Economists like to call their profession "The Dismal Science," so you'd think they would have a monopoly on, or at least competence in, measuring dreariness. But it turns out they're not even measuring our misery properly. So claims the Huffington Post, which recently debuted its own Misery Index -- the sum of unemployment and inflation -- to account for the millions of Americans who've been pushed to part-time, or simply given up looking for jobs altogether, but don't appear in the official unemployment rate.
Let's take a look:
As you can see, the Misery Index isn't a very good indicator of actual economic misery, because it puts June 2009 about thirty percent below June 1991, and economists agree that the '91 recession was mild compared to this. One reason for that discrepancy is that MI was designed in the 1970s, during a period of stagflation -- that's the rare occasion when we experience stagnant growth and inflation. But inflation is a strange factor to consider during recessions. During most serious downturns, falling employment doesn't hold hands with rising inflation, because falling wages means less demand, which can push prices down. That's one reason why, for example, Paul Krugman warns about a deflationary cycle these days, even with Fed interest rates scraping the ocean floor.
As the HuffPo admits, the number 29.9 doesn't really mean anything by itself. It's more of a point of comparison for months to come, something to check to see if the economists shouting stagflation turn out to be right.