If you are old enough to remember the devastating recession of the late 1970s (to 1980s) where inflation was as high as 15% and elderly people were reduced to eating cans of dog food, you might find conditions we’re living in today reminiscent of that era. Unemployment is at at all time high, where millions of the jobs lost during the pandemic are never going to come back. There is constant unrest in many of America’s biggest cities. Prices of groceries are rising faster than most people can keep up with. Housing costs are so massive that construction of new homes are almost at a standstill. The only saving grace we had back in the 1970s was disco and I’m hoping to God disco comes back because I need a night out of dancing, drinking and not thinking about how miserable our lives are going to be.
The past couple of months has brought untold misery to hundreds of countries around the world. Millions of COVID-19 infections, with hundreds of thousands of them fatal, 30 million plus unemployed in the U.S., rising levels of anxiety, depression and substance abuse. Maybe now is a good time to talk about the Misery Index.
Back in the 1970s and 80s the “Misery Index” was popularized as a measure that accurately captured the misery and malaise of the time. The original Misery Index was a bit too simplistic as it only captured the severity of the two main vexing issues of the time, unemployment and inflation. The Misery Index was popularized in the 1970s as an easy way to understand the measure of America’s economic health. Equal to the sum of inflation and the unemployment rate, the original Misery Index was born.
During the presidential campaigns of 1976 and 1980, the Misery Index became more popular. In 1976, then-candidate Jimmy Carter criticized President Ford and in 1980, then-candidate Ronald Reagan pointed out that the Misery Index increased under President Carter.
It is my opinion, based on what I am feeling, seeing, reading , hearing and listening to, we are headed towards another Misery Index, much like we felt under President Jimmy Carter, back in the 1970s. It’s just a matter of time before some news organization brings back the return of The Misery Index. I lived through The Great Misery Index of the 1970s, so I know all too well enough of what we are headed in to. It’s not going to be pretty. It’s going to be miserable. Don’t believe me? If you can, start watching re-runs of some TV shows dating back to the 1970s, such as Good Times and All In The Family.
Just this morning, I bought eggs al Aldi that were 45% higher than what I bought just last week! Two people on my block have built chicken coops and are now raising and selling eggs! At $4.00 a dozen I might add. My neighbors are also talking about raising chickens for food. Back in the 1970s people were raising rabbits for food. I have a cookbook I used to follow back in the 1970s. I went into my basement this morning and dug it up. Apparently, I’ll be back to making lentils at least once a week, soaking dry beans overnight and cooking up my old bean favorites, such as New England Baked Beans in my crock pot, just like I used to do back in the 1970s.
I had been contemplating NOT doing my vegetable garden this summer but I quickly corrected that thought when I looked at the price of peppers this morning too. I promptly went shopping at my local nursery and bought up already-started plantings of tomatoes, peppers and broccoli. Next week I’ll be going back for eggplant, zucchini and whatever else I think might grow well here. I took out my green bean and pea pod seeds from my freezer and will be planting those around my solo apple tree and solo peach tree. Who knew? I’m contemplating getting a blueberry bush (very expensive right now at $24) just so we’ll have an ample supply of fruit this summer.
No one is talking about it today but we already have a current Misery Index in play:
In September 2019, the Misery index bottomed near all-time lows at 5.21%. By March 2020, it had climbed slightly to 5.94%. But in April, due to the COVID-19 shutdown and consequent high unemployment, the Misery Index shot up to 15.03% based on 14.7% unemployment and 0.33% inflation. As inflation rises the cost of living increases and as unemployment rises more people cross the economic line into poverty. Therefore, this index is a quick and dirty metric to gauge the health of the economy since both high unemployment and high inflation are major factors to the average wage earner. Click here for more info.
I’m sorry to say that many of us (me included) are going to see our lifestyles diminish. I don’t think my husband and I will ever live in poverty (thankfully, we own assets) but I can already tell that he and I need to tighten our belts and get prepared for what misery may lie ahead for the both of us. We will be facing unprecedented inflation which will reflect a downgrade in COLA (Cost Of Living Adjustment). We will be paying higher prices for food, clothing, healthcare, energy and whatever else we may need to live our lives. You can argue this fact with me all day long. But the truth is there for all of us to see and feel. The powers that be won’t be able to hide it much longer. They’re taking a gamble with our lives in anticipation that this time their tried and true methods will come out with a different scenario. But you and I both know that’s not true. The more they send us in stimulus money, the more our America dollar is de-valued and the less and less we can buy.
Here’s what Dave Ramsey had to say today, about what we all are facing today:
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