The number Democrats should fear the most
Friday's poor employment number will cause political problems for the Democrats as the touted benefits of their policies fail to pass the spin zone. The numbers "saved" ruse will become increasingly absurd as the unemployment number remains stubbornly high. Instead of jobs saved being recycled we might start hearing more about the total jobless rate - which includes discouraged workers no longer looking - that ticked up to 17.3% from 17.2%.
Many of the unemployed are out of work for longer periods of times, stoking a revulsion against incumbents and the leaders of this country that are right now all Democrats. Even the Associated Press has stopped the spin machine for awhile and showed that the hope that propelled Obama to the Presidency is no longer held by millions of people who are too discouraged to seek work.
Even Reuters has started pinning the blame where it belongs: politicians who have injected a lot of uncertainty into the business world and who have enacted or proposed to enact policies that are inimical to hiring because they increase the costs and regulatory burden of each employee.
Who killed the jobs? Democrats.
But there is another number Democrats should fear because it was used by them and then against them three decades ago. This number is the misery index and was used by Jimmy Carter to help him defeat Gerald Ford and then was used by Reagan against Carter a few years later.
The Misery Index is the sum of a nation’s unemployment, interest rates, and inflation figures. Given the Fed’s printing presses are running red hot and the Democrats show a propensity to profligacy, inflation looks to rise in the year ahead. Commodity prices are heading steadily higher, fueled by too much cash, and too much deficit spending. The Democrats have put policies in place that crimp the development of our vast mineral and energy reserves,. These trends are like the pig in the python - eventually the rise in these input prices will be reflected in higher prices for all consumers. A further source of anxiety should be the ever-weakening dollar that makes import prices higher in dollar terms.
The misery index now stands at 12.8%, the highest since 1991 and 3 points above its average since then.
As Business Week reported this past week:
Whichever methodology you use, the misery metric will likely have political implications near-term… U.S. President Barack Obama faces his first midterm congressional elections in November. Their opposition will surely seek to capitalize on voter discomfort with the economy.
That's what happened in 1976 when Jimmy Carter exploited a misery index of around 13% to help defeat Gerald Ford for the Presidency—only to see it rise to more than 20% four years later, costing him the same job. So unless they can cut their current indices, lawmakers could suffer their own form of misery this year: lost elections.
The public likes to have proxies that explain a lot in a simplified form. Hence, the appeal of batting averages, stock market averages, and - in the hands of politicians - the misery index. The appeal is clear: with the anti-incumbency mood sky-high, every politician (and most of them are Democrats and they will be blamed) will face the prospect of having one simple number used against them. The number can be fleshed out a bit with a Reagan-like phrase: are you feeling better off today than 2 (or 4) years ago? Or, a recession is when a neighbor loses his job; a depression is when you lose your job; and a recovery begins when a Democrat loses his.
Watch out Democrats - it is a number that will be haunting you through November and the years beyond.