Don’t Shoot the Downgrade Messenger
When companies like AT&T and Caterpillar reported that the ObamaCare law would cost them hundreds of millions of dollars, Commerce Secretary Gary Locke called them “irresponsible.” Congressman Henry Waxman (D-CA) threatened to haul the CEOs into hearings to defend their statements. (Waxman later cancelled those hearings when it was pointed to him that the companies were required by law to report to the SEC their best estimates of ObamaCare’s effect on their financial bottom lines.)
It could be worse for S&P. Some liberals want to do more than merely launch a congressional investigation. Leftist filmmaker Michael Moore recently urged President Obama to “show some guts & arrest the CEO of Standard & Poors.”
It is true that S&P (as well as the other two major credit rating agencies Moody’s and Fitch) can be rightly criticized for failing to downgrade various risky mortgage-backed securities a few years ago — thus contributing to the disastrous housing bubble. But note that critics of S&P are now trying to have it both ways. They’re criticizing S&P for downgrading the federal government too quickly, rather than too slowly.
The threat of government action might stop Fitch and Moody’s from following suit with their own downgrades — at least for now. Moody’s has already reaffirmed its current AAA rating, whereas Fitch stated they are still performing their review and “haven’t formally reaffirmed“ their AAA rating.
Our government can attempt to “shoot the messenger” all it wants. But its current policy of spending more money than it has will eventually catch up with us all. The only question is when. The Chinese government — which can’t be intimidated by threats from Congress or Michael Moore — has called the downgrade an “overdue bill.”
Ayn Rand once said that we could evade reality, but we couldn’t evade the consequences of evading reality. Unless we change our ways, America will soon learn what those consequences will be.
We are destroying your currency and economy. We are setting the stages for a New World Order and One World Government. The nation-state no longer exists. Patriotism and nationalism is dead. There will some pain for some people. Adjustments will have to be made. It will require a whole new mindset. Don’t think of yourself as an American citizen. Think of yourself as a global citizen, a citizen of the world. We are entering a new era in the history of mankind. Those who refuse to join us will cause themselves unnecessary pain and suffering. A New World Order and One World Government is inevitable, just a matter of time. Those who resist will end up in the dustbin of history. I hope none of you are foolish enough to attempt to resist. Resistance is futile.
Under the guise of free trade we are destroying your manufacturing base, your economy, your currency, and ultimately your sovereignty. Under the guise of all these free trade deals we are erasing your borders, your national identity, your loyalty, we are outsourcing all your manufacturing jobs and destroying the middle class. Your economy is based on nothing. You produce no real wealth. Your economy is a deck of cards which we will collapse when the time is right. We control both political parties. You are peons. You have no power. We control the media, the financial institutions, Wall Street, the corporations, the entertainment industry etc. You are so Balkanized and divided, you will never be able to stand up to us.
The world is changing. Very soon an independent “America” will cease to exist. Get it through your heads. The nation-state is dead. Borders are obsolete. Nationalism is dead. You are not am American citizen. You are a global citizen, a citizen of the world. There is no American economy. There is a global economy. Your system of government is obsolete, irrelevant and inefficient. It will be replaced. Initially, there will be some pain for some people/countries. They will have to adjust to the new way things are done. But long-term things will be much better, much smoother, much more efficient. The world faces many problems, and the only solution is a New World Order and One World Government. We are entering a new period of human history. Those who are stubborn and refuse to join us will cause themselves unnecessary pain and suffering. A New World Order and One World Government is inevitable, just a matter of time. Those who resist will end up in the dustbin of history. I hope none of you are foolish enough to attempt to resist. Resistance is futile.
Another visit from ‘THE BORG’ eh?
How about screening this boneheaded troll out?
Is that you George Soros?
Would you shut the f*ck up already, you stupid asshole? You’re not even funny by accident. And, when AMERICA is destroyed, THE WORLD is destroyed, you f*cking dolt. REMEMBER THAT.
*)((&UJOOJOEUOTEU(IOJGOIJDUI*^7890-!!!!!!!! <–yes, I'm angry!
