"These bodies that see public debt as a burning issue today foresaw no problems with the unsustainable private debts of the banks investing in sub-prime holdings a few years ago. "The vast majority of the analysts at Moody's [one of the leading ratings agencies, and seen as the most likely to move on the UK's debt rating] are honest individuals who try hard to do their jobs," Eric Kolchinsky, a former managing director at Moody's told a US Senate subcommittee on investigations a few weeks ago. "However, the incentives in the market for rating agency services favoured, and still favour, short-term profits over credit quality."
There's a reason for this. These agencies are primarily funded by the banks that they are supposed to be rating, creating what several former officials testified was a fundamental conflict of interest. In the words of Upton Sinclair, "It is difficult to get a man to understand something when his job depends on not understanding it.""
True. Clear conflict of interest.
Otherwise, the piece is a wafty, empty rant about how great people are and how terrible the markets are. And how politicians are all self-interested liars.
I think it's fair to say that the politicians actually did a decent job of outlining the cuts we may face. The 'more fierce than Thatcher in the 80s' quote was from one Ali Darling, for example.
Yet it's those same wicked politicians Younge is then trusting to sort out the democratic deficit that places the markets in such power. Well, that's stupid.
It would certainly be nice of elected politicians had more power than the markets, but without giving any kind of detail, just carping from the sidelines doesn't much help.