S & P: They Set the Standard & We Get Poor

They set the standard & we get poor.

That's the takeaway from the recent Standard & Poor's downgrading of America's credit rating.

After all, despite the ongoing collapse of the Wall Street/global corporation trickle-down theory, we are facing a job crisis which almost every well-known player in DC - except Jeremiahs and Cassandras such as Bernie Sanders and Nancy Pelosi - virtually ignores. Even the White House gives only lip service to job creation, while accepting the basic frame of the Republican obsession with debt reduction.

How extreme a threat are we facing to the continued coring out of our economy except for paper financial wealth and the expansion of global companies overseas? Well, Eric Cantor - the majority leader and the most prominent Tea Party voice in Congress - is opposed to extending federal unemployment insurance because it would be "pumping up" the unemployed. That is his position despite the collapse of a demand economy in the US - and the fact that each dollar paid out in employment "generates two dollars of economic growth."

Yes, there are all sorts of things wrong with this first-time-ever downgrading of the US's ability to repay debts. Firstly, as financial analyst Naomi Prins bluntly points out, "S&P's downgrade carries a large dose of irony, since the extra debt the U.S. has piled on recently came courtesy of S&P's moronic toxic asset ratings."

All the major credit rating companies - and that includes Standard & Poor's - according to the movie "Inside Edition," were complicit in allowing Wall Street to sink the American economy by overvaluing the economic stability of banks "too big to fail."

And then there's the interesting twist that the credit rating decrease was done in part because Congress (i.e. the Republicans) wouldn't agree to additional revenues. As Thom Hartmann asks on Truthout,

Have you seen, anywhere, in any media, or even heard reported or repeated on NPR, the following sentence? "We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act."

It's right there on Page 4 of the official Standard & Poors "Research Update" - the actual report on what they did and why - published on August 5th as the explanation for why they believe Congress - and even the Gang of Twelve - will be unable to actually deal with the US debt crisis.

Ironically, and to the detriment of the nation's fiscal well-being, Standard & Poor's was curiously low-key about warnings when Congress extended Bush's tax cuts for the rich. And it misled investors by giving solid ratings to corporate economic bombs like Enron.

The one thing that the Standard & Poor's downgrade does indicate is that the US economy is in a heap of trouble, which Standard & Poor's and other major analysts helped create.

And what is slip-sliding away beneath the political positioning in DC on the deficit - and the downgrading itself - is that no economy can be strong without an economic engine that creates an infrastructure of jobs for its citizens.

Without consumers able to purchase goods and services, the nation is left with just a shell of an economy - and a small class of citizens who profit off of the nation's economic decline. Standard and Poor's is among that list.

Meanwhile, financial rating agencies set the rating standards for "creditworthiness," and the rest of us get poor.

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