Word to Obama

Posted on by Iansã

On January 10 Moody’s, in concert with the other main bond-rating firm, Standard and Poor’s, gave the United States its top AAA credit rating. The terrorist blackmail threat came in the form of a demand by Moody’s that the US government “reform” Social Security and Medicare: “In the very long term, the rating could come under pressure if reform of Medicare and Social Security is not carried out as these two programs are the largest threats to the long-term financial health of the United States and to the government’s AAA rating.”

Steven Hess, Moody’s top analyst for the US economy, spelled it out more explicitly to the London Financial Times: “If no policy changes are made, in 10 years from now we would have to look very seriously at whether the US is still a triple-A credit…. The US rating is the anchor of the world’s financial system. If you have a downgrade, you have a problem.” Thus does Moody’s man calmly threaten to plant the financial equivalent of a thermonuclear device under the Statue of Liberty. . . .

As vividly reported in the Washington Post by Alec Klein in 2004, the giant German insurance corporation Hannover declined repeated Moody’s offers to rate its credit. Moody’s promptly issued an unsolicited and adverse rating, and then–just like a small-time mobster after hurling a brick through the window of a liquor store–went back to Hannover and reissued its invitation to offer protection-by-rating. Hannover’s top man said he wouldn’t surrender to blackmail, and so between 2001 and 2003 brick after brick went through the window as Moody’s steadily reduced Hannover’s rating all the way down to junk.

By contrast, Enron handled relations with Moody’s with ermine gloves. . . .

[I]f Moody’s is going to present itself as a major political player presuming to dictate national policy down the barrel of a financial gun, its executives and analysts should be hauled into the star chamber. Let’s have a war on terror and a rendition of these Moody’s executives before a special investigative committee of Congress with full subpoena power. Ask them to explain their own role in causing the financial upheavals afflicting the planet right now, due to the collapse of the housing bubble and its impact on the home mortgage market. . . .

In fact, it’s almost entirely Medicare, not Social Security, that accounts for the projected rising costs in our shriveled welfare state. The culprit here is not the swelling ranks of older people but the insurance and drug companies’ grip on our health system. Conversion to single-payer would mean huge savings. The United States pays around 15 percent of its GDP for healthcare, about 70 percent more than the outlay of other advanced industrial countries. Shift to single-payer and quit shoving money–4.7 percent of the GDP–down the imperial sinkhole, and there’s no fiscal crisis of any sort, short- or long-term, for Moody’s or anyone else to fret about. And in the even shorter term, if Moody’s sees fiscal crisis looming, why don’t its overpaid executives for once put the national interest first and call for a tax hike on the rich? Pollin tells me that just going back to Clinton, as opposed to Bush 2, on taxes for those making more than $200,000 a year would generate $60 billion a year. Do this and end the war in Iraq and you wipe out the deficit at a stroke. . . .

Axé.

6 thoughts on “Word to Obama”

  1. I can’t resist pointing out that Hannover Rueck *didn’t* buy U.S. mortgage debt. (Sorry, I know it’s a detour from your actual point).

    Reply

  2. My husband’s “free” medicare is costing us $500.00 a month. He is in perfect health. For some reason, mine is “only” $200.00, and we can’t figure out why. Of course there is no transparency in the system! But we have to help pay for all the expensive drugs our neighbors take. That’s why he still works. Taking it easy in retirement is not even on the rader, since we also have to partly finance our children and grandchildren, lest they go bankrupt.

    I want the Clintons back and this is why. I don’t care if Ophrah is kind-hearted and Micelle gives a hell of a speech! I want substance, not a lot of feel-good crapola.

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  3. S – Cockburn does make errors (and get a bit hot under the collar.)

    H – it looks as though they are neck and neck. This post is a message to whoever wins the nomination … I think it’s going to be Obama but who knows. I was for Kucinich, then I was going to vote for Edwards, and we didn’t vote here today, we had Mardi Gras!

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  4. I am very pessimistic. Most of all, I see that Americans will take any fantasy over reality, and it’s easy to see why, considering how bad things are.

    And I am tired of all the crapola, big time. The crap culture. How can I make common cause with boobus Americanus?

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  6. Pingback: At least masochism involves some pleasure « (Almost) Without Footnotes

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