anguished bawling

The spectacle of states pathetically frustrated because a small, anonymous troop of self-proclaimed evaluators has given them a bad mark, as would an economics prof to dunces, is at once farcical and highly disturbing. So, dear voters, you have put in power people who tremble at night like schoolchildren when they learn in the early hours that representatives of the ‘market’ - i.e. the speculators and parasites of the world of property and capital-have rated them AAB rather than AAA? Is it not barbarous, this consensual hold over our official masters by unofficial masters, whose sole concern is their current and future profits in the lottery in which they stake their millions? Not to mention that their anguished bawling -‘a! a! b!’ - will have to be paid for by compliance with the mafia’s commands, which are invariably of the following kind: ‘Privatize everything. Abolish help for the weak, the solitary, the sick and the unemployed.

France's most famous living Maoist is on a parallel track here: the idea that a Moody's rating matters was always wrong, but was never more than a pretext to do what the government wanted to do anyway. They've already moved on. The ratings agency argument was always a waystation from the position that poverty was the problem towards the idea that people in poverty are the problem. Labour hasn't managed to nail this yet, or indeed be convincing about whether they intend to.

Comments

[Alex]

Meh, sad-donkeyism, and French academic guff. Menckenian horselaugh required.

[Malcs]

A little rich to dismiss the article in such terms, Alex - whether the charge of "guff" be justified or no, it isn't edifying to read a refutation that sees you disappearing up a hole made of code-words.

I can see that the power of a credit rating might be overblown; but is it so wrong to suggest that reports of "market anxiety" have an effect on politicians' decision-making? I'd be genuinely interested to know.

[ajay]

I can see that the power of a credit rating might be overblown; but is it so wrong to suggest that reports of "market anxiety" have an effect on politicians' decision-making? I'd be genuinely interested to know.

What market anxiety? Moody's is not the market. Moody's is not the market! Look here, for example:
http://www.tradingeconomics.com/united-kingdom/government-bond-yield

That there, _that's_ the market. Run that back to the 1990s and you'll see that UK ten-year debt is almost at a 20 year low in terms of yield.

So, yes, it's perfectly possible that market anxiety would affect politicians' decision making. And it should! Borrowing costs are things that politicians should be thinking about when it comes to drawing up budgets, and the market is where borrowing costs come from. Just as a government that plans to build a lot of hospitals should be thinking about the cost of concrete, and a government that is planning a national health service should think about the cost of pharmaceuticals.

But, right now, the market is supremely unworried about lending money to the UK government.

So the linked writer is making a crucial error: he thinks George Osborne knows what he is talking about and that "Moody's sovereign debt rating muppets" is a viable synecdoche for "the bond market".

He's also been paying very little attention to the news. The UK's new Moody's sovereign credit rating is not AAB, it is Aa1. Moody's doesn't do AAB. In fact, no major rating agency will give a rating of AAB. A minor point, but it does undermine his credibility a wee bit.

[ajay]

And, and this is a point that is worth making, are we really supposed to believe that George Osborne and David Cameron are deeply, seriously committed to increased social spending on "the weak, the solitary, the sick and the unemployed", and it's only their fear of the bond market's wrath that's stopping them?

[Malcs]

Cheers Ajay.