Everybody Knows the Score

The reaction to the S&P downgrade seems to be split between those, like Robert Reich, who think it’s bullshit, and others, like Ezra Klein, who think we got what we deserved. Indulge in that kind of analysis if you wish, but I don’t have to check with a cab driver, hang out at the Applebees salad bar, or pound coolata martinis with the locals at TGIF to know how this is going to shake out. Average salt-of-the-earth Americans don’t start working the refs when their FICO score gets cut. They know that a lower credit score means that your credit card interest rate goes up and your credit limit goes down, you’re stuck with a prepaid cell phone, and that your clunker had better make it through the winter.

The question is whether the Democrats can get out in front of this, or whether they’re going to let the tidal wave of “both sides do it” bullshit engulf them. I’m hoping for the former but betting on the latter.

Also, too: though I have no respect for credit agencies, I have to assume that Moody’s and Finch’s Fitch’s and whoever else sells useless ABA+/- ratings will eventually be falling in line behind S&P. Those guys already were burned once by being behind the curve, and they’re not going to let it happen again.






101 replies
  1. 1
    Ron says:

    But it’s not quite true that Americans don’t work the ref. There’s a whole industry out there of “check your credit score” sites to help people make sure that their credit report is accurate.

  2. 2
    cathyx says:

    I think it’s Fitch, not Finch.

  3. 3
    Samara Morgan says:

    But you wholly endorse the “both sides do it” eumeme.
    that is why de Bore and Kain are frontpagers, and why you link Kain at Forbes.
    you honestly think Team Reaver can be reasoned with and there can be compromise with pure evil.
    de Bore and Kain are just holding the vaseline jar for another reacharound.

    both sides do it means we are just the same.
    we are not.

  4. 4
    Samara Morgan says:

    And its not what we DESERVED….its evo theory of culture and games theory in action.
    Once we invaded Iraq this was inevitable.

  5. 5
    mistermix says:

    @cathyx: Thanks.
    @Ron: “Check” as in “nervously look to see if my overlord has ruined my life”.

  6. 6
    walt says:

    Oddly enough, I was at an Applebee’s last night. A right-wing friend needed to eat so there we went. It’s an odd feeling but I knew there was something very different about the clientele. I couldn’t imagine anyone having a discussion about politics, or good food, or art, or anything creative. This is the place you go to get away from complexity, nuance and ambiguity. Maybe I was looking at David Brooks’ America with jaundiced eyes, but something tells me a rating agency could come here and conclude America’s pig-out days are almost over.

  7. 7
    PurpleGirl says:

    The ratings companies — because that’s what they are — didn’t miss the housing bubble/mortgage scandal. They are paid to analyze economic conditions and give an opinion. They did what their clients wanted. Their clients wanted to sell bonds and for that they needed a good rating. And then the publishing companies (S&P, Moody’s, Fitch et al.) sold those opinions to people and other companies. They are in the business of publishing economic opinions.

  8. 8
    cathyx says:

    This whole S&P downgrading makes me think that there is a power struggle developing between the banks and large corporations. S&P is owned by McGraw-Hill who own many media outlets. And they are fighting over owning Congress and the laws they make. The winner owns the United States of America.

  9. 9
    Rhoda says:

    The Republicans destroyed the full faith and credit of the USA when they were voted in the house in ’10. That should have been your lede and the first sentence in every progressive blog and every democrats press release on the downgrade. Fuck s&p, that they’re idiots and wrong should be the second paragraph. This is huge and set up as sweetly as the Ryan budget was. It is a dead simple and true statement and the s&p press release gave democrats all the cover they need. The press won’t tell that story until the democrats make the case, they don’t want to tell that story. But that doesn’t matter.

    The Republicans are your kid stealing the credit card and buying thousands in nonrefundable shit. And all the 2012 candidates stood with them, even Mittens. The press is desperate to make this a humiliation for Obama moment, but the facts point another way.

    All democrats need to make that case as clearly and surely they made the case against the Ryan budget.

  10. 10

    I have to assume that Moody’s and Finch’s Fitch’s and whoever else sells useless ABA+/- ratings will eventually be falling in line behind S&P.

    Yes. And if this downgrade doesn’t hurt, future downgrades will. At some point, the ratings will weigh down on the economy, which is already fragile.

    Speaking of fragile, is anyone keeping up with Europe’s economy?

  11. 11
    Samara Morgan says:

    and apparently you do not know the score. Games theory in action.

  12. 12

    […] TO THE DARK SIDE Now everybody may get to pay more to lenders. But, thank sweet Jesus, it’s not a tax increase giving revenue to the federal government. […]

  13. 13
    Valdivia says:

    I think there is a slightly more nuanced difference between the takes than Mistermix is making out. (Sorry Mistermix!)
    Ezra K is not saying S&P is right on the economics of it. His point is about the politics of what just happened with the debt ceiling and the Republicans. While those who say this is bs are focusing on the economic analysis. I think there is a way in which both views are right: S&P made shitty economic analysis but what they got right is that this Congress and this Republican incarnation of politics is going to destroy our country and has already destroyed our credibility that we can govern ourselves. I think Ezra is right that this is a warning shot from the business community that after this it won’t be business as usual.

