The White House, as detailed on Kos by Hunter, pointed out that Standard and Poor's used faulty "math" when calculating the credit worthiness of the United States. Further, S&P admitted that they had "errors" and needed to recalculate. Think Progress explains that the agency did it because of the GOP's Jim DeMint-inspired "Fergit? Hell, no!" strategy.
Here's the thing, though. Just before all this... can you remember, anymore, the heady days before America's credit was lost, her white feather unsullied?... generally people on the right and left were saying that the ratings agencies themselves -- Moody's most of all and S&P second of all -- were corrupt. Democrats more than Republicans, but both sides, were saying that we should A) prosecute, B) investigate, C) ignore these houses of corruption.
Now, despite being off by two trillion dollars in their estimates, S&P has said that it wants to downgrade anyway, because -- heck, it wasn't the money, money that they were rating. It was the American people and Congress and Democracy itself.
S&P has said, effectively, "We don't like your financials: fail!" When they were caught making massive errors, they responded with, "Confidence... it's all about confidence, and we don't have any in you. You need to change your system: fail!"
Hunter asked rhetorically whether or not anyone would pay attention to a single house doing this, when there was little credibility to it.
Oh, yeah. It is the news today. It will be the news all day. S&P has just become Sarah Palin. Let me explain:
The ratings agencies have statutory hooks into the investing and banking groups. These are things the banks can sever, to some degree. They have no regulation, too, and this is something the government can remedy. After all, the ratings services emerged as one of those ad hoc "genius of the market" solutions in the first place (like private health insurance). No one designed them or planned them.
However, what they're there for is measuring confidence in a confidence game.
Trading depends on belief as well as real value, and banks and traders rely on expert analysts (who miss a few trillion sometimes, but hey!) to say what's good or bad. The product they sell is confidence. They are saying, "This is worth believing in." They're supposed to be saying so based on analyzing financial health, but they sometimes base it on who's leading the company, what other investor showed up, etc.
Therefore, if we were going to take our own direct action against S&P, or Moody's, we couldn't. We need for them to be laughed at, and, most of all, ignored.
Television and radio were hyperventilating on financial doom for two weeks. (Don't have a Lexis/Nexus account, or I'd cite the numbers that reinforce your own experience. Debt talks have been the top story on ... everything. America held hostage has pushed famine in Africa, the radioactive tsunami, the Haitian tragedy, and Afghanistan from the public's small channel of news.) When S&P gave the news a satisfying doom to go with the gloom of television graphics and radio sound effects, it became part of the story.
In other words, the S&P downgrade feels justified. Like Sarah Palin's comments about "real America," it has no sense to it, but it feels good. It feels like we deserve it, because we keep hearing how poor and spendthrift we are. From the point of view of narrative logic, we cannot report Suzie Spendsalot for weeks and then end the story with "and she lived happily ever after." Oh, no. The narrative desire of news is, "And so the Villagers branded her forehead with an AA+ negative outlook with a hot iron, and she wept that she was such a bad little girl."
How do you get rid of Sarah Palin? Like Bloody Mary, you refuse to say her name. How do you get rid of S&P? You don't make them the headline and body of your news report. What will the news do? It will satisfy its narrative desires, its "truthiness," even if it means defying reason, truth, and the good.