Friday, 17 February 2012
Credit agencies? Give me old-fashioned governments any day
Governments get a bad press these days. Politicians are dishonest, the line goes. The parties that run them in democracies are unrepresentative of the single issue campaigns that really move people, critics argue. The bureaucracy is apparently unresponsive in a 'consumer' age that basically assumes that choice and a margin of unused capacity to choose from are all that matter in public services - and the eternal restlessness of mobile phone-touching, constantly-wired citizens be damned.
Well, there's a truth to all that. But - as all truly boring people say - it's only part of the truth.
In fact, there are much more mendacious, self-serving, unrepresentive and unresponsive agencies abroad in the world.
Noted the recent outbreak of fretting about credit agencies' downgrading of soverign nations' and big companies' credit worthiness? Well, you might not have noticed just how paper-thin the intellectual rationale for any of that 'work' really is - and how misguided the fetishisation of credit agencies really can be.
Credit rating agencies usually report, for a fee, to private-sector clients and rely on those clients' accountants and published reports to rate their trustworthiness. They said Greece (above) was solvent. They said that US mortgage debt was rock-solid. They have a history of sending out mixed messages and firing off premature emails. Their reports are full of technical errors, massively overstating the US budget deficit, for instance. Above all, they safeguard rich people's risk taking (bond holders and pension funds) and destabilise the workaday economy everyone else relies on - as European Union Commissioners have pointed out. I could go on. One day I will. Be warned.
You know what? I'd deal governments - with all their flaws and frustrations - any day of the week than break bread with these guys.