    The problem of course is that this will be lost on the both sides do it meme from the media and I think that no matter how in front of this the Dems get, the media will NOT let them at all because accepting that one party and only one party is solely responsible for trashing the economy is too much cognitive dissonance and they would have to take part of the blame for missing the story for the past 4 years.

  14. 14

    As I was saying

    The president called on Congress to extend the payroll tax credit, extend unemployment insurance, and fund new construction jobs when it returns from its summer recess after Labor Day. He insisted there is no contradiction between short-term economic stimulus measures and long-term deficit reduction.

  15. 15

    This turd needs to be laid squarely in the lap of those who laid it: Bush, Cheney, and Wall Street, and those who wouldn’t let us do massive stimulus that would have at least gotten the recovery beyond the sitting-up-and-taking-nourishment stage; the GOP and the Blue Dog wussies. And of course the teabaggers are going to blame this all on Obama. That’s all they know how to do.

  16. 16
    RossInDetroit says:

    @walt:

    I was at an Applebee’s last night.

    We went last weekend, and probably eat there 5 times/year.
    Note to non-carnivores: There is almost nothing you can get there unless you order something with the meat left off. They don’t even have a salad without meat. The Chicken Caesar minus chicken is OK.
    There’s the artichoke dip available if you’ve saved up your whole week’s limit of fats for one meal.

  17. 17
    RossInDetroit says:

    @General Stuck:

    I wish the Pres would go full court press on jobs. Just repeat that over and over and over until it sinks through the MSMs thick skull that we need to get people back to work. There’s a tiny chance that someone will eventually notice that the GOP does not want to create jobs if the Dems put one job creating program after another in front of the Republicans and they push every one away.

  18. 18
    Samara Morgan says:

    @Valdivia: and it will also be lost on mistermix because he thinks both sides are the same and a glibertarian is just a liberal friend you haven’t made yet.

  19. 19

    @RossInDetroit:

    I wish the Pres would go full court press on jobs. Just repeat that over and over and over

    He will, when the August recess is over after Labor Day. Just setting the field of play now, for when the pol combat resumes in September.

  20. 20

    Let me recommend this excellent commentary from The Economist on the S&P downgrade. Their point is that it is our toxic politics revealed by the debt ceiling debate which prompted the downgrade.

    Investors largely tuned out the debt-ceiling debate until its final days out of a belief based on long experience that for all the antics and rhetoric of the Tea Party, the people who actually run Capitol Hill would never compromise the country’s credit worthiness. After all, it was Mr Boehner who reminded his freshmen colleagues that on the debt ceiling they’d have to act like “adults.”
    __
    That is not what happened. As the fight dragged on, the leadership moved closer to the Tea Party, not the other way around. And they seem happy with the results. Why else would Mitch McConnell have promised on August 1st to do exactly the same the next time the debt ceiling must be raised?
    __
    It is striking that the proponents of this strategy seem so oblivious to its impact. Our economy is lubricated by a sophisticated and stable credit market whose most vital component is also the most ephemeral: trust. As the crisis amply demonstrated, when trust erodes, the system freezes up. America has built a reputation for responsible and credible management of its finances over the centuries, and that reputation has been reduced to a political football, like a federal judgeship. Henceforth a foreign pension fund or central bank that once mindlessly ploughed his spare cash into Treasurys will have to think twice.

    They’re blaming the Tea Party’s toxic politics, the GOPs capitulation to nutballs, and the Democrats’ spinelessness. It’s hard not to see the logic of that.

    We’re no longer the can-do nation, we’re the “crawl into a ball and sob” nation.

    Serves us right. Maybe the next election will see something different happen, maybe the banksters and Wall Streeters will whip their GOP dogs into shape, I dunno. But this really is a bad place we’re in.

  21. 21
    mai naem says:

    And all this is good news for John McCain. Also. Too.

  22. 22
    kay says:

    I don’t know how is shakes out politically, but this is a really good point, and can’t be said enough, as far as I’m concerned:

    Ezra:

    “Those of us in Washington who would like to see the government work have long wondered when the business community and other entities who need a functioning political system would begin exerting a countervailing force. ”

    Business leaders need political stability, predictability and a governmental structure to pile up all that money in an orderly fashion. The idea that they could function in some libertarian paradise or that government is useless or “in their way” has always been a self-serving, ego-gratifying lie they told themselves and the rest of the country.

    Better get cracking boys. The system you rely on, but graciously allow the peons to fund and protect is falling apart, and you had a direct role in tearing it up, because you didn’t want to pay your fair share.

    The business community has been intransigent. Maybe it’s time they moved a little, and recognized the value of the political stability they enjoy, and rely on.

  23. 23
    beltane says:

    I agree with Rhoda here, especially her first sentence. This wasn’t something that just happened because of a dysfunctional Washington. This was the outcome of deliberate sabotage on the part of the Republican party, its leadership, and of every assclown in RealAmerica who voted to sabotage their own country. The use of the term “terrorist” is making the righties squeal, therefore it should be used more often.

    @cathyx: Yes, there definitely seems to be conflict brewing between the two main factions of Galtian sociopaths. This conflict should be exploited as much as possible. There was no way these two tribes of vipers were going to maintain amicable relations indefinitely.

