John Kerry Distorts the Economy's Performance for Political Gain

John Forbes Kerry has really done it this time. He has mangled a previously sound economic index and turned it into his latest attack on hard-working Americans. John Forbes Kerry, the man who has not worked a day in his life as a middle class American, is now championing this flawed, pessimistic index which only highlights the weak spots in the American economy – an economy that is growing at a record pace. The true misery index (inflation + unemployment rate) has performed quite well under Bush, but of course Hanoi Kerry chooses to ignore that little tidbit, instead choosing to display his latest concoction of economic pessimism. It is the height of hypocrisy for John Forbes Kerry to make any remark whatsoever regarding the price of gasoline. This is, after all, the man who supported higher gas taxes ELEVEN times in his political career. What are John Forbes Kerry’s suggestions to improve the (already robust) economy?

- Raise the tax burden on working Americans
- Strangle the economy with regulations and bureaucratic red-tape
- Raise protectionist and isolationist walls around the economy and stymie free trade

Why does Hanoi Kerry want to talk down our economy? Why does he cheer failure of Americans in their economic endeavors? This man will do anything to distort and smear the work of Americans. This is the liberals’ game: Have no faith in Americans. Discourage their efforts. Trample their successes. Emphasize the negative. Root for failure at every turn.


Wall Street Journal
Misery Loves Company
April 13, 2004; Page A20

As John Kerry showed yesterday, there is a way to make lemons out of lemonade: Mine government statistics to show that, all evidence of prosperity to the contrary, the country is actually going to hell in a hand basket. Voila -- the Kerry campaign's new "misery index," which allows the Democratic presidential challenger to paint George W. Bush as the reincarnation of Herbert Hoover.

The original misery index -- the sum of the unemployment and inflation rates -- leapt into the public consciousness when candidate Jimmy Carter attacked President Gerald Ford's record back in 1976. Back then the index was stuck at 13.5. Over Mr. Carter's White House tenure the country only suffered more, as the index shot up to 20.6. For the record, it's now at a historically low level of 7.7, eight points below when Bill Clinton sought a second term in 1996.

Mr. Kerry's new misery index purports to tell a different story, and would have us believe that the middle-class way of life is profoundly threatened. Of the seven components, three are based on the price of goods and services that have been rising far faster than inflation: college tuition, health care and gasoline.

While these trends are worthy of discussion by themselves, they don't tell us much about the ability of a middle-class family to make ends meet. That's why statisticians use a basket of goods and services weighted according to the expenses of real households in order to calculate the inflation rate. No doubt Mr. Kerry's college audiences this week will be pleased by his pledges to hold down tuitions. But they might also consider whether his cherry picking of figures to get his desired answer would pass muster in their classrooms.

Credit should be given where it is due, though, when it comes to gasoline prices. Sure, some of Mr. Kerry's answers to this problem are uninspiring -- "work more effectively to ensure that OPEC increases production." And the suggestion that the Bush Administration's collusion with oil companies at the expense of conservation has somehow driven up gas prices is nonsensical. Nevertheless, it's encouraging that in recent days Mr. Kerry seems to have realized that excessive regulation in the form of "the patchwork of rules on gas all over this country" has driven up costs.

There are more serious problems with two other components of the Kerry misery index. Median family income and private-sector job growth both depend on data from the Bureau of Labor Statistics measuring employment last year. This is tabulated largely on the basis of large companies' payrolls, since the government has a tough time tracking the self-employed and new jobs at small firms.

In the past this was not such a problem but as the economy evolved it has become a major distortion; by one measure these difficult-to-count jobs accounted for 31% of employment growth since the end of the last recession. In an attempt to compensate, the BLS uses states' unemployment-insurance rolls, but because of a time lag economist Brian Wesbury estimates that the government low-balled job growth for the second half of 2003 by 734,000.

But the best proof that the Kerry index doesn't reflect reality is the way it distorts history. By his measure, the Carter years supposedly saw a six-point improvement in the misery index, while under Ronald Reagan the U.S. fell back almost as far. Does anybody else remember it that way?

The most interesting question about Mr. Kerry's misery index is how faithfully it will be updated. As unemployment continues to fall and real incomes rise, will Mr. Kerry stop mourning the demise of the middle class? Since misery loves company, perhaps that's too much to hope.

 

Many of you may wonder why John Forbes Kerry has selectively excluded the real components of the “Misery Index” from his latest political grandstanding and distortion campaign. It’s simple, really. The original components of the Misery Index are the inflation rate and the unemployment rate. Measured by these two components, the economy is quite strong.

Inflation Rate: The inflation rate is currently near HISTORIC LOWS. For the 12 months ended in February, prices rose only 1.7%. This is TINY. Sorry John Forbes Kerry, but you get a big SWING AND A MISS for inflation.

Unemployment Rate: Around here we all know that the unemployment rate is a lagging indicator of the economy and will almost certainly decline due to record economic growth in the second half of 2003. We also know that the tragic attacks on America on 9-11 and the bursting of the speculative late 90’s technology bubble have dramatically skewed the job loss figures. What many liberals don’t know, or possibly don’t care to know, is that the unemployment rate for March was 5.7%. This rate is lower than it's been in all but 20 of the previous 56 years on record. What they don’t want to know is that the economy has experienced 7 consecutive months of job growth, and last month showed the strongest gain in payrolls since April 2000 (the height of the stock market boom). The current unemployment rate is beneath the average for the 1970s, 1980s, and 1990s. Why do the liberals paint such an ugly jobs picture? Why are the over 650,000 jobs created in these 7 months not included in the liberals’ assessment of the economic situation? Political motivations, of course. Pessimism is their M.O. They want the American worker to feel bad about the economy. They want consumer confidence low. They want failure. Sorry John Forbes Kerry, but you get a big SWING AND A MISS for unemployment rate.

So now you see how John Forbes Kerry selectively attacks Americans’ work ethic and labor talents in a malicious manner. You see how he twists facts, ignores facts, and promotes negativity. This is a man who made his name by complaining about the efforts of our troops in Vietnam, and complaining about our military’s leadership. He has a history of highlighting failures and everything negative. He twists positives into negatives. As you can see, not much has changed.

 

Sizzle Chest,
I eagerly await your economic rebuttal to my content-filled posts. You are on the clock. Should you choose to not respond, you will have your nickname of Sizzle Chest *permanently revoked* and a new name shall be given to you. You will not like this name as much.