The Wall Street Journal opines today:
As 2009 opened, three weeks before Barack Obama took office, the Dow Jones Industrial Average closed at 9034 on January 2, its highest level since the autumn panic. Yesterday the Dow fell another 4.24% to 6763, for an overall decline of 25% in two months and to its lowest level since 1997. The dismaying message here is that President Obama’s policies have become part of the economy’s problem.
This sentiment reminds me of James Surowieki’s blog post from early January, the one in which he tried to read the tea leaves of hope scattered amidst the stock prices of the month. If you remember, back in the glory days of Dow 9000, Surowieki intuited that the gods had spoken in favor of SuperJesus Black Reagan’s hopium for the masses:
support for the stimulus package, as well as support for the Paulson plan, hasn’t just come from liberal economists or Democratic politicians. On the contrary, among the biggest supporters of both have been the world’s investors, at least insofar as their collective judgment is reflected in market prices…it was only after Obama unveiled his economic team and made clear how big his stimulus plans were that the market began its sharp recovery (the S. & P. 500 is now up twenty-five per cent since Nov. 20th).
Surowiecki then offered this roundhouse kick to finish things off:
The point is that it isn’t just some group of pointy-headed Keynesians saying that a big stimulus package will be good for the economy: the collective wisdom of the market is saying the same thing. And it seems peculiar for a supposed believer in the efficiency and intelligence of markets—which, as a libertarian economist, I assume Kling is—to simply disregard what the market is saying in this case. In effect, libertarian economists are saying that they have a better sense of what’s good for the economy than the aggregated wisdom of investors does.
At the time I read this I imagined Bruce Lee screaming over the body of his defeated opponent. But now I wonder if Surowiecki will write a follow-up post now that the wisdom of the market–as represented in stock prices–supports the skeptical libertarians? Ah, to be a New Yorker intellectual, cheerleader of the Donk, free to pontificate in a consequence free environment!