The Bush Depression?

Paul Krugman is terrified:

Another day, another terrifying economic report, this time on unemployment claims.

So are we now losing jobs at the rate of 600,000 a month? 700,000? If fiscal expansion takes, say, 8 months to kick in (and that’s optimistic), where will that leave us?

In the mean time, President-elect Obama's economic team is bracing for the worst. Marc Ambinder:

It's quite unsettling to talk to members of Barack Obama's transition teams these days, especially those who are helping with the economics portfolio. Without going into details, the sense I get from them is that they are very worried that the economy will get a lot worse before it gets better. Not just worse... a lot worse. As in -- double digit unemployment without the wiggle factors. Huge declines in aggregate demand. Significant, persistent deficits.

...Where the discussion isn't going, at least in public, is the possibility that the first foreign policy crisis the administration will face will be the complete economic collapse of a large, unstable nation. To be sure, Pakistan is nearly broke, and U.S. policy makers seem to be aware of that; but a worldwide demand crisis could lead to social unrest in countries like Indonesia and Malaysia, Singapore, the Ukraine, Japan, Turkey or Egypt...

I have enormous faith in the ability of "Team Obama" to right the wreck Bush will leave behind. But it's going to take some time to untwist the metal and set it all upright. Things WILL get way worse, I believe, before they get better. In fact, this downturn may shock the hell out of those of us who see the Great Depression as something only from the pages of our history books, or who don't remember the big downturn of the 70s.

But through it all, I want every one of you to remember one thing. This financial collapse is due almost entirely to the incompetent leadership of the current Republican administration. Obama's team should be able to pull us out of the tail spin before we slam into the ground, but they'll need time and a whole lot of breathing room.

Strap yourselves in. It's going to be a long, very bumpy ride.