Clueless S&P Has No Right to Pass Judgment

Paul Krugman blames the "extremism of anti-tax Republicans" for pushing the nation into this credit rating mess, but he finds it a little hard to see Standard & Poor's as the wise elders in the room. "It’s hard to think of anyone less qualified to pass judgment on America than the rating agencies," he writes at his blog in the New York Times. "The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?"

Nice, too, that S&P messed up its math by $2 trillion or so. That's embarrassing in itself, but it also shows that S&P is wrongly focused on short-term deficit reduction as our magic solution. It makes no economic sense, argues Krugman. "In short, S&P is just making stuff up—and after the mortgage debacle, they really don’t have that right." (More Standard & Poor's stories.)