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Roger’s Rules

by Roger Kimball

How Do You Spell ‘Retaliation’?

February 5th, 2013 - 5:23 am

I have been thinking about the Roman orator and statesman Marcus Tullius Cicero lately. Like many people of my generation, my first recollection when hearing the name “Cicero” is of interminable Latin sentences where the critical word is parked like a caboose about thirty words later than you would have expected it, and in a gerundive construction suggesting causation or obligation. Or was it a double dative? In any event, in school Cicero was someone to be deciphered rather than understood. He didn’t like Catiline, whoever that was, but what has that to do with the market in ablative absolutes?

Now that I look back to Cicero’s life and work, however, few figures from any age seem as searingly pertinent to our own social and political life.

There is a reason Cicero’s work made such a profound impression on the American Founders. John Adams, reacting to a biography of Cicero, cut to the chase: “I seem to read the history of all ages and nations in every page — and especially the history of our own country for forty years past. Change the names and every anecdote will be applicable to us.”

Consider this passage from Cicero’s On Duties:

 Whoever governs a country must first see to it that citizens keep what belongs to them and that the state does not take from individuals what is rightfully theirs. … As for those politicians who pretend they are friends of the common people and try to pass laws redistributing property and drive people out of their homes or champion legislation forgiving loans, I say they are undermining the very foundations of our state. They are destroying social harmony, which cannot exist when you take away money from some to give it to others. They are also destroying fairness, which vanishes when people cannot keep what rightfully belongs to them. For as I have said, it is the proper role of government to guard the right of citizens to control their own property.

It’s hard to believe that was written circa 44 BC, not the day before yesterday.

I intend to come back to Cicero at greater length on another occasion. For now, I simply want to wave the Ciceronian flag a little and suggest that his magnificent attacks on corruption and the abuse of state power have many lessons for Americans at the dawn of the twenty-first century.

Consider the news, which was reported just yesterday by the Wall Street Journal, that the Justice Department is suing the rating company Standard & Poor’s “in retaliation for the S&P’s temerity in downgrading U.S. sovereign debt for the first time in history in 2011.”

Oops! That was the unexpurgated version. The announced reason the Department of Justice is going after the company is because “the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions.”

What do you think? Companies like S&P and Moody’s look at a variety of factors to try to determine the creditworthiness of a company or a country. Their assessments are festooned with warnings and cautions, just like those “past performance is no guarantee of future returns” slogans you see pasted at the bottom of every mutual fund you’ve ever plunked a dime into.  Investors certainly did “lose billions” in the financial crisis. But whose fault was that?

The hyenas, in the shape of various states’ attorneys general and other entities unhappy about the fact that they lost money investing in some of the most exotic and risky financial instruments ever devised by the mind of man, are gathering around the tasty carcass of these companies. But no one forced anyone into making these investments. Credit ratings are not predictions, they’re educated guesses about the future based on the past. Often — usually, in fact — the future looks a lot like the past. Sometimes it doesn’t.

Partly, I think, the move against S&P (the other rating agencies are also in the government’s crosshairs) is a an example of the time-honored practice of scapegoating. People are looking for someone to blame and the rating agencies seem like low-hanging fruit: “Hey, they told me this might be a great (though risky) investment, and I lost money! Whom can I blame?”

But I suspect this is not only about scapegoating. I suspect it is also about retaliation. We are living with the most fiscally incontinent administration in U.S. history, perhaps in world history. Both S&P and Moody’s took note of this incontinence and broadcast the news by downgrading U.S. debt in 2011. The result? A $1 billion lawsuit against S&P. Merely post hoc? Or do you discern a teensy bit of propter hoc there as well? I do.

Meanwhile, if you are really interested in who and what caused the financial meltdown of 2008, I have some reflections here.

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