Oops! Wrong hat.
Eenie meenie chili beanie, the spirits are about to speak:
Shorter Megan McArdle: Wall Street and DC are two separate entities that do not understand each other. Wall Street wants DC to raise the debt ceiling but DC thinks that Wall Street wants DC to cut spending. The GOP must compromise to keep the money flowing.
Shorter Megan McArdle's Commenters: Let the government burn. What could possibly go wrong?
Do you know what happens when you support the tea party on your blog, marry a tea-party astroturfer, and propagandize to tea partiers? You personally give the tea party permission to be insane idiots who will do their damnedest to destroy everything you value and love most: your money.
You broke it so you bought it. Enjoy the fruits of your labor.
10 comments:
Given a chance to live in Actual Galt's Gulch, Megan reveals herself as just another statist moocher. Witness my complete lack of surprise.
This entire post is about toadying up to the ratings agencies.
"it will show that we are currently unable to make the ugly bipartisan compromises that long-term budget balance requires, and raises the risk that sometime in the not-very-distant future, the other party will retaliate by threatening default."
This is glue-sniffingly stupid. Raise your hand if you think a significant political actor would not be treated as radioactive by voters, the press, and potential donors if they threaten default.
It gets worse, because she says ratings agencies operate within a loose ten-year window. So she's saying the ratings agencies fear an explicit threat of default by some political actor within ten years. And she doesn't point out how incredibly stupid this is.
So that's pail of water number 1: acting as secretary for ratings agency concerns without any analysis of how stupid they are.
Pail #2: the entire post is about wall street's concerns with the ability of the US to pay back its debt, right? Except McMegan elides wall street's likelihood of continuing to buy US debt with the concerns of the ratings agencies about keeping a AAA rating on that debt.
Look at how she starts off just talking about "Wall Street" and "investors" in the beginning, where it's all breezy and anecdotal and general. Then she just throws in "ratings agencies" out of nowhere. At the end, when she starts talking about specific concerns, she talks about "Wall Street and the ratings agencies" in tandem, but she talks exclusively about what ratings agencies are thinking in their decisions about rating debt. She implies that the same reasoning applies to general investors in deciding whether to buy debt.
And these are just light-years apart. US debt will continue to be the safest piece of paper to own. Take it away, James Galbraith: “US debt consists of bonds issued in US dollars, which I assume the S&P analysts know. How can the US possibly default on its own currency? The obligation is in nominal dollars, which is to say when the bond retires, the US issues a check in dollars to cover it.”
Since the US prints its own currency (or actually just issues electronic payments to create new money) whenever it needs it, as Galbraith puts it, “As long as there is diesel fuel to power up the back-up generators that run the government’s computers, they will have the money to back their own bonds.”
US debt is going to be paid back unless there's hyperinflation, which the US is nowhere near. Every dumbass legacy frat boy on Wall Street knows this. It doesn't matter what ratings agencies rate the debt. It shouldn't even have a rating.
To recap: McMegan is carrying water for the ratings agencies, by both not pointing out how stupid their political concerns are and by eliding their concerns about rating the debt with Wall Street's incentive to buy the debt, which will remain unchanged.
Why is she doing this? We can only speculate, but we know that the ratings agencies are a prop in the financial structure that helps hoover up all the economic growth in the US for the top 10%. In the run-up to the financial crisis, they whored themselves out by taking fees to rate subprime crap as AAA. They continue to take packages of debt bundled by large firms and rate them as those firms wish.
Keeping belief alive in the capability of ratings agencies to objectively assign credit ratings to debt is essential to their continued existence. I hope McMegan is being rewarded amply for her yeoman efforts.
(Oh and of course the credit agencies are pushing for austerity measures that would further structure the political system to fellate the rich and bone the poor. But helping that cause is more of a secondary concern, it seems like, to providing cover for ratings agencies in general).
Sorry for so much wonkery on a humor blog but goddamn this stuff makes me mad.
Do you know what happens when you support the tea party on your blog, marry a tea-party astroturfer, and propagandize to tea partiers? You personally give the tea party permission to be insane idiots who will do their damnedest to destroy everything you value and love most: your money.
I think you could expand from Megan to our corporate media in general, re: the teabaggers. In fact, I left a nearly identical comment for Joe Klein a little while ago.
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But that trick never works!
If ony their mean, stupid insanity only hurt themselves.
Ben is totally right, both on the merits and on the substance of the argument. The key point is that the rating agencies have been whoring themselves out to Wall Street for about 15 years now.
It takes a special breed of dumb and entitled such as our Mcmegan to pull off this crap.
What is more dangerous than ignorance pretending to be knowledgeable? Not pretending, but actually believing she is knowledgeable.
This time for sure!
I was driving and listening to Laura Ingraham being mad at the Tea Party types for not taking the political win of a relatively good deal - one of the Boner bills - and immediately after came Rush yelling about so-called conservatives compromising.
They should be married.
What folks don't seem to realize is that the US ruling class has become so parochial and shortsighted that it can't do anything that's not fueled by it's own rapacious greed. They could unite on TARP, deregulation and other "collective looting" measures. But anything that requires any kind of sacrifice by any tiny sector leads to a wholesale breakdown. Even if it offers massive benefits in the long term.
In the past the elite expected to shell out high taxes and to deal with sometimes burdensome regulation. They expected that government might fuck em a bit for the common good. And they ACCEPTED it, because they knew that if they didn't, eventually everyone else would decide that the rich weren't very useful and the "job creators" would find themselves on the wrong side of a class war.
Off topic, I really and truly must share this.
Megan is just the victim of a cruel prank, the poor dear.
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