  24. 24
    harlana says:

    Well, if we have a payroll tax cut, I hope Obama issues a check this time like Bush did, jeebus. I’d rather my $500 go to a starving family or something. It’s not enough to make much difference to me now that I have a job – it might pay for a couple month’s worth of meds but those I can wrangle out of my doc when I have to. Or borrow money. Some people don’t have anyone to go to or anyone who cares.

  25. 25
    Valdivia says:

    @kay:

    Once again you said it much much better than I but stressing the salient point we should be focusing on.

  26. 26
    harlana says:

    @Mustang Bobby: But, but, we can’t look back! It hurts delicate fee fees and frightens those fragile, terminally confused independents!

  27. 27

    @beltane:

    This was the outcome of deliberate sabotage on the part of the Republican party…

    Yes I agree completely. I firmly believe they deliberately sabotaged the economy to orchestrate a power grab in 2012. Obama scares the shit out of them. As much as people on the left are frustrated with POTUS, Obama is the GOPs worst nightmare: a charistmatic African American (and half white) president.

    Republicans have always been scared of black people. :-)

  28. 28
    Admiral_Komack says:

    “The problem of course is that this will be lost on the both sides do it meme from the media and I think that no matter how in front of this the Dems get, the media will NOT let them at all because accepting that one party and only one party is solely responsible for trashing the economy is too much cognitive dissonance and they would have to take part of the blame for missing the story for the past 4 years.”

    THIS.
    The media will do their false “both sides do it” bullshit, no matter what the President and the Administration does.
    And if the President tries to circumvent the MSM to put forth the message to the American people that the TeaRepublicans are to blame for this, you’ll hear “oh, well, he didn’t use the bully pulpit, so he’s weak”.

  29. 29
    harlana says:

    @Admiral_Komack: That’s why we need to scream louder and tell the people what we would do for them if it weren’t for republican obstructionism. We need to formulate job proposals and explain them to the public in, of course, simple terms, what we want to do for them to put them back to work and relieve some of their suffering. I’m sick to death of the argument that this and that won’t pass so stfu – tell the people why it won’t pass, who is responsible. What, at this point, have we got to lose? What, at this point, else can we do?

  30. 30
    chopper says:

    now that US bonds are rated below the CDOs that blew up the economy in 2008, i need to take my money out of treasuries and buy some subprime mortgage backed securities. anybody know where i can buy some?

  31. 31
    El Tiburon says:

    The question is whether the Democrats can get out in front of this, or whether they’re going to let the tidal wave of “both sides do it” bullshit engulf them.

    Have the Democrats ever gotten out in front of anything?

    The only thing that comes to mind is Bush’s privatization of SS, but I don’t think the Democrats had anything to do with that. At all.

    Let’s see: When Democrats are in power, the Repubs demand UP OR DOWN VOTES and to FILIBUSTER JUDICIAL NOMINEES is a sin and NEVER TALK BAD ABOUT THE PREZ during wartime and on and on.

    Yet here we are…

  32. 32
    Dennis SGMM says:

    The threat of further downgrades has simply given the Republicans another hostage. Those who were unafraid and even anxious to force default so that the gov would “live within its means” will be emboldened to push even more radical cuts to programs they don’t like. The rationale will be “We have to cut to the bone lest our debt be further downgraded.”

    The sane side will want to use all of the tools at hand, including increasing revenues and stimulating job creation. The insane side will turn into the Demon Barber of Fleet Street. The rest of us are for the moment just along for the ride.

  33. 33
    kay says:

    @Valdivia:

    It’s such a lie that they’re free and easy, wheeling and dealing in a free-market bubble wholly of their own making. They need a functioning, rational government more than any one individual does.

    The Tea Party got government off their back. Finally. They destroyed it. Why no celebration? They can all go back to being individual yeoman farmers and merchants now, which is what they’ve been yearning for.

    Liberty! At last! They’re free to trade trinkets across state lines. I would think they’d be dancing in the aisles on Wall Street.

  34. 34
    geg6 says:

    S&P’s math is questionable and the economic analysis is too. But their political and public perception analyses are correct. And they place the blame squarely where it belongs. The Teabaggers and their GOPer enablers in Congress. The fact that they are doubling down on playing political games with our economy is more than enough reason to have doubts about the US’s financial stability, regardless of what the numbers say.

  35. 35
    wrb says:

    @RossInDetroit:

    There’s a tiny chance that someone will eventually notice that the GOP does not want to create jobs if the Dems put one job creating program after another in front of the Republicans and they push every one away.

    yes

  36. 36
    chopper says:

    i guess obama’s got the advantage here, since congress is in recess. better get crackin’.

  37. 37
    beltane says:

    @harlana: We need to formulate and push for jobs proposals in order to prove to the American people that the GOP is completely indifferent to job creation or anything else that benefits the country. By shutting up, the Democrats are tacitly acquiescing to GOP extremism and disloyalty to country. A real patriot works tirelessly to better his or her country.

