Standard & Poor’s director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default — a position put forth by some Republicans.
Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that “people in the political arena were even talking about a potential default,” Mukherji said.
“That a country even has such voices, albeit a minority, is something notable,” he added. “This kind of rhetoric is not common amongst AAA sovereigns.”
I’ve been critical of S&P’s reasoning. The ratings agency itself has a lot to answer for and doesn’t strike me as very credible. But honestly, this more forthcoming political rationale for a downgrade makes a lot more sense than anything else I’ve heard.
I used to think global warming denial was the most alarming example of motivated reasoning in our politics. But maybe not. Denying what can at least be made to appear a longer term threat is one thing. Denying the idea that a credit default would be immediately devastating, or arguing that it would be manageable or even desirable, strikes me as an even more extreme concoction and rationalization.
I’m also still waiting for the Onion headline: “S&P Downgrades Earth; Cites Unbalanced Carbon Budget.”
Links to this Post
- S&P Downgrades Planet Earth!!! | The Intersection | Discover Magazine | August 16, 2011