Okay, President Obama. Here is the solution to the rating service conundrum: get rid of them. The S&P is not a divinely established entity. It is owned by the publisher, McGraw-Hill. Who in its office does the “rating”? Anybody know? We know this: the first figures provided by S&P to the treasury department contained a 2-trillion dollar error! It was corrected and then the S&P downgraded America’s rating from triple A to double A-plus, an act described by Secretary Geithner as evincing “terrible judgment.”
Stockholders are paying for the S&P judgment in a big way. The Dow Jones closed down 634.76.
Secretary Geithner had intended to leave his Washington job and return to New York City, but he relented at Obama’s urging and announced he is staying on as Secretary. So, here is the solution:
President Obama and Secretary Geithner hold a joint conference-announcement in the White House and declare the S&P “null and void” — no longer applicable to the nation’s credit rating. Uncle Sam has always paid his debts, they point out, and will continue to do so. Ditto for the other rating services. Who needs them? Who appointed them? True, the banks will miss that triple-A stamp affixed to various sheets of paper as signs of worthiness, but heck, they can attest to the validity of their crap themselves without the mystery attachment.
This announcement will serve an ancillary purpose: it will respond to the growing belief that Mr. Obama is weak, a patsy, a plaything for the various components of the U. S. Congress. It will reassert his authority.
And the upcoming 12-member commission assigned the job of rounding out the Debt Ceiling measure will have yet more power — authority to endorse the President and Secretary’s abandonment of the concept of unknown sanctifiers of the U.S. obligations. The word of the United States should be, and is, enough. Always has been and always will be.