I am perplexed by the storm of criticism leveled at Standard & Poor's. Don't get me wrong--that S&P, or any of the ratings agencies, is even taken seriously is a monumental farce, given their role in the financial crisis.
But, we're missing the point:
It is a mistake to solely blame the Republicans.
It is a mistake to solely blame the president.
Unless we say it clearly, we cannot get this right: this is about a completely corrupt and failed economic system, a system that has failed for 30 years to serve anyone but the very wealthy and, in the past few years, chose global austerity over meaningful work.
Of course the downgrading of the country's debt is ridiculous. But, the whole friggin' debate about the phony debt and deficit "crisis" has been ridiculous--a debate that has been fueled and supported across the political spectrum: by Republicans, by Democrats, by the White House, and by the nation's official transcribers (formerly known as "journalists").
Standard and Poor's is playing its role perfectly in this entire economic game.
Point 1. We are in the midst of a multi-decade campaign to promote a scam. The scam starts long ago with the drum beat about the virtues of the "free market" and "free trade", promoted by Democrats and Republicans who advance the grand myths of low taxes, deregulation and small government ("The era of big government is over"...)
Point 2. Those myths lead, in part, to the financial crisis in 2008. Simple example: The Bill Clinton-Robert Rubin caper to repeal Glass Steagall in favor of the Orwellian-sounding Financial Services Modernization Act—we know how that worked out.
But, as important, a critical part: what I call creeping austerity--a long-term assault on wages, forcing people to live on their credit cards and cash generated from a housing bubble.
Point 3. The ratings agencies were complicit partners in building the pyramid of bad assets for one reason: profit and greed. They are not independent organizations. They are, in fact, tools of Wall Street--and oftenincompetent to boot.
In fact, some money managers already get this and arecutting ties with these bozos.
Some of the world's largest asset managers are cutting ties to credit rating agencies, potentially signaling the beginning of the end of their grip on global financial markets.
Managers responsible for billions of euros of fixed income investments are reviewing relationships with the likes of Fitch Ratings, Standard & Poor's and Moody's Investors Service, whose calls on Portugal, Ireland and the United States have roiled central banks desperate to avert a collapse of the Euro zone.
Fund firms contacted by Reuters said rating agency research tended to be backward-looking and superficial, and often encouraged the kind of speculation that has recently dragged down Italy, one of the world's largest government bond issuers.
4. S&P has the temerity to pull off the current debt downgrade farce, in part, because virtually no one went to jail for the financial crisis--certainly no one from the ratings agencies. .So, if you are an S&P executive, the message to you is very clear: you will never pay a price for either being complicit or giving out crazy information.
The opposite is true: if you help us enforce the austerity agenda, then, you will prosper.
All this nonsense about the debt and deficit "crisis" could have been addressed in a calm, simple manner.
We could cut $2 trillion in corporate welfare
We could have spent another trillion dollars to give people work because (aside from the morality of making sure people have a job) people who are working, duh, pay taxes--which helps federal and state budgets (ask Jerry Brown about that).
Or we could have said let's enact a single-payer system as a sensible economic (not to mention moral) solution to health care costs, demand that the rich pay higher taxes and save hundreds of billions of dollars and end foreign wars and, presto, magically, plenty of money would flow into the coffers of the government.
But, instead, the answer has been: take out of the hides of working people. Preach austerity.
This isn't an S&P ideology.
This is a broad agenda that has been shared and promoted by both political parties and the traditional media.
S&P is simply a tool to enforce that agenda.
(note: I'll be on the road most of Monday from the crack of dawn so I will not be able to dialogue with colleagues until very late. Have fun)