Tuesday, August 09, 2011

Standard & Poors or Dumb & Dumber?

Should the name be Standard & Poors or Dumb & Dumber? Here's a very good analysis in The Nation.

And another by Joe Nocera in the New York Times.

The Times is also reporting that the S.E.C. has downgraded S&P back for their own failings. Why didn't the S.E.C. downgrade the credit raters credibility earlier?

Remember, S&P and Moody's and Fitch were the ones who rated Enron AAA and did the same for the fraudulent toxic securities Wall Street dumped on customers prior to the 2008 collapse. The credit rating agencies caused the collapse by selling their ratings rather than making corporations earn them. And who had to clean up the mess? Taxpayers. It's S&P's mistakes that have ballooned our national debt. As I said the other day, blaming Obama for this is like blaming the surgeon for the cancer you wanted removed.

The real causes get lost in the noise as mommy and daddy argue. The problems we have aren't obscure or hard to understand, just hard to hear anyone talk about on television, unless you count Jon Stewart who may be the best explainer around. Maybe it's because he's allowed to use obscenities. We need them to describe what is going on.

Then there's the dull, boring but pithy and usually dead-on correct Brookings Institution.

But these causes are just political. The real cause of America's thirty year decline has been Reaganomics. Ronald Reagan (who was officially declared a god several years ago) established the rule that people who work should be paid less and pay more in taxes, and that people who own and don't work at all or work very little should reap the big rewards and pay taxes at a lower rate.

This dynamic took a robust economy and made it fragile, nervous, unstable and underfed. What feeds an economy? Incomes from honest work. Who has thrived most in Reagan's economy? The predators, the parasites, the "creative destroyers", the manipulators, the people who shuffle money rather than making products or delivering services. Reaganomics has hollowed out the America we grew up in, moving the wealth and the productivity offshore to low-wage havens and their private islands. Maybe Americans are finally waking up to this. I hope so.

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