  38. 38
    RossInDetroit says:

    @wrb:

    Except I’m forgetting to think like a Republican. Their responses to Dem jobs bills will probably be:

    Lower taxes on the wealthy
    Elimination of regulations on business
    Liberalization of trade (sending jobs offshore)
    Send immigrants home
    Abolish unions
    Prayer

  39. 39
    chopper says:

    the way reich puts it, it’s like the arsonist coming back to the scene of the crime and telling the firefighters that they’re doing a shitty job.

  40. 40
    Suffern ACE says:

    Still don’t know what to think about this. On the one hand, why does S&P insist on $4 trillion? If their model is nonsense, then there really isn’t much basis for the rating. Beyond that magic number, there isn’t much reason to believe that a sovereign fiat currency debt won’t be repayed even if the debt load doubled.

    On the other hand, it doesn’t matter if you always have paid your bills on time. Ratings agencies are supposed to tell investors whether you will in the future. If the Brazilian congress decided started questioning whether or not it needed to make payments even if it could pay, I’m assuming it would be downgraded. Same if the board of a corporation went on record saying that they’ll skip a few payments as they don’t think bondholders should matter much and want to prove that point. In this sense, it doesn’t even matter if $4 trillion or $400 trillion is the right magic number.

  41. 41
    Emma says:

    @Admiral_Komack: Then maybe it’s up the rest of us to go on the offensive? That’s how the conservatives got a lot of their power. They screamed at the media every time they tried to do their jobs. The difference would be we’re trying to get them to do it.

  42. 42
    fasteddie9318 says:

    Here’s how it works:

    * Ratings agency downgrades rating, explicitly blames Congressional Republicans in its justification for the downgrade
    * Democrats use this occasion to attack…the credibility of the ratings agency
    * Republicans use this occasion to attack…the Democratic president
    * Village idiots adopt Republican framing
    * Public blames Democratic president

    As always, I enjoy being on the side of The Gang That Can’t Shoot Straight Except When It Comes To Shooting Itself In Its Own Eye.

  43. 43
    Emma says:

    @Dennis SGMM: I don’t think so, not this time. S&P were very clear on their reasons for the downgrade, and it wasn’t cuts. That can be used to advantage.

  44. 44
    lldoyle says:

    This is a hostage situation in which the GOP stabbed the hostages, they died 3 days later, and they’re going to campaign on the theory that the Democrats did a lousy job as cops/hostage negotiators, so just elect the GOP to be the new cops. [After all, hostages died while the Dems controlled the White House and the Senate.]

    And the public is expected to forget or just not discern who it was that stabbed the hostages in the first place.

    The 30% who believe Fox buy this story and will argue with you as to which party actually took the hostages. The other 70% is all flummoxed and frustrated by the repeated-until-it’s-true “both sides do it” bullshit. All the GOP needs to do is have 21 of that remaining 70% break their way, all the while suppressing the votes of those extremely likely not to buy their party line.

    It’s difficult to muster confidence that the Democrats have a strategy to beat this, much less the will to see that strategy through. My own hope is that our salvation will come from the UK, where people with the will to do something about Murdoch are giving it a go, so that maybe the fallout will become a windfall over here.

    I hate this Blanche DuBois “strategy” of relying on the kindness of strangers, but haven’t yet seen a viable alternative, unless it is what’s happening in Wisconsin. But at this point, we’re tempted to think that even if it goes well in Wisconsin on Tuesday, the GOP will go to school on it better than will the Dems.

  45. 45
    chopper says:

    @fasteddie9318:

    Democrats use this occasion to attack…the credibility of the ratings agency

    it’s only been half a day. besides, it isn’t just dems. at least half the talk i’ve read about this downgrade has been of the ‘S&P? aren’t those the guys who gave AAA ratings to the garbage CDOs that took down the economy?’ sort. the 2 trillion dollar math error (forgot to carry the 2!) certainly makes them look even dumber.

    i’m assuming one of the reasons obama’s administration is coming down so hard on S&P over this is to try to minimize any effect on the markets.

  46. 46
    Emma says:

    @fasteddie9318: Instead of enjoying your misery, why don’t you do something about it?

  47. 47

    I don’t agree that the wingers will get even more leverage from brinkmanship with nihilistic methods, now going forward with spending bills to fund the US government. I think the downgrade, even if publicly blaming Obama for it, privately, the GOP branetrust and top leadership will not want to take it quite as far as they did.

    The polls already blame them some more than dems, and they will push their luck if they go balls to walls again, especially with shutting down just the fed government, which is far less severe a thing as default. And something dems will be harder to bluff with.

    They still won’t cooperate on anything Obama proposes to do, and will take every opportunity to defund or otherwise sabotage the implementation of the ACA. But not take it to the limit again. That was one reason Mcconnell came up with the idea of turning the debt ceiling raising over to President Obama, because the crazy motherfuckers in the House were serious about burning it down, in lieu of standard politicking.

    As Mitch stated rightly at the time, that republicans would get blamed for letting that happen.

  48. 48
    Judas Escargot says:

    Still trying to figure out S&P’s political motivation.

    This will almost certainly be framed as an Obama failure by our super-elite MSM… but the S&P press release explicitly calls out the GOP refusal to raise taxes as a big part of their rationale.