It is a done deal. We have destroyed America. Soon we will have a New World Order and One World Government — with us in control. It will be impossible for you to fight back. You are so Balkanized and divided, you will never be able to stand up to us. You are on the wrong side of history. You will end up in the dustbin of history. Resistance is futile. It’s a done deal. If you’re gonna get raped, you may as well enjoy it…
All thugs! Does it remind you of Hitler’s Germany? Or Stalin’s Russia? Poor USA under Obama!
They also shut down drilling in the Gulf Coast and probed the resulting rise in gasoline prices.
The wonder is not that Congressional approval ratings are low, it is that the citizenry has not risen up and removed them all.
… or attacking scientists for showing that AGW is real and serious.
Both practices being harmful … short-sighted … and futile.
The physician’s response to climate change
URL: http://www.ncbi.nlm.nih.gov/pubmed/19418286
Just lie down on the cough there and tell us, do you see these persecutors often?
Oh please – Give it a rest will you? We all know that you love global warming but the financial crisis just kicked down the door and has entered the room. If the U.S. economy tanks then it will be as much of a disaster for the eco-totalitarians as it will the rest of us. Those who will benefit from our collapse, such as China, don’t exactly have “enviromental justice” at the top of their agenda.
The western nations are the only ones who take AGW seriously (wong-headedly in my view) and if we go under then Captain Planet goes with us.
T. T. Thomas, you need to be reminded what percentage of China’s ruling politburo are degreed engineers.
That percentage is 100 percent.
All fourteen Central Committee members are engineers.
———————————
China Sets Solar Power Price to Boost Profits, Investment
URL: http://www.bloomberg.com/news/2011-08-01/chinese-government-sets-nationwide-solar-photovoltaic-power-on-grid-prices.html
And this is supposed to reassure us how exactly? The strength of China isn’t in the fourteen engineers in the Politburo but in the hundreds of millions of peasants out in the hinterlands who do what they’re told and receive pennies a day. The engineers are successful because their work force costs practically nothing.
Buddy you must hold freedom to be pretty cheap if you are willing to sell it out in favor of a facist state just because it’s leadership collectively has an engineering credential. That’s pretty sad.
It’s not supposed to reassure you. The point is that replacing far-left technological ignorance with far-right technological ignorance is unlikely to improve America’s economic fortunes. As Richard Feynman famously said “Mother Nature cannot be fooled” … and very often, her messages are ideologically inconvenient.
EXCUSE ME!!! I think you forgot to turn left at Albuquerque…. intending to respond to somebody else!
I suggest everyone call members of the banking committee, especially if one of your senators is on the committee. Also call the ranking Republican, Sen. Shelby, Alabama. I’ve called Sens. Toomey, Demint and Shelby. This is nothing more than a communist soviet show trial designed to intimidate. It has nothing to do with discovery. Our leaders take us over the cliff and then kill the reporter who tells the truth. What a sad situation.
What the hell did anyone expect? The standard “progressive” response to bad news (bad for progressives that is) is to shoot the messenger. Remember how Ken Starr went from being some anonymous lawyer to a sexually-repressed, mentally-ill weirdo almost overnight? I don’t know whether S&P is accurate or fair or has their math straight. They are at least in the ballpark and it is better that we here the bad news sooner rather than later. I have lost a lot (for me) since last Friday but I would rather have the crisis now when we still have some resources to fight it rather than later when we may crumple like a styrofoam cup.
Another nicely reasoned piece, Dr. Hsieh.
Keep the logic and level-headed analyses coming. It’s needed now more than ever in these incendiary times.
A piece worth reading….EXCELLENT!!!!
The country has been overrun with politcal zealots on both sides thus, the nation crumbles and problem solving foreign.
TT, you are doing here exactly what the article says, shooting the messenger. The zealots on the Left have been driving the bus for a long time, with the acquiescence of the compliant middle. Now we can on the Right see the cliff in the near distance and are yelling, “Stop!”. In response, you label us as “zealots”.
