April 20, 2011

WHITE HOUSE JAWBONE FAIL: WaPo: Obama administration officials tried to keep S&P rating at ‘stable’. But they were unable to hide the decline.

Reader Paul Jackson emails: “I wish the WaPo had been a tad more informative about this private urging that came from the Obama administration. I’m wondering if other administrations have tried this in the past, but we don’t know since the WaPo didn’t tell us. My cynical guess is that if say the Reagan or Bush41 or Bush43 admins had done the same thing, they would have pointed this out. These guys really do think they can run the country like a ward in Chicago….amazing. I now expect that Obama will start hurling negatives at them, as that’s SOP in his playbook that has become far too predictable for a man who thinks so highly of himself and his intelligence.” I don’t think prior administrations have tried this, because to my knowledge no prior administration has had to deal with a decline in the U.S. credit rating, perhaps because no prior administration has been so unrelentingly profligate.

UPDATE: A Wall Street reader notes that there’s a history of this kind of thing: “As Enron was imploding in late 2001, ex-Clinton Treasury Secretary Bob Rubin tried to get the Bush Administration to lean on the ratings agencies.”

Former Clinton Treasury secretary Robert E. Rubin telephoned a top Treasury official last fall to explore whether the Bush administration could intervene on behalf of Enron Corp. as the giant energy company neared collapse, officials said yesterday.

Rubin, chairman of the executive committee at Citigroup, one of Enron’s main creditors, called Peter Fisher, Treasury undersecretary for domestic finance, and asked “what he thought of the idea” of calling bond-rating agencies to help forestall a crippling reduction in Enron’s credit rating, according to a statement released by the Treasury Department.

Fisher told Rubin that he didn’t think it was advisable, and did not make a call, Treasury said.

The news of Rubin’s efforts concluded another day of disclosures at the Treasury Department, on Capitol Hill and elsewhere about the extent of government contact with Enron executives in the weeks before the company’s filing for bankruptcy court protection.

It’s all about controlling the narrative, I guess.

Comments are closed.
InstaPundit is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.