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HuffPo's New Level Of Misery

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Huffington Post

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Huffington Post

If this recession truly is unparalleled, it means that we likely need new metrics to understand it. The Huffington Post went about making one, combining indicators to create a new "Real Misery Index."

The original misery index is an economic indicator, created by economist Arthur Ocun and often invoked by Jimmy Carter. It's calculated by adding two nasty economic numbers — the inflation rate and the unemployment rate.

HuffPo decided that wasn't enough for a variety of reasons. Those unemployment numbers don't include people who aren't working as many hours as they like, and people no longer looking for work. The consumer price index, a standard measure of inflation, doesn't emphasize key costs like food and energy. Also, the original index doesn't factor in a number of defining elements of this recession, like home foreclosures or losing health care.

HuffPo's numbers combines the U6 unemployment formulation, the inflation rate for food and beverages, gas, and medical costs, and yearly increases in credit card delinquencies, housing prices, food stamp participation, and home equity loan deficiencies.

As you can see, the numbers are, well, pretty miserable.