“Better angels of our nature”

Today, 6 November, is the anniversary of Abraham Lincoln’s election as President of the United States.

Here’s how he ended his first inaugural address:

We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.

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Man walks into a column, no.31: Credit

I’ve been hooked by the wrangling in the US over recent weeks and months: heated wrangling about the country’s debt and what to do about it. Like all US wrangles, I couldn’t help but view this one through the prism of The West Wing, and so it was no surprise when despite Republican reneging, double-dealing and general nastiness (how predictable: boo! hiss!) a deal was done at the last minute: almost certainly thanks to a genius ploy thought up by whoever President Obama has as his Toby. Or Josh. Or maybe Sam. Anyway.

Except… in The West Wing I don’t remember things ending like this. However nasty it got in Aaron Sorkin’s Washington, you knew who you were dealing with, whether congressmen, judges, political aides, lobbyists or pollsters. People who were either a legitimate player in the political system (howevermuch you disagreed with their views, they had a mandate) or could be linked back to someone with that kind of legitimacy.

In the real world, however, we find that the hours and hours of debate, negotiations, claim and counter-claim have been rendered null and void as a result of a credit rating agency… called ‘Standard & Poor’s’. It’s like when you played a game of Monopoly as a child with your brother and sister and with minutes to go before the end the family dog comes and shits on the board.

Seriously: who are these jokers and why on earth are they suddenly more important than leaders of both houses of Congress and the President put together? My first clue comes from the Washington Post’s coverage of the downgrading. The Post’s article notes that:

S&P’s downgrade served as an indictment of the gridlock that sent the nation to the edge of defaulting on its debt obligations. It is also striking in part because it reflects the tremendous power of a small group of financial analysts employed by a New York company — part of McGraw-Hill. Credit-rating companies’ reputations were sullied during the financial crisis.

Then Mehdi Hasan, writing in the Guardian, asks why we care what these rating spoilsports think when they (a) are unelected and (b) got it so manifestly wrong last time around: the bipartisan US Financial Crisis Inquiry Commission described S&P (and the other two of the ‘big three’ ratings agencies) as ‘key enablers of the financial meltdown’: they gave investors blind faith by maintaining high credit ratings in stocks that were fundamentally bad.

By far the best source of info on Standard and Poor’s and the people behind it is from the Reuter’s news agency, in this lengthy but excellent piece. We learn the big three are wealthy: S&P’s operating profit was $3.58 billion during its boom years of 2004-7, for example; that S&P in particular is about as firmly embedded in the institution of America as anything, dating to a history of financial details of the railroads in 1860 and something called the Standard Statistics Bureau in 1906; and that people who work at S&P are well educated (one in four have doctorates) and well paid, with analysts earning up to $167,000 per year.

Decisions on sovereign debt ratings are taken seriously – a country analyst conducts considerable research and speaks to many government and other officials at the country concerned – but the committee that makes the ratings only ever takes a couple of hours to reach its verdict. But the main weakness of the process from a transparency point of view is that the membership of the committee is never published, meaning accountability is weakened.

On a very basic level I think the degree of unchecked power and influence wielded by this small group of highly paid financial analysts is pretty disgusting and completely bizarre. How can it be that the leader of the free world – someone whose birth certificate has been scrutinised, for heaven’s sake – lives in fear of a man who up until a couple of days ago didn’t even have a Wikipedia page: David Beers, the head of sovereign credit ratings for S&P.

With that said, an interview with Beers himself did give me a little pause for thought. In it he points out in an apparently reasonable and level-headed tone, that Standard and Poor’s has been talking for quite some time about the deterioration of the US’s public finances (it’s hard to argue that they have been deteriorating) and that the agency’s main concern is that a substantive deal on reducing the debt won’t be done because of the polarisation of political opinion (again, hardly controversial). Beers closes with this, which makes me start to question the accountability point a little:

…it’s important to actually read what we say. That’s why we put all of our research for free, including our sovereign research, on our public website—for people to read our analysis. Whether they agree with us or not, it’s always a good idea before you draw a conclusion to read what we say.

The influence of S&P is still bizarre. But perhaps, just perhaps, the ire that’s beginning to be directed its way by governments and commentators is a reflection of the fact that they are, in this case at least, accurately forecasting the beginning of the end of the global financial dominance of the United States. And in the short-term that can’t be good news for anyone, in Europe at least. Where’s Jed Bartlett when you need him?

Man walks into a column, no.3: Freedom

This post was written by Phil

The links between right-wing rhetoric and the murderous acts of Jared Loughner are tenuous at best. But the hatred that dominates so much of political discourse in the US really does seem different to our own both in its prevalence and its force. Why is this?

It’s tempting for a Brit, a European, to feel smug about the apparent brutality of life in America at times like these. But acts of political violence and hatred are to be found here too. Upon hearing that members of a Kansas church planned to picket the funeral of a nine-year-old girl were you left thinking: that sort of thing could never happen in this country? But were the plans made by a different religious group to stage a protest along the same route in a Wiltshire town used to mark the death of fallen soldiers so very different?

The tone of mainstream media comment, on the other hand, really does mark the US out as being in a different league. As revolting as the Richard Littlejohns of this world can be, even the nastiest Daily Mail columnist wouldn’t have the courage to invoke Nazi death camps or talk of God ‘washing this nation with blood’, as Fox News talkshow host Glenn Beck feels able to.

But it would be a mistake, it seems, to suggest that this is an exclusively right-wing phenomenon: as TIME correspondent David Von Drehle points out, statements from those on the left of the spectrum such as ‘Mission accomplished, Sarah Palin’ are hardly anti-inflammatory (President Obama even dabbled, once saying that if their opponents brought knives to a fight, the Democrats should bring guns).

The reasons for the nastiness of America’s political discourse are undoubtedly multifarious and complex, but I’d argue that there are three that must surely feature prominently in any explanation. 

First, the United States is a vast, messy compromise of a place, borne out of still comparatively recent (at least in European terms) internecine conflict. States many times larger than most countries guard their independence judiciously and see Washington as a remote and meddlesome place. 

Second, the only thing able to unite such a coalition was an artefact of both stunning elegance and hopeless imprecision: the US Constitution. By enshrining in its first amendment the fundamental right to freedom of speech – maintained time and time again as capable of trumping almost everything else – it’s very difficult to legislate for civility. 

Third, with the partial exception of the internet, American mass media is, like everything else in the world’s biggest marketplace, dominated by big, big money, and commodified to hell. In a maelstrom of channels and voices, it’s no surprise that extremism and demagoguery win out. 

So when all is said and done, perhaps what’s most remarkable is that, in the face of these structural and overwhelming odds, the US hasn’t ground to a standstill of infighting and name-calling. The Republican Party is, of course, still holding out hope…