On Friday, Standard & Poor's reduced the credit rating for long-term U.S. government debt by one notch, from AAA, to AA+.
The Obama Administration responded by taking to the airwaves, hammering away at anyone or anything responsible for the (gasp) downgrade. Treasury Secretary Tim Geithner even attacked S&P's credibility, saying the company’s record has been terrible and its arithmetic worse. According to the Treasury department, the credit-ratings firm made a $2 trillion math error, calling it the "amateur hour."
I guess you could call all this a theme. Paul Krugman certainly got the message, writing on The New York Times Web site that "it's hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy?”
Of course, it didn’t end there. The Administration, still not convinced that the American people won’t soon turn their frustrations towards the White House, also blamed Republicans. Campaign advisor David Axelrod even called it a “tea party downgrade.”
My father used to say that there’s a time and place for everything, and I wish it had been a message he delivered to President Obama instead of me because I’m convinced at this point that the only real amateurs are the hacks currently whispering into the ear of the President.
Ok, so maybe that was a low blow, but the point here is this. S&P has made a decision that has struck a nerve with investors, but not all of them. Billionaire Warren Buffett says the S&P is flat wrong, period. No name calling, no threats, just some billionaire logic saying, if anything, the downgrade may change his opinion of the S&P. Heck, ole Warren even told CNBC that he may even buy U.S. Treasuries that yield nothing if he had to do it. That’s good to know.
Moody’s also has me smiling a little. That ratings agency has reaffirmed America’s AAA status, disagreeing with its rival S&P. But not all is glorious at Moody’s either, saying all eyes must remain on the U.S. budget deficit and more importantly how it’s handled moving forward. Good luck with that.
So, once again we're turning to the President for answers. I’m just wondering where the White House plans to send me next. Change we can believe in? I guess President Obama was talking about my pocket change since before this is over, it may be all I have left.