Top of the News: The not-especially-bearish UC Berkeley economist Brad DeLong argues that the U.S. faces a 5 percent chance of a depression-causing shock -- and a paralyzed government won't do much about it.

The significance, beyond DeLong's good reputation, is that for more than 2 years he has said there was no chance of repeating a Great Depression. And 5 percent is a small chance, but serious nonetheless given the widespread hope for a recovery.

"We could cushion the impact of another big downward shock by a lot more deficit spending," he writes. "unemployment, after all, goes down whenever anybody spends more...But the centrist Democratic legislative caucus has now dug in its heels behind the position that we cannot undertake more deficit spending right now because we have a dire structural health-care financing problem after 2030."

Meanwhile, the rescue record of both the Bush and Obama administrations is controversial, to say the least: helping Wall Street socialize losses while keeping its party going. Remember AIG?

Indeed, there are, as they say, risks to the scenario of a recovering economy. One biggie is the large number of unemployed and little chance for major job creation in the months, or even years to come. (Washington's jobless rate ticked up to 9.3 percent in October). Another is the fiscal condition of the states. Then there's the many little bubbles being cooked up because D.C. handed out rescue money without demanding reform -- everything from new derivative games to the carry trade.

The banking sector is still sick, with debt bombs waiting to go off. The too-big-to-fail institutions that caused systemic danger are bigger still. Commercial real estate -- we'll see.

Meanwhile, Roger Baldwin and Daria Taglioni make a compelling case that global trade imbalances have not really improved. The supposed improvement is merely chaff thrown off by the huge drop in trade after the crash. That means, among other things, less chance for America to dig out of its debt.

Today's Econ Haiku:

Stewards like Allen
Make for a healthy city
Hope he gets well soon