Perhaps we might have saved money by just letting GM (and others) fail back then…

But I am just concerned that the psychological/emotional. and even real financial impact of that happening, when we were at the verge of total economic collapse, might just have been too much for our national psyche, and the economy. We'll probably never know

Dorian

As I mentioned above, I am optimistic; I'm just not sure what measures to use to justify it when there are so many conflicting ones out there. I'm really not sure what would have happened had we let GM go into bankruptcy in the beginning; it wouldn't have been good, that's for sure. On the other side of it though, the Feds could have saved billions of dollars that were otherwise thrown into the black hole.

Regardless, I'm an ordinary American as well and keep hoping for better days ahead for us all.

Thanks for your comments.

As I have made it perfectly clear, I hope, I am not an economic expert, just an ordinary American who is optimistic about America and our economy and, thus–rightly or wrongly–seeks signs to confirm such hope and optimism.

But you do pose an interesting issue: the rising unemployment and whether unemployment is a lagging or leading indicator of the economy.

I have to be frank, I don't know. But economists fall on both sides. Most claim that “unemployment is the most popular lagging indicator, because it shows whether companies anticipate things getting better or worse. If companies believe things are bad and getting worse, unemployment will rise. If they are more optimistic, then unemployment will fall”

There are others who feel that this “ain't necessarily so.”

For example, in “Employment a Lagging Indicator? Not Always. Using Outdated Economic Data and Trends for Future Financial Models. Just Because Stocks Rebound doesn’t Mean the Fundamentals are Good” you'll find an interesting discussion on this, and–as a bonus and as the title implies–also about “just because stocks rebound doesn't mean the fundamentals are good.”

http://www.mybudget360.com/employment-a-lagging…

Another piece, “Unemployment Not Lagging Indicators,” starts as follows:- “It is conventional wisdom pontificated ad nauseam on business channels like CNBC and Bloomberg that employment figures are “lagging indicators” of the state of a country’s economy.” and goes from there

. http://laborupfront.blogspot.com/2009/04/unempl…

But back to the GM bankruptcy and ensuing unemployment.

Seeing the market jump to some of the highest levels in a while, on a day whent GM formally files for bankruptcy and when tens of thousands of people lose and will lose their jobs, makes me think that the markets have seen this coming for a while, had already “discounted” this and that the impact on our economy and on jobs would have been worse had we not bailed out GM, and others, initially, and had we just let GM go under a few months ago, when our economy was in a much more dire state. Just a personal opinion.

But, as you say, “If people don't have jobs, the last thing they probably care about are the numbers of the stock exchange, polling data, or what anybody else has to say concerning the economy.”

Very sad and what a shame our country finds itself in such a state.

Thanks again,

Thank you

May 31 (Bloomberg) — Unemployment in the U.S. probably surpassed 9 percent in May for the first time in more than 25 years, underscoring forecasts that the economy will be slow to pull out of the worst recession in half a century, economists said before a report this week.

The jobless rate climbed to 9.2 percent, the highest level since September 1983, according to the median of 59 estimates in a Bloomberg News survey before the June 5 Labor Department report. Other data may show manufacturing and service industries shrank at a slower pace and consumer spending dropped.

“The economy is decaying at a slower rate and that is the best you can say,” said Steven Ricchiuto, chief economist at Mizuho Securities USA Inc. in New York. “I can’t tell you we are out of the woods yet.”

Economists forecast the jobless rate will head to almost 10 percent by the end of the year, depriving Americans of the income needed to propel spending and stoke a vigorous recovery. Access to credit will likely also be limited as record defaults and foreclosures make banks reluctant to lend.

Wait 'till the employment outcome of the GM bankruptcy…

I am sure that the 9.2% of the labor force that is unemployed are partying tonight because the DOW went up 200 points.

Dow Jones swaps Travelers, Cisco for Citigroup, GM

The stock market's best-known barometer is adding Cisco Systems Inc. and Travelers Cos. and dropping General Motors Corp. and Citigroup Inc. The changes were announced as GM entered bankruptcy protection, a move that was widely expected.

Cisco, which makes computer networking gear, is filling the role left by GM after 83 years as part of the Dow. Travelers, the property and casualty insurer and one-time division of Citicorp, will replace its former parent. The changes to the 30-stock index take effect June 8.

Re-reading your comment, I now realize that you may have been commenting from a different perspective.

If you are saying that, regardless of any “glimmers of econonmic hope,” this wasn't a good day for GM workers and perhaps not a good day to be procaliming good economic news, you are correct.

While I did not consciously connect the two events, I should have been more sensitive to the timing of my post, and I apologize for any perceived insensitivity on my part.

Dorian

Of course, the GM bankruptcy, with the resulting job losses and other heartbreaking ripple effects, is a tragedy—a national tragedy, I would say.

It is a consequence and sadly part of the economic crisis our country is presently going through.

Ditto for Chrysler, etc..

I just hope that some of these glimmers of economic hope we are seeing, including on a day with such other sad news, are real, lasting and will hasten our recovery and prevent any more similar catastrophes.

I realize, these glimmers, if lasting, have come too late for all those thousands of harworking GM and affiliates people.

The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor.

Forty percent of the company’s 6,000 dealers will close, the workers’ union will be forced to finance half of its $20 billion health care fund with stock of uncertain value in the restructured G.M. and bondholders, including many retirees, will get 10 percent of the equity, with warrants that could allow them to get another 15 percent.

http://www.nytimes.com/2009/06/02/business/02au…

That's a lot of people who most certainly are not all that optimistic, especially when the President says they are making a “sacrifice for the next generation”. This doesn't even account for all the parts manufacturers, or any other business that is even remotely related to GM. This most certainly is not very positive.

“The Fed is trying to achieve aims that are not internally consistent, namely, prop up asset prices by directing credit to preferred sectors, and create positive inflation expectations.”