Misery index: Will the Bush economy doom the McCain campaign?

Presidents running for reelection have long known that two issues are good predictors of success: whether the county is at peace, and whether its citizens are living in prosperity.

The misery index, a term coined by the late economist Arthur Orkin, combines the national unemployment rate and the annual rate of inflation to track the mood among voters. Any president whose misery index climbs above 10% -- Gerald Ford in 1976, Jimmy Carter in 1980, George H.W. Bush in 1992 -- is in trouble. Those who serve in times of a falling index -- see Ronald Reagan and Bill Clinton -- prosper.

The Wall Street Journal, in a recent editorial called "McCain, Bush and the Dollar," argues that the economy is ailing now not just because of the subprime mortgage crisis, high gasoline prices or federal tax policy. The culprit, says the Journal: the Bush administration's "malign neglect of the dollar."

All three of [the administration's] Treasury secretaries have lectured us that a falling dollar is useful to help exports to reduce the trade deficit. In any case, they like to add, the dollar's price is set by a "free market" -- and don't we favor free markets? They seem not to understand that a currency is not like bananas or wheat; its supply is set by a monopoly known as the central bank.

Whatever McCain's feeling about the dollar, he is no doubt familiar with the old saw that presidents who keep the country out of war and in a healthy economy tend to be rewarded at the polls. Which may be one reason he is distancing himself from the Bush White House.

-- Johanna Neuman

Chart: Wall Street Journal, www.miseryindex.us