Fiscal conservatism

What that sober, serious minded, responsible and utter failure fiscal conservatism has wrought: Nearly 600,000 new claims for unemployment benefits last week. And that number hasn't even been "upwardly revised" yet.

New claims for unemployment benefits rose more than expected last week, the government said Wednesday, as layoffs spread throughout the economy, more evidence the labor market is weakening as the recession deepens.

The Labor Department reported that initial requests for jobless benefits rose to a seasonally adjusted 586,000 in the week ending Dec. 20, from an upwardly revised figure of 556,000 the previous week. That's much more than the 560,000 economists had expected.

That's also the highest level of claims since November 1982, though the work force has grown by about half since then.

Meanwhile, in that other wellspring of good economic news, the housing market:

The housing market weakened dramatically in November, with prices taking their deepest dive in at least 40 years as buyers refused to wade back in during a growing recession, according to data released yesterday.

The declines cited in government and industry reports were worse than analysts expected and deepened concerns that the housing downturn has entered a new phase, fired by a recession it helped create, economists said.

[...]

Sales of existing homes fell 8.6 percent to a seasonally adjusted 4.49 million units in November compared with October and were down 10.6 percent compared with the same period a year ago, according to data from the National Association of Realtors. The Commerce Department reported sales of new, single-family homes fell 2.9 percent to a seasonally adjusted annual rate of 407,000 in November. It was the slowest sales rate in 18 years and down 35 percent compared with a year earlier.

[...]

Home prices also tumbled. Median new-home sales prices fell to $220,400 in November, down 11.5 percent from $249,100 a year earlier. The slump in the resale market was even more pronounced: Existing-home prices fell 13.2 percent, to $181,300 from $208,800, the largest drop since the Realtors group began collecting data in 1968 and likely the largest decline since the Great Depression.

Do you think we'll get to the point that we stop calling the Depression of the 1930s the "Great Depression" like we stopped calling World War I the "Great War" and start referring to Depression I and Depression II?

I certainly hope not. Unfortunately, given the state of the economy, it's not an unreasonable question to ask.

Put that in your Legacy file, George.

UPDATE: With regard to my question about Depression I and Depression II, it appears that Paul Krugman thinks we could get to that point. But what does he know about economics? He's just a professor of Economics and International Affairs at Princeton University and a winner of the Nobel Prize in economics.