I greatly respect James Surowiecki

Which is why I'm sorry to see him write something so idiotic.

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.

Where to begin?

1. Surowiecki plays the same bogus storytelling game with the stockmarket that I suppose all financial writers are supposed to do. He attributes the earlier collapse to a failure to pass the original Paulson Plan, despite the fact that it dropped again shortly after it finally did pass. he attributes the recent increase to the fact that Obama has layed out his stimulus plan, but it could just as easily be because of the cabinet picks Obama has made, or the movement of the planets. Surowiecki is fraud to pretend he stands on solid ground when he claims to understand what the "aggregated wisdom of investors" is "endorsing".
2. Even if he could tell what they were endorsing, he would still face an uphill battle to demonstrate that it was what they thought was "good for the economy" rather than just for themselves. I'm sure than if the Fed started pumping currency into Microsoft, the stock of that company would explode; regardless of the the fact that such an action would not be good for the economy as a whole. The fact that the S&P 500 is up 25% since November may just mean that investors think they can make money off of the specific companies in that index, rather than off of the imagined health of the economy as a whole.

This is sloppy thinking that is unbecoming of Surowiecki. I advise him to get some basic reading on rent seeking in before he embarrasses himself again by suggesting that believers in minimal government ought to listen to a bunch of investors.