Stupid people cashing in their retirement just makes them more stupid, because they pay a 10 percent IRS penalty if they're under 59.5 plus get taxed on the distribution as if were income.
Stupid people doing stupid things isn't one of those things that economists consider when measuring the economy, but thinking stupid people doing stupid things with their 401K is a mighty solid indicator of a stupid person, stupid, including ignorance of looking at unemployment, consumer confidence, wages, the stock market and other things that actually indicate economic health.