It’s also true that S&P is hardly some kind of Delphic Oracle. It and the other rating agencies were almost criminally negligent about the risks of subprime mortgages during the housing bubble. And it’s not as if S&P told investors anything about U.S. fiscal problems on Friday that they didn’t already know.
So what’s new?
The big new element on Friday was an official outside recognition that U.S. creditworthiness is being undermined by a new factor: political insanity. S&P didn’t base its downgrade on a change in the U.S. fiscal and economic outlook. It based it on the political game of chicken over the debt ceiling, a game that Republicans initiated and pushed to the limit, and on a growing gloom about the partisan deadlock. Part of S&P’s gloom, moreover, stemmed explicitly from what a new assessment of the GOP’s ability to block any and all tax increases.
S&P was remarkably blunt that its downgrade was mostly about heightened political risks: “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed,” it said.
I think that this is the correct assessment - I cannot see how the political system in America can get to grips with any aspect of the problem.
It's not just the US - is not conventional leadership embedded in a paradigm of rational engineering? Is not THIS the centre of the problem?
This assumes that our enormous institutions are the only way. So no one questions the Education system. They try and make it more efficient but don't consider that we might educate our kids in a way that is not mechanistic. The same for health. We do nothing to help people get healthy - there is no money in that. So we depend on a system that we cannot afford to stop us dying.
The US spends more than the next 20 nations on defence. Has this made America more safe? The reliance on a few super high tech weapon systems - is this really the way?
Our food system depends on a few vast food enterprises that have to make the numbers. So we are dependent on a food system that not only makes us ill but degrades the environment. It can get more efficient but only by increasing the risks.
Our creditors want action. But if we stay in the paradigm that we live in, there is no action that will do anything but make things worse.
This includes each of us in our family settings.
We too have to make the numbers. WE assume that this means that both need a job so that in the limited time we have left, we can pay to have our kids looked after and fed.
Is this the ONLY way really?
Well many of us are finding out a new way because we don't have the job and the income stream any more to pay for our western high costs.
Making our own food, helping each other look after the kids is a start. Then we look ahead and think about college - it's off the table we cannot afford it. So what do we do? We find a way to help our kids get the learning they need in a new way.
We worry that we don't have access to health insurance, and then some might learn that we can live differently and make it unlikely that we get ill.
The real revolution will start with us - not with our leaders who are immune from the pressures of how life is being lived by most people.