The recent Intercept article on Hillary Clinton’s silence on rating agency reform got me to thinking about the biggest stakeholder in Moody’s, Warren Buffett (with $79 billion, the third richest man in the world). Guess what? Warren is a big HRC fan and is going to have a nice big fundraiser for her right before the Iowa primary. Moody’s and Standard & Poors, the two biggest securities ratings agencies, were identified as major culprits in the 2008 financial meltdown because they knowingly gave investment grade ratings to shoddy mortgage-backed securities. The business model of these ratings companies is hopelessly conflicted, because they risk losing business if they don’t please their clients by providing desired ratings.
Bernie Sanders has proposed regulatory measures that would end corruption in the ratings industry, but Clinton has remained silent on this issue. Warren Buffet thinks the way Moody’s works is just fine because it earns him a pile of money. There is not a single bit of visible evidence that Buffett is buying influence with Clinton. Their relationship is perfectly legal and business as usual in American Politics, and that is why I support Bernie Sanders.