The Campaign Spot

Election-driven news and views . . . by Jim Geraghty.

How Dare Standard & Poor’s Tell Us What We Hate to Hear!


Plenty of bad news to chew over in the Morning Jolt

[Standard and Poor's offered] a thoroughly depressing, and no doubt brutally honest, assessment.

Naturally, the Obama administration did what it does best in response: They blamed their political opponents.

This was a “tea party downgrade,” said [Obama chief strategist David] Axelrod on CBS News’ Face the Nation.

Axelrod said S&P’s decision was “largely a political analysis.” “And that’s what we should focus on because what they were saying is they want to see the political system work. They want to see a sense of compromise. They want to see the kind of solution that the president has been fighting for, a large solution that will deal with the problem, that will be balanced, that will include revenues.”

Instead, said Axelrod, conservative, Tea Party-influenced Republicans “played brinksmanship with the full faith and credit of the United States. And this was the result of that.”

“It was the wrong thing to do to push the country to that point” he said. “And it’s something that should never have happened. And that clearly is on the backs of those who were willing to see the country default, those very strident voices in the tea party.”

Of course. Nothing’s ever their fault.

 In fact, in the full statement, you’ll see, “Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.” It is revealing that Axelrod can look at this and declare, “they really agree with us!”

I like Ed Morrissey’s analysis: “S&P didn’t say anything yesterday that was not common knowledge and common sense.  If you had to rate a potential investment that had an income of, say, $22,000 a year but had costs of $37,000 per year, a standing debt of $143,000, and contracted future debt that exceeded $1 million, would you give that investment a gold-plated AAA rating and buy their bonds at the lowest interest rate possible, or at all?  Of course not, but that’s exactly the fiscal situation of the US, at a 100,000,000:1 scale. The anger is mainly misdirected.  The media wants to blame the Tea Party, but the Tea Party wants to solve the actual problem — overspending and over-commitment to entitlement programs.  The Tea Party wants to blame the Obama administration, and it deserves some blame for refusing to address the real structural problems of the US fiscal condition.  But that fiscal structure far predates Barack Obama, both as President and as human being, and Congresses and White Houses of both parties have done little to address the real problems in Medicare, Medicaid, and Social Security. Why?  Because as soon as people try to do so, demagogues accuse them of wanting to push Grandma over a cliff.  Voters respond by punishing the reformers and rewarding the demagogues.”

Nonetheless, the reckoning is at hand, and we can see who sees this depressing fiscal development as another crisis to not be wasted, another opportunity to demonize the opposition. It’s what they’ve been doing since Day One.

I’m reminded of Daniel Hannan’s remarks to former U.K. Prime Minister Gordon Brown, and can’ resist paraphrasing: “Soon the voters too will get their chance to say so. They can see what the markets have already seen: that you are the downgraded president of a downgraded country.”

TurboTax Timmy: The Administration’s Indispensible Man

By the way, back on April 19 of this year: “U.S. Treasury Secretary Timothy Geithner today said there was “no risk” that the United States would lose its prized AAA credit rating, saying political prospects for long-term deficit reduction were improving. “No risk of that,” Geithner told Fox Business Network when asked if the United States would see a downgrade after Standard and Poor’s on Monday slapped a negative outlook on its Treasury debt rating.”

Hey, Nostradamus is sticking around at Treasury: “Treasury Secretary Timothy F. Geithner has told President Obama he plans to remain in his job through the fall of 2012, keeping in place Obama’s longest-serving economic adviser after the first-ever U.S. credit downgrade and renewed fears of a second recession. White House press secretary Jay Carney said: ‘The president asked Secretary Geithner to stay on at Treasury and welcomes his decision.’”

“There’s still more downgrading to be done, apparently,” quips the JammieWearingFool.

Tags: Barack Obama , Tim Geithner


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