarter because he
took over after Kennedy's assassination. But if his term was
up in sixty eight, then he would have won the
sixty four election. So he technically I think would have
been able to have been president. Again, I'm not sure
(18:32):
we could have found this out too sure, but I'll
bet there's somebody out there who can explain it to us,
and so email us, will you? Uh? At any rate,
Nixon gets elected and um, the misery index shot up
to eleven point six seven during the first term, but
then started to this decline enough that he did get
re elected. Um. But then uh in n with Watergate,
(18:54):
the misery index leapt all the way up to seventeen
point oh one. That's not good. Now, that's that is
the all time high at the time from what I understand. UM,
and that happened around nineteen seventy four, which meant that
when Watergate broke, some people who really subscribed to the
misery index say Watergate might not have been quite as
(19:15):
big a deal. If um, the misery index have been
low at the time, he might have been able to
squeak by without resigning or being forced out of office.
I think everyone has more leeway if things are great,
you know. But he his his his his currency had
been spent. Man. I watched all the president's men a
few weeks ago. Again, you ever seen that great, great movie. Yeah,
(19:39):
I've always meant to really really good and just sort
of like, they don't make a lot of movies like
that anymore. Spotlight reminded me of all it's good. It's
just I call it movies for adults. You know. There's
no chase scenes or anything remarkable. It's just good dramatic
movie making. Yeah, good stuff anyway. Wait, what's wrong with
the chasing? Uh? What's wrong with chase? No, there's nothing
(20:03):
inherently wrong with this, but I know what you mean,
just for the sake of a chasing, which we see
a lot of these days, you know what I mean,
Like Mark Ruffalo is chasing a priest in a car
and spotlight. Yeah, um, where were we? Okay, we're with Nixon. Um, well,
not with Nixon, you know what I mean. Ford comes
in office for a short time, and he actually managed
(20:25):
to get the misery indext year down. Well. I think
just the fact that Nixon was out. I think that
probably helped um you know and inspire like consumer confidence
in the like. So it crept back down to twelve
point six six, but not enough to keep um, the
Democrats and Jimmy Carter from coming into office and Carter
actually cited the misery Index. It was relatively new at
(20:48):
the time. He talked too much about it, but it
was it was a g whiz thing that you could
really just point to, like this post this, This is
the misery index. Can you can you hear me? That's
my car? But that was his amous quote, can you
hear me? It came back to haunt him though, to
say the least, because he talked a lot about the
misery Index, and then in his term the it reached
(21:10):
an all time high of twenty one. Yeah, which, man,
I really think that shock to the system under the
oil embargo, um and plenty of other stuff. This stuff
gets laid at Carter's feet, I think unfairly in a
lot of respects. Well, I mean, I would love for
someone to really that really knows their stuff to explain
(21:33):
to me exactly how much a president's influence has on
the economy and how long it takes for that to
bear fruit. Yeah, I would love to know that too.
I think though, Uh, the guy who came after Carter, Reagan,
is a pretty sterling, unassailable example of an impact a
(21:54):
president can have on the economy, whether you agree with
his politics or his economic policies are not. He most
decidedly had an effect on the economy. Yeah. I just
remember hearing one time. I need to look this up,
but somebody told me once that that the economic impact
of the presidential a four year term is felt the
most like eight years later or something. Yeah, that makes
(22:15):
sense to me. Economies don't move on a dime. Yeah,
I just I don't know if that's talking lumbering things.
They aren't fully understood by anybody. Yeah, it's interesting to
me now more than ever before though, because remember economics
used to I know, I was really really surprised when
you suggested this one. It's slightly more interesting to me. Oh,
(22:36):
just wondering things like that, and during an election season,
like are the decisions we make now gonna affect us
in one year or two years? Eight years? Uh? Yeah, Well,
if there's any economists who are still listening after that
initial remark about the new astrology, we'd love to to
get a primer on how long it takes for a
(22:56):
president to impact an economy, if they do at all.
I'm sure it's a arrange, you know, it's not like
starting it eight years and really, honestly was Carter that
band or was he a victim of cross stars. Yeah.
I mean you can make a case where a lot
of bills of presidencies not being directly at their feet.
