Two Quick Points on Kling v. Surowiecki
By Bryan Caplan
1. Financial markets’ support for the Paulson plan is hardly evidence that the plan was good for the overall economy. After all, its essence was a massive transfer from taxpayers to financial markets. This is just a bigger-scale version of the confused view that if a Detroit bail-outs raise the stock prices of GM, Ford, and Chrysler, it must be sound economic policy.
2. Am I the only one who finds it bizarre for Surowiecki to appeal to the “wisdom of crowds” after the debacle of 2008? The main flaw with The Wisdom of Crowds is its inadequate search for evidence against its main thesis. But in 2008, a massive counter-example bonked the world straight in the nose.