The foolishness of crowds

24 February 2009, 0203 EST

John Dickerson asks “Is it Obama’s Fault the Dow Is Tanking?” and provides “yes” and “no” talking points. Josh Marshall thinks the answer is no:

I was just watching Chris Matthews explaining how the Dow is President Obama’s “scoreboard” and how people are going to start getting angry at him soon if he’s not able to get the Dow to stabilized and start going up soon… There does seem to be a certain lack of comprehension of the fact that there are economic realities, actual losses, underlying the steep stock market decline.

I don’t watch much any cable news these days, yet I can guess that some number of talking heads are nattering on about how “the market” is passing judgment on Obama’s plans, and finding them wanting.

What I want to know is: why we should care? Of course I don’t like seeing my last ten years of savings getting hammered; I’d be rather pleased, in fact, if the stock market rallied for a very long time. But shouldn’t it be pretty obvious by now that the collective judgment of “the market” isn’t worth sh*t?

I’d hoped that at least one positive externality of the implosion of our financial system would be an end to all the blather about how we should look to Wall Street’s group mind for useful assessments of just about anything, let alone the best way to clean up the mess it made for us. After all, these are the same people who watch CNBC and think “moral hazard” means spending money on people making less than $250K a year.

Dan Nexon

Daniel H. Nexon is a Professor at Georgetown University, with a joint appointment in the Department of Government and the School of Foreign Service. His academic work focuses on international-relations theory, power politics, empires and hegemony, and international order. He has also written on the relationship between popular culture and world politics.

He has held fellowships at Stanford University's Center for International Security and Cooperation and at the Ohio State University's Mershon Center for International Studies. During 2009-2010 he worked in the U.S. Department of Defense as a Council on Foreign Relations International Affairs Fellow. He was the lead editor of International Studies Quarterly from 2014-2018.

He is the author of The Struggle for Power in Early Modern Europe: Religious Conflict, Dynastic Empires, and International Change (Princeton University Press, 2009), which won the International Security Studies Section (ISSS) Best Book Award for 2010, and co-author of Exit from Hegemony: The Unraveling of the American Global Order (Oxford University Press, 2020). His articles have appeared in a lot of places. He is the founder of the The Duck of Minerva, and also blogs at Lawyers, Guns and Money.