(23:16):
But you remember that, uh Simpsons where they unveil a
statue of Jimmy Carter in Springfield and on the pedestal
it says Malaise Forever, and somebody goes, Jimmy Carter, He's
history's greatest monster Carter. So, like we said, it came
back to haunt Carter because he talked a lot about
(23:37):
the index. It rose a lot. Then Reagan came in
was like, well, let's talk about that misery index that
you like to talk about so much. That's in an
all time high. Reagan got in there, um knocked it
down to nine point five five by the end of
his term, enough to get Bush Senior in Um, it
inched up some then Clinton was able to Uh, it
(23:57):
didn't go up that much though. And I read an
interesting article to day on whether or not ross Pero
really got Clinton elected, because that's sort of the popular
thought he was a spoiler. Yeah, I could see that,
but um, he was definitely more in line with um
Bush seniors policies and Clinton's well at the time, yeah,
you would think, but I read, uh, I read one
article that said that it was kind of a myth
(24:18):
that basically that Clinton won by six million votes and
it would have taken of Paros supporters to have uh
been aligned with UM with Bush m hm, and supposedly
exit polls showed showed it more like thirty And so
they're saying it's sort of a myth that Pero swung
(24:40):
the election to Clinton. I see, but I mean that
was one person's opinion to who knows. You know, I've
been reading a lot about you know that we that
that suspicion you can't quite kick that there's really no
difference between Republicans and Democrats these days, that they're really
just kind of all in the same little club. I
think people feel that way sometimes. I've been reading a
(25:00):
lot about that, and apparently it's all based on neoliberalism.
That's like the key and um, there's there's a lot
of If you look into Neil liberalism and the policies
of neoliberalism, you realize we're like living in the thick
of it. But no one everyone's kind of blind to
the idea that it's just a single thing that basically
everybody in power subscribes to and that it has a
(25:25):
triple down effect of screwing over everybody below the top. Um.
But just the name itself seems totally fine, you know.
But it's uh, it's it's interesting. Yeah. I researched that
a little bit lately too. Yeah, there's been some good article.
We totally should let's do it, agreed. Man, we're gonna
get some emails for that one from billionaires. Yeah. Um,
(25:48):
So let's just finish out this quick little recap. Clinton
brought it down to seven point three five. Things were great,
Bush Junior gets elected. Um, despite the fact that Clinton
had a low index. Well, it depends on how you
look at the two thousand election. We should do one
on that one too. But this is the this is
that's considered one of those rare instances where the misery
(26:10):
index didn't indicate where it was going to go. But
you could also say it might have had things gone
slightly differently. In the Supreme Court George W. Bush, the
index rose from seven point three five to eleven point four,
and then Obama came in it went down to seven
point eight seven. But another weird flaw in the system
is exposed there because, um, despite the fact that the
(26:32):
misery index was lower, things were not good. The stock
market had crashed, unemployment was rising at a rapid rate,
and they said, you know this. It basically was another
example of like, look, this misery index isn't all it's
cracked up to be right, so let's work on it. Yeah.
I think a lot of people said this is too simplistic.
You can't rely on this. But we'll talk about some
(26:54):
of the additional factors that people have worked into the
misery index after this. All right, Chuck, so the misery
(27:24):
index open. Everybody's happy with him. They're like, this is
just too simple, especially in what's called the post stag
inflation era after the oil embargo. Um. And so some
people have said, okay, you can there's certainly there's other
things you can add in to give a genuine, true
snapshot of what the conditions are like on the ground,
(27:46):
as it were. Right, Well, yeah, not only what the
conditions are, but whether or not performance over a period
of time is getting better getting worse. Yes, And you know,
rather than say, oh, under under this president, the misery
index was this, you know, and it gives you a
pretty good idea this with this one guy UM named
Robert Barrow. He wrote a book called Getting It Right,
(28:08):
Markets and Choices in a Free Society, and in it
he takes the misery index Oakin's Misery Index, and he says,
we can add some stuff to this to to make
it an even clearer picture, not just of the conditions
on the ground, but you can take it and apply
it genuinely to a president's entire term to see just
how good their economic policies were or weren't for the
(28:29):
health of the economy. And he added some other stuff. Yeah,
he added four main new measurements. Uh. Took the inflation
rate during the last year of the president's term, compared
it to the average inflation rate over the entire course
of the subsequent presidents, which is based on what you
were saying that like the a four year term, the
(28:52):
effects are felt like years down the road. So I
think that's what he was doing there, right, Yeah, it
makes sense. Did the same thing with the rate of unemployment.
