The New York Times reports that Standard & Poor's has warned that Greece would be judged (by it) to be in default if a plan proposed by France to restructure its debt went through. Standard & Poor's also said it was cutting its rating on Greek debt from B to CCC.
I agree that's news. But to quote ProPublica's Jesse Eisinger: "As everyone knows by now, the credit ratings agencies played an enormous role in creating the conditions that led to the financial crisis. Their willingness to slap Triple A ratings on all manner of Wall Street- engineered mortgage rot was enormously lucrative for the raters but a disaster for the global economy."Everyone knows it by now, but somehow the financial press keeps reporting on these firms as if they never failed at the very thing they are supposed to do, as if the corrupt system they were enmeshed in was never exposed, as if nothing happened that might cause an intelligent reader to ask: why is the financial system still listening to these guys? That's what the Times did today, so I expressed myself thusly on Twitter....
I soon got a reply from David Joachim, Weekend Washington editor for the New York Times. (And kudos to him for engaging because we do appreciate that...)
What's notable to me about this response is that it misses the point I was making in order to deliver its payload in realism. Joachim is saying to me, "I understand your outrage that the system still relies on S & P, but the fact is that the system does. We are simply reporting that, so what's your beef?"
But I had already said what my beef was: That the Times didn't even bother to explain how it was that S & P still has this influence. The reporter just shrugs and accepts it. But why? Is that the only newswriting alternative? So I repeat my point:
Now it's time for a second lesson in realism. This one's about what can realistically be expected of the New York Times. I am said to have excessive expectations that cannot be met.
So now we're debating whether "in every instance" the entire saga of these corrupt and incompetent ratings agencies should be "relitigated" just so the Times can report a new development in the Greek debt saga. Sigh. I try again:
Or maybe not that hard. Ever heard of linking? Number of links in the Times story on the Standard & Poors warning: zero. Number of links it would take to explain how it is that Standard & Poors retains its influence despite its "enormous role in creating the conditions that led to the financial crisis..." One.
- Click Starkman's link and this is what you find:
It does me. It especially frosts my flakes because--despite the fact they are embedded in the financial system by their official status as Nationally Recognized Statistical Rating Organizations--when their conflicted ratings turn out to be bogus, they seek refuge behind the First Amendment. They fend off fraud claims by claiming they were just expressing an opinion. (Hey, man, it's just my 'pinion.) And it works!
Unlike journalists, however, the rating agency is paid by the institution whose work it is covering. Imagine that model at a newspaper:
LOCAL COLUMNIST: "Mayor, you"re doing a great job--AAA!"
MAYOR: "Thanks!" (hands over bag of cash).All I'm asking for is a little Starkman when the Times has to report on credit agencies that have failed utterly in the very thing they are supposed to do but yet are still asked to do it. The situation is surreal. Expecting it to be noted is to me a realistic demand to make on our press.