Fourth branch, Third World

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I think that Ezra Klein of the Washington Post, like the few other reports I've seen about the Standard and Poors threat to downgrade US debt to Third World status, just misses the point.

Yes, insane Republican ideology and The Conceder In Chief have done a swell job creating an existential economic threat by tying approval of the debt ceiling to the politics of government spending and taxation. This is the "Worst. Congress. Ever." Blah blah blah.

In journalism lingo, there's a "buried lede" in Klein's piece:

And having upset S&P, appeasing them might not be so simple. Beers repeatedly emphasized that he wasn’t just looking for a number. He was looking for something “credible.” And credible, in his view, was something that both parties had embraced. After all, he argued, deficit-reduction plans have to be continuously implemented over a decade or more, and if there’s not “buy-in from both parties,” there’s no reason to believe that the plan will survive the inevitable changes in political control.

On the one hand, the S&P view is a reasonable analysis. But on the other, sinister hand:

You might ask whether all this matters. S&P got the financial crisis almost entirely wrong — in fact, their analytical errors, alongside those of other agencies, substantially contributed to it — so why should we listen to them now?

But the question isn’t whether S&P should be listened to. It’s whether the market will listen to them.

Yes, that's right. The once-respectable financial rating agency, which is as tarnished by the 2008 economic implosion as any Wall Street investment bank, has made federal legislative politics an evaluative criterion for assessing the full faith and credit of the US government and the debt it issues.

And as a small digression, it's probably worth inserting here that there really is no deficit crisis. The deficit is high-ish in relation to conventional yardsticks, but interest rates are so low (near zero as applicable to government borrowing, in fact), that there is no problem servicing this debt... unless the ceiling isn't raised promptly. The "deficit crisis" is an invention of right-wing politicians, corporate media, and as a johnny-come-lately, President North Star.

But back to the libretto: There is nothing benign whatsoever about what S&P is up to here. They aren't trying to serve as a voice of reason: they're emphatically inserting itself into the political fray with the power of a fourth branch of government, but one outside of federal checks and balances. "You motherfuckers attend to the 'deficit crisis' ," S&P seems to be saying, "or else we'll sic The Market on you." With "you," of course, meaning both politicians and voters. It is an aggressive, unconscionable lobbying assault on behalf of The Corporation---a protection racket that the federal government must now subscribe to with an initial payment of $4 trillion extracted from middle-class taxpayers, the poor, and the elderly. If they pull this off, there will be no end to the racket until we're all living in sheet metal shacks on dirt lots.

The S&P threat gives every politician in Washington enough cover, or terror, to cave in to the demands of the Republican legislative caucus and The Conceder in Chief for "the good of the nation." Once this smelly, syphilitic Wall Street camel has its nose all the way into the tent, S&P might conceivably become as powerful as the Federal Reserve in dictating the grim economic future of America. No accountability; just the perpetual threat to shit everybody else's nest if some warty bankers and corporate chieftains don't like the drift of public policy.