That was number two. Uh. He added in changes for
the thirty year government bond yield over a presidency. And
then finally he said, um, I need to look at
the difference between the long term GDP growth the real
(29:14):
rate of growth. Compare all these things along with the
original Uh, this plus this equals this, right, and with
the real growth rate. Um, that's where you take the
actual change either the shrinking or the growth of the
economy the g d P year over year. Right. And
he took that for year after year over the course
(29:35):
of the presidency and averaged it out. I guess that's right. Yeah,
And he came up with what's called the Barrow Misery Index.
And UM, a lot of people think that that's where
the misery Index started, when in fact it was Oakin
who came up with it about twenty years before Barrow
took it up and improved it. So under Barrow's Misery Index, UM,
Clinton and Reagan, that's Bill. Clinton of course came out
(29:58):
on top. And then it got named Steve Hankey about
ten years later. This was originally in and then Hankey
came along in two thousand six and said, you know what,
we need to add even more things. And this all
just makes sense. You need to if you want a
more detailed picture, then add more detail to the data
going in, you know. So he said, we need more
detail Uh, why don't we do this. Let's um, let's
(30:22):
measure inflation and unemployment like we're doing, and then let's
now add interest rates and subtract annual percentages from the
GDP to get a more accurate picture. And he said,
you can use this anywhere, you can use it all
over the world. Well, that's what he did, and that's
kind of what made his his version of it pretty famous.
He figured out how to apply it to other countries,
(30:44):
even countries that used UM price controls to keep inflation
in check, which means price inflation is held back artificially.
So Hanky looked into other things like UM the exchange
rate in the black market, and then given country that
kind of thing UM, and he figured out real inflation rates,
and he applied it around the world to find out
what country is the most miserable in what country is
(31:07):
the least miserable. And what he found in two thousand
fourteen was that the most miserable country in the world
was Venezuela, which had a Hanky misery index of seventy
nine point four. It's pretty high, very high. And then
Japan had the lowest misery at five point four one. Yeah,
the US came in at about nineteen, correct, I think eleven? Yeah? No, no, no,
(31:31):
eleven was our Oh I'm sorry. Nineteenth yeah, yeah, ranked
nineteen within eleven. I didn't hear that, yeah, because my
tooth is still gone. You think it'd be. It would
be more pronounced if they were nineteen. I would have
heard it clearly as about August can't get here soon enough.
(31:54):
So um, there are critics of this one too, though,
there's critics all these indexes. Well, yeah, the the A
lot of them say, no, still too elementary. Some people
say this is all just try like you can't. You
can't use this stuff to to make any real predictions.
You could use it to look back at the past,
but to use it for the future, probably not. But
(32:17):
some people do believe in the idea that if you
have enough data and the right kind of data, you
can get a clear picture of misery. And again that's
what we're after here, Like, the whole point of the
misery index is to figure out how unhappy and and
just low the average person in a country is feeling
at that moment, right, so um, HuffPo actually came up
(32:40):
with a pretty good one. HuffPo boo in two thousand nine,
HuffPo came up with what they called the Real Misery Index, right,
and so a lot of people cite the the use
of what's called YOU three unemployment statistics, which when you
hear unemployment numbers in the news, that till you're hearing
(33:00):
that's what the Bureau of Labor Statistics issues as the
official unemployment numbers. Right, yeah, And that's the very first
thing that people will say if they want to poopoo
the unemployment numbers, that that these are these are just
false numbers. Yeah. If someone says, hey, man, look how
great ex president is doing. Look at the unemployment rate,
right man, they're just using the U three. They need
(33:22):
to use the U six. Wake up, pal up in
your eyes, which you know is valid. Well yeah, so, um,
the BLS has six measurements of unemployment you one through
U six, and YOU six is the broadest. It includes
people who are so discouraged with the state of the
job market that they've given up looking for work and
(33:45):
they're just like, have given themselves over entirely to judge
Alex right, and then um. It also includes people who
are working part time but wish they could work full time,
but there's no full time work available. I'm a graphic designer,
but I work at Starbucks. So that's the U six
measurement that and that's considered the the broadest snapshot of unemployment,
(34:09):
the real m vision of unemployment. Yeah, like you said,
mostly they use you three, I guess because it's in
