The notion that democratically elected governments are at the beck and call of the structures of capitalism is hardly new.
But it is brought into stark relief by today’s statement by Standard and Poor’s, the international ‘benchmark’ credit agency rating, as reported in not untypical fashion by the Finiacial Times.
The FT pays most attention to the fact that S&P have changed their ‘outlook’ for the UK from ’stable’ to ‘negative’, on the basis that, in their view, the post-recession recovert might take longer than the government say it will, and that therefore government debt will be higher for longer.
Almost in the margins to this S&P wisdom (as in, best guess), it is noted that whjat is staying exactly the same is the triple A (the highest possible) long term and A-1+ (highest possible) short term sovereign credit ratings.
So what’s going on here?
Well, simply put, S&P are telling the UK government, on behalf of the whole of the capitalist system, how to run the country.
Despite an IMF report the previous day saying that the government’s measures (i.e. borrowing and printing money) were actually being pretty effective, S&P feel quite at liberty – indeed see it as their job – to tell the government it’s getting it all wrong; in so doing they give a huge boost to the Conservatives, who are much more likely to heed their call for cuts if they come into power.
In other words, S&P are seeking to influence the next election, and are content to use their huge institutional power to do so.
And let’s just remmber who S&P are for a second.
Yes, they are that main credit rating agency which failed entirely to foresee the risks associated with Collatoralised Debt Obligations, despite plenty of warnings, and therefore contributed significantly to the financial collapse of 2007-08.
Yes, they are ones who in large part caused this whole mess by not understanding banking properly (or at least preferring not to understand it) who are back 12 months later lording it over the government, trying to ensure massive cuts in spending (for that is what their proposed strategy boils down to), and actively promoting a change of government to that end.
As I said, none of this is new, but that doesn’t make it any righter.
For a good review of the same stuff, see Zebra Mbizi (a blog well worth keeping an eye on, though I don’t agree with everything), and the link to Robert Peston’s blog.
http://business.timesonline.co.uk/tol/business/economics/article6329979.ece
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