Shooting the, uh . . . Messenger
“Who elected the credit rating agencies?” is certainly a popular refrain on (some) Op-Ed pages lately.
The sentiment is that the credit rating agencies are unfairly holding a dagger to the U.S. financial system — threatening to downgrade U.S. debt unless it demonstrably gets its house in order.
The problem for the credit rating agencies is that they very much held their tongue as trillions of odious securitized mortgages got “distributed” (Goldman Sachs’ term for it) across the global financial system in the years leading up to The Crash of ’08.
And why did the credit rating agencies do that?
Because Wall Street paid its fees.
And what happened to the credit rating agencies as a consequence?
Nothing.
How ironic, then, if what should ultimately do in the rating agencies is the blowback they may face if/when they take the financially correct — but politically harrowing — step of downgrading U.S. debt.
P.S.: The cynical solution to avoiding a U.S. debt downgrade?
Bribe — or intimidate — the credit rating agencies.
It worked before.