the middle. I mean you one. They would never use
you two. Everybody used to like, but not anymore. I
still like you too, get yeah, you know, not like
(34:30):
I used to. I'm not anything, but I did see
that concert they did on the HBO, and I have
to hand it to him. My big problem with you
two for years was that they just got so out
of control with those live shows like these giant spider
spaceships and things. And I was always of the belief that, man,
you need to go back to basics and just get
(34:51):
up on stage and play again. And that's what they
did with this new tour. I mean, there was a
cool visual element, but the stage set up in the
way they did it was very much back to basics
in it. I think they really connected with fans again. Yeah,
that's kind of help. Yeah, because you can only when
the when the interactions between you and the fans rather
than the fans and giant spiders. Yeah, you just you
(35:13):
can only go so far in that direction. I think
they realize that. Sure, anyway, where do you go, Youtuo,
I'll defend those guys. Um, even though I know everyone
in the world generally wants to punch Bono in the face,
I'm not one of them. It's kind of feel weird
like them. Yeah, I'm on record. I know if you're listening, well,
(35:33):
if you're Jared indicators, any any predictor Bonno is going
to come out to be canonized one day. What oh yeah, yeah,
you know you're like, there's something about Jared. I don't
like him, and you know, we found out about Jared
and then um, you're saying something's good, like they're gonna
find a cure for cancer and a saliva or something.
(35:55):
You never know. Um, so did we even mention what
the HuffPo what kind of outrageous numbers they came up with? No, well,
we didn't mention everything they used. We were talking about
the use six measurement. HuffPo used that measurement the most
extreme of unemployment numbers. They also used other things like, um,
the inflation rate of food and drink and fuel and
(36:18):
healthcare because other The misery index just uses the consumer
price index, which is inflation as a whole. HuffPo used, um,
the the inflation of some really essential things that people
can't do without and where you're gonna immediately feel the
pinch when prices go up. With those two factors, right. Um.
They also included the rate of credit card delinquency, the
(36:39):
cost of housing, how many people are using food stamps
that seems like a smart move home, equity loan deficiencies,
I guess, people who are laid on their payments. Um.
And then they took the average of those seven numbers
and added it to the U six unemployment numbers, which
here you can step back and say, wait a minute,
how would you how are you adding this together? How
(37:01):
does this make any sense? You can't just keep adding things, right,
And really you can take that all the way back
to the initial misery index, Like what you're just adding
unemployment percentage and inflation, and all of a sudden you
have a magic number that doesn't make any sense. This
HuffPo metric really points out the inherent flaw in it.
I think, yeah, because in two thousand eight, the Oakland
Misery index was eight point one, but huff po's Real
(37:25):
Misery Index a k A. You think things are bad,
here's how bad they really are index was twenty nine
point nine compared to the eight point one, right, and
some people are like, oh, well, that just shows how
off the oaken misery index is. Who knows. I know
they quit doing the real Misery Index at HuffPo like
five years ago. I think it was a am I
(37:47):
going to call it a stunt. It was a bit
of a stunt maybe, but I'm sure really what happened
was the writer who was contributing it for free, like
left for a paying job. That's probably what U into
the huff Real Misery and day Yeah. Um, I was
reading this guy, Tim McMahon. He has a site, or
he writes first site, I'm not sure it's his. Are
(38:09):
not called inflation data dot com. Jim McMahon, Tim his brother,
not the Super Bowl Shuffle, No, his brother. Um. So
he mentioned this two thousand one paper that concluded that
unemployment causes one point seven times more misery than inflation.
And so if you're doing any kind of misery index
(38:30):
that uses those two, you need to first multiply the
unemployment number by one point seven before adding it to
UM the inflation number to to properly wait it, and like,
how did they come up with that? So I looked
at the paper. It was actually pretty clever. There's like
twenty three years of this survey of life satisfaction and
happiness that these researchers looked at back in two thousand one,
(38:53):
and they found that UM economically based or just like
how happy are you? Know, here's the thing, it was,
how happy are you? It was like a single question
like would you say, based on how you're feeling right now,
that you are fairly satisfied, unsatisfied, very satisfied with your
life right now right? And then they took that that
measurement for that that country as a whole, and you
(39:13):
can do this for any country that participated in the survey.