    And, while money will be made over the weekend by those who bet on a downgrade… the resulting long-term economic effects can’t really be good for anyone. Euros? Real estate? Jump into the commodities bubbles? There’s nowhere else for capital to go.

    So, what gives?

  49. 49
    JPL says:

    @Southern Beale: Thank you for the link

    My more optimistic take is that the behavior of the markets and record disapproval ratings will force Congress to acknowledge the idiocy of their recent behavior and to adapt by substituting compromise for brinkmanship. Investors won’t learn much new from S&P’s announcement. Politicians should.

    I’m personally not optimistic that this will happen. Boehner has already spoken and they put country third. Teabaggers first, Republicans second and country third.

  50. 50
    Valdivia says:

    @kay:

    I guess the thought they could have deregulation but still have the semblance of governance to give full credibility to their shenanigans. It turns out once you try to unleash one the other one comes tumbling down.

  51. 51
    Judas Escargot says:

    @lldoyle:

    And the public is expected can be relied upon to forget or just not discern who it was that stabbed the hostages in the first place.

    FTFY.

  52. 52
    RossInDetroit says:

    Still trying to figure out S&P’s political motivation.

    S&P smelled beer and cigarettes on our breath, found an Ozzy cassette in our room and doesn’t like that crowd we’ve been hanging out with so we’re getting a curfew until we prove we’re more mature and responsible.

  53. 53
    jwb says:

    @Judas Escargot: Watch where the political money from Wall Street goes. That will answer your question as to who S&P is working to screw.

  54. 54
    wrb says:

    @RossInDetroit:

    Yep.

    An unfortunate thing is that if they do get in they will probably immediately impliment massive stimulus and job creation package and the people will think they were right all along.

    It will include the things you suggest plus
    defense spending, if not wars
    An awesome wall along the border with blinky lights and twirly bits

  55. 55
    Anya says:

    I am not worried about any additional economic setbacks coming out of this downgrading, or any other problems because Rick Perry is going to pray for America. Help is on the way so stay tight, America.

  56. 56
    kay says:

    @Valdivia:

    It turns out once you try to unleash one the other one comes tumbling down.

    Right. I don’t really agree with Ezra that it’s inevitable they’ll ride to the rescue to defend the US governmental system they rely on. I kept thinking they would offer some help, some solution, some idea after the crash they caused and they never did. Nope. No help there! They immediately started whining and blaming poor people, because poor people are so incredibly powerful in this country they somehow tanked the economy. Who knew people who make 22k a year had all that clout? They do! Business leaders tell us they do!

    I think it’s just as likely they’re making contingency plans to save their own individual assets, again. They probably buy their own bullshit, after spouting it for 30 years. “We don’t need gubmint!” My. Ass.

  57. 57
    Villago Delenda Est says:

    @kay:

    The business community has been intransigent. Maybe it’s time they moved a little, and recognized the value of the political stability they enjoy, and rely on.

    These idiots do not understand cause and effect; they do not understand the organic complexity of society. They’re like the IT glibertarian morons who have no fucking clue that their entire professional lives are a creation of the evil government they hate so much, in that computers and the internet would NOT EXIST without the government’s initiatives and projects that led to their creation.

    The state that they hate so much makes all this possible. There is no such thing as a free lunch. Progressive taxation is how you pay for the lunch you get.

  58. 58
    chopper says:

    @General Stuck:

    I don’t agree that the wingers will get even more leverage from brinkmanship with nihilistic methods, now going forward with spending bills to fund the US government. I think the downgrade, even if publicly blaming Obama for it, privately, the GOP branetrust and top leadership will not want to take it quite as far as they did.

    right now all the gooper candidates are yelling about how this downgrade is all obama’s fault. funny that with the exception of huntsman, every one of them was demanding that the US not raise the debt ceiling and default on its debts. yeah, under your preferred policy we’d already be at BB or worse, but AA is totes obama’s fault.

  59. 59
    Omnes Omnibus says:

    Jaysus, people. The tea partiers shot their wad, got very little in return, and were explicitly blamed in the downgrade. I think this was their high tide moment. It is not that they won’t be able to do any damage in the future, but every day that ability will diminish.

  60. 60
    Triassic Sands says:

    The reaction to the S&P downgrade seems to be split between those, like Robert Reich, who think it’s bullshit, and others, like Ezra Klein, who think we got what we deserved.

    I don’t see that those two are mutually exclusive. S&P’s decision could be bullshit AND be just deserts for a bunch of nihilistic children. As always, it’s just too bad that the Republicans are going to drag the rest of us down with them. Still, in a country that has representative government, when the people elect a bunch of mindless, irresponsible thugs with no appreciation for decency it seems fair when that fact is recognized.

  61. 61
    MikeBoyScout says:

    About Standard & Poors:

    With offices in 23 countries and a history that dates back more than 150 years, Standard & Poor’s is known to investors worldwide as a leader of financial- market intelligence one of the financial institutions responsible for the 2008 global economic collapse.
    Today Standard & Poor’s strives to provide investors who want to make better informed investment decisions fellow banksters who have historically stolen from and gamed supposedly open markets with market intelligence well timed propaganda in the form of credit ratings, indices, investment research and risk evaluations and solutions.
    Most notably, we are known as an independent provider of credit ratings a rating agency that rated worthless CDOs as AAA and having been informed of a $2 trillion error in our August 2011 US debt rating downgrade calculations. In 2009, we published more than 870,000 new and revised credits ratings. Currently, we rate more than US$32 trillion in outstanding debt.

