It really didn’t surprise me when last year the EU parliament voted to prevent ratings agencies from explaining exactly how lousy a credit risk it and its constituent governments are. You sort of expect that kind of thing from an outfit that has elevated ramming things down ordinary citizens’ throats to an art form.
Dear Leader’s SEC has now gone down the same road. Point out that, as Instapundit has observed in numerous contexts, things that can’t go on won’t; that promises that can’t be kept won’t be; and that debts that cannot be paid won’t be either, and they drop on you like a ton of bricks, and in exchange for a promise not to destroy your business they extort a vow of silence. “Nice business you’ve got here. Be a pity if it were litigated into oblivion, wouldn’t it?”
As a side effect of what Prof. Reynolds describes in “Ham Sandwich Nation: Due Process When Everything is a Crime,” every last one of us is absolutely exposed to this kind of treatment. In a world in which pretty much every person is committing something like, as the title of a book phrases it, Three Felonies a Day, then any of us can be prosecuted for any of them, more or less at the whim of the DOJ (the same outfit which brought you Operation Fast and Furious, the illegal gun-running scheme into Mexico). As a precondition of not destroying your life through the cost of defending yourself — even assuming you win — the government may extort from you surrender of rights you otherwise would hold inviolate.
In the ratings agency case described at Zero Hedge, you would think that the company, Egan-Jones, which is in the business of reporting the financial condition of the U.S. as expressed through its debt issues, and expressing opinions based upon that news, would enjoy the same measure of press freedom that, say the NYT enjoys when it commits crimes like disclosing national security secrets which have been provided to it, and which it knows have been provided to it, in violation of numerous valid criminal statutes. I mean, what is the meaningful distinction between Paul Krugman’s solemnly assuring us that infinite government borrowing to finance infinitely growing governmental spending is just wonderful . . . and Egan-Jones pointing out that you’d be something of a fool to believe that the U.S. will actually be able to pay the stuff back in dollars that haven’t been devalued to the vanishing point? Perhaps they do. On the other hand, I’m quite comfortable that if you press any company hard enough you will find something, somewhere, in some part of its operations, that is in violation of some obscure regulation. It appears they found such a regulatory violation at Egan-Jones. The federal government offered them a bargain: You surrender your rights of press freedom and we won’t destroy your livelihoods.
Now, does anyone pay much attention to what Egan-Jones says about federal government debt? Honestly, I’d never heard of them before I read the linked article. But as the Chinese say, kill the chicken and make the monkey watch. Does anyone think that S&P, or Fitch, or Moody’s weren’t paying attention to what happened to their smaller colleague?