And then they looked at inflation, and then they looked
at UM unemployment for those years and they could figure
out the the variation between or the interplay between unemployment
and inflation and satisfaction, and they found that uh, that
UM that unemployment was one time one point seven times
(39:38):
more miserable than inflation in regards to life satisfaction, as
that survey. Guess it's pretty clever. It's a lot of
hocus pocus, but it's I thought it was pretty clever
how they did it. That makes sense to me because
to be without work, like if you have a job
and things inflation is happening, you still have your job, sure,
and you're like, man, this sucks to pay this much more,
but you can still conceivably pay for Yeah, I'll cut
(40:00):
back here or there if you if you're unemployed, then
there's not a lot of hope. Yeah, one, the number
might be conservative here. Yeah, I agree with you. Very
interesting stuff. So that's uh, that's it, man, that's the
misery Index. You got anything else? No, but I'm looking
forward to hearing from economists that me too, like in
(40:22):
an unbiased way to try to explain things. Me too.
If you if you send just you know, these crazy
political emails and they're they're gonna fall in deaf years
because everyone yells at each other that they're right. I
just want to hear some real numbers, do it, chuck. Uh.
If you want to know more about the misery Index,
you can type those words in the search bar how
(40:43):
stuff works dot com. And since I said search bar,
just play an old search bar. It's time for a
listener mail. I'm gonna call this, uh, follow up on
vocal pride once again. Um. Regarding vocal pride, guys, Uh,
you guys were offended because someone said local pride was repulsive.
(41:04):
But there is another side of this, dudes. I suffer
from a neurological disorder known as miss aphonia, which we
totally should do a show in this. It's a condition
where a person has extreme emotional response commonly occurring sounds,
and I remember hearing a lot of times it's like
people chewing noises or gum or whatever. Um he said.
In my case, my trigger noise is the high pitched
(41:26):
s sound when some people speak. Uh. It feels like
my brain is cringing, as if an allergic reaction is
taking place. Cannot stress enough. This is not a mere annoyance,
as a legitimate mental disorder that can vary great and
greatly in severity. I don't visibly freak out when I
hear my trigger noise, but it really kills me inside,
gives me an instant headache. And that's why, which is
(41:47):
why I will get away from the noise if at
all possible. Um, I believe in avoiding complaining in life
and playing the victim. But this disorder really has made
my life like a subtle hell. It's been especially toxic
to my emily relationships and my ability to learn in school. Um.
I felt compelled to email you guys, because you definitely
appreciate interesting medical conditions. I think would be a great
(42:09):
topic for a show someday. I was a documentary about
it called Quiet Please. If you watch the trailer, you
might be inspired to watch it to learn what the
condition is. Huge. Thanks to everyone of Stuff you Should Know.
You make a mundane parts of my life interesting and educational. Uh.
I'm gonna anonymize this from Texas because I didn't hear
back from him from text. Yeah, text PS was in
(42:33):
disbelief when Chuck said he had not seen Billy Madison
or Happy Gilmore. That's a good PS. I believe it.
It's a good PostScript and post PPS right, not p
s S. I think it's post PostScript. Yeah, but people
who often put PSS what doesn't mean? Do you think
Stuff you Should Know could ever become a television show? Well?
(42:54):
Text never we actually did that. We we found out
the hard way that it came Yeah, we did a
TV show on the Science Channel and it ran for
one full season that played out over the course of
several days, which we'll always have. We'll always have that
season of television we did once. It lasted nine or
ten days. Yea, let's just show them all at once,
(43:16):
out of order. But you never know, we might get
another shot at stardom. But we're not looking to it. No.
I like it in this room where no one's looking
at us. Jerry be there looking away in discuss That's right,
good idea about the mesophonia. I think we mentioned that before,
(43:37):
Like that was I really like that vocal fry episode.
And that was the one thing that I wish we
would have mentioned because it's a legitimate thing that it
does affect some people. Um, but yeah, look for a
mesophonia episode at some point in the future. Text. If
you want to get in touch with us, we're all
over social media. We're on Twitter and Instagram at s
(43:57):
y s K podcast, We're on Facebook dot com, slide
Stuff you Should Know. You can send us an email
to Stuff Podcasts at how stuff Works dot com, and
you can join us at our very own home on
the web. Stuff you Should Know dot com. For more
on this and thousands of other topics, visit how stuff
(44:17):
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