Who is Standard & Poor's anyway?

[Originally posted on Marx's Theory of Revolutions on April 23, 2011]

Who is Standard & Poor's anyway?

Or maybe “Whose are they?”

And what a funny spokesman to make the announcement downgrading the U.S. sovereign debt – not good-looking, well-dressed, nor showing much composure on the national stage. He looked as if he really didn’t know he was holding a dagger ready to be plunged into the Backs of the President and the Democratic Party. Or maybe he did and it scared him. Not a man with a historical mission.

What’s the point of this? Why now? It looks like nothing so much as an imposition on the affairs of the nation totally out of proportion with the real importance of an organization which, however reputable, should not be attempting to influence or decide such natters. And how does this serve investors?...which is what I suppose they thought they were doing.

Next it seems the company (the Milwaukee company I work for) is among a number of innocent bystander insurers injured by this ill-conceived attack. We say S&P at the same time changed our outlook from stable to negative because our “business operations and investment assets are largely concentrated in this country” but that is disingenuous at best. Fact is, we own a whole lot of the downgraded U.S. sovereign debt.

Speaking of debt owners: there is China, which owns a whole lot more than the company does. This little organization of pinheads and beancounters has managed to shake the foundations of China’s foreign and economic policy. At least it got her attention.

The fact that S&P is not supposed to have such a gigantic impact, but is merely in the position of being able to do so, suggests that they are paid to do it, doesn’t it? As I say, who owns them, anyway? It certainly has the appearance of wrongdoing, doesn’t it?

I suppose they are professionals first and citizens last. God forbid their “outlook” becomes a self-fulfilling prophecy. Ultimately the action is rash as well as disproportionate, and I hope the pinheads in the other ratings agencies don’t repeat it.

There’s more to be said about how this action overreaches the role of a ratings agency in society and the economy. Are they saying that the “outlook” is, that Congress and the President will not be able to agree on measures to secure the payment of the debt? This is to express a mere opinion on a matter of politics – clearly out-of-scope for them, and equally clearly above their pay grade. Or is there some “objective” measure of a nation’s ability to pay its obligations that the United States has run afoul of? But then who’s to say how these measures or standards apply – in the way they might apply to Greece, Portugal, or Ireland – to the world’s largest economy? There’s no precedent here; objectivity gets swallowed up by speculation.

On either account, and really in spite of whatever reasons they may have had for it, this new outlook puts a potent weapon into the hands of irresponsible people – not just the Tea Party Republications, but the big bourgeoisie who fund their fear and ignorance. A warning could instead have been issued to both sides; it’s certainly valid to say that if they fail to reach compromise, the outlook will become negative. It’s not S&P’s job to influence politics in this way.

Moreover, it’s just barely possible that this announcement has shifted the balance of the debate ever so slightly in favor of those who spend so much of their money teaching impressionable people what to believe and how to vote. What’s good for the big bourgeoisie is not necessarily good for the democracy.