Two Quick Points on Kling v. Surowiecki

You are not the only one.

The "stimulus" plan is popular with the stock markets because it favors certain special interests.
Simple as that. The stock market is just a single indicator of economic performance, and it is far more reliable in periods of steady growth than during volatile times like now. Why are so many economists losing their heads lately?

"After all, its essence was a massive transfer from taxpayers to financial markets."

There is an urgent need to analyze the bailout / stimulus mania from a public choice perspective, that's for sure.

If it will be agreed that the Paulson plan was just another wealth redistribution scheme, the support of progressive politicians and some "libertarians" would be very ironic.

Bryan,

Have you or Arnold tried writing to Surowiecki to get his response to your criticisms. I think that a big part of what is wrong with our public discourse is that public intellectuals toss out these little gems and then take no further responsibility for them. If a writer/thinker has any intellectual integrity at all, then he should either defend or retract his ideas in the face of criticism.

Bryan, I think the wisdom of crowds works better with less government distortion. Do ya think the goverment chartered ratings agencies may have had a hand in the 2008 counterexample, by assigning triple-A's to junk? Once the crowd sees contracts trading on ratings, essentially the game is over, and the crowd is the last to know.

Bryan, while James' argument 'tain't that great - the market isn't making a political point - yours against crowd wisdom isn't working for me either. What about the debacle invalidates crowd wisdom?

Please note the CDSs were concentrated in a relatively few hands, as it turns out, and the financial teams playing with those were relatively small in proportion to the overall size of the institutions - this wasn't a hula-hoop craze, in the end.