    There. Feel better?

  62. 62
    wrb says:

    This payroll tax cut is good but it sure could be bigger. A full payroll tax holiday on incomes under $250k wouldn’t generate a full trillion, and if the likes of Krugman and Romer are to be believed, the economy needs more juice than that.

  63. 63
    kay says:

    @Villago Delenda Est:

    These idiots do not understand cause and effect; they do not understand the organic complexity of society.

    I think they did understand it, once. I talk regularly here to a local business owner who is a big employer. He’s an older man, in his early 70’s. He left the Republican Party because he knows what he relies on to do business. He doesn’t bullshit himself about how this country works. Like it or not, it’s all connected. He actually personally lobbies on trade issues that affect his business. He travels to DC himself, then comes back here. Direct connection.

    My feeling is the later generations lost that bigger picture. They bought their own self-aggrandizing bullshit, which one must never, ever do.

    With lots and lots of help from an adoring media, of course.

  64. 64
    Josie says:

    I’m envisioning a political ad showing clips of Republicans making stupid statements, such as McConnell (sp?) promising to do this again often, Boehner saying he got 98% of what he wanted, and some teapartier stating his willingness to crash the economy, followed by coverage of the downgrade. It needs to be laid out in simple terms for everyone to see.

  65. 65
    Triassic Sands says:

    @Samara Morgan:

    Depending on what “it” is, both sides do do it. But it is grossly misleading to present that description the way the MSM in this country do.

    For example, both sides have played bullshit games with the rules of the Senate. That’s undeniable. But, and this is the huge but…but the Democrats have not taken things to the extremes that Republicans have. There is a fundamental difference between Republicans and Democrats. Dems believe in the system, but they are willing to game it. Republicans have utterly no respect for the system at all. They have no respect for elections or democracy or a free and open society. Democrats won’t destroy the country to get what they want. It’s become clear that Republicans will.

    In the past, there was a difference between the GOP and Dems in the degree to which they played their games. Now, it has become a difference — no longer of degree — but of kind.

    The media in this country have failed miserably. I see no reason to believe they will change and if they don’t, our system is very likely to continue to degenerate and ultimately fail.

  66. 66
    Odie Hugh Manatee says:

    @jwb:

    I see an upcoming battle between the moneybags side of the Republican party and the Teahadists. The Teahadists are encouraged now by their ‘success’ and are ready to do more damage. The powers that be (money) are going to try to stop them in their tracks. The way I see this unfolding is that the money bags will try to get the ‘sane’ (read: bought off) Repubs together with some newly bought off Democrats (along with some already bought off Democrats) to save the day (and in turn, return control of the Republican party to them).

    There is going to be lots of fireworks, that’s for sure.

  67. 67
    chopper says:

    @Josie:

    at first glance, i thought the campaign ads would write themselves for the GOP. reading S&Ps reasons for the downgrade, and the fact that the GOP candidates wanted us to default, makes me not so sure. obama certainly needs to get in front of this and fast since congress is in recess.

  68. 68
    somethingblue says:

    I’m not an economist (nor do I play one on TV). But if I understand it correctly, the ratings cut means that S&P thinks the U.S. is half a sliver of a fraction more likely to stiff its creditors than New Zealand or Germany are. I don’t know how anyone who followed the debt ceiling business could see that as anything other than charitable.

  69. 69
    chopper says:

    @Odie Hugh Manatee:

    i guess all the gloating about a ‘democratic civil war’ out of the usual suspects after the debt ceiling deal was a bit premature.

  70. 70

    @Samara Morgan:
    John never advocates taking the GOP at their word, and while games theory does predict this *everyone here* already factored that into their thinking. This blog has been full of ‘the Republicans will just stab you in the back anyway’, and the counterargument has been ‘it’s better than financial armageddon’. Which, in fact, is classic games theory. You pick the best option you have, knowing it’s unlikely to be the optimal ‘you shiv them and get everything you want’ result. Seriously, M-C, you have the most cursory understanding of the things you spout, and you declare that cursory understanding as if it’s a deep insight that no one else here has had. It’s not. We were already there and had moved past into more complex arguments about whether or not the GOP could enforce their threat.

  71. 71
    Odie Hugh Manatee says:

    @chopper:

    I’m guessing that Boehner claiming that he got 98% of what he wanted and then our credit rating taking a hit afterward has pretty much put any ‘civil war on the left’ on hold…lol!

    You can bet that S&P was the big money side of the political spectrum weighing in with their disapproval. I’ll also bet that Boehner is regretting his statement about getting his way too…lol!

  72. 72
    Omnes Omnibus says:

    @Frankensteinbeck: You know that you are wasting your (virtual) breath, right?

