Real Americans do cry in their beer

Charles Johnson of Little Green Footballs chides Tea Party leaders for whining:

What I don’t get: Tea Party leaders wished out loud for the US to default on its debt payments, so why are they whining now when people blame them for the S&P downgrade?

I mean, they didn’t get everything they wanted; they didn’t get to cause a full-fledged economic disaster. But they did manage to force the first US credit downgrade in history, and that’s not too shabby. Maybe next time the apocalypse.

Forbes and Summers dismiss S&P’s recent credit grade

As reported by Politico (h/t Glenn Greenwald). First, Steve Forbes

…called the S&P’s downgrade of the United States Friday night from AAA to a AA+ an “outrageous” move. He argued that the downgrade wasn’t necessary since the government would be able to pay the interest and principal on bonds.

“I’m surprised Standard & Poor’s would play politics,” Forbes said Sunday on CNN’s “State of the Union.”

Larry Summers

…echoed Forbes’s thoughts and said the United States would be able to pay its debts. He noted that mega-investor Warren Buffett encouraged buying U.S. bonds.

“Look, Standard & Poor’s track record has been terrible, and its arithmetic is worse,” Summers said. “So there’s nothing good to say about what they’ve done.”

Quote of the day

Nate Silver tweeted:

Don’t know why we treat S&P and Moody’s like a 4th branch of government when they’re the Wall Street equivalent of the LA Clippers.

S&P's/Moody's smell after a day or two

That’s a pretty nice country ya got there…

I wouldn’t want anything bad ta happen to it, something like:

Standard & Poor’s Ratings Services said today that it affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the U.S. Standard & Poor’s also said that it revised its outlook on the long-term rating of the U.S. sovereign to negative from stable.

What does this mean? Well:

The surprise move [by standard and Poor’s] sent US and European shares lower. The S&P 500 fell the most in a month, and the US dollar dropped against the euro and Swiss franc. Oil was also sharply lower.

In Europe, the main UK, German and French indexes all fell by at least 2%.

Also:

The reaction to S&P’s warning of a debt downgrade has been as predictable as it was swift. Paul Ryan responded that the debt “threatens not only the livelihoods of future generations, but also the economic security of American families today.” Eric Cantor described the S&P action as “a wake-up call.” House Majority Whip Kevin McCarthy, another “Young Gun,” said pretty much the same thing.

But:

At least one economist burst out laughing on hearing about the S&P announcement. “They did what?” exclaimed James Galbraith, a professor of economics at the University of Texas in Austin, who formerly served as executive director of the Congressional Joint Economic Committee. “This is remarkable! It certainly will confirm the suspicions of those who have questioned S&P’s competence after its performance on the mortgage debacle.”

Lindorff continues by asking:

So what’s going on here?

There would seem to be only two possibilities:

Either S&P has been pressured by powerful Republicans and/or Wall Street Bankers to issue this warning, in order to add to national hysteria about the national debt and win more drastic cuts in social programs, or S&P is simply blowing it again.

I disagree with Lindorff in one respect and would say instead that there are at least three possibilities at work here. One, Standard and Poor’s is a viciously corrupt organization. Two, Standard and Poor’s is a massively incompetent organization. Or, three, Standard and Poor’s is both viciously corrupt and massively incompetent. Door Number Three seems to me to be the best option of the three! If, then, Wall Street wants to use extortion to attack the remnants of the New Deal, if it wants to add a bit of gravitas to America’s deficit hysteria, it would be served much better if it used the right tool for the job. S&P lacks the credibility needed to make this threat work.