Job losses continue to slowly decline

The ADP employment report suggests that the BLS will announce job losses this Friday that will be somewhat less than they were last month. Maybe not as much of a reduction as the market expects, but the trend in the numbers continues to point in the right direction. The labor market continues to slowly heal. We're still many months away from net job gains, but we'll get there sooner or later.

Meanwhile, though, the unemployment rate is going to remain uncomfortably high, especially for all those politicians who argued so fervently early this year that dumping a trillion dollars of tax rebates, transfer payments, make-work projects and general government largess into the economy over a period of years would guarantee a quick economic turnaround. As the evidence accumulates, we see instead that it would have been far better to just let the economy follow its own course. Better still, we could have used the money in a much more intelligent fashion by making permanent cuts in marginal tax rates that would have quickly resulted in more work and more investment.

Let's hope this ends up being an expensive lesson in how not to stimulate an economy. Voters seem to be getting the message already, to judge by yesterday's election results. Politicians, as usual, will be late to the party.