  73. 73
    kay says:

    @Villago Delenda Est:

    And I’d qualify, to say they didn’t know it, then they knew it for short historical period, and now they don’t know it again.
    I think we tend to assume there’s some sort of accumulated historical knowledge, and there may not be, because we’re talking about different generations and (of course) different people. Maybe our assumption that they know they need a stable and functioning political and governmental system is based on our assumption that they’re aware that this system they enjoy didn’t always exist, and doesn’t have to continue to exist. There’s no guarantee it will continue to exist, actually. It was deliberately created, and it can be destroyed.
    They might not, actually, know that, as individuals. If they think the country began on the day of their birth (and some of them appear to) they could take the whole thing for granted.

  74. 74
    chopper says:

    @Odie Hugh Manatee:

    those dudes just couldn’t help but gloat, could they.

  75. 75
    Odie Hugh Manatee says:

    @chopper:

    In the case of Erickkk, Son of Erickkk, it was crowing. Loudly and proudly. Now he’s whining like the little bitch he is. He’s trying to spin the S&P story as their being upset at the Democrats for not giving in to deeper cuts.

    He knows that his ‘movement’ is in trouble. He knows it.

  76. 76
    cat48 says:

    John Harwood, cnbc/msnbc/NYT, says the GOP now owns part of this Economy b/c they knew what the results would be if they did not obtain a $4T Deficit deal with the prez. The SP Warning was issued on 07/14 & they still would not agree to Revenues to get to this total. He said they decided to go to the last minute with the debt ceiling. Of course, it happened on Obama’s watch, so he’s responsible too. Also2, the teaparty.

  77. 77
    Patty K says:

    Shouldn’t a credit rating agency be good at math? Yet the NYT reports that Standard & Poor delayed its announcement of the US downgrade after discovery of a serious mathematical error and conceded the error only after about an hour of discussion with Treasury. Hilarious! Math teachers everywhere should immediately downgrade S&P from an A to a D-.

  78. 78
    Villago Delenda Est says:

    @kay:

    they could take the whole thing for granted.

    That, right there, is the crux of the problem.

    None of this stuff around us burst forth from the head of Zeus. None of it.

    But all these assclowns treat it that way.

    Which is why I say they don’t understand cause and effect. Probably because it hurts their pea brains to attempt to do so.

    I helped to launch a small community ISP in Oregon 17 odd years ago, and for a long time I was the “institutional memory” of the operation. If someone new asked “why do we do this this way?”, they would look to me for an answer. Sometimes it was an improvisation to work around our chronic lack of lavish funding. It didn’t seem to make sense to many of our newer volunteers or hires until I explained to them why it was the way it was, and how it would be different if we could have thrown money at the problem.

    Unfortunately, some of our board members needed this sort of education on how the world of the early ISP actually worked. Fortunately, most of the leading members of the board had enough native intelligence and experience of their own in operating up-by-your-own-bootstraps organizations to appreciate all this.

  79. 79

    @Samara Morgan:
    In addition, you cannot claim this as justification for your model, because you never used your model to predict that the US would go into credit default because of Iraq. To try and reorganize your model to take credit afterwards is called ‘bad science’.

    Here are things your models have predicted:

    Continued Palestinian uprisings inspired by the ‘Arab Spring’ would gather universal support from other Middle Eastern countries and force Israel to surrender – hasn’t happened.

    Cyber attacks would increase, destroying the ability of industry and particularly the government to keep secrets, thus redefining society – hasn’t happened. The cyber crimes that keep happening like they always happened remain amusing anecdotes.

    The Arab Spring would sweep a wave of unity across the Muslim world, making them band together and kick the US out of everywhere – boy, that one really hasn’t happened. If anything the infighting has been the exact opposite.

    The US will be kicked out of Iraq and Afghanistan based on the inability of Islam to fold to Christian teachings. Here you’re closest, in the sense that *we were leaving already*, but religious tensions continue to not show themselves as a reason why. And unfortunately, if you think you can get credit for predicting something that was already happening, you really know nothing about modeling.

    Your models do not work, M-C. In fact, the reasoning you are using is exactly the same as David Brooks’. Think about that. Do you find that admirable in any way?

    @Omnes Omnibus:
    I know, but I’m testy this morning and I’ve raised too many children not to be irritated by the logical style of a 19 year old libertarian. It’s ironic that she has the same intellectual depth as the group she obsessively hates.

  80. 80
    Amir Khalid says:

    @Omnes Omnibus:
    I don’t know about that. People all over the world are looking at America now and thinking, “Here, thank God, we don’t elect angry toddlers to Parliament.” Whatever else happens, you’re stuck with your crew of Tea Party toddlers at least until January 2013. That’s plenty of time for them to do helluva damage.

    They’re taking George Walker Bush’s approach to the max: shut your eyes to fact, stop your ears to reason, do what you damn well please, blame the consequences on those who tried to stop you. They must seriously believe what they’re doing will win them reelection. Given the failings of American mainstream media, there is every reason to fear that they’re right.

  81. 81
    boss bitch says:

    John Kerry started in on the media right BEFORE the downgrade. Obama told the media in one of his press conferences to knock off the “both sides” garbage over the debt negotiations. They didn’t listen. Since this story broke, I’ve been seeing a lot of responses from Dems on twitter. The media isn’t listening. I don’t even see Dem responses on liberal blogs.