You view us as equivalent to the zealots of the Left. The person stubbornly driving us towards a cliff may be properly called zealous. The person seeing the danger and reacting appropriately is not zealous, but alarmed. The former is foolish. The latter is wise. They are not equivalent at all.
Your view is that the compliant middle should instead be allowed to drive, neverminding that they will continue to drive towards the same cliff, albeit at a slower, less reckless pace. Yes, that compromise will work just fine. Who knows? Maybe they will finally see the cliff at the last moment and be able to stop in time.
Surely, some in the “middle” are seeing it, and their voices are joining those of us yelling, “Stop!” We only seem zealous to you, because you just really do not yet truly apprehend the danger. The failing is not in us, but in you. “There are none so blind as those who will not see.”
So, you shoot the messenger. You call us zealots.
Marc…excellent and well prepared piece of diversion. Now lets get past the ‘political’ rhetoric.
TeaParty-GOP on the three and half year crumbling economy and jobs.
Analysis: Taxes to high!
Analysis: Too many government regulations.
This was their analytical messaging in 2010 up to the point a few months ago when they diverted the national debate away from the economy and jobs, to government deficit spend and debt. Then the rhetoric was; “the spending and debts hangs over our economy.”
Resolve for to high taxes: They can’t give anybody a straight up answer.
Resolve for regulations: They can’t give anybody a stright up answer.
If the taxes are to high then surely they must have a definitive answer on what the perfect tax ratee or resolve should be. Obviously not!
If they say theres excessive regulations tanking the economy then surely they have the precise regulations figured out. Obvously not!
Now lets move to deficit spending and debt.
Analysis: To much government spending.
Analysis: To much government debt.
Analysis: Big three entitlements to costly.
So whats their grand resolve?
Resolve: Cut, Cap, balance.
If you suggest/demand ‘cutting’ government spending then surely you must know precisely where and how much. Obviously not..until some magic point after the 2012 elections.
If you suggest/demand ‘capping’ the national debt you move into the realm of government and fiscal ignorance… or corrupted deception….or willing to sacrifice large segements of the population. The governments fiscal machine is locked into a circular catch-22.
If you suggest/demand ‘balancing’ the governments FY books you’re being most disingenuous. All the government can in this regard is ‘shift’ direct or consequential liabilities to someplace else.
With every act comes consequences! Thus far, the ‘political’ rhetoric of the TeaParty-GOP indicates one of two things. 1) Disingenuous. 2) Can’t think and reason beyond their eye brows.
Since January 2011 check out the economy and jobs data. Since January 2011, check out the increase in the national debt. Since January 2011, check out the total dysfunction of the congress. Since January 2011 who took over the national debate and diverted it away from the economy and jobs.
Politically, who stands to ‘gain’ from a continuing economy in the tank and continuing high and unemployment? Democrats or the TeaParty-GOP?
This is the most do nothing congress governing on behalf the nation since 1947 or 1948. Name the last legislative ‘form’ bill to come out of the House or Senate since January 2011.
I submit to you that, if the Teaparty folks came to the congress with viable solutions for the economy and jobs, the Democrats would be running you over to get them and leverage it into a second term for Obama. On the other hand, if the Tea Party came to congress with ‘comprehensive solutions’ for the economy and jobs, that a majority of the people could see as viable, the Tea party would be selling it 24/7 across the lands to achieve leverage for the 2012 election. However, neither is the case is it?
So, I stand on my comments! The government is being controlled by zealots of the most extreme components of the two parties. The two extremes, the socialist progressives of the Democrats and the Christian Coailition-TeaParty and the Libertarian/Anarchists of the GOP. Neither are about fixing problems! Both sides extremes are in an ideological turf war for the 2012 elections.
If the Tea Party wants or demands to govern on behalf of the nation as a King, then, may I suggest……… If not, then grow up and govern on behalf of the nation within the constitutional and congressional process! Governing taxes for example, by signing a contract/promise with a very small special interest group thats not elected by the people, is unconstitutional and should be deemed criminal, I don’t care what the party.
Once again we see the messenger being shot. If you don’t like what he has to say at least find the source of your consternation – which in this case YOU EFFING IDIOTS happens to be OVERSPENDING! —- OH! Right! You can’t talk about that – can you. So the Democrats all come out after getting the game-plan talking points on their iphones or whatever and parrot the party line and start shooting – at the Tea Party – S&P – and anyone else not on the side of progressive spending sprees.
Such a typical reaction from these morons since they are out of bullets for the argument.
Well, if I had a doctor that missed my Enron malady and my toxic mortgage backed security disease he or she would have no credibility with me. In fact, I’d sue for malpractice ( seen that happening lately? Anywhere, on too big to fail Wall Street? Surely there are enough lawyers?) I say default and get it over with. You really think all those creditors, the banks, the Chinese, Wall Street, are disinterested babes in the woods? They knew what they were doing. The Chinese front 2 trillion dollars to the Americans so the Americans, Nike and Apple, can off shore jobs to the Chinese so the Chinese can have a full employment economy. Look at your significant other deep in the eyes, or even your neighbor, and ask the question: are you really going to pay down that 14 trillion dollars in debt, climbing by 7 more trillion dollars in ten years, in our lifetime? Yes? With a structural 15 percent unemployment rate in America so the Chinese can build bullet trains that crash and keep a full employment economy? And what exactly have you been smoking? Hell yeah, “shoot the messenger”,’ cause the messenger was in bed with the financial elites creating the fantasy that you can be the reserve currency for the world without running current account deficits. And the left have the fantasy that they can enjoy the benefits of a reserve currency country without fronting the money to be the world’s policeman. The far right and the far left want the impossible, the goodies of empire but without its dark, stark, conditions. And the European elite think the American knuckle draggers will continue to front the money and troops to defend the French and Germans from there own home grown peculiar ethnic conflicts, that have raged all through modern history, with only an OK from the United Nations and the Arab League. I don’t think so. Even the Greeks, the people who gave doctors the Hippocratic oath, aren’t going to pay the Germans and default instead.
The President, Secretary of the Treasury and leftists who want to argue with S&P’s about their numbers are akin to Gen. Custer arguing with his Scouts on the number of Sioux just over the next hill.
By the way, the argument over the $2 Trillion “error” is intentionally being misrepresented. S&P used the original debt assumption of $22.1 trillion instead of the modified (based upon GDP growth assumptions) of $20.1 trillion.
Understand this; one is 93% of 2021 GDP, the other is ONLY 85% of 2021 GDP.
Does anyone believe a growth assumptions of 3% to 5%? Most honest brokers are using near-term GDP growth rates of 2% or less.
The administration and media aren’t being honest.
Regardless of which is nearest the actual projection is not really important. The important point is that neither is sustainable.
Thanks again, Paul, for an excellent, well thought out article.
Interestingly enough, Egan-Jones (a rating firm less beholden to government regulators) downgraded U.S. debt three weeks before without such a negative reaction (http://online.wsj.com/article/SB10001424053111904480904576498493884494956.html). Perhaps government bullies are irritated that their toadies aren’t toeing the line.
It says a lot about Congress that they’d rather investigate the S&P for doing it jobs rather than confront our growing debt problems. Shame on them.
http://www.intellectualtakeout.org/library/articles-commentary-blog/national-debt-faq
FWIW:
The WH and its gang of enablers accused S&P of a $2 trillion dollar debt projection error (over 10 years) in the recent past.
That is a lie. The ones who made that error in August of 2009 was the White House itself. The CBO called the WH on it, and the WH owned up to the error. S&P’s actual “error” was no error at all: they simply used a different projection method covering 3-to-5 years, which they felt was more in line with what could realistically be estimated. So they came up with a different figure because of a much shorter projection period — hence, a smaller dollar amount. This has been “reinterpreted” as an “error” by Obama and gang This White House and the Democratic Party are the most mendacious bunch of politicians in living memory.
“Ayn Rand once said that we could evade reality, but we couldn’t evade the consequences of evading reality.” The left disagrees. They believe that since people and reality are infinitely malleable, the solution to evading the consequences of evading reality is to squeeze harder. That is, enslave people more and demand people fake reality harder. Every bully knows this.