Our Sunday Charts
One of my favorite children’s stories is “Tear-Water Tea.” Located in a young readers’ book called Owl At Home by Arnold Lobel, “Tear-Water Tea” is about an owl who identifies sad things so that he can fill his teapot with his tears. Moving from “Chairs with broken legs” to “Songs that cannot be sung because the words have been forgotten” and “Mornings nobody saw because everybody was sleeping,” Owl cites a litany of heartbreakers until the pot is full.
If we were writing an economic “Tear-Water Tea,” the following graphs about the US recovery from the Great Recession of December 2007-June 2009 might be included.
Sluggish GDP Growth:
The value of goods and services produced during one year, the GDP can be a barometer of a recovery. When it soars, so too can employment, incomes and spending. With GDP growth hovering below 5% and also declining, you can see the opposite in this graph.
A Worrisome Output Gap:
Underutilizing our land, labor and capital means our GDP is lower than it could be. The result, below, is an output gap between actual and potential GDP that will jeopardize our attempts to minimize unemployment.
Slowly diminishing Unemployment:
You can see that compared to other recessions, high unemployment is creeping downward from an unusually high level at a tepid rate.
Our bottom line: Just contemplate an economic recovery with sluggish GDP growth, a worrisome output gap and slowly diminishing unemployment and you get an entire kettle of tear-water tea.
Three "Tear-Water" Graphs
Elaine Schwartz
Elaine Schwartz has spent her career sharing the interesting side of economics. At the Kent Place School in Summit, NJ, she has been honored through an Endowed Chair in Economics and the History Department chairmanship. At the same time, she developed curricula and wrote several books including Understanding Our Economy (originally published by Addison Wesley as Economics Our American Economy) and Econ 101 ½ (Avon Books/Harper Collins). Elaine has also written in the Encyclopedia of New Jersey (Rutgers University Press) and was a featured teacher in the Annenberg/CPB video project “The Economics Classroom.” Beyond the classroom, she has presented Econ 101 ½ talks and led workshops for the Foundation for Teaching Economics, the National Council on Economic Education and for the Concord Coalition.
