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Thursday, Aug. 18, 2011 05:09 pm

The downgrading of America

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As Lily Tomlin noted, “No matter how cynical you get, it’s almost impossible to keep up.”

Many of us view the deficit ceiling brouhaha between the Obama White House and the laissez-fairy extremists in the Republican House as some combination of farce and fiasco. So much political playacting around a made-up deficit “crisis” in order to avoid dealing with the real deficit that’s crushing America’s middle class and draining the lifeblood from our economy: the jobs deficit.

But wait – before I could work out my anger over that fiasco, here came an even more incredible farce. A Wall Street credit rating firm, Standard & Poor’s, thrust itself onto the national stage by arrogantly, recklessly and wrongly downgrading the sovereign credit status of the United States of America from AAA to AA .

Lest you think that this is an unimpeachable judgment by solid financial experts with no private agenda, you might recall that S&P geniuses had bestowed AAA ratings on hundreds of billions of dollars worth of subprime-mortgage investment packages that turned out to be, in Wall Street’s lingo, “toxic waste.” These packages precipitated the financial crash of 2008. Thanks, S&P!

Oh, well, mistakes are made, right? Yes, and often. S&P professional assessors had also judged Lehman Brothers to be a highly rated investment, when – poof – Lehman suddenly went bankrupt. Imagine the surprise of investors who had trusted S&P’s seal of approval.

This outfit has less credibility than the government it has immodestly chosen to downgrade. Indeed, in its assessment of U.S. creditworthiness, S&P made another little error – a $2 trillion miscalculation in deficit math that should have altered its negative conclusion. The company admitted its error, but humility is not a trait that’s in S&P’s genetic code, so – damn the evidence – it downgraded the U.S. anyway.

Company honchos explained their unprecedented move this way: “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

Notice two key phrases there: “our opinion” and “in our view.” What we have here is not a factual judgment, but a blatant political play by and for financial elites to impose their laissez-faire extremism on government policy. Specifically, this document is part and parcel of the push by right-wing corporatists to force Social Security, Medicare and Medicaid onto the killing floor.

By downgrading the government’s credit rating, they add to the absurd hysteria over the deficit. “It’s the cause of America’s economic stagnation,” they wail, “and the only way to fix it is to take sledgehammers and chainsaws to programs that the middle class and the poor rely on.”

Yoo-hoo, Wall Streeters – it was not workaday folks who crashed our economy, it was you! Your financial collapse wrecked the livelihoods of millions and jacked up the federal deficit you now decry. These elites are hoping that we can’t keep up with the fact that they’re using their own failure as an excuse to go after essential public programs needed by the very people they’ve knocked down.

This plutocratic power play is a defining issue of our time. It’s also potentially a unifying issue for a new progressive populism. The real spectrum in our country is not right to left, it’s top to bottom – and the vast majority of people know that they’re being pushed farther and farther down from those few at the top who control practically all of the money and power (excuse that redundancy) in our society.

By big margins, Americans emphatically support the public programs that the S&Pers are out to gut. They also agree by the same margins that the way “to stabilize the government’s ... debt dynamics” is not with more cuts in our nation’s historic democratic promise, but with an aggressive jobs program to revitalize the middle class.
Instead of downgrading America, let’s build it up. Where’s the party that will address this deep and broad democratic yearning?  

Jim Hightower is a national radio
commentator, columnist and author.


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