Rating Agency Executives Should Work From Alcatraz

(Fred Weinberg/The Penny Press) – Listening to the chattering class bloviate about raising the national debt limit, you’d almost forget a few things.

I heard our very own Secretary of the Treasury tell CBS’ Bob Scheiffer that unless Congress raised the debt limit, the credit rating agencies would downgrade the United States of America’s debt and all hell would break loose.

I almost drove off the road (I was listening to C-Span Radio on the satellite receiver) I was laughing so hard.

I was laughing because it’s better to laugh than cry.

You would almost forget that those so-called “ratings agencies”—led by Moody’s—were the same clowns who rated the big banks’ mortgage bonds AAA.

The same bonds which contained so much junk—if you believed our Treasury Secretary when he was the President of the New York Federal Reserve Bank—that damaged our financial system so thoroughly that it needed to be bailed out by the Federal Government. Which is part of the reason that today, 40 cents of every dollar the feds spend is borrowed.

You might forget that these are the people who told us that the Bank ofAmerica was making good mortgages—the same mortgages they just had to pay investors $8.5 billion (with a B) to buy back because they were so bad that even the Bank of America, which can justify almost anything, couldn’t defend them.

But those “ratings agencies” are the people who will downgrade the U.S. debt?

Moody’s is going to “downgrade” the nation’s debt?

And we’re supposed to be scared of these incompetent clowns.

Frankly, they’re lucky they are not in prison.

Here’s an idea from rural Nevada.

How about we actually threaten to default on our debt?

Why not call the President’s bluff?

There’s an old saying that if you owe the bank $10,000, you have a problem.

If you owe the bank a million dollars, the bank has a problem.

Adjusted for inflation, here’s the scenario:

What do you think would actually happen if we toldChina and Saudi Arabia we wouldn’t pay them 100 cents on the dollar?

Many economists will privately tell you that the correct answer is nothing.

Yes, we have a trade deficit with both nations.

But if they stop selling to us, they won’t have anything to loan us any more. Think of those nations as a great big Wal-Mart Supercenter with no customers. Or, in the Saudis’ case, a huge truck stop with no trucks.

We may not be in that bad a position.

I’m not a conspiracy theorist. But years ago, when the late President Dwight Eisenhower left office warning us of a military-industrial complex, he never mentioned the financial firms which powered the military industrial complex.

How much does the financial sector have invested in keeping the United States in debt?

That’s a question which almost nobody but “nutcases” ask—you know, all of those people who ask all those inconvenient questions about the Federal Reserve.

Remember that the Federal Reserve is all about borrowing.

When a nation’s claim to fame is that it is the most reliable borrower in the world, what does that say about its place in the world?

A big part of our problem is that we keep electing people who give the job of negotiating trade and other financial deals to people who couldn’t negotiate a pawn loan inDetroit.

The truth is that we probably don’t have an economic problem in Washington as much as a competence problem.

Barack Obama is a naïf.

His peeps are almost uniformly incompetent.

They’re driven by ideology and the special interests which want things from the government can play them like Steve Martin plays the banjo.

Remember, special interests never worry about your best interest—only theirs. If your interest happens to coincide with theirs, fine. If not, it’s their way or the highway.

Hence Barack Obama tells CBS that he “can’t guarantee” Social Security checks on August 3 if Congress doesn’t cave in by August 2.

Does he care about your Social Security check? Only as a political tool.

Will you get your check if there is no deal on August 2?

If Obama wants to be re-elected you will.

These people are all as phony as a three-dollar bill would be if this government ever decided to print them.