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.