  82. 82
    Villago Delenda Est says:

    @Frankensteinbeck:

    One of M-C’s most cherished beliefs is that Islam is immune from proselytization.

    Which explains why the Saudi religious police have suppressing Christian proselytizing as one of their primary tasks.

  83. 83
    boss bitch says:

    @RossInDetroit:

    I wish the Pres would go full court press on jobs. Just repeat that over and over and over until it sinks through the MSMs

    He’s going on mid-west bus tour while the children (congress) are on vacation. I heard the media is already complaining.

  84. 84
    RossInDetroit says:

    @boss bitch:

    He’s going on mid-west bus tour while the children (congress) are on vacation. I heard the media is already complaining.

    Oh, poor babies. Gonna have to be on the ground, in flyover land no less. And it’ll be hot and there won’t be proper pampering for the media. If only they could stay home in their air conditioned ivory towers and phone the whole thing in instead of rubbing elbows with the rabble.

  85. 85
    Villago Delenda Est says:

    @boss bitch:

    Please see my nym.

    It’s what needs to happen.

  86. 86
    boss bitch says:

    @Villago Delenda Est:

    your what now?

  87. 87

    @boss bitch:
    The lack of liberal blogs reporting anything Obama or the Democratic leadership do does upset me. I believe it is A) proof that the media’s refusal to report anything but their equivalency horse race crap works, and B) abetted by deliberate ratfuckers who became trusted during the Bush administration when ‘I hate whoever’s in power’ meant you were right 80% of the time anyway.

    EDIT
    @boss bitch:
    I’m utterly rusty on my Latin, but I believe his pseudonym means (roughly) ‘The village should be destroyed’.

  88. 88
    Kane says:

    I have to assume that Moody’s and Fitch’s and whoever else sells useless ABA+/- ratings will eventually be falling in line behind S&P.

    Don’t count on the other ratings agencies following Standard & Poors. It appears that S&P was hell-bent on downgrading the country’s AAA bond rating even after it was pointed out that their initial calculations included a $2 trillion calculation error. Their downgrade seems to be based less on the actual numbers and more on the current political climate.

  89. 89
    RossInDetroit says:

    @Kane:

    Their downgrade seems to be based less on the actual numbers and more on the current political climate.

    This seems clear to me. It’s a pretty important milestone. Concrete evidence that Republican Dysfunction has real consequences. I wonder if anyone in the media will notice and say so or if they’ll fall back on the easy “both sides…” analysis.
    Yeah, the latter most certainly.

  90. 90
    boss bitch says:

    @Frankensteinbeck:

    oh okay. thanks.

  91. 91
    boss bitch says:

    @Villago Delenda Est:

    now that I know what you’re talking about, yes it does.

  92. 92
    Villago Delenda Est says:

    @Frankensteinbeck:

    Indeed.

    The nym is a play on “Carthago delenda est”, which legend has it was the phrase Cato the Elder used at the end of all his orations in the Roman Republic’s senate.

  93. 93
    Villago Delenda Est says:

    @RossInDetroit:

    Absolutely. S&P isn’t commenting on the numbers, it’s commenting on the idiocy of the teabaggers who now control, for all practical purposes, one of the two major political parties, and the disastrous consequences of that control.

  94. 94
    smintheus says:

    I don’t think S&P is taking potshots at Republicans so much as it’s trying to work the Dems. It demands further revenue hikes and/or entitlement cuts or it will lower rating again. That’s hostage taking, and we know which party lets itself be taken hostage. We also know that the GOP will not allow any tax hikes. So S&P is saying to Dems: Cut Medicare and Social Security of the Treasury gets it.

    http://flapola.blogspot.com/20.....urity.html

  95. 95
    Ol' Dirty DougJ says:

    I have finally found a way to live, in the presence of the Lord.

    I had to think to remember this one.

  96. 96
    Brad says:

    Now I finally understand why the Japanese government uses nothing but prepaid cellphones.

  97. 97
    wrb says:

    @Ol’ Dirty DougJ:

    Following the shadow of the skies

    Though this concrete blocks my view

  98. 98

    This isn’t about ‘hurting’ America- these credit rating agencies attempt to provide accurate analysis of risk to investors or something, and it doesn’t take a genius to figure out that the US is a bad investment when it’s policy seems to be spending money that it doesn’t have while promising to spend more that it doesn’t have in the future and also plunder anyone with any wealth.

    Let’s just time-travel back to the awful Bush years and cut spending by a trillion and ramp down the debts to the 300-500 billion range and be done with it already.

  99. 99
    d. john says:

    *stuck* with a prepaid cellphone?
    2001 called. They want their analogy back.
    Unlimited text,
    Unlimited minutes
    Unlimited internet
    $35/mo (maybe local sales tax)

    no commitment.

    if you are still on a “plan” you are dumb.

  100. 100
    bob h says:

    I’m guessing that they will wait until the new super legislature for deficit reduction falls apart amid squabbling and recrimination.

  101. 101
    Jake Ward says:

    This is all the consequence of us being taken advantage of by the central banking system. It’s designed to keep us in debt. If we keep printing money to solve our problems we will end up making our monitary system worthless. rapid rescore credit

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