Brushfire of Freedom
Ram Rants
Let us set the “Wayback” machine to the days of Jimmy Carter. The heady days of double-digit inflation, double-digit interests rates (13% on a home was a good deal), the rise of OPEC and the failed polices of the Democrats that lead to the decline of US power around the globe. Remember the Iran hostage crisis? How about the Misery Index?
If you have any knowledge of US history from the 1970’s, you will recall that the media began to track“ The Misery Index” as a way to measure how well, or poorly, Americans were doing at the time. The index was created by economist Arthur Okun, who was an adviser to President Lyndon Johnson. It is the sum of the monthly unemployment rate and the inflation rate. These two statistics are used because if prices are going up and you are out of work, you are more likely to be miserable. Thus the higher the prices and the more people out of work, the more miserable the general populace is expected to be, hence the index.
During the Carter administration, the index went from 12.72 to 19.72 in a span of four years, with an average of 16.26 and a high of 21.98. During the recent Bush administration, the index FELL over the eight years, from 7.93 to 7.29, an average of 8.10 and a high of 11.47. It should be noted that the last two years of the Bush administration have been largely influenced by a Democrat Congress. If you exclude those last two years, Bush’s high is only 9.79.
Let’s pause here for a moment and make note of a key fact. The United States is not a dictatorship (yet), nor are we a monarchy. Attributing the index solely to a single man (like Carter or Bush) is not exactly accurate. Further, because the House of Representatives in Congress control the government purse strings and as such the majority of the fiscal policy, the index should be attributed to the entire legislative and executive branches, not to a single man. Yet the fact remains that we attribute the policies of the government to the man in charge, and that man is the President of the United States.
So how are we doing so far under the B. Hussein Obama administration? Well, it’s a little too early to measure. After all, he’s only been in power since January of 2009, but we can review the trend so far and make some estimates as to where we are headed. When President B. Hussein took office, the misery index for December, 2008 was 7.29, with an unemployment rate of 7.2%. This was actually up from the April, 2008 low of 4.8% unemployment. Since B. Hussein has taken office, the misery index has risen to a new high for his administration of 8.34. That is an increase of over a point in the first two months (ok, 6 weeks) that is largely due to a spike in unemployment of nearly a full point.
But the index is a combination of unemployment and inflation, so how is inflation impacting the final number? Well, in December 2008, inflation was at a low 0.09%, and a very low 0.03% in January 2009. For February, the number has been recently reported at 0.24%. That’s still a pretty low number, no real concern, right? Well, when you compare monthly inflation since B. Hussein has taken office, you will note it has nearly tripled. If the current rate of increase is maintained, we will be back to double-digit inflation by June of this year.
Ok, I admit, that’s jacking with the numbers and a little bit of fear mongering. Let’s take a more realistic look at this.
In the first 50 days of this administration, the government was spending $1 billion per day, an amount that far exceeded the expenses of the Iraq war in any single day. These same policies have devalued the economy, devalued the dollar, and driven a significant increase in our national debt. Since the US dollar now is worth less than it was about three months ago, it takes more dollars to buy the same product. This fact is reflected in the increase in oil prices, which have climbed since B. Hussein took office back to the $50/barrel range. This type of price increase is commonly called “inflation”. Not all inflation is bad, in fact it is an expected occurrence. However, rapid or excessive inflation is an indication of economic troubles, and is sometimes associated with a devaluing currency. In other words, too much of anything is a bad thing.
When it comes to the economy and government, it is the regulatory, tax, debt, and money policies of the government that influence the private sector. Businesses try to work within the laws and regulations to prevent action against the corporation. This administration has already established monetary policies that are creating and will continue to create inflation, due largely to actions that have devalued the dollar and increased the national debt. If we assume a purely linear growth rate for inflation, based on the monthly levels of increase to date (0.21% per month), inflation will be at 2.52% by the end of 2009 and near 5% by the 2010 elections. If unemployment stays flat (B. Hussein expects it to rise), the misery index will be at 10.62 (higher than Bush) by the end of this year, and 13.14 (higher than Bush AND the Democrat Congress) near the 2010 elections. There are only two conclusions we can make from this analysis. Either Democrats love misery and implement policies that drive up unemployment and inflation, and thus the Misery Index, when they have power, or misery loves Democrats and only appears when Democrats are elected. Either way, increased misery is not good for the economy